Category: News

J.C. Penney’s disastrous 4th quarter 2012 loss of $2.51 per share, which capped off a year with a greater than 30% same-store sales decline, should have come as no surprise.

The key shareholder currently driving Penney’s decisions, Bill Ackman, is a savvy activist investor who knows how to agitate for quick capital market hits, like spin-offs of non-core assets, splitting up of companies, and forced mergers. But he shows almost no evidence of understanding enough about strategy to turnaround a company.

So when he takes on an investment that necessitates improving the core operations of the company in question, whether Borders, Target or J.C. Penney, the results are usually disastrous. (In fairness, not every time: his Canadian Pacific Railway turnaround effort seems to be gaining traction.)

The PowerPoint decks that he uses to lecture company management and investors on the brilliance of his plans illustrate the problem with his approach. They include lots of build-up charts that begin on the left side of the page with a low bar showing current earnings, a high bar on the right with the target earnings and then a series of building blocks that ladder from the pathetic performance on the left to the wonderful performance on the right. Better inventory management will produce 6₵/share. Higher sales/square foot will produce 11₵/share, and so on.

But the charts all assume that the base bar on the left is stable and secure. That’s where the problem begins. The base bar isn’t stable. No crummy company without a strategy is stable and secure and J.C. Penney demonstrates that in spades.

So while Ackman waxes eloquent about how CEO Ron Johnson has doubled the sales/square foot in the mini-store-within-a-store he has been installing within J.C. Penney stores, the so-called ‘new J.C. Penney’, overall store sales are plummeting dramatically. That, of course, means that for the approximately 90% of the store that isn’t the new J.C. Penney, the floor of sales/square foot hasn’t been a floor but rather quicksand.

The problem with J.C. Penney is that it serves no compelling customer purpose — and neither did Borders. It doesn’t have an aspiration for winning — just for improving from the current pathetic state. It hasn’t made a choice to pursue a distinctive where to play and how to win that makes it a must-have destination for some set of shoppers for some set of goods. This is the heart of strategy: a set of choices that aspires to win against all comers in a certain place by delivering a particular winning proposition.

Investments in improvements without a clear definition of strategy are simply a waste, whether or not the CEO came from a company with an awesome strategy or not. The only competitor against which the ‘new J.C. Penney’ is actually advantaged is the ‘old J.C. Penney’.

Customers are likely to walk through the ‘old J.C. Penney’ part of the store thinking “this is pretty bland” and then get to the ‘new J.C. Penney’ part and think “wow, the rest of the store is really a lot worse than I thought.” That is how sales per square foot in the ‘new J.C. Penney’ can be double the rest of the store and total store sales are down 30%. The tiny ‘new J.C. Penney’ part of the store is cannibalizing massive volumes of sales from the ‘old J.C. Penney’ part of the store for each customer who walks through the door.

Ackman publicly argues that as the ‘new J.C. Penney’ grows from about 10% of the store to 100% of the store, the whole store will have double the sales per square foot of the old J.C. Penney stores. But when the old J.C. Penney square footage disappears, the new J.C. Penney will actually have to compete against real competitors like Macy’s or Saks or Target and that isn’t going to be pretty. If ‘new J.C. Penney’ had shown itself to be capable of spurring sales by a magnitude that overcame the net cannibalization of ‘old J.C. Penney’ sales, there may be some hope. But that is so very far from the case that there is little or no hope that J.C. Penney will prosper, let alone survive.

If Ackman wants to actually turnaround ailing companies, he and his managers need to figure out strategy. They need to inspire to win, not just improve. They need to get adept at choosing a place to play and a way to win that makes the company distinctive against competitors in the eyes of customers. In the meantime, investing alongside Ackman in this sort of venture is an iffy proposition.

We get a lot of unsolicited business and technology books at GigaOM: our editorial group table in San Francisco is littered with inspirational tomes, visionary essays, and other tips for people who hope to become highly effective. Most of these books gather dust or serve as makeshift monitor stands. But along with a lot of folks, we’ve been looking forward to the release of Facebook COO Sheryl Sandberg’s new book, Lean In.

The book — which goes on sale today — has already been subject to an amazing amount of discussion, a fair portion of which clearly took place before people had read the book. We decided to try something novel and actually read the book before commenting on it or the important discussion it has provoked about women, men, Corporate America, technology, and leadership. After our paidContent book expert Laura Owen obtained advance copies of the book from its publisher, Random House’s Knopf, we distributed them to our female editorial staffers (and one earnest-yet-intimidated male staffer) and organized a virtual book club discussion on Socialcast, our internal collaboration site. We present that discussion in the same fashion as our debate about Twitter anonymity and web vigilantes last year.

Here’s what the GigaLadies had to say about Sandberg’s book.

One of the things we had wondered about was whether Sandberg’s book was just another portrait of insular Silicon Valley culture — interesting and noteworthy but not necessarily applicable to those outside the industry.

Stacey Higginbotham wondered if Sandberg’s book actually encouraged the wrong kind of stereotypes about women in the workplace.

Barb Darrow thought she perhaps could have chosen a better role model.

Eliza Kern, the youngest member of the GigaLadies, found the book interesting and useful but also a little weird.

Clearly, Sandberg raised a lot of good questions about the current state of gender relations in the workplace. How can we address those questions?

At least one guy was glad to see a nuanced but important discussion.

Any good book club discussion involves stories or situations from real life and how they relate to the topic of the book.

The anecdotes continued.

Ki Mae Heussner wondered if the GigaLadies saw themselves as competing against other women, rather than competing against people in general, as the book noted has been the case in the past. Speaking of competition, Sandberg’s book has been linked with an essay by Anne-Marie Slaughter called “Why Women Still Can’t Have It All,” and Slaughter reviewed Sandberg’s book for The New York Times’ Sunday Book Review section.

Finally, I attempted to figure out how best to change the situation so that books like this don’t have to be written.

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Over the last few weeks, PickupTrucks.com has published both 2012 half-ton retail sales figures and 2012 total half-ton sales, which gives us the data we need to talk about “fleet mix,” or the percentage of trucks that Ford, GM, Ram-Fiat, Toyota, and Nissan sell to fleets.

• F-150 sales – 19.1% fleet
• Sierra 1500/Silverado 1500 sales – 11.5% fleet
• Ram 1500 – 12.3% fleet
• Tundra – 4.2% fleet
• Titan – 16.5% fleet

These numbers show that Ford is the king of fleet sales, and that Toyota doesn’t depend on fleet transactions nearly as much as the rest of the truck manufacturers listed.

Why does this matter? Because fleet sales should never be compared to retail sales, as a fleet buyer has very little in common with a retail buyer (more on that below). Yet despite this inequality between a fleet buyer and a retail buyer, Ford, GM, and Ram-Fiat are never shy about quoting total sales numbers (which include fleet) and then using these numbers to brag about their “increased share.”

Specifically, if we look at retail numbers only, Toyota’s share of the retail half-ton truck market is about 9.5%, and that number is only going to grow as the 2014 model hits the street.

Tundra Sales Poised to Grow

Whenever a new model hits the ground, sales improve. Both Toyota and GM are bringing new trucks to the market this year, so they should both see growth from the numbers below (graphic borrowed from PickupTrucks.com).

Ram, on the other hand, is on the wrong side of the new model launch curve. Instead of selling the hell out of their new truck with lots of new features, they’re spinning their wheels trying to overcome production issues (including workers sabotaging new trucks, if you can believe it). Ram still hasn’t delivered trucks with the new Pentastar V6 (at least not in volume), their air suspension system isn’t available yet, etc.

If you launch a new truck but can’t get it to market before GM and Toyota launch their new trucks, than you’ve squandered your opportunity. Therefore, I don’t see Ram sales growing in 2013 at a rate any better than the rest of the industry. In fact, we may see them underachieve (which, incidentally, is what the early figures are showing, as Ram sales are only up 8% compared to 20% for the rest of the industry).

Then we have GMC. The sales gap between the GMC and the Tundra is very close, and the Tundra is 2-3 good sales months away from tying GMC sales. That would be historic (only, admittedly, sales figures really don’t matter, so this is all about bragging rights).

My Soapbox – Why Fleet Sales Can’t Be Compared to Retail Sales

Fleet buyers care about one thing: cost. How much does the truck cost today, how much will it cost tomorrow, etc. When fleet purchasers evaluate pickups, they look at a handful of costs and concerns:

1. Total up-front cost
2. Long-term cost
3. Resale value
4. Cash flow

As I wrote a couple of years ago, the math works out in such a way that it’s really the total up-front cost that drives fleet sales, as operating costs are roughly equivalent from one model to the next, and resale value isn’t really important to buyers who drive their trucks into the ground.

Good commercial financing (like the programs offered by Ford Motor Credit) can also help promote fleet sales, as they can reduce the cash flow hit that business must take when they invest in new equipment.

The point? When you hear a Ford or GM fan tell you about how many trucks their favorite company sells, you can explain that a big chunk of those sales are the cheapest trucks on the planet, and that anyone can get that fleet business…they just have to be cheap enough.

Kudos to Ford, GM, and Ram-Fiat for making their trucks so cheaply.

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The post Numbers Show Tundra Is Poised to Eclipse GMC Sierra, Possibly Overtake Ram 1500 appeared first on Tundra Headquarters Blog.

SoundCloud is one of those rare European online startups that is cornering its market: if you want to embed or share pure audio, whether it be music or podcasts, you’ll probably use this service. But that said, even if SoundCloud is the great hope of the Berlin scene, its ability to turn a decent profit has remained questionable.

A couple of moves revealed at SXSW on Monday may change that. The first is a drastic simplification and improvement of SoundCloud’s paid-for premium tiers -– the company’s primary source of income – while the second is the introduction of a so-called Pro Partners tier for brands. The Pro Partners tier is not only a serious potential revenue source, but it also introduces a visual element to the site that is likely to trickle down to ordinary consumer accounts in time.

Freemium boost

Let’s look at the simplified freemium model first (bearing in mind that free membership allows two hours of uploaded audio). Previously, SoundCloud had four paid tiers, starting on the Lite package, which offered four hours of audio for €29 ($38) a year, and grading up to a Pro Plus package that included unlimited audio and various analytics for €500 a year.

There are now just two paid tiers for the average user: a Pro package that is priced the same as the old Lite (€29 annually or €3 a month) and offers the same amount of audio storage, but with added analytics and controls; and a Pro Unlimited tier that adds unlimited storage at €9 a month or €99 a year.

In short, becoming a very heavy SoundCloud user just got significantly cheaper and more attractive.

Paving the way for ads?

The Pro Partner program is in beta for now, with early users including Snoop Lion, Red Bull, The Guardian, Kevin Smith’s SModcast and even the Grammys (for the CenterStage talent contest). These brands and musicians are able to promote their profiles in the “Who To Follow” section, and they can also create what SoundCloud calls “moving sounds” — essentially, image slideshows that run behind the service’s trademark soundwave representations. Moving sounds can be reposted just like any normal audio stream, although they don’t work in embedded streams yet.

As SoundCloud co-founder and CTO Eric Wahlforss pointed out to me, the company has been working with artists and major labels for a while now, but this move opens up new possibilities:

“We’re changing the canvas so it becomes more visual. It’s cleaner and simpler. As an audio partner or a brand you get that canvas to express your identity on. It works for brands who are creators of audio content as well –- we’re only bringing on brands that are creators as well right now.

“Some features — or all even, we hope –- will eventually trickle down to all of the tiers.”

For artists, I can certainly see the introduction of “moving sounds” providing an opportunity for simple, stylish visual expression. The images will need to fit into the bar format used for all SoundCloud sounds, which differentiates the potential results from, say, those slideshows people create when wrangling an audio track into a terrible makeshift YouTube video.

But the real opportunity here will be for advertisers. It is now much easier to imagine a scenario where brief ads are inserted into streaming playlists, in between tracks, with both audio and moving graphics being part of the deal. And, asked whether this is the direction in which SoundCloud is heading, Wahlforss certainly didn’t deny the possibility:

“In general, there is a whole movement of native advertising. We’ve seen success with YouTube with promoted content, so we feel there isn’t anything happening in audio on the native advertising side. We think we’re the best positioned of any service out there to do that and to really work with creators.

“[However] we’re in the early stages right now; it’s in the experimental phase. Right now these pieces of content won’t appear unless a friend of yours reposts the content.”

Wahlforss’s caution is well-advised: SoundCloud may be the de facto user-generated audio platform on the web now -– an expensive game to be playing -– but it is not invincible. People are willing to tolerate ads to some degree, but not if they are too intrusive. Monetizing this platform will mean walking a delicate line.

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As Nokia’s (NOK) share of the world’s largest smartphone market plummeted, Samsung (005930) shipments exploded in 2012, propelling the company to the top of the smartphone food chain in China. New data released on Sunday by market research firm Strategy Analytics and reported by Yonhap News Agency suggests Samsung shipped just over 30 million smartphones in China last year for a 17.7% share of the market. Samsung shipped just 10.6 million units in 2011. Lenovo was the country’s No.2 vendor with a 13.2% share and Apple (AAPL) was the third-largest vendor with 11% despite the fact that China’s largest wireless carrier does not yet offer the iPhone. Nokia, China’s top smartphone vendor in 2011, saw its market share slide to just 3.7% last year, making it the No.7 vendor according to Strategy Analytics.

Nipendo, a company with a business-to-business Software-as-a-Service network for managing invoices and other processes, has taken on $8 million in Series B venture funding. Horizon Ventures led the round. The money, which brings the total the company has raised to $12 million, will help Nipendo add business in the United States. It already operates in France, India and Israel.

In addition to invoices, the Nipendo network lets companies exchange requests for proposal, purchase orders, delivery information, feedback about suppliers and other information.

The first version of the product became available in 2010, Co-founder and CEO Eyal Rosenberg said. Now several enterprises in Israel use the product, along with some in the United States, such as Hewlett-Packard, IBM and Pfizer. The customer count has passed 3,500, Rosenberg said.

Nipendo faces competition from IBM’s Sterling Commerce and SAP’s Ariba. But legacy systems can take months to connect a vendor and a supplier, Rosenberg said, and Nipendo can do that in just a few hours, and it can also cooperate with enterprise-resource planning products from legacy vendors. As for newer competitors, such as Tradeshift, Rosenberg said, “The competitive advantage … is that we cover a much deeper space of this area, where we manage the whole process and we validate everything.”

Enterprises certainly can benefit from software that brings together invoices and other kinds of paperwork, instead of keeping it spread out on paper and in emails. The question is whether Nipendo will stand out as the top SaaS choice internationally.

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Software-defined networking (SDN) is the buzzword in companies of all sizes today. This GigaOM Research podcast addresses key questions about SDN: its use cases, its impact on traditional networking leaders, and promising startups to watch in this space.

(download)

iTunes

Stitcher Radio

SHOW NOTES
Host: Adam Lesser
Speakers: Isabelle Guis and Lee Doyle

Instgram’s Twit-storm, Netflix nabs Disney, GMail’s Pretty iPad App

RoadMap re-run, our talk with Instagram’s Kevin Systrom

iTunes 11, When Things Connect, Sun Volt

What Aspiring New Media Stars Should Know About Agents and Managers

Holiday Gadget Gift Guide

War Tweets, Google TV and Nexus 4

Director Jay Duplass on low-fi movies through high-tech

Election Dissection, Ditching DSL and Dumping the iPad

Sandy’s Social, Infrastructure Impact and Forstall

Windows 8 Surfaces, and disruption eruption

iPad Mini, iMac gets skinny

Boxee Cloud DVR, Apple Rumors and Chromebook

Commutist interview: Joy of X author Steven Strogatz

Commutist podcast: Patent trolls, Costco ban and Passbook’s home run

Commutist, meet Nerdist, and interview with Chris Hardwick

T-Metro, Broadband Caps, Remembering Steve Jobs

Apple’s iO-Mess, Dirty Data Centers and Tesla

News from the Mobilize Conference

Paul Tough: How Children Succeed and what you can learn from them

The iPhone 5 Event

Come on, Kindle, Light My 4G Fire

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• Cloud computing infrastructure: 2012 and beyond
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This is an age of openness and transparency. Hierarchies and tyrants are so 20th century. So why is it that the most successful corporation on the planet in this new millennium has been a secretive hierarchy run by a (now-deceased) tyrant? It’s a question I couldn’t help asking Don Tapscott after reading the new ebook he has co-authored with Anthony D. Williams, Radical Openness: Four Unexpected Principles for Success. (There’s a related TED talk by Tapscott, in case that’s how you prefer to digest your information.)

Tapscott and Williams are the guys behind Wikinomics and Macrowikinomics (I’m still waiting for Wackywikinomics), and their new book is a nice, brisk little read that tempers its cheerleading for openness with a some welcome grains of sober realism. But then there’s that Apple question, which I posed to Tapscott in an email. What follows is our edited exchange:

I spent the first third of the book, where you talk about how companies need to be more open and transparent, thinking to myself, “But what about Apple?” Then to your credit, you bring up the paradox yourself. Apple is probably the most successful and innovative company on earth over the past decade, and it’s extremely closed and secretive. What’s up with that?

I think people misunderstand Apple. It’s more open than most observers note, and that’s been at the heart of much of its success. Its greatest liability is a legacy of traditional closed behavior in several areas. And today the company has become more open in a number of areas, as the pressures of the market forces are forcing it to open up even further.

To begin, Apple is more transparent than one might think. Like all companies it has four major stakeholders: customers, employees, business partners, and shareholders. Yes, Apple is obviously super-secretive with its customers about product announcements. That can be a powerful marketing technique if you have the market muscle to pull it off. At the moment Apple can get away with this behavior, because it so powerful in the niche markets in which it operates and it has a small array of products. But as it tries to expand its share of the corporate market, business customers will demand to be well briefed regarding Apple’s intentions and its product roadmaps.

Most companies don’t have the luxury of creating market hype through secrecy. For them, openness is a better strategy. RIM is a good example of this. The struggling company was forced to share details about its Blackberry 10 platform. It had to pump up the buzz around its platform to encourage its current customers to stay loyal and developers to make apps. And as Apple continues to lag well behind Android in market share, eventually it will be forced to be more open with consumers as well.

It’s also true that Apple keeps its own employees in the dark. They have few details about what is in the company’s product pipeline. But such opacity does not derive from some inherent benefits of closed work systems. Rather it is purely in aid of ensuring secrecy of its product strategy with customers, and over time this will change too because closed silos hurt serendipity and innovation. The open work systems within Google, for example show how full collaboration within an enterprise pays off.

So you’re predicting that the Great New Secret Apple Product hype will be a thing of the past in a few years?

Yes. As competition intensifies and as Apple gets more serious about the enterprise marketplace, it won’t be able to maintain its product secrecy hype. They already need to share important information with enterprise customers.

What about its other stakeholders?

In terms of its supply chain partners, Apple itself has huge transparency and visibility. It can see down through Foxconn all the way to suppliers two levels below. True, this visibility has not extended to the rest of the world, but in this age of transparency Apple can no longer keep its supply chain practices secret.

Everyone knows about Foxconn’s labor relations and how its factories are run like minimum-security prisons. This is an enormous problem for Apple, not just for its reputation but also the disruptions such working conditions can cause in the supply chain. So as Apple becomes naked it is being forced to get buff — to clean up its supply chain practices.

As for transparency with its shareholders, Apple is actually very open — respected as being one of the best companies on the planet for providing shareholders with pertinent information. The only area in which it had been faulted is whether it had been sufficiently candid about Steve Job’s declining health.

Paradoxically, Apple’s success is largely due to other kinds of openness — sharing and collaboration. The iPhone and iPad are nice pieces of hardware, but that’s not what created their market success. By opening up what are called “application programming interfaces,” Apple has enabled its customers and the world of software developers to build apps on its platform. In this sense Apple’s corporate borders are quite open and porous. It is a design and marketing company at the heart of an enormous business web of suppliers and software developers — based on openness.

To be sure, Apple is obsessed with guarding its intellectual property, and has sought refuge in outmoded laws that today stifle innovation in our economy. But increasingly this comes at a cost too. Android, the open-source software platform developed by Google, quickly became the dominant operating system in the mobile marketplace. Open-source software stimulates creativity and attracts attention. Over time, openness tends to win out in the market. Google was smart to release the Android software’s inner workings so that manufacturers could tweak the operating system to their specific devices. Other companies have made similar moves. IBM gave away $400 million worth of software to the open-source Linux movement, and in exchange received many billions in savings and new business. That decision also blocked Microsoft from the enterprise computing market. I’d attribute 10 percent of IBM’s value to the strategic decision to embrace Linux.

I still don’t think Android generates anything like the profits Apple makes from the partly closed iOS ecosystem. Again, do you figure that’s just a matter of time, that eventually Android will win?

Yes. All things being equal (they haven’t been equal in the past due to the ineptitude of mobile device manufacturers and Microsoft’s inability over two decades to create a coherent and truly user friendly PC operating system) openness will win out. Of course there can be benefits to being closed, and if you have a proprietary lockup in a market margins can be significant. But the arc of competitiveness is towards transparency, collaboration and increased sharing of intellectual property, as Anthony and I discuss in the book.

Every company needs a portfolio of intellectual property — kind of like a mutual fund. IP such as trade secrets should be protected. Some should be shared in a limited way as Nike placed 400 patents in the GreenXchange. And some should be placed in a commons as IBM did with Linux.

In fact it’s not only companies but entire industries that need to rethink their strategy. A great example is the pharmaceutical industry, which must place clinical trial data in a commons or the industry will collapse. Such sharing doesn’t undermine profitability. It enables it, as a rising tide lifts all boats and pharma companies compete on a higher level where they provide protected or proprietary products and services.

Apple became the world’s most valuable company for a number of complex reasons, including the design genius of its brilliant founder. But when you look under the surface, it is more open than you might think and there is no real evidence that its secrecy has helped it succeed. As it comes under more intense competitive pressures, Apple will need to become an even more open company. This will be good for its customers and everyone.

GIMP is the most powerful free graphics editor around but you can extend it even further with the right extensions. You’ll need to find them first, of course, because GIMP doesn’t have any built-in mechanism to show you what’s available. But if that’s too much trouble then you could always install GIMP Extensions for Windows, which gives you more than 50 in a single package.

You’ll get GIMP Paint Studio, for instance, which equips the program with additional brushes, patterns, palettes and more.

Plugins include Adaptive Contrast Enhancement, BIMP (Batch Image Manipulation Plugin), Cartoonizer, Focus Blur, GIMP Mask, Image Registration, Liquid Rescale, PAL & VHS, and Save for Web.

Bundled scripts include AnimStack, Fake HDR Effect and Split Studio 3. While GIMP FX Foundry adds more than 100 new options all on its own.

There’s more file format support (APNG, DDS, JPEG XR, WebP).

And you even get animation options via GIMP Animation Package. (The full list is available at the GIMP Extensions page.)

You don’t have to install all of these, fortunately. If you have some already, or just want to decide for yourself, then the setup tool allows you to select the extensions you need, and the ones you really don’t. Whatever you’ve chosen will then be added to your system with a click.

Launch GIMP and you’ll probably find it’s now quite slow to start. Much of this is a one-off, though, as GIMP Extensions’ new tools are installed and initialised. And once the program appears, you can begin exploring its extra powers — the new FX-Foundry menu is a great place to start.

Art, Copy & Code has partnered with artist Zach Lieberman, Google, and interactive collective YesYesNo to create what it calls a smart talking sneaker with personality.

The Talking Shoe, which Google has been showing at the South by Southwest (SXSW) tech conference in Austin, Texas, includes an accelerometer, gyroscope, Bluetooth and other everyday technologies, that combine to “translate the wearer’s movements into funny, motivating and timely commentary”. In the video that shows off the sneakers, example phrases include “This is super boring” (when you’re just sitting around), “I love the feeling of wind in my laces”, “Are you a statue? Let’s do this already” and “Call 911 because you’re on fire”.

Apparently what the shoes say can be posted to Google+ by the user, sent to real-time ad units, or broadcast to the world via onboard speakers.

The shoes are a very early prototype (the design, which includes a fat speaker and a circuit board on the tongue, wouldn’t look out of place in Back to the Future), and it’s not something that’s intended to actually ever make it to market — at least not in its current incarnation — but as with Google Glass they hint at a future filled with wearable technology.

Obviously, no one would ever want to own a pair of sneakers that shout embarrassing things like “You’ve made a very proud shoe” when you take them off, but we can all see the possibilities offered by Google Glass and there’s been a lot of buzz about Apple’s rumored iWatch.

What do you think about the idea of wearable tech? Inevitable and the next step forward, or a ridiculous idea that you would rather avoid altogether. Comments below please.

Philips Hue is a lighting system that changes the definition of what your standard home lighting setup is, and now there’s an official developer program for the innovative Wi-Fi-connected bridge and bulbs, so that third-party apps and hardware can pick up what Philips has started.

To be clear, people have developed apps for the Philips Hue system already; we covered one two Hue hacks just last week, including an iOS app that turn your Hue home lighting into a dance party, and a software add-on for Minecraft that changes your ambient lighting to match the day/night cycle in the world building game. But those, and other Philips apps to date, have been built mostly by developers who are reverse engineering their own solution.

Philips recognized that devs wanted to do different things with the Hue, and decided to help them out, by opening up an official developer program, complete with an SDK for iOS developers, and APIs that allow both software and hardware makers to take advantage of the Hue’s connected features. The official tool means that developers can depend on it as a stable channel through which to build Hue integration into their products.

Hue uses the ZigBee standard for home automation, which means that they can talk to each other, as well as motion detectors, connected thermostats, connected appliances and more. The new developer program will mean that hardware makers using these standards can build in Hue-compatible features, so that the lights can be triggered by various actions. You could have a specific light recipe come on whenever you open the door, for instance, or when a thermostat is set to specific climate setting.

Other potential uses of the developer tools include apps for amateur and professional photographers, which could help them optimize lighting for a shoot with a simple app attached to a device with light level detection capabilities. Philips also plans to release future features around geo-fencing, scheduling and other smartphone sensor capabilities that could expand what developers can do with them.

“We’re now at a point where there are already about 10 applications that have been shared and built from the unofficial developer community for new applications around Hue,” explained George Yianni, HUe System Architect in an interview. “Now what we want to do as Philips is we actually want to help and grow and encourage this community, and give them tools and proper documentation. Also, we want to give them commitment that this is the API and we’re going to support it and it won’t change overnight.”

Yianni says that’s been the big roadblock stopping bigger developers and companies from creating apps and accessories for Hue so far. Specifically, it’s been holding up hardware development, he says, and that means you can probably expect to see some big names start to integrate Hue into their own lines of connected home devices.

The developer tools will be available free to anyone who wants to create applications and devices that connect to the Hue system. Philips will also continue to work on expanding the Hue line, Yianni said, with new lightbulb types to follow soon. With new third-party investment in the Hue ecosystem, as well as more from Philips itself, it’s about to become a lot more than just a different kind of lightbulb.

LovePalz, the virtual sex gadget designed for long-distance couples, has finally set a launch date for both its products and Web-based control center. On March 29, you can get your hands (and other parts) on Hera and Zeus, the two devices designed by Taipei-based company Winzz.

The titillating wireless gadget has been generating buzz since announcing pre-orders in September. Winzz says that they received over 5,000 pre-orders within two months, back when the LovePalz set of two devices was available for $94.95 each. Now that the pre-order special has ended, each piece, called the Hera and the Zeus, is available separately for $189. Despite the higher price, Winzz reports that they have sold 1,800 items since February 28.

Lovers can control their LovePalz devices during a cybersex session by using the LovePalz Web site, which also has a mobile version. A spokeswoman told me that the company is still working on launching a LovePalz iOS app, but progress has been delayed because of the App Store’s restrictions on selling adult-themed content.

The Hera resembles a dildo, while the Zeus is like a sleeker, high-tech version of the infamous Fleshlight. (The names are interesting because although ancient Greek deities/husband-and-wife Zeus and Hera were often separated by long distances, that’s because Zeus was off having sex with everyone in the universe besides Hera).

Both toys have multiple pressure and speed sensors that work without buttons and allow partners to feel what each other is doing to them in real time. The devices are waterproof, rechargeable, and are engineered with an air pump and automatic piston. Why, you ask? Well, the air pump means the Hera toy can “get bigger when you are bigger,” as the LovePalz Web site puts it, and the air pump allows the Zeus to “tighten up.” The company ensures users that it has tested the air pump many times to make sure “the speed is ideal and stops when it’s getting too tight,” so there will be no news headlines screaming “LovePalz, the genius of penis explosion.”

The LovePalz’s painstaking engineering sets it apart, but there have certainly been other virtual sex toys. The Virtual Hole and Stick set (yes, that was its real name) was designed back in 2007 as one of the earliest “teledildonics” products. Web site HighJoy bills itself as “the premier online destination where you can find the necessary tools that allow you to control another’s personal massager over the Internet.” Other virtual sex toys have been a bit more one-sided, like the RealTouch, which allows users to interact with porn.

Electrostatic interfaces – systems that make your fingers “feel” textures on a smooth metal plate – have been around for a long time. They haven’t quite caught on because the sensation is a little creepy and it’s not quite foolproof. However, a researcher at Disney Research in Pittsburgh, Pennsylvania, Olivier Bau, has created a unique system that creates these sensations on any surface using a special wearable system that actually controls the electricity sent to nerves in your skin.

His Revel project is an example of this technology in action. An object is treated with a special paint and then a “generator” attached to the body. As you move your finger along a surface, the system changes the way the surface feels to the touch and can recreate ridges, etched lines, and other sensations. It’s the first step in true universal interaction with objects.

Bau also discussed other projects in the works including one in Tokyo that allows you to create invisible physical objects by controlling the muscles in your hand. That’s right: you could pick up an invisible chess piece and your fingers would freeze at just the right spot so it would feel like you’re holding something sold.

Bau now lives in Los Angeles but is continuing work on the “invisible” for Disney’s research arm. I asked him if he had to wear mouse ears at work and he very demurely refused to answer.

We’ve heard it before and we’re hearing it again: VMware plans to to take on Amazon Web Services. GigaOM reported it last July, breaking news of a planned spin off tasked with this job.  Part of that spin off would revolve around Project Rubicon, a public Infrastructure as a Platform play. CRN followed up in August with its report on Project Zephyr which it described as a challenge to Amazon’s public cloud.his week CRN again reported on VMware’s AWS killer.

One can only hope that VMware CEO Pat Gelsinger, EMC CEO Joe Tucci and EMC chief strategist Paul Maritz will put some clarity around all this Wednesday when they talk to institutional investors. This event has been billed as an update on the Pivotal Initiative, the aforementioned spin-off which was finally announced in December.

Meanwhile, as talk of VMware’s proposed AWS killer circulated, Forrester analyst James Staten had his own interesting take on how VMware should attack its public cloud problem and it doesn’t hew to VMware’s vSphere-and-vCloud Director blueprint. That’s a non-starter in this new world of mobile and net-new applications, he wrote:

“What you should be doing is admitting you screwed up with vCloud Director 1.0 and 1.5 and kicking ass in engineering to get a true cloud to market ASAP.Your real threat? CloudStack and OpenStack atop Xen or KVM sold to a new cloud administrator inside the enterprise who starts with the service elements of a cloud the DevOps crowd values and worries less about the underlying abstraction layers and infrastructure. This is your real threat.”

GigaOM Pro analyst Jo Maitland took those thoughts a step further. “VMware should buy Eucalyptus for customers that want an internal cloud that is compatible with AWS and build an OpenStack alternative to AWS just like everyone else. vSphere and vCloud Director do not a cloud make.”

AWS partners shouldn’t be shocked, shocked!

Some providers of AWS monitoring services expressed outrage last week after Amazon offered a a free trial of its own Trusted Advisor service. The issue is that Trusted Advisor offers configuration advice and other perks that compete with some of what Newvem, Cloudyn, Cloudability and other third parties offer.

Here’s the thing: Trusted Advisor has been around for a while — GigaOM reported on it last June. As Ed Byrne, CEO of CloudVertical, another monitoring provider who seemed less perturbed by the move, put it: “It’s been in beta for probably six months — everyone in the industry knew it would exit beta and become part of the basic offering, It’s a little rich to cry wolf now.”

Indeed. Any third party who thinks that AWS won’t keep building more services and capabilities is nuts. It’s like Amazon started out building a big, airy room with lots of space and gaps to be filled by third parties but then starts sucking all the air out of that room itself as it adds more of its own stuff.

Byrne summed it up: “If we have to make our business hoping AWS won’t do obvious value-adds for their customers, we are dead in the water. Of the $1.7 trillion per year spent on IT infrastructure, probably $3 billion is on AWS. There’s a whole lot of people trying to understand cloud economics for their own organization, for a migration, for a private or hybrid strategy [there’s] plenty of scope for providers like ourselves and the others.”

 

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As Nate Silver discussed earlier today at SXSW in Austin on Sunday, the polarization of cable news and politics means that if you’re a serious Rachel Maddow fan, there’s only a tiny chance that you also vote Republican, and the same is true of Sean Hannity listeners and chances they’ll go for Democrats.

But as we change where we get our news and turn to places like Twitter for information and verification of facts, it’s important to ask how that polarization will translate to social media – if it will at all. Several journalists discussing the future of news dissemination (something we’ll also be discussing at paidContent Live in April) tied these issues to those of crowdsourced news, particularly in the Middle East, when the tensions between accuracy and access are most apparent.

NBC correspondant Ayman Mohyeldin made an interesting argument about verification, arguing that people should be free to select the accounts they want to follow and personally decide whether to trust that information or not, just as they tune into particular cable shows in the United States and apply their own sense of skepticism to Maddow and Hannity.

“You ultimately choose which channels to watch,” he said. “There’s no reason that should be different in who you follow.”

The argument puts a good deal of trust in the user’s judgement and takes some pressure off journalists or random people on Twitter to present accurate information, but it’s an idea that fellow panelist Andy Carvin has popularized to much controversy recently. The idea came under fire during the spread of misinformation on Twitter during Hurricane Sandy, and certainly has its detractors:

The end user is responsible for deciding who they trust, @AymanM says. True, but most don’t have the expertise to decide. #nextnews #sxsw—
Eric Carvin (@EricCarvin) March 10, 2013

But it’s a good reminder that even if we think of cable news as being particularly polarizing right now, news consumption and opinions on Twitter might not be all that different.

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Nate Silver, writer for the New York Times and America’s favorite nerd, took the stage in Austin at SXSW on Sunday to talk about his favorite topic: data. Needless to say, Silver’s had a few wins this year in that department.

He recently published a book called The Signal and the Noise that looks at the role data plays in our daily lives and the way we can use it to better understand the world around us. But speaking at a breakneck speed in front of a large audience in Austin on Sunday, Silver addressed some fairly random topics and questions:

1. Why the competition matters

“I’ve tried to work in fields like politics and baseball where the competition is not very good.” Silver said the lesson is important for startups, too: if you’re doing the same service that 98 percent of your competitors provide, there’s less room for growth.

2. On moving

“There were too many cool people moving to Brooklyn, so I had to move back to Manhattan.”

3. Who would play Nate Silver if they make a FiveThirtyEight movie

“I really hope they don’t make a movie about me. But I would think Brad Pitt. In terms of appearances.”

4. How he got his start

“Initially when I was a ten-year old I really wanted to build my fantasy baseball league. And I kept drafting … really crappy players and I didn’t understand why I couldn’t win. So with me it’s often been about competition, about wanting to win my NCAA tournament pool or my fantasy league.”

5. On fame

“Ironically I think I’m getting way too much credit now,” Silver says. “We’re very results-oriented as a society.” Silver said he’ll become uncomfortable if FiveThirtyEight ever discourages people from voting as the predictions improve, something he’s discussed before.

6. On the best way to pick a March Madness bracket:

“Travel distance matters a lot to performance.” Silver said that FiveThirtyEight does March Madness bracket predictions, but noted that people filling out their own should remember the correlation between travel distance and performance.

7. On one of the hardest things to predict:

“We had a formula that tries to predict the numbers and it’s only about 70 percent right,” Silver said of the Oscars. “That’s a field where you don’t have very good data available.”

8. Why he’s misunderstood by critics

“I think sometimes people mistake what I do as someone who’s saying everything we do is predicable…. Whereas really I’m more of a skeptic of prediction,” he said. “What I’m actually doing is taking polls and averaging them and the fact that it’s so surprising says a lot about where we have to go in terms of science and math.”

9. The strangest model he’s ever been pitched on

“I got pitched one time by a guy who works for a cricket team in India and thinks there can be like a Moneyball revolution in Indian cricket. I wasn’t too psyched about that.”

10. One piece of data he uses to make decisions in everyday life

“Don’t fly out of JFK in New York in the evening in the summer. If you fly out in the morning, and I’m not a morning person, but you probably have a much better chance of not having delays cascade across the system.”

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When it comes to building out the broadband infrastructure, the data networks and the processing for the internet of things, we’re going to have to make some changes. That’s the message I got from conversations with a variety of people and from panels at South by Southwest in Austin this weekend.

It’s the network, stupid

When considering washing machines that tweet, inventory-tracking sensors that send a few pieces of data or home health monitoring systems that are tracking someone’s heartbeat, most people assume the data is so small that the network can handle it. But today’s networks are designed to fulfill very different scenarios.

However, Joe Weinman, the SVP of cloud services and strategy at Telx, noted that the old broadcast model employed by cellular networks (and even to an extent wireline networks) focuses on sending a piece of content down to many. In some cases it’s one piece of content down to one person, but with the internet of things the devices at the edge are sending many different chunks of data up to the core.

That could require new ways of designing networks with a focus on uploads. There’s another element as well that wasn’t discussed too much at the panel, and that was the issue of quality of service and latency. In the heart monitoring example, that’s data that should have priority over other network traffic because it needs real-time monitoring. However, if it’s just gathering information for diagnostic purposes, then it’s fine if that traffic takes a back seat to other bits.

Processing may find a new home

The network is probably the most important (and is definitely the most expensive) element of the internet of things infrastructure, but another ongoing debate is about where the information collected by the thousands (millions?) of sensors we’ll connect will be turned into action or aggregated to form meaningful insight. Namely, will the processing happen in the cloud, or will it happen locally?

Wael Diab, senior technical director at Broadcom’s infrastructure and networking group, noted that the pendulum has swung back and forth between centralized and distributed processing since the mainframe. But what’s worth noting about the internet of things is that there will need to be both — and where the processing takes place will be dynamic depending on several factors.

For example, if the promise of a truly universal internet of things ever occurs (as opposed to siloed areas of connectivity in the medical space, the home, the car etc) then devices might send certain types of data to a local hub in a medical or automotive setting because it’s more secure or cheaper, but take advantage of the cloud and wireline broadband in the home or work setting.

What’s almost universal among people I’ve discussed this with is that the technology to make the internet of things possible has been around for a while. The big change is now that people are able to mediate the lack of standards and interoperability in the underlying technologies using the web via a smartphone.

But that won’t be enough to truly created a connected world with services that span different devices — the promised internet of things.

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