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Blinded by Vista Sales Numbers

Posted on August 18, 2008 ·

This is one of those rare occasions when I can pull up an old post, dust it off,  and voila! – I’m done.  Yes, I am lazy – but hey, I can’t help, this is one of those “I’ve told you” moments.   Here’s what I wrote last year:

Time for a reality check. Product quality, customer satisfaction and market success have very little to do with each other when you have a monopoly.

The Vista problems are real, they are not fantasies created by bloggers. But how exactly are consumers supposed to revolt? They still need computers, and despite Apple’s respectable growth, they still represent a fraction of the consumer PC market. Try to buy a PC today, it’s hard to NOT end up with Vista (even I got one)

Customer demand for Vista? No, it’s customer demand for computers, in a market with no choice. I’m not “making this up”, Donna. It’s all in Microsoft’s 10-Q:

…Client revenue growth correlates with the growth of purchases of PCs from OEMs that pre-install versions of Windows operating systems because the OEM channel accounts for approximately 80% of total Client revenue. The differences between unit growth rates and revenue growth rates from year to year are affected by changes in the mix of OEM Windows operating systems licensed with premium edition operating systems as a percentage of total …

The increased “demand” for premium versions comes from another well-documented fact, i.e. Microsoft’s new segmentation, castrating Vista Home Basic and essentially making Home Premium the equivalent of XP Home – a hidden price increase, by any measure.

A true measure of “demand” for Vista would be corporate licenses and retail sales, and both are behind. But not for long: eventually, after the release of SP1 corporate IT will give in, too – who wants to be “left behind”, after all.

Today InfoWorld burst the Vista Sales Bubble (if you ask me, there never has been a bubble, but that’s another matter):  35 percent of mainly enterprise-class users “downgrade” their Vista systems to XP.

The numbers speak for themselves, let me just add this: next time you look at Vista Sales figures, remember: these customers did not have the choice to buy XP directly, they had to get Vista on their systems, then “downgrade” (upgrade, if you ask me) to XP.    But by then their transaction is booked as a Vista purchase!

Vista sales figures are inflated, these transactions were not real purchases, just ransom paid to the monopolist for the privilege to use the OS that actually works- XP.

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What Are a Million Users Worth? Zoho Thinks a Lot.

Posted on August 6, 2008 ·

The first time I wrote about Zoho – the “Safer Office” they had less than 50 thousand users – not a lot for a web service. Today they announced having a million users – and that’s just direct Zoho users, not including those served by Baihui in China, or any other white label providers.  Back then they had 3 products: Writer, Sheet and CRM – today the list includes 17 Applications, 5 Add-ons and 4 Utilities.

The chart below shows steady growth in monthly new registrations – the sudden spike in May is the effect of opening Zoho Apps to users with Google and Yahoo accounts.

Now, you may ask, what are a million users worth in the world of freebies?   Web startups do go out of business not being able to monetize their popularity.  Zoho’s story has been that Adventnet, the parent company with “boring” but reliable, cash-cow network management products is financing the “Zoho experience”.  Well, here’s an update to that story: the Zoho brand itself has been self-sustaining for a while now.

While Zoho does not disclose numbers – it’s their prerogative, being a closely held private company – they apparently have paying users.  The number one revenue generator is Zoho CRM, that they were asked to abandon in order to be allowed to join Salesforce.com’s  Appexchange.  Apparently they made the right decision, and instead of being relegated to providing an Office Suite only, they keep on adding business applications like Projects, Invoice, People, Meeting..etc.  Incidentally, these apps are where Zoho makes their money.

The free Office and other apps with the million-or-so users are Zoho’s main marketing vehicle.  As we often discussed here, they don’t have a Sales force, in fact they don’t “sell” as such: the products sell themselves.  This trend will likely increase as Zoho now increasingly focuses on integrating existing services rather then just pumping out new ones.

That is not to say that the Office Suite can’t became a source of significant revenue, but perhaps from a less expected source: while Zoho strives to become the outsourced IT department for small businesses (SMB) they have seen a flurry of large enterprise inquiries recently.  I am aware of ongoing projects with customers that even enterprise software giants SAP or Oracle would consider strategic, key accounts – let alone Microsoft. smile_wink

As for the one millionth user: Zoho CRM user Dean Detton of Prestige Automation Inc has been invited to celebrate at the Zoho Party during the Office 2.0 Conference on September 4th.

The address for the party is: 1 Cloud Avenue.  See you there! martini

(Disclaimer: I am an Advisor to Zoho)

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Does UPS Have Deep Systematic Problems?

Posted on July 26, 2008 ·

(Updated… a lot)
Recently I’ve seen signs that may suggest the occasional UPS glitches are not-so-occasional, and there may be deeper systematic problems with our favorite delivery service.   The brown truck driver is as friendly as he ever was – it’s the systems that appear to s***w customers left and right.

First there was the unreasonable delay within California, then the case of the “lost” packages, a systems failure compounded by rude customer service:

  • Four out of five packages I dropped off at the same UPS store disappeared – i.e. they were never entered in UPS’s tracking system.
  • Since the system is always right, customer service accused me of never having shipped them in the first place, then of not applying the labels properly.
  • When the recipient, Shoebuy.com, a major UPS customer initiated a trace, the previously non-existent packages miraculously all showed up at the destination UPS center, without any indication how they got there.

The above example may not be rare, as demonstrated by this commenter:

Texas-to-Texas package disappeared (was never scanned in) and 30 hours later showed up in Alabama.  UPS has no clue how it got there.

Finally, my third shipping experience within a month:  I’m expecting a Sony Reader sent from NY to CA.  It was originally due to arrive on 7/28 but now I see it’d rescheduled for 7/29.  A one-day delay is not the end of the world, until you look at the details:

-The package arrived at Vernon, CA Thursday, 7/24.

-Next arrival scan is in Los Angeles, Friday 7/25 evening. (Great progress!)

Now, I don’t know why it sat a full day virtually in the same place, but even with this delay, if it’s in Los Angeles on Friday, why on Earth can I not receive it on Monday in the San Francisco Bay Area?   Why the Tuesday delivery?  That’s 5 days within California!

Admittedly my statistical sample is rather small, but 3 failures out of 3 deliveries within a months suggests these may not have been accidents, UPS may just have more serious logistic / system problems than they care to admit.

Update: Rob’s story below is so shocking, anything I’ve experienced pails in comparison.  You just HAVE to read it in full.

Update #2: On second thought, it’s a story worth bringing it up to here in full:

I’ve got one for you….

My sister-in-law has MS and receives very expensive injections delivered once a month, packed in dry ice because it has to stay refrigerated.

My sister-in-law lives with her mother. Well, her mother had decided to cancel her Dish Network subscription. Dish told her to put all of the hardware in a box and they would pay to ship it back to them via UPS. Only problem was, there was no hardware to return since she had already done that through the retail store. Dish claims that they notified UPS to cancel the pick-up…given the rest of this debacle, I’m inclined to agree with them.

Meanwhile, my sister-in-law gets her medication delivered via FedEx (because there’s no way UPS could get it there in time before the ice pack failed). FedEx leaves the package containing the medication on the front porch.

Now, UPS shows up a little bit later and TAKES THE WRONG PACKAGE. Apparently, the instruction to cancel the pickup never made it to the driver. The package they took was clearly in a FedEx box, with FedEx shipping labels, etc. There were no UPS shipping labels anywhere. UPS essentially stole her medications right off of their porch.

You would think, given their commercials about “delivery intercept”…you know, “there’s a problem with the gizmos” that it would be a simple matter to stop the package and turn it around….NOPE. Their advice was to call FedEx (what the *&!@^ does FedEx have to do with it and to call the pharmacy to get a replacement). They said that it was en route to Dish Network and they couldn’t stop it, but that Dish could send it back (which Dish would have to pay for…how is it Dish’s problem?). The problem, which was explained to them, is that by the time all that happens, the medications will have reached ambient temperatures and will be useless and that my sister’s insurance wont pay for the $1500 meds twice in one month.

They eventually rectified the situation by reimbursing my sister the money, but only after she paid out of pocket to get the replacements and after spending countless hours on the phone with UPS customer service.

What can Brown do for you? I don’t know, but I know what I’d like to do to brown….

Update (7/29): Today is the rescheduled delivery date.  The latest scan info shows yesterday my package was in Sacramento, 90 miles NE of me (remember, it was coming from LA, South!).  I smell another re-schedule 🙁

Update (7/29 evening): UPS just confirmed they really have no clue where the package is and recommended I contact the sender, as only they can initiate a trace.  Deja vu 🙁

Update (7/30): The sender initiated a trace and the expected delivery date field completely disappeared.  A few hours later new scan information showed up:  Out for delivery.   This means I should get it today. Hooray!  Except… the package is in Vancouver, WA, and I am in California.   If UPS keeps on randomly driving around the West Coast, they might just accidentally find me one day 🙁

Update (7/30):  I called UPS with my concern that it cannot possibly be “out for delivery” from Vancouver, WA.  They confirmed I should ignore the status, the package indeed will find my way to CA today.  Yeah, right.   A few hours later someone woke up.  Now delivery is rescheduled for the third time, adding two more days, with this status message:

VANCOUVER,
WA,  US		 07/30/2008 10:43 A.M. INCORRECT ROUTING AT UPS FACILITY / THE PACKAGE WAS MISSORTED AT THE HUB. IT HAS BEEN REROUTED TO THE CORRECT DESTINATION SITE
07/30/2008 7:25 A.M. OUT FOR DELIVERY

This is beyond pathetic…

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Earthquakes, Google Juice and How Content Beats AdWords

Posted on July 23, 2008 ·

I often find out what’s happening in the world just be looking at the keyword activity in my blog referral log.  Like today, when I received readers looking for news on the earthquake in Japan.  This is actually sad, I feel bad for people looking for real info and getting “hijacked” – I am clearly not an earthquake expert, not even an authority on the subject.  All I did was point out how Twitter had been the first to report on several quakes in China and Japan, long before the major news-wires, and miraculously (and unfortunately) my post became the #1 hit for the Japan earthquake search on Google for a while, even preceding Japan’s Meteorogical Agency, which should be the ultimate source for such information.

This isn’t anything new, I’ve seen some of my posts get into top Google positions before – but it’s more understandable when I write about a more obscure subject, or a startup nobody else covers… like Brainkeeper,  where my post was #1 for months, preceding the company’s own site.   Being #2 for the fairly generic search on saas very small business is a bit more surprising, and #1 for Microsoft Outlook Sluggish is certainly rather unexpected.   Yahoo, for a change, lists my fairly old post as #1 for the very generic search term Startup Executives, and how on Earth did I get to dominate the igoogle for google apps search? smile_embaressed

Recently I’ve noticed it almost doesn’t matter what I write about, I can get a premium position for certain relevant keywords. As much as I am enjoying it (hey, who doesn’t like Google Juice), there’s something fundamentally wrong with this system.  I think blogs are somewhat overrated, and perhaps individual posts should be weighted on their own merits, not the Google Juice of the main blog itself.

But there’s another conclusion we should draw here. Content is really king, to the extent that it can compete with advertising. Businesses should take notice: you can pay for AdWords, or get to the top by developing your own content – and organic hits are worth more than paid ads. smile_shades

There’s another side of the coin here: if you don’t develop your own content, someone else will – and you may not be happy with the results.   I’m not sure UPS enjoys seeing my post immediately under their site for the google search  UPS Tracking…

So once again: the old adage “Content is King” has got a new meaning.  I’ve been contemplating this for a while, and am getting ready to announce a new initiative in the next few weeks.

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Brick-and-Mortar Stores Need Uninformed Customers

Posted on July 19, 2008 ·

$49.99

$5.36

I moved my printer and need a longer USB cable.  Options:

– Drive to Best Buy, hoping they have the 15ft cable in store.  Cost: $49.99 + gas + an hour of my time.

– Order on eBay. Cost: $5.36, shipping included + 5 minutes research and order.

Oh, yes, I am not getting the gold-plated version.  Who needs it anyway?

Brick-and-mortar stores really need uniformed customers to survive.

Update: To Save Gas, Shoppers Stay Home and Click – reports The New York Times.

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AT&Tease

Posted on July 18, 2008 ·

Again…

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Sync Update: Syncplicity, Dropbox, Windows Live (?) Mesh

Posted on July 17, 2008 ·

Quick update to my recent Syncplicity review:

In the meantime Microsoft’s Windows Live Mesh opened to the public, combining synhcronization and backup – also competing with their own Foldershare.  Now a word on what will happen to Foldershare, but I guess the writing is on the wall.  That said,  Live Mesh just failed for me the second time, so I can’t really recommend it.

Another service, Dropbox is getting a lot of buzz nowadays, largely to a smart theme of giving out limited numbers of beta invitations.  Apparently artificially created shortage is good marketing, bloggers LOVE being able to give away 10 or so invites…

Dropbox has one advantage over Syncplicity: it’s multi-platform, including Apple’s OS X and Linux, whereas Syncplicity is Windows only for now.  But that’s where it ends: it has less features (forget Web Apps integration, e.g. Google, Zoho, Scribd, Picnik), and has what I consider a huge flaw:  you have to drop your files into a dedicated folder to be synchronized.   That may be reasonable if you want to collaborate on a limited set of files, but it simply does not resolve the “access to all my data anywhere, anytime” problem.  It’s certainly a show-stopper for me.

So if you’re waiting for a Dropbox invitation, you might as well try Syncplicity – you’ll love it.  And if you sign up here, you get 1G more, i.e. 3G of free storage instead of the standard 2G.

Update: I received a very good, constructive comment from Assaf, who pointed out this was a largely negative post.   In my mind this post is an extension of my original Syncplicity review, but now that I re-read it on it’s own, I agree with Assaf.  Please read my response here, that makes this post complete.

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Belgian Chocolate Online: Chocolaty Sweet Tale of How Poor Service Really Hurts Business

Posted on July 14, 2008 ·

Perhaps it all started with Jeff Jarvis’s Dell Hell.  Simple story: famous blogger gets poor service > blogs about it > company faces media backlash > company wakes up to social media, turns around > eventually Jarvis praises them as a Cluetrain business.

Then there’s Comcast: everyone’s love-to-hate cable company that now actively monitors Twitter for customer complaints in an effort to improve both their image and customer service.  These companies know something that many others still ignore:

Times have changed. Using blogs, Twitter, social networks one single unhappy customer can make a business look really bad.  Poor service is bad PR, which is very costly to undo. Good Customer Service is great  marketing.

Now here’s my story of an online retailer that’s about to learn these rules.

My Dad has diabetes, and he likes chocolate – not a good combo.smile_sad There’s hardly any choice in sugar-free chocolate, what’s available locally tastes like **** and is overpriced.   Eventually I found two (only !) online sources that sell Milka, his favorite brand.  I ended up ordering from Belgian Chocolate Online,  (www.chocolat.com,  www.chocolatesimports.com) owned buy CandyWorld, USA.   The site claims they ship the day after the order is placed, yet mine was only sent 9 days later, after I inquired.  The delay was actually reasonable, due to a heat-wave, but shouldn’t they notify customers?

But the real surprise came a week later, when I received a large box  of almost-expired chocolate.  True, it had a few weeks left, but given the economics of shipping, I bought 40 bars, i.e. 4 kilos, or close to 9 lbs.  I don’t know about you, but my Dad certainly does not eat that much in 4 weeks…

Two of my email complaints were left unanswered, so a week later, by the third email I was a bit antsy:

Dear Customer Service,
I don’t get it. Is your solution to Customer Service issues to not respond at all?   I’d like to know if you intend to replace the old product with fresh one, or send  refund.  This is my last request, if you continue to ignore me, I will pursue this on my own.

Finally they answered (emphasis mine):

Dear Customer:

We are not ignoring any emails. We are helping customers placing their orders or who really need customer’s service. We can’t help you in an expiration date problem that you do not like and which isn’t a problem.

The chocolates you bought are still not expired and we do not see why to replace or to refund. The expiration date is not the date for consumption, but a date to sell. We do NOT sell any chocolates with an expired date.

Ouch!  Who really need customer service… I’ve just spent $130 on old product and I don’t qualify for attention.  Expiration date is not a problem… although this obviously sounded baloney, I wanted confirmation, so I contacted Kraft Foods, Milka’s parent company, who responded within a day:

The product should be consumed by this date. We cannot assure freshness after that date because the taste and texture may have deteriorated.

(Side comment: talk about the power of brands … yes, Milka is a popular brand in Europe, and Milka is owned by Kraft, by can you imagine asking for Kraft Chocolate?smile_wink)

Anyway, I am confirmed to be right about the expiry date, and  Belgian Chocolate Online’s attempt to explain the problem was a lie .  They were right in one point though: technically, they did not sell expired chocolate.  Not until one day before expiry … then good luck trying to eat it all quickly.  It is common practice by groceries to deep-discount perishable goods a few weeks/months before expiry, and one can even find Milka chocolate on eBay at a  fraction of the original price – but eBay sellers disclose the shortened shelf-life, for fear of eBay ruling against them in a dispute.   I guess there is no such policing on the Wild, Wild Web.

Except… now every consumer has the means to get “noisy” about their problems.  I am no Jeff Jarvis, but CandyWorld USA is no Dell, either: I wouldn’t be surprised to see this post on the first page of several relevant Google searches (see update), and believe me, that will cost them a lot more than it would have cost to keep me happy.   Of course not everyone has a moderately well-read blog, but just about anyone can make noise on Twitter, and Get Satisfaction is another great resource to vent and get service.

In fact a combination of Twitter and Get Satisfaction was what brought me Comcast help a few months ago.  The attention I received from Comcast Executives from Philadelphia and here in California was quite amazing.  Comcast is becoming a hero for listening to customers on Twitter, and others follow. Southwest Airlines now even has a Chief Twitter Officer.

Are these examples PR acts or real customers service?  The individual complaints are resolved, for the customers involved, it’s real service.  But Twitter or not, the “loud” unhappy customers are still just a fraction for now – which is why companies can afford to go out of their way to satisfy them.

I trust that simple market mechanisms will force companies -large and small- to improve service in the long run.  The economics are simple:

  1. The PR damage (and potential loss of sales) caused by “noisy” individuals far exceeds the cost of helping them, so companies pull resources to put out these fires.
  2. Yet firefighting is costly, may work with dozens, hundreds of customers, but not all.
  3. Companies will reach a tipping point, where all the after-the-fact firefighting will become so costly, that it will actually be cheaper to train their support personnel and provide better service in the first place, thus the Twitter-heroism will decline.

We’ll all be better off after #3. smile_regular

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Update: Just as exptected: a few hours later this post is on the first page if you search for Belgian Chocolate Online,  and comes up first, before the vendor if you search for sugar-free Milka, which is how I found them in the first place.

Update (9/16):  Following the trail from my blog referrer log I’ve just discovered this post is now #1 on Google for the “milka chocolate marketing” search.  Oops… that can’t be good – for Milka.

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MyGallons.com – I Smell Something, and it Ain’t Gasoline

Posted on July 8, 2008 ·

I can’t believe all the positive reviews of MyGallons on decent blogs with sizeable readership… have we all become so naive as to believe anything that promises relief from the gasoline squeeze?

At least Mashable is doubtful, and Autoblog warns it may be a scam.  So what’s this all about?

A newly launched service that allows you to prepay for gas at today’s prices, then fill up your car using the MyGallons debit card at your locked-in price.  You pay an annual membership fee ranging between $30-$40, and $1.95 every time you reload the card.

Jeff Nolan looks at how this might (or not) work from the consumer / small business side, and concludes:

For this to work for consumers the bar is steep. First and foremost, you have to consume enough fuel to make the incremental cost savings exceed the fees you are paying, and because the savings you can achieve are a function of the time between when you load the card and then use it, well you have to pre-purchase a hell of a lot of fuel to get to the point where the price differential naturally widens.

I’m more in the other side, how is this to become a sustainable business?  After all, you’re locked-in price and debit card is only worth anything as long as the company that backs it up is still in business.

I could see the model work in a “normal” fluctuating market, where the price fluctuation, along with the membership fees and one-time charges all work out to the company’s benefit.   But in the current market with steadily climbing prices, their core business, “betting” on the gas price is a losing proposition, except for the membership fees, so they need a lot of longevity to stay solvent until they see gas prices decline.  They are either “loaded” and have huge credit, which I doubt, or will have to be very smart putting  the upfront customer payments to work: they have to find very lucrative short-term investments that grow faster than the gasoline index.

And when they see relief – i.e. gas prices start to drop – they will profit on existing deposits, but it’s also the end game: new deposits will dry up, as they have no business model for a declining market (customers can’t short the market).

But that’s long-term speculation, let’s focus on the immediate issues.   MyGallons  does not have a banking partner payment network to support their debit cards.  The Launch press release stated a week ago:

…the gas redemption program uses the Voyager fleet network, owned by US Bank, which is accepted at over 95% of gas stations nationwide.

As it turns out, they were only in negotiations with US Bank, which decided to pull out.  For this very reason the Better Business Bureau assigned MyGallons an F, their worst rating.   Not having a financial network has not stopped MyGallons from signing up new users, in fact, according to Founder, President Steve Verona, over 6,000 signed up in the first week.  Will the company be able to issue the debit cards?  The promise 4-6 weeks delivery, so that buys them some time.   The information on the website is still misleading:

MyGallons has learned that its prior vendor, GoGas Fleet, the reselling partner for US Bank’s Voyager Network, is no longer able to honor our agreement  [ there was no agreement! ] to provide its services to our members. MyGallons is currently in negotiations to team with one of the competing national payment networks to support our exciting program to ease the pain of rising gas prices.

Talk about Mr. Verona, different sources know his background quite differently.   The Miami Herald, his home paper:

“A former consultant for technology companies, Verona has been trading commodities and currencies since he was 13.”

The Los Angeles Times:

Verona, 39, has been involved in a string of companies including DB Net Ventures Inc. in Upper Darby, Pa.; Jewish Jeans Clothing in Columbus, Ohio; and an online store called Pursue Peace Clothing. Verona confirmed that he filed for personal bankruptcy in Ohio in 2001.

Oh, well, at least he gas relevant experience: bankruptcy proceedings.

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UPS: Tracking and Customer Service Failure

Posted on July 7, 2008 ·
Photo by William J.Image via Wikipedia

Recently I ranted about UPS’s delays and customer service level – oh, boy, little did I know then just how bad UPS Customer Service can really get.

Four out of five packages I dropped off at the same UPS store a 2 weeks ago still showed “Billing Information Received” status a week later.   In UPS lingo this means the shipping label was created, but the package was never received by the company.  There’s nothing to track, as far as UPS is concerned, the package really doesn’t exist.  This was what the Customer Service agent repeatedly told me anyway, further explaining that the only way  this could have happened if I either did not send the packages at all, or did not properly attach the labels.

Of course she did not have an explanation on how the fifth package safely arrived in the meantime – after all, I did not dropped them off at UPS according to her theory.  If it’s not in the system, it doesn’t exist. Only when I asked her if she was accusing me of lying did she change tone, and recommended we put a tracer on the lost packages. Since these were returns to ShoeBuy  using their return labels, they were considered the shipper, not me, so they had to initiate the trace.

ShoeBuy is a company with amazingly good Customer Service – since Zappos is often referred to as to epitome of Customer Service, let’s just say ShoeBuy is like Zappos, often with lower prices.smile_regular They picked up my email immediately, and they probably carry some weight with UPS, since the non-existent packages were found in no time.  The tracking information below tells the whole story:

The packages never entered UPS’s tracking system, there’s no sign whatsoever that I ever sent them from California, yet they miraculously showed up at the destination, ready for delivery upon ShoeBuy’s inquiry.  So much for the rock-solid tracking system…I understand the first step, i.e  a UPS store clerk forgetting to scan the received packages, which then got loaded on the truck anyway, but how were  4 packages then able to bypass all further stages of scanning?

But let’s finish this post on a positive note: it’s a story of good Customer Service, after all – just not by UPS.  ShoeBuy, upon finding what happened, immediately refunded my money, before they even received the packages from UPS.  Wow!  They know something about keeping customers happy.smile_regular

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