Amazon's service failure provides cautionary Anywhere lessons

For those who started their long weekend early last week, Amazon's storage 'cloud' service goes was offline for about three hours on Friday. When I combine this with the similarly long Blackberry outage earlier in the week, I think there are some lessons worth noting:

• Outages that seem important to you aren't important to service providers. Too many people assume that by outsourcing their technology challenges, they'll be getting world class service and risk management in return. Based on the quotes of Amazon and Research In Motion executives, those assumptions are misplaced. RIM co-CEO Jim Balsillie dismissed the Blackberry outage as "an intermittent delay, a couple of hours. It's old news." Amazon at least admitted that the downtime was unacceptable, but only did that after customers spent hours searching for the cause of the problem.
• Cloud services don't guarantee anything. No matter how good those service level agreements sound when you sign them, when the service is down, you're down as well. And if you look very carefully at most of those service level agreements, the penalties for not providing the service are limited to what you are paying that month. That's cold comfort when your business's revenue goes to zero for an unknown period of time.
• Anywhere services need more than commodity service. Many Web 2.0 startups have staked their future on the hope that cloud computing is "good enough" to propel their business models. But as consumers get used to Anywhere services -- ones that anyone can use on any device on any network -- the more they will be disappointed by garden variety, commodity service. Those companies aspiring to be the next Google should remember that Google started out by building its own massively-redundant infrastructure in closets at Stanford University rather than just piggybacking on university resources. Anywhere reliability and scale will require more than formless cloud infrastructures to work 24 hours a day, seven days a week.

One final note: one of the companies I consider to be a great Anywhere company already is FedEx. While some may argue that it isn't in the Anywhere information business, many of their executives would disagree strenuously, noting that the information they collect on packages and deliveries is just as valuable as the packages themselves. I remember one of the CIOs of FedEx commenting, "Our data center is a lot like Noah's Ark: we have two of everything." And their circa 1996 thinking about contingency planning and reliability of service as documented by Wired Magazine is a great example for companies today to consider:

Behind one of these straitlaced corporate citadels, a low-slung building squats buried under a vine-covered earthworks, shielded by walls of thick concrete. Formally known as the Global Operations Center, it serves as a subterranean command facility for the entire FedEx distribution and delivery system. Employees call it "the Bunker."

The lighting in the Bunker is subdued, and a hushed intensity crackles through the climate-controlled air. On the walls, giant flat-panel projection screens display real-time weather maps of the continental United States, while workstations around the periphery stand equipped with banks of computer terminals and heavy black telephones. A team in the back of the room specializes in domestic operations, and another behind it focuses on surface transportation. Up front is the international unit; a bevy of flight crew dispatchers are positioned off to the left, and there's a handful of meteorologists tucked off in a dark corner.

"It's pretty quiet here now," explains Bunker manager Pete Gwaltney. "But come midnight, the place will be a whole lot busier. At peak periods, we operate in five-minute decision cycles.

"Gwaltney's job is to keep the FedEx distribution network running smoothly despite the inevitable grind of glitches and failures that plague any complex mechanical system. But as he nonchalantly puts it, "This company spends lots of money preparing for contingencies."

To demonstrate the point, he explains how FedEx launches an empty jet freighter each night from Portland, Oregon, bound for Memphis. The jet tracks a course that brings it close to several FedEx terminal airports so that if one of the jets parked on the ground suffers a sudden mechanical failure, the empty freighter can swoop down and pick up the stricken plane's cargo.

The image of that empty FedEx jet streaking through the night reminds me of the old "doomsday" bombers that were kept aloft and on alert during the Cold War. "Jeez," I remark. "It's like Strategic Air Command around here." Gwaltney smiles, as if the same thought crossed his mind a long, long time ago. "Actually," he says, "it's more like Strategic Freight Command."

That's what I think of as the gold standard for Anywhere services. And for those companies who think they can bet their futures and investors' money on cloud-based, best-effort services and compete with companies that think like FedEx, good luck with that. You'll need it.

Mobile ESPN browsers eclipse PC users and your favorite mobile Web sites

One of the pieces of research I'm just starting is a report on mobile Web sites. In the course of my research, I came up on this piece of news from January:

The biggest upset of this football season may have been Appalachian State University's victory over Michigan. But for the mobile-marketing industry, it came the day ESPN had more visits to the NFL content on its mobile Web site than it did to the same area on its PC site.

[From More football fans hit ESPN's mobile site than its PC pages - RCR Wireless News]

I think everyone now accepts that the number of global mobile phones now easily eclipse the number of Internet users in the world (2.7 billion phones versus 1.1 billion Internet users as of 2006). But many still think that's all about voice communication, not the Internet. But with the advent of first-class Internet Web browsers on platforms like the iPhone, Nokia's S60 series, and others, we're just beginning to see the impact of the mobile Web. My prediction: it's going to be even bigger than the PC Web. And the ESPN watershed moment noted above is just the start.

So here's a question for readers that would help me with my research: What's your favorite mobile Web site? Ideally, it would be a business site (I am, after all, director of Enterprise software, not consumer), but even if your favs are consumer sites, I'd love to hear about them. Leave a comment below, and in the process, tell me what mobile phone browser you are using to access that site. I'll start the ball rolling by saying my favorites on my Apple iPhone are Facebook (amazing functionality for a mobile site), Bank of America (bofa.com), and FedEx (fedex.com -- they always embrace new technologies quickly). What are yours?

Imagine if you didn't hate your mobile carrier

CNBC today kicked off its coverage of the World Mobile Congress today with an article titled, The Mobile Industry Has an Innovation Emergency.". I have to say, I agree with CNBC's point of view that many players in the mobile industry are stuck not knowing how to innovate. But after fighting with making mobile calls from my office in downtown Boston the last week or so, I have a dream that I think would challenge today's mobile carriers in their quest to become Anywhere providers:

Imagine if our mobile phone carriers actually tried to exceed our expectations?

Today, we tend to give mobile phone carriers accolades for just doing their jobs some of the time, like placing phone calls and delivering text messages. I've been trying to place and receive mobile phone calls from my office in downtown Boston over the past few weeks, and despite having a contract with the largest mobile phone company in the US, my success rate is about 75%. Said another way, my carrier doesn't deliver the service I pay for 25% of the time. Not exactly the poster child for world-class service, is it?

Imagine what would happen if they not only delivered service 100% of the time, but actually made it a fantastic experience?

Truth be told, dealing with any mobile carrier today is about as much fun as a root canal. Assuming you can actually make a call (see paragraph 2 above), calling to complain doesn't help. The carriers may claim that our phone call to complain is important to them, but that doesn't provide any salvation from their hell of automated phone trees. I'm happy to key in my phone number to allow them to access my records, but having to repeat that number verbally with the customer service rep after I've done it online just adds insult to injury. And the fact that I have to do that every time I get handed off to another representative just reinforces the impression that my business just doesn't matter to the people running these carriers.

Am I a dreamer to expect anything better? Perhaps. But there's data that suggests that if a new entrant delighted customers, the old guard of mobile phone companies could see serious trouble. The data I'm referring to comes from a study that Changewave released this week about the iPhone.

According to Changewave Research, Apple's iPhone has become the most popular choice for consumers planning to replace their mobile phone, which you can see below

Why? Here's a pretty good reason: 72% of iPhone customers are "very satisfied" with their phones, compared with only 55% for RIM customers, and even lower results for all the other manufacturers. Here's ChangeWave's chart for that result.

This data would be impressive for any manufacturer. But the really key point here is that the iPhone is made by a company that wasn't even in the mobile phone business a year ago. Further, Apple completely ignored the requirements of old-guard carriers; instead, it insisted that carriers do things that would help consumers, like instituting unlimited data plans and visual voice mail for the iPhone. It focused on delighting the customer, not perpetuating same old way of doing business.

Now I know that very high barriers such as spectrum rights and infrastructure costs block new carriers from entering the mobile phone business. Yet every successful new business overcomes some sort of obstacle that previously seemed insurmountable; after all, FedEx's overnight delivery business model was panned as impractical when the US Postal Service had a near monopoly on package delivery. And what better recipe exists for success than millions of unsatisfied customers willing to pay a monthly fee for a better service?

I don't know if there's a Steve Jobs, a Fred Smith, or a Herb Kellaher (Southwest Airlines) out there thinking about creating a great mobile phone business. But imagine if consumers were so excited about a mobile carrier that they'd line up for days to sign up for their service, like they do at the Apple Stores today. Imagine if that carrier guaranteed your satisfaction with their service or your money back. Imagine if that carrier had only a few, simple to understand services that took a few clicks to sign up for and another few clicks to get rid of if you didn't like them. And imagine if that carrier actually had customer service people who had both the power and authority to turn dissatisfied customers into satisfied ones.

I don't think Steve Jobs, Fred Smith, or Herb Kellaher have any plans to get into the carrier business. But I can dream, can't I?