Thursday, July 19, 2007

Bidding on Ebay and other auctions

USA today has an article on irrational Ebay bidding. Apparently researchers found bidders often pay more than they could if they just accepted the "buy it now" price.

The researchers put this down this down to bidders getting carried away with auctions. While that's almost certainly true, I suspect there's also a mentality that an auction will always result in a bargain.

I used to go to technology auctions and and was an early adopter of the Grays Online website. One thing I discovered very early was that the average punter pays way over the odds for computers and electronics at these auctions and it's why I rarely bother with them these days.

One thing I've always noticed is that bidders don't know the retail price of items. Often you see somebody paying well over what it would cost to buy at the local computer store.

Another factor that trips buyers up is not understanding hidden costs. An observation in this article was that Ebay bidders are suspicious of hidden charges but often didn't consider shipping fees.

In computers there's even more hidden costs. Usually an auctioned second hand computer doesn't come with software licenses and warranties. My view is this alone reduces the value of the box by 60%.

I reckon auctions are a good way of buying and selling. But when you're buying the most important thing is you need to be aware of the retail price before placing a bid.

Wednesday, July 18, 2007

The joys of selling a business

Over the last nine months I've been looking at exit strategies from the IT support business and to say the process has left me scarred and bitter is an understatement.

When selling a business, the prospect buyer quite rightly wants some certain that wheat they are buying is what's been represented. For the seller, this means quite a bit of work. What's more it's quite reasonable for the buyer to require the vendor to spend some time helping with the transition to new owners.

So given the amount of work involved for the business owner, the sale price of the business needs to be worthwhile.

My experience was that the prices on offer weren't. I even had one prospective buyer claim they had just bought a 30 year old business with a turnover of 750,000 and gross of 180,000 for $18,000.

With those sort of numbers it was hardly worth selling.

I thought this was just me, that I really hadn't built a business that was worth anything. Fair enough, such is life and it's time to move on.

But then I started talking to others who've owned businesses and tried to sell them. I was surprised to find my experience was not unusual. Many people just walk.

So when I read a recent article on the Smart Company Blog about the under-representation of services businesses I couldn't help but add my two bob's worth.

This lead to this interesting reply from Andrew Kent at Biz Exchange. His view is the idea that these business are worthless is bunk.

I agree, all businesses have a value, but the market price for many businesses make it not worth selling for many business owners.

My suspicion is a service business needs to get over the two million dollar turnover threshold before it's attracts the attention of investors and serious buyers. Below that you are largely selling to people buying their own jobs or competitors who are at best half hearted about building a client base.

Andrew to his credit has decided to test this by making an offer on his blog: The first ten IT and construction business that approach him will get a free listing on Biz Exchange. It's an experiment I'll be watching with interest.

Sunday, July 15, 2007

Why the ACCC is wrong about Google

The Australian Consumer and Competition Commission's action against Google has generated a lot of interest. One article that caught my eye was James Kirby writing in the Sydney Morning Herald about his experiences with Google and the Eureka report

I don't agree with James, the size and cost of the Search Engine Optimisation industry is irrelevant to this issue. The point is that some businesses and SEO consultants are gaming the system and deceiving Internet users.

For instance, we hold the trademark for PC Rescue a search on the term "PC Rescue" in Google brings up our name as the first search item.

On the ads on the right of the screen, we find five ads that use the PC Rescue term and the top one is a local business that has almost certainly included "PC Rescue" as a phrase in their adword campaign.

Are they engaging in misleading conduct or breaching our trademark? Quite possibly.

Is Google? I don't think so. They aren't pushing or endorsing these services anymore than the SMH or Eureka report does with their advertisers.

Our trademark has been breached numerous times by IT businesses advertising in newspapers, Ebay and the Yellow Pages. While we've sent them sternly worded letters, we've never considered threatening the advertisers simply because the advertisers aren't responsible.

Just as the local paper, Ebay and Yellow Pages aren't responsible for these bozos who are too lazy to think of their trading name I can't see why Google should be. So far, the US courts have agreed with this.

There's no doubt that some advertisers are abusing the Ad Words system. They are deliberately using other's trade names as their key advertising terms.

In my non-lawyer reader of the Trade Practices Act, the ACCC certainly has a case against the Trading Post, if the allegations are true then their conduct was likely to mislead or deceive.

It's not the first time big Australian businesses have been accused of this and it's good the ACCC has decided to step in. I just suspect Google is the wrong target.

Monday, July 09, 2007

Ignoring Vista

Computer Reseller News tells of how many computer resellers and vendors, including Dell, are offering non-Vista systems and even ripping Vista off and replacing it with XP.

While I've been critical of Vista, the fact is that it is here and it will eventually be bigger than XP. Ignoring it is not an option if you work in general support.

So my mind boggles at the attitude of Jay Tipton, vice president of Technology Specialists, who is quoted as saying "Technology Specialists won't even run the operating system internally on any of its production systems because Tipton does not want his technicians taking time out of their day to "debug Vista.""

Apart from the obvious cheap shot that a business calling itself "technology specialists" is pretending the latest Microsoft operating system doesn't exist, the other question is how on Earth can Mr Tipton expect to support his customers when the inevitable happens.

I recall this was an issue when 98/ME was phased out for XP. At the time many, if not the majority, of suburban techs refused to support Windows NT/2000. I was telling those I spoke to that they had no choice if they wanted to stay in the business.

Most of them did stay in the business, but I suspect a lot of them still don't really understand Windows XP, let alone Vista.

This is another reason why computer techs need to have a training path similar to other trades like motor mechanics and hair dressers. Not only would this give techs better skills but it would also improve their image with consumers.

When you see comments like Mr Tipton's you can understand why many consumers are deeply worried when they have to ring the local computer tech.

Sunday, July 08, 2007

Strangling the data flow

One of the things that's always rankled me about the Australian broadband market is the way the big operators are determined to strangle demand in order to make a quick buck.

Alan Kohler picks up this point in his Fairfax column, he found he started copping a fat bill when his kids discovered the joys of Limewire.

I've always maintained these "cheap" Telstra Bigpond plans are dangerous as they mean you are writing a blank cheque to Telstra. A cheque that almost certainly will be cashed when someone in your family discovers file sharing or video downloads.

But that risk is a smaller issue. A slightly bigger issue is how the Internet providers have messed the whole market up by offering too many complex plans. My guess this was inevitable given theboth Telco and IT industries love complexity and the Internet combines the worst of the two.

The biggest issue of all though is how the providers use data pricing and limits to strangle demand.

While Telstra is the obvious bad guy with it's consumer and wholesale pricing policies, Alan identifies the underseas cable operators as the biggest villains. Despite their only operating at 25% capacity, their charges are outrageous.

In my view, this is where the problem really lies. We can roll out as many high speed domestic networks as we like, we can put WiMax in every village, ADSL 2 in every phone exchange and fibre to every home but it makes a spit of difference is the data is strangled under the Pacific.

This is a classic example of how successive Federal governments have misunderstood communications.

The Keating government screwed up seriously when they allowed the old Overseas Telecommuncations Corporation to merge with Telecom to create Telstra.

They then compounded the problem by creating a Telstra competitor out of a bunch of cronies who were more interested in building high rise monuments to themselves rather than provide a real alternative for Australian telcoms consumers.

The following Howard government further compounded the problem by privatising Telstra and allowing the existing operators to consolidate their power.

One of the beauties of the capitalist system is that big profits attract competitors. Telstra is planning to build it's own cable to Hawaii and PIPE networks has their own proposal as well.

I hope the proposal by PIPE networks get up. The Telstra cable will only increase their dominance and the only surprise is that taken Telstra so long to get around to do this. We need as much competition as possible in the market place.

It would be good to see the Federal and state governments support the PIPE proposal by committing to using some of their capacity. It seems to me the economics of the PIPE proposal rely on the goodwill of the smaller Internet Service Providers which is a risky proposition at best.

Hopefully our leaders will see the benefits and importance of these proposals.

Friday, July 06, 2007

Charging for drivers and upgrades

A little storm was whipped at ZDNet about Creative charging for ALchemy software. This raises the question of when is it fair for a vendor to charge for an upgrade.

The initial ZDNet report was that Creative were charging for software to run their popular Audigy sound cards. Ed Bott's later report clarified the charge is actually for the ALchemy software which replaces features Microsoft have dropped with Vista, the drivers themselves are free but don't have the advanced gaming features.

To be fair to Creative, they are at least supporting their product. Plenty of other hardware vendors have told customers that it's tough luck, they won't support Vista for relatively new equipment.

I'm on Creative's side on this. Creative have obviously spent money and time developing the software so it runs on Vista. As a businessman I think they deserve being paid, although as a customer I wouldn't be happy.

The real problem for vendors is that with dramatically reduced margins, it's difficult to provide service like this. You certainly can't afford to build it into the profit from selling the original card.

This is the downside of cheap hardware and software. The cheaper it gets, the harder it is for vendors to supply after sales service.

One of the biggest challenges for the IT industry is educating customers that you can have a cheap product, but after sales support is going to cost.

Of course you don't have to do this if you don't compete at the cheap end of the market. But that's another issue.

Thursday, July 05, 2007

The real cost of Macs

Australian Personal Computer makes the point that Macs resale value makes them a better investment than Windows systems.

The fact there's a healthy second hand market for Macs 0is no surprise to anyone working in the industry. For years, you've been able to sell your two or three year old Mac for a decent price. While PCs are just run until they can run no more.

As Danny Gorog points out, this makes the Mac more attractive as an investment.

Most consumers and small business probably don't care; they'll just run it until it fails, then buy a new one and leave the old one sitting in a closet somewhere.

For a canny business owner, this is probably a good way of managing your IT investments. It's just a shame many business owners don't think this way.

Wednesday, July 04, 2007

Confusing the masses

Not content with confusing us with five different versions of Vista, Microsoft throw seven different versions of Office into the mix.

In answering a question in our sister site, IT Queries, I was looking at the Microsoft Office website and the list of different versions of MS Office 2007.

What a mess!

On top of having the seven different types, there's also the added fun of OEM and boxed product licenses.

I won't even mention the Value Licensing scheme for larger organisations which is so complex even those who follow Microsoft for a living find themselves falling into a coma when trying to explain it.

Microsoft really need to look closely at this complexity. It too hard for professionals, let alone consumers and small businesses.

Software companies have to get it through their heads that all the messages they put out about software piracy are pointless if no-one can understand the rules.

Monday, July 02, 2007

Eating your own dog food

I've always liked the term "eating your own dog food". While it's a computer industry term for using your own software on yourself it could apply to any to any industry. There's a few executives at Telstra, Coles Myer and Hewlett Packard I'd love to see with a face full of Pal.

A good example of what happens when you don't try your own product is when you launch a crook website. I had just such an experience today.

As part of our new IT Queries website, I've been exploring advertising options. Yesterday I spent 45 minutes filling in a sign up form for a division of a multinational. So imagine my irritation when I receive a confirmation email telling me to click on a non-existent hyperlink to proceed with my application.

At least they have a phone number, unlike many others these days. So I call them first thing this morning to see if it has been processed.

The girl that answered the phone was charming and delightful, except she didn't speak English very well and had trouble even taking my name, let alone figuring out my problem. She transferred me to the webmaster.

Again he was very helpful and friendly. The website's under construction he said so there might be a few hiccups.

That's nice, but I really didn't feel like waiting a fortnight and then spending another 45 minutes so I explain this and ask to speak to someone who can confirm my application for the privilege of becoming one of their partners has been approved.

"Oh you'll have to speak the general manager for that"

Huh! WTF?!? "Okay, can you put me through?"

"Oh no, he's not in at the moment. I'll take your details and get him to call you back."

Now, as a small business owner I respect and admire other businesses that keep their management structures flat, but the GM of a division of a multinational dealing with a straightforward issue like this is a bit strange.

The real lessons here are that if you are going to automate your processes, make them simple and concise: Someone more pig headed and stubborn than me would have given up well before 45 minutes.

The other lesson is not to launch a product when the website isn't ready. This post is being written at the beginning of July 2007, the product was launched in October 2006. The website should have been tested and ready a year ago.

Another lesson is to test your systems. Sending a confirmation email with a missing or inoperative link is sloppy to say the least.

I believe every manager of every organisation should have to eat their own dog food. In this case it would have saved me a lot of wasted time. I wonder how many potentially profitable "partners" these guys have lost.

No advantage to Vista

Computerworld reports Gartner Research is finding there is no "real competitive advantage" in upgrading to Vista.

Unlike Gartner research director, Martin Gilliland, we don't find this surprising at all. No business, big or small, should be plunging into a new operating system without doing their homework first. For a large company, that's a lot of homework.

Our experience with Vista has been largely positive apart from some really irritating UAC issues and so far we've seen few issues with spyware.

For an upgrade to Vista, we'd be suggesting a new machine is the way to go. This means at least $1,500 when you include the machine, Office 2007 and Vista Business. That's not a minor investment across a dozen machines, let alone ten thousand and we're not including the migration costs.

While Vista will become common in small business over the next year, there's no real reason to junk your existing XP machines.

Thursday, June 28, 2007

Inefficiencies

http://www.arnnet.com.au/index.php?id=198599350&eid=-100

Wednesday, June 27, 2007

The end of the big, ugly operating system

Australian Reseller News has a strange opinion piece on the end of the big, monster operating systems like OS X and Windows Vista.

Ephraim Schwartz thinks "our grandchildren will be using discreet, unobtrusive operating systems that will be invisible to the naked eye." I have news for him, we're using them already in mobile phones, DVD players and motor cars, just to name three of many thousands of items.

The small, compact and reliable OS is with us it's just that they are discreet and unobtrusive.

Comparing computers and operating systems to cars is a valid thing to do. I do it all the time because the analogy works well.

Unfortunately, Ephraim makes the comparison of today's operating system to a guy who built his garage in 1959 to fit a monster Cadillac of the ear. The problem with that analogy is such a garage would fit a modern SUV just nicely.

There's no doubt operating systems should go on a diet and I think that will happen as the current crop, particularly XP and Vista, are collapsing under their own weight.

They may well be simpler and have a smaller footprint but it's unlikely they'll have less features. This is what the market wants in an operating system. I don't think it's likely to change.

Tuesday, June 26, 2007

Vista installation blues

Andy Pennell had a terrible experience installing Microsoft Vista. It started when he couldn't open the box, continued with a failed BIOS upgrade to his motherboard (luckily covered by warranty) and finally concluded with "My particular hardware cannot install Vista, and no-one knows why".

So what you might ask? Well Andy Pennell is a software developer at Microsoft.

What this shows is even skilled, well connected people like Andy struggle with operating system upgrades.

This is why we recommend consumers DON'T install Vista on a machine running XP. If the system is running well then it should be left alone, if it isn't running well then installing a new operating usually makes the problem worse.

If you want Vista, then buy a new system.

Thursday, June 21, 2007

Securing Internet Explorer

ZD Net runs through the instructions for securing Internet Explorer from exploits and drive by downloads. The advice largely relies on disabling Active Scripting which is fair enough as this is way most malware gets on. The problem with this advice is that takes most functionality from IE.

Many secure sites, such as banks and stockbrokers, need Active Scripting to run properly. This is why those sites often don't work with Firefox, Safari or Opera.

To get around this, the advice is to add the secure sites you want to your trusted user list. There's a number of problems with this.

The first is many sites aren't consistent in their domain names. Your bank's online transaction site might have a completely different address to their main name. To further complicate things, the login page might be completely different to everything else.

A further problem is the risk that even trusted sites can be compromised. The Sydney Opera House fell to this and a number of Italian sites have hacked recently. So you can't necessarily trust trusted sites.

The final, and telling blow, to this advice is that Active X is not the only way to get infected. If you've been infected through another avenue, then you'll be in trouble anyway. What's worse some of the better spyware is watching as you type your password.

The best solution in my view is to surf the net in a restricted user profile. That is, a profile that doesn't have the rights to change the system settings or install anything new.

Spyware is the biggest problem facing Windows users. The reason for this is the total access most users have as administrators. By running as a limited user, you stop those problems.

Monday, June 18, 2007

Turn off the TV

It's not surprising Australian TV viewers are turning off the commercial TV stations. The Daily Telegraph reports viewers are down 7% this year.

Given the arrogance of the Australian commercial TV networks, this isn't surprising. They have kicked around their viewers for too long and people are getting the message.

Here's a few examples of how they treat viewers badly.

1. Slow bringing good product to market. The top US TV shows arrive on Australian screens at least one season late. This might have been alright in 1973, but viewers know better today.

2. Crap Australian product. Too little homegrown product and what does get to air is often rubbish. Licensed version of Big Brother and other pointless tripe just turns viewers off, even the dimwits who watch this garbage eventually get bored with the same thing.

3. Too many repeats. Now, I enjoy The Simpsons, but honestly Channel Ten just how many times can you flog repeats of poor Bart?

4. Bizarre programming decisions. When the good stuff finally arrives from the US it gets scheduled late at night. This wouldn't be so bad if you could record it, but the networks make that hard by showing the episodes out of order and a different times each week.

5. Inconsistent program times. You can't record these programs because no-one has any idea when the show will go to air next week. It might be 1.00am this Tuesday and 11.45pm the following Monday.

6. Late running programs. Even if you do figure out when the program is scheduled to be on, you may well find it's not anyway. Peak time shows commonly run late, by midnight shows can be up to an hour out.

7. Out of order shows. This has to be the ultimate insult. You get a TV series like the Sopranos and show it out of order. What's worse, you sometimes drop in episodes from a previous series just to make sure everyone is confused.

8. The death of late night TV. No-one expects good television at 3am. But the "interactive quiz shows" that encourage morons to waste their pensions on texting premium call lines are beyond an insult.

9. The death of the ad break. The crucial moment in CSI arrives where you find whodunnit. As the music rises to a climax and the DA prepares to give their denouement, Rove McManus's head bounces across the bottom the screen to announce his interview with Paris Hilton tomorrow night.

10. Sheer incompetence. Channel Seven paid over $300 million Australian dollars for the rights to show half the Australian Football League games. They promptly gave the good ones to the Pay-TV networks and scheduled the remaining ones in a way that managed to irritate every Aussie Rules fan in the country and cause a major clash with their coverage of the V8 Supercars.

The latter point probably explains why Pay-TV subscriptions are up. Half the country's Aussie Rules fans are either signing up or about to. With this Channel Seven also managed to singlehandedly sink the Save My Sport campaign. Most Aussie sports fans now know free to air sport means "near live" or "we might show it next Wednesday at 3.00am after Hot Dogs super text quiz."

There's a simple answer to criticism of TV: Turn the thing off.

I have for the above reasons: The only commercial TV I now watch is the 5pm news (it suits our family routine) and the odd bit of sport. It seems I'm not the only one.

Dell listen and admit mistakes!

The Direct2Dell blog is an good insight into the workings and thinking of Dell. So today's blog entry about the mistakes Dell have made with trying to close down a consumerist story is a very interesting read.

Dell clearly made a mistake by letting their lawyers send off a take down demand without supervision. Experience shows take down demands only draw attention to the message. In my view, every lawyers letter should be checked by relevant managers who should ask "how does this demand help the business".

That said, the blog is a good apology for it and an interesting look at Dell's thinking and strategy.

The original consumerist article came about because Dell have too many channels offering too many products. So it's not a surprise a canny buyer can exploit loopholes and inconsistencies to get a better deal.

Dell's current set up just confuses customers. I have to say I'm often confused when I visit their website. So the point made in the Direct2Dell blog entry that small business products will be different to their Home and Home Office offerings is important.

I'd actually like to see them drop the "Home and Home Office" label, put the home office products in with small business and offer systems purely for home.

One of the banes of my life are home business owners who allow their home office computer to be used as a home computer by the kids. We need to get the message out to those who work from home that letting the kids use your business computer is as dumb as letting the kids drive your car.

It's good to see, though that Dell are listening. You just hope they won't let their legal counsel to go off half-cocked in future.

Dell and Nokia rise to meet the iPhone

The story that Dell are going to offer unlocked Nokia mobiles is an interesting counterpoint to the Apple iPhone's release.

It seems to me Nokia and Dell are using their comparative strengths to counter Apple and their phone. The biggest advantage for the Dell-Nokia partnership is that the phones won't be locked to any phone company. This puts the iPhone at a huge disadvantage with many early adopters.

This won't kill the iPhone though. One of the attractions of the Mac is "it just works" and it indeed it does for the typical user. If Apple can do the same thing with the iPhone then the customers that just want their phones to work will be quite happy sticking with whoever Apple wants to tie their service to.

While I'm an iPhone skeptic, one thing is for sure: It's going to shake up the existing mobile industry. This Dell-Nokia deal looks like the first reaction. We'll no doubt see more of this in the future.

Sunday, June 17, 2007

Sensis to sell The Trading Post

The Australian Newsagency Blog picks up the news that Sensis might be selling the Trading Post.

This isn't before time. When Sensis purchased it, I was baffled as to how a classified listing service like the Trading Post would fit with the monopoly Yellow Pages business. It's difficult to think of a sector more different than Sensis' core business.

As it turns out, it looks like Trading Post hasn't delivered, or rather Sensis hasn't found those synergies. With the rise of free listing services like Craigslist and auction sites like Ebay, the Trading Post was always going to struggle anyway.

I say it's difficult to think of a business more alien to Sensis, but they did find one. They decided to become a competitor of ours by buying Invizage.

To say the Home and small business IT support industry is alien to Sensis is an understatement. The industry is fragmented and even players like Invizage wouldn't have 5% of the market. This on it's own would be alien to Sensis' management.

Selling and providing IT services is even more different to Sensis' Yellow Pages business. I actually feel sorry for the Sensis managers who found themselves having to get their heads around the cultural differences.

If the Trading Post is up for sale, then Invizage can't be far behind. Hopefully Sensis will stick to it's knitting of the Yellow Pages and find ways of leveraging the massive market power they currently have in this sector.

Smashing Keyboards

I smashed a really good keyboard on Friday thanks to a customer.

Last week, I visited a home where their wireless network was down. I did good job. Before leaving, I explained that wireless networks were unreliable and it might be that we have to look at alternatives.

The following morning she rings and gives me an earful. I was "out of my depth", "incompetent" and didn't follow her instructions.

I smashed the keyboard after she hung up.

The sad thing is I walked out of that job thinking I did well.

This episode made me think about why this industry is so difficult. Out of a hundred customers, you'll get twenty call backs about other problems. Of that twenty, five will be angry and rude like the lady on Friday.

You'd be lucky to get one in a hundred thank you for a good job.

I'd suggest the biggest cause of burn out in the IT industry is this constant battering on a tech's self esteem. Getting shot down like on Friday really hurts.

Multiple listing in the Yellow Pages

Smarthouse News has a grumble about Audio Visual retailers having to list in two Yellow Pages categories. They should be so lucky as IT support businesses have the luxury of listing in seven different categories.

Computer equipment-hardware
Computer equipment-home &/or small business
Computer equipment- Installation & networking
Computer Equipment - Repairs, service & upgrades
Computer Equipment - Supplies
Computer systems consultants
Computers-Technical support

Now that's a nice little earner for Yellow Pages. Given a Yellow Pages listing is probably the single most expensive marketing expense for a small business asking to list in SEVEN categories is prohibitive and probably impossible.