Monday, August 29, 2011

How to solve the economic crisis

The "economic crisis 2.0" is a popular theme in the media right now and most certainly this is something that everyone of us should be concerned about. Stockprices have been falling for months, GDP growth has slowed to zero, most western nations, businesses and households have debts that really cannot increase and China is fighting with inflation. The methods used to soften the "economic crisis 1.0" in 2008 cannot be used this time anymore. So what is the solution and what are the methods we can use this time?

The Reason
In order to find a solution for the crisis I would define the primary reason for it. It is a bit abstract, but nevertheless it is true. The reason any economic crisis is that the things we do and how we do them no longer maches the technological and social situation of the society. By this I mean the following:
- we overproduce some goods and services and underproduce others. This results in stores, businesses and factories being closed
- the skills of people and jobs desired do not match the needs of consumers. This results in unemployment.
For example the financial sector, that really does not create much value for the society, has grown unproportionally big and has to lay off thousands of employees now. On the other hand we could use a much bigger green energy sector that would produce the electricity needed after "Peak Oil" and German closure of nuclear powerplants.

The Solution
If you look at the abstract level then the solution for the crisis is actually easy. :-) Mostly because this crisis is caused by just the ordinary economic cycle and not by a natural or demografic shift like running out of oil, being hit by a meteorite, climate change or the population becoming too old. (Somoe of these will be the reasons for the next and much more serious economic crisis. Sorry for being pessimistic here. :-))
So the recipe to solve "the economic crisis 2.0" is that many of us must start to do something different or differently. We must reorganize the society a bit. But not much, probably just about 5-10%. :-) Some of us must change what we do, take a job on another field for example. Most of us should do our work more efficiently, work more or consume less. If enough people make change in their lives then the national economics will go to surplus again and the Western economies would be able to start paying back the debt to China.

The IT
...and here is where IT steps in. Information Technology has been the enabler for more than 50% of economic growth in the last 20 years and there is much more to gain from IT. Today the processes inside an organization are more or less supported by IT and the efficiency gains from implementing new IT systems is moderate (but they are there). The real "undiscovered territory" lies in the area of inter-organization information exchange. There are very little systems that support processes involving many organizations. Amadeus and IATA airline ticket booking systems can be described as an example here.

The brakes
The faster we reorganize the better. The faster "economic crisis 2.0" changes to "economic growth x.0" the better for all of us. But there are phenomenons that are making the necessary shift slower and agonizing:
- The mindset of people and the desire to continue doing the same thing, the same way and hoping to earn more by doing so. (...and this includes the financial innovators whose algorithmic trading can be blamed as being one of the reasons for economic crisis 1.0)
- Labour laws and trade unions who support the status quo and do not allow the necessary employment market changes to happen

and on the IT field:
- Exaggerated fears on data security. Data security analysis can close any IT initiative. One can always find a 0,00001% probability of a break in and close down a project that might bring 0,001% GDP growth.
- Lack of leaders and leading organizations who would build inter-company IT systems. These are difficult projects that might need even 5+ years of investing.

So lets get rid of these breakes, re-organize and change the crisis to a growth period..... until the 3.0.

Saturday, August 27, 2011

The "operating service" makes it easy for associations and foundations to create an e-service

The operating service is a totally new level of IT management service on the Baltic markets. Services more or less similar to this have been offered in the Scandinavian and Western markets, but in the Baltics Elion is one of the few companies capable of offering such a service. Elion is operating the E-waybill system for the Forest and Wood Industries Association. The E-waybill system is a huge innovation for timber logistics. But we can say that the way we set up the IT management model is almost as innovative.

Here is a small video presentation describing the differences between traditional hosting and the operating service. I will be giving a longer version of this presentation on 31.08 at the conference organized by the Estonian business newspaper Äripäev.

Saturday, August 20, 2011

IT providers and startups: Promote your country, city, company or service

If you have interesting and innovative news or analysis about IT trends, startups, enterpreneurship support programs from your country, city or company then I would be most happy to promote them on It would be interesting for other readers to know what is happening in the IT field in Romania, Hungary, Vilnius etc. and what kind of new IT, mobile or SaaS (Software as a Service) services will be conquering the world next.

In order to do so just send me an e-mail:

Thursday, August 18, 2011

Garage48 series - "just fun" becoming a movement

The Garage48 series of events is a very interesting phenomenon!
The idea of a Garage48 event is to gather different teams in one facility and let them develop an IT or a mobile service in 48 hours. The series originated from Estonia but has gone really global with next events planned in Tartu, Nairobi and Kampala. According to the business newspaper E24 the founders of Garage48 receive constantly invitations from all around the world to organize events in their city.

We in Elion are sponsoring Garage48 and will open our platforms to the events so that the teams can develop new services for example for our digital TV subscribers. We find this is a great way to implement open-innovation and co-operate with people outside the company.

As a great fan of startups and open innovation I can surely recommend Garage48 as a co-operation partner to established IT service providers and telecoms. This is one of the best ways to find ideas for new services and new business. So if you need new young enterpreneurs to help you discover new IT or mobile business then contact the Garage48 organizers!

Monday, August 15, 2011

Pilveraal poll shows: Android will rise and Windows Mobile has no chance

The poll on Pilveraal on mobile platforms closed and the results are clear:
85% of the voters think that Android will rise. Only 14% think Android will fall. 35% think that Windows Mobile will fall and none think it will rise. Regarding iOS the results are more uncertain with 35% voting for rise and 14% voting for fall.

Our predictions about the domination of platforms is more or less a self-fulfilling prophesy as we choose and promote platforms that we think will be dominant and abandon platforms that we think are without a future. Can we therefore predict that:
- Android's position on the smartphone market will be similar to Windows's position on the PC market
- iOS-s position will be similar to MacOS's and
- Windows Mobile will enjoy the same position on the smartphone market as Linux does on the PC market?

Monday, August 8, 2011

Amazon AWS and MS BPOS Ireland outage

Amazon AWS and Microsoft BPOS are experiencing major downtime on their Ireland sites. By now it is almost over and most of the service is up and running again according to the status report you can see here: AWS Service Health Dashboard. The reason to this outage was a lightning strike hiting a transformer. I have been in the IT services, datacenter and hosting business well over 10 years and my experience is:

- If you are an IT service provider and have an incident then the most important thing is to inform your customers. Sometimes it is even more important to focus on communication than to fixing the problem.

- By moving servers to hosting providers, centralized datacenters and even to the cloud-provider we concentrate risk and if something major goes wrong then more systems are affected. But this does not mean that moving to hosting or cloud provider means more downtime. Actually the opposite is true. The difference is that if Amazon or my employer Elion for example has an outage then it is all big news and everybody talks about it. If a mailserver of a company with 100 employees is down for 10 days every quarter then this will never make it to the headlines of newspapers.

By the way, does this incident reveal that Amazon and Microsoft host AWS and BPOS in the same datacenter facility? :-)

Saturday, August 6, 2011

The rise and fall of mobile platforms

There is a new poll up on Pilveraal about the rise and fall of mobile platforms. Please choose the options you think will happen by 2014! Will Android's popularity rise or fall? Will Windows come and beat the current dominants?

This is a self-fulfilling prophecy. If the majority of people think that some platform will rise in popularity then they prefer this platform when buying a new mobile and recommending a new phone to their friends. This in turn increases the popularity of the platform.
The same is true for the opposite of course.

Friday, August 5, 2011

IT education is getting more popular in Estonia

As E24 wrote in their recent article the number of applicants to the IT College rose significantly this year. The average number of candidates applying to one free scholarship was 3,96 last year rose to 5,35 this year even the number of free scholarships was risen by 10 places. The number of applications has risen to 207 from 60 in the year 2007.

According to IT colleges marketing director Sigrid Tammiste the main reason for increasing number of applications is the personal and direct marketing programs that IT college ran this year. The overall practical approach in their programs and the media coverage about the lack of IT specialists have also supported the popularity of IT education in Estonia.

I also did my small part and took part in the campaign of promoting IT education. I talked about the perspective of learning IT to high-school students. As a presenter I must say it was a very interesting and really challenging! The public was quite different from the one you have on seminars and conferences. Imagine the most monotonous and un-excited voice you have ever heard answering you "I will not go to learn IT.... because.... I don't know.... well because..... it is not interesting." after you have given a 15 minute agitation speech. :-) But as the results show, the campaign was useful and I am sure we did help high-school students choose IT. I would do it again next year as I strongly believe that IT and engineering overall is a very useful education.

Thursday, August 4, 2011

E-mail marketing solutions

In Elion we offer e-mail and homepage hosting service to business customers. From time to time we get inquiries from our customers who want to do e-mail marketing. Could you recommend what e-mail marketing tools are good in your opinion? Are there any Baltic or Nordic solutions for that? Any freeware solutions?

For newsletter I use GetResponse’s free and limited version. In my opinion GetResponse is good. There is an easily configurable form for registering e-mail addresses, the user experience is OK and there is a lot of newsletter statistics available. The only problem with GetResponse is their high price. I as a blogger would be ready to pay about 10,well maybe even 15-20 euros/year. $98 per year with maximum 250 subscribers is at least 4 times too much in my opinion.

Wednesday, August 3, 2011

Using social media in customer service

I am moderating the European innovation agencies taskforce analyzing the use of e-portals in the agencies. (Innovation agencies are for example Tekes-Finland, Enterprise Estonia, Vinnova-Sweden, Research Council of Norway)

One thing we analyzed in our work was the use of social media as a tool to interact with customers. The issues and results we encountered are general and relevant to all organizations so I hope you find this short summary useful.

The first thing to decide is what the organization wants to do with social media. There are four levels:
- Not to use social media
- "One way" communication
- Gathering feedback
- Two way communication and customer service.
I would argue based on the Estonian market that government institutions and innovation agencies are leading the way here. If for example the Estonian Police has a Facebook page to discuss general traffic and security issues then most businesses use social media primarily for marketing purposes only. There are only some companies who publish relevant information on social media, discuss, gather feedback and serve customers on Facebook for example. (My employer Elion among them. :-)) This situation is probably due to change, but as getting to level 4 means costs in the customer service department it will take some time. After all this would mean that someone must justify a budget for a specialist "spending time on Facebook". A challenge indeed!
By the way there are tools that can monitor socialmedia and internet and alert you if someone mentions your organization somewhere. This makes it possible to react and manage the discussions.

The second thing we analyzed was the tools and networks in use. In Western-Europe it seems that the global social tools - Facebook, Twitter, Youtube, LinkedIN - dominate. There is little room for local social networks.

The third thing an organization must decide is how much effort to put into social media: is it a hobby for some specialists or managers, whether to hire an editor or make interacting in social media someones role. Should an organization try to set up its own social network? I am sure that in the next five years there will be social media departments in all mid-size and big organizations.

An interesting challenge in using social media is how to get your employees actively involved. "How you make a programmer write a blog post?" The problem is that if you hire an editor or a social media specialist then they are not specialists in the services the organization offers and therefore cannot discuss about it.
But there are possibilities to solve this issue. The first thing to do is to communicate that "promoting the company on Google+ or Facebook is work and it is OK to do it on work time." The second thing to do is to find interesting topics for the employees to write about and if you have people who are excited about Java technology then they could discuss in the Java web-communities.
Many innovation organizations that we interviewed did not have this problem at all and surely this depends on the people working in the organization. Being humble is not a virtue anymore?! :-)

Related to the previous is the issue on whether the organization should have rules on what and how people can write publicly. There have been some cases where customer service personnel call the customers names on Facebook and get fired due to that. This kind of behavious should be prohibited of course. On the other hand if you create policies on what and how people can write about then you turn "exciting discussing" into "hard and boring work" and lose the initiative of people.
The practice in innovation agencies is that people are trusted and there are only some minor guidelines on what and how to write. I think this is a good idea in all organizations.

What would you want your service providers to do on social media?

Monday, August 1, 2011

Google+ or Facebook

The small poll that on shows that:
- 49% of readers think that the number of Google+ visitors will exceed the number of Facebook visitors in 2011 or 2012.
- 14% think that it will happen in 2013-2014
- and 35% think Facebook will remain more popular.

The current situation according to is that 1,46% of internet users visit and 44% visit Facebook.

I visit both of them on daily bases. How about you?