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Maybe you haven't noticed, but what is happening in the telecommunications market has a lot in common with the automotive industry.   Perhaps I believe this is so because I work in telecom and my brother works for an automotive company, but I don't think that's the only reason.  Here's why.

• Mergers, acquisitions, and buyouts everywhere.  Let's see....  Cisco alone has purchased 40 companies in the last five years.  Meanwhile car companies have been bought and sold, and bought and sold - Chrysler is a good example - owned by Daimler-Benz, then an investment company, and now Ferrari.
• The government has been "involved".  Broadband stimulus for the telcos (and perhaps governemnt help for what's left of Nortel?) "Cash for Clunkers" for the auto companies (along with multi-billion dollar bailouts for GM and Chrysler).
• Market changes wrought by new technology and customer requirements.  For telco - IP, wireless, Apple and the iPhone, Google.  For the auto companies - hybrid vehicles, in car systems - GPS, Ford/Microsoft "Sync", Bluetooth, MP3/iPod/iPhone connections - desire for quality and value.

What it all means to me is that telecommunication companies should take a look at Ford's plan for success - it seems to be working well.

1. Accelerate new product introduction - replace or refresh 70 to 90 percent of product lineups.  How many new products have arrived in telecom over the past 5 years?  Does anyone have plans to refresh to replace 70 to 90 percent of the product line - or just "make do" with the old stuff?
2. Reduce structural costs.  That could mean a more rapid transition to optical/IP networks and faster retirement of legacy PSTN/SONET-based technologies.  And say, wouldn't a refresh/replacement of back office systems get costs down?
3. Be careful about taking government money.  Ford  acquired private funds during the downturn, then spent the money on new products.  GM and Chrysler took the goverment money and have spent millions on financial advisers and supporting government bureaucracy.   For telecom, the question is:  "What real results have we seen from the broadband stimulus initiative?  How much longer will it be before we see any - if at all?"
4. Rollout new products to reduce product age by 20% by 2014.  What would that take for telecom to do the same?

The auto industry and telecommunications both have a long, rich history of success.  However, changing times means changing the business - significantly - to remain successful.  Telecom companies might look to Ford as a harbinger of doing business in a global, rapidly changing, economy.  That means investing in new products, reducing structural costs, and being careful to avoid government subsidies that hinder their abilities to capitalize on emerging market opportunities.

Toys, Toys, Toys

I love technology just about as much as anyone, but I'm beginning to wonder when one's ability to manage all of the inputs and outputs that technology provides will overload.  The result, of course, will be disaster.  Maybe not big disasters, but small disasters that will result in pain for many individuals and their families. 

Case in point.  On a recent road trip, I stopped to refill my car with gas.  Sitting on the other side of the bank of gas pumps was a pickup truck blaring rap tunes.  The loud music attracted my attention, but the driver didn't just have loud music in the truck.  He also had a DVD player with the screen pointed at him, a lapop open and working on the passenger seat, and a dashboard that was ringed in neon blue lights that flashed around and around the circumference of the instrument panel.  Wow, I thought, I hope he isn't driving that truck anywhere around me!

People are constantly driving their cars while talking on the phone, texting, surfing the web, using laptops, looking at maps generated by their GPS's, singing along with loud music, managing the behavior of their children - and now watching DVD's and enjoying lights that flash in their faces.  How many accidents will occur because we humans can no longer all of the inputs and outputs - and drive our cars as well.

You know, the more I think about it, the more I think it that it's time to surrender to technology.  Let's develop cars that can drive themselves - so we can phone, text, surf the web, use our laptops, sing along with the music, manage our kids, watch DVD's and enjoy light shows!  We'll all be safer on he road!

Baby Steps

I read IBM's "smart home" announcement today with interest (http://www.pcworld.com/article/185856/ibm_to_show_smart_home_devices.html).  But, frankly, I would have liked more.  Talking about linking media and "smart" thermostats isn't really earthshaking.  I have that in my home today.  And, the reality of what is currently available is, well, pretty basic.  But, there's a reason for that of course.

I think the conversation I had with the installer of my TXU "smart" thermostat (http://www.txu.com/residential/itherm_WebOffer.htm?WT.ac=DSMHP)tells the story well.  TXU currently offers homeowners, like myself, a thermostat that includes a wireless connection to your home wireless router and allows you to program it through the web and get reports regarding your energy useage.

The installer told me that when TXU started the program, they learned a lot as they went. 

• TXU didn't ask prospective customers simple questions like:  "Do you have a high speed Internet connection (DSL, Cable, Wireless) and wireless router with available Ethernet port?"  Instead, they asked customers if they had Internet access.  "Of course" answered a number of customers using dial up.  No high speed connection, no router - big problem.
• Many customers didn't know how to disable firewalls in their PCs and routers that got in the way of the thermostat's communication.  And, by the way, neither did the installers.  They're heating and cooling experts - not network "geeks".
• A number of customers got the thermostats simply to replace an old analog thermostat and have absolutely NO interest in using the web-based tools available to them.  Most of these folks hardly use a PC and could care less about the Internet.  (Yes, these people still exist!)
• Many installations took HOURS - up to 4 and 5 hours to install this relatively simple device!  (It took 20 minutes at my house.  I didn't need the "training" he was supposed to give me on how to use the web-based interface...it really was pretty darn simple!)  And, even then things didn't work.
• I have a friend (who is in the tech area by the way), who told me that she never HAS been able to get the thing to work at her house.

Therefore, I think that before the "smart home" takes off, companies that are in this market segment will have to:

• Not be afraid to ask prospective customers a fairly robust set of questions to make the installation process as painless as possible for both parties.  Better to be prepared than attempt installs that fail.
• Understand that not everyone is ready for the smart home - choose prospective customers carefully.
• Train installers in multiple technology facets.  These folks will have to know a bit about power, communications, PCs, applications, and media devices.  This will mean a pretty significant investment in training, but one that will pay dividends almost immediately.
• Make things SIMPLE.  The more complex everything is - the more chance there is for something to go wrong.  And, of course, if it's complex, most people won't take the time to figure out how to use it - it's just a waste of time to them!

So, we're just taking baby steps in the smart home arena right now - and we have a long way to go.  I don't think the technology itself will hold things up - but I do believe that without proper planning and training companies delving into this area could end up spending a lot of $$'s and having a lot of unhappy customers in the near term.