SMALL BUSINESS BLOG

Now here’s something none of us were expecting. Retail spending went up in May, says Reuters. This is peculiar because everyone’s talking about an economic slowdown. And they didn’t just nudge up a bit, they shot up by 3.5 per cent.

This is strange because we’re all feeling the pinch quite a bit - I know, I filled my car the other day. So what’s fuelling the sales mini-boom? Reuters’ contacts believe it’s seasonal. I have a few further ideas:

1. Let’s play a game. Go onto a train or bus and see how many people under 20 are carrying very visible consumer electronics, usually a media player of some sort. They keep buying this stuff regardless of what happens to the economy.

2. The nation is notoriously a binge-drinking group of massively obese individuals. We are not achieving this by holding back on food and drink spending.

3. As a side effect of 2, even those of us who don’t feel obliged to buy a new summer wardrobe every year are finding to our dismay that none of last season’s clothes actually fit any more. So we’re going out and replacing them.

Add inflation and the real price rises rather than official figures (see the car comment above) and you’ve got a good basis for quite a nice little rise in spending, at least in the shorter term.

Becky McCray continues her series of observations from the heart of the US.

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Would you believe that small town manufacturing is a bright spot in the US economy? It is.

You’re more likely to hear about plant closures, mass layoffs, and jobs shipped off to countries with cheaper labor. But small town economic development expert Jack Schultz of Agracel, Inc., can cite example after example of small town manufacturers expanding, adding jobs, opening new facilities, and searching for more suppliers. What’s driving this expansion? Exports.

As our older massive manufacturers stagnated and have downsized, smaller manufacturers have sprung up in small towns. These modern manufacturers have seized the opportunity of the lower dollar to export a huge range of goods at more attractive prices.

In American Manufacturing - Booming!, Schultz lists the manufacturing expansions his firm is working with. They include companies in food processing, ag equipment, animal feed, furniture, metal fabrication, machinery, medical equipment, printing and building accessories. Small businesses added more jobs in May than the overall economy lost, according to the ADP Small Business Report, which monitors businesses with fewer than 50 workers.

Even as the nationwide US economy fluctuates, expect small town manufacturing in the US to continue to expand. I’ll take that as good news.

Last week’s Web 2.0 Strategies conference in London brought together people who were anxious to find out whether and how to implement ‘Web 2.0′ in their organisations. They came with a generally favourable disposition towards the subject but most of those I spoke to were finding it difficult to engender enthusiasm among their senior management. The main management concerns seemed to be ‘time wasting’ and ‘information security’, especially when the Web 2.0 technology under scrutiny was Facebook.

Their bosses have businesses to run and they can’t see how letting people throw sheep at each other or list their favourite music is going to help. They do, of course, assume that sheep-throwing is what you want to do when you’re supposed to be getting your work done. The concerns boil down to trust. Penny Edwards from enterprise social computing company, Headshift, was at the conference and this is what she had to say on the subject:

“…the trust aspect is a no brainer. If companies think Facebook is an instrument for time wasting and don’t trust their people to work autonomously and responsibly, then there’s little surprise that these same companies are struggling to adopt approaches and social tools grounded in openness, sharing and emergence.”

Web 2.0 isn’t about perpetuating traditional business methods. It’s about enabling people to find each other and the information they need without any intermediation by a team leader or a boss. It accelerates work and it creates and deepens working relationships. But only if a) the organisation employs knowledge workers, b) the staff are trustworthy and c) they are trusted. It doesn’t mean abandoning all control, but it does mean delegating as much as is practicable. And formal control can still be exercised in the form of rules to frame behaviour. Mostly, though, it’s down to common sense - don’t talk company secrets in public, don’t copy confidential data,…

One company found that by creating a user forum, it could slash its support costs. Users are encouraged to go online to seek help and to help each other out. A body of support knowledge is being built that users and help desk staff can reach directly. Such informal knowledge bases are usually more up to date than any centrally defined and composed information source.

Speaker Dion Hinchcliffe spoke of what happened in the wake of Hurricane Katrina - in a single day, thousands of volunteers copied details of 50,000 individuals to katrinalist.net (the link no longer works). Within five days, the list contained 88,000 entries. Anyone searching could, within days of the disaster, have a chance to find out if friends and loved ones were safe. Imagine how long it would have taken the authorities to specify and implement an equivalent public access database.

RoI was another term that reared its head. As conference chairman Euan Semple likes to say, ‘if the I is low, no-one’s going to give you a hard time on the R.’ But, more seriously, some applications of the software gives a clear return, others are ’softer’ - the effect of a helpful online presence on the brand image, the value of inventiveness that comes from the synergy of people from different disciplines working together, the value of hearing what customers really think and dealing with the issues raised, … For some this openness is unsettling, but it is likely to be the way successful companies build their brand loyalty and leadership.

What’s clear is that none of this is a quick fix. It will probably take months for participants to find their feet with social computing tools, whether initiatives are pushed from the top or drift up from the grass roots. Initiatives needs to be nurtured and encouraged and, indeed, monitored by people who understand the genre and who are enthusiastic without being blind to the practicalities. And, let’s be clear, these evangelists are very unlikely to be from the IT department. Web 2.0, despite its name, is principally about people, not technology. It’s about ways of working with each other that subverts traditional hierarchies, with the software providing the necessary sharing and finding capabilities.

Despite the hype around the launch of the iPhone 3G by Apple CEO Steve Jobs on Monday, there were also some serious nuggets aimed at the business community. So is a battle looming between Research in Motion (RIM), the makers of Blackberry, and Apple for the hearts and minds of the small business user?

Although Blackberry’s core constituency is the corporate world and Apple’s is the consumer, both clearly have an eye on the sizeable SME (small to medium-sized enterprise) market.  The fact that they’re coming at it from different directions makes for an interesting contest.

Other than being much cheaper than its predecessor, the new iPhone also has three key elements for business: integration with Exchange Server allowing push email (i.e. email that arrives automatically and near instantly); the ability for developers to make business-focused applications for the phone, and; MobileMe, more of which later.

While a challenge to Blackberry, most of this is not new.  RIM has built its business on push email, security and business focused applications for years.  It is quite simply way ahead.  Indeed recent US data from IDC showed it increasing its US market share for business smartphones by 9.4% to 44.5% in Q1 2008, at the expense of Apple and Motorola.

It already has its Independent Software Vendors programme churning out business specific applications e.g. CRM integration via salesforce.com, mTem, a mobile time and expenses tool and ‘Work and Repair’ which gives field workers one touch access to job, customer, inventory and warranty information.

It remains to be seen whether Apple can attract significant volumes of developers through its iPhone Developer Programme interested in creating practical business applications, rather than games.

Indeed there’s an argument for saying that the iPhone’s lurch into the mobile gaming and enterprise space simultaneously is a strategic error.

Do you really want to issue your employees with what amounts to a mobile gaming console?  Surfing social networks on the web is one thing, getting them hooked on Super Monkey Ball is something else all together.  At least the ‘Crackberry’ instils an addiction to work-related email.

Surely two separate versions of the iPhone, one for business and one for consumers will become a reality in the not too distant future.

As Dr Windsor Holden, principle analyst at Juniper Research, said to me earlier today:

“The iPhone is still overwhelmingly a device aimed at consumers.  It may pick up business customers around the edges, but it’s not a direct competitor to Blackberry.”

Dr Holden’s argument is Blackberry should stick to its knitting and it will stay ahead.

I’m not so sure and I’m not sure RIM is either, if the plethora of consumer focused add-ons and leaks of a new phone called ‘Thunder’ is anything go to by.

Sarah Probert, EMEA marketing director for large enterprise and SME segments at RIM dismissed stories re Thunder as rumour and speculation when I spoke to her recently.

But she did outline her company’s small business strategy. One vital element is a desire to work more closely with third party channels so small business owners can get support and advice from trusted suppliers other than traditional mobile providers. Another important element is the launch of Blackberry’s new easy to install version of their push email software to allow small businesses to set up the service on their own servers or computers.

Which brings me back to Apple’s MobileMe.  It also offers push email, calendar and contacts synchronisation on mobile, laptop and desktop over the web for $99 a year.  Yes, it’s consumer oriented, but it’s also the most significant of Apple’s announcements from a small business perspective.

The ability for business data to flow seamlessly between mobile, office and ‘cloud’ (i.e. servers accessed over the web) will be the real battleground for small business customers over the next few years.  Not having to worry about backing up documents, instant access to information and seamless synchronisation at minimal to zero cost will become the de facto standard expected by SMEs.

Apple is now positioned to compete for this market.  Google, with its Android mobile operating system is also perfectly placed to integrate Gmail, Docs and its other online services onto mobiles at zero cost to the user.  Microsoft may also be on to something with Office Live and Mesh.

All of a sudden having push email as a unique selling point becomes less important as do the traditional  carriers and handset manufacturers.  It’ll be interesting to see how RIM positions Blackberry as it squares up to new competitors who are very much not the usual mobile suspects.

A visit with FaceTime introduced me to the term ‘greynet’. Since it’s been knocking around for donkey’s years, I should have known about it. But I didn’t. And so, I figured, nor would you. (Skip this blog if you’re up to speed on the subject and protected from greynet attacks.)

A greynet is a network-enabled application which is installed behind your firewall. The benign ones include services such as Skype or MSN Instant Messaging, which allow people to see when their contacts are present and to ‘chat’ with them by typing short messages. Unfortunately, these and other social networks such as Facebook, can be the means by which these greynets penetrate your defences, especially when they’ve been installed by end users with no IT involvement. An unwitting download of an apparently innocuous file or application is all it takes for trouble to begin.

Greynets operate by tunneling through your protective firewall using unsecured communications ports or even slipping out through port 80 - the one which gives staff access to the internet. Most commonly, the malicious ones can steal information and disrupt the operation of your computers.

We are used to securing our email systems and protecting ourselves from infected file attachments. This kind of security is very mature and widely available. But it only works once the level of infections bring it to the attention of the anti-virus companies. They then figure out a ’signature’ for a piece of malware and incorporate it into their virus databases. From then on, subscribers are protected.

Compared with instant messaging and other social software such as Facebook or MySpace, email protection is a positively leisurely exercise. Problems spread relatively slowly - when was the last time you heard of a major email-borne virus infection? But, without monitoring software, social software can allow malware to creep in undetected. This is not the only threat, but it’s the one that you can do least about without help.

The other threats are the usual employee-related ones of letting information out deliberately or accidentally, of failing to create an auditable trail of business communications, of wasting time, and so on. Frankly, these need to be dealt with by common-sense guidelines, although some of the greynet protection software, appliances and services can help.

FaceTime is aimed at mid to large enterprises and may be overkill for a smallish business. It connects on the one side to over 150 instant messaging and other social services and passes all traffic through its filters which spot, instantly, when something suspicious is happening. It does this by looking at traffic content, but it also looks inside the data packets and at their patterns as they flow through. Some customers settle for reading the logs after the event. The sensible ones choose to be alerted at the first sign of trouble.

Since FaceTime is aimed at the upper end of the market, I went searching for something more appropriate for the smaller business. Depending on your inclinations, your needs and your budget, you might want to go for regular software, a managed service or an appliance that fits into your network. To get a flavour of each type, you might try visiting Grisoft, Panda and Finjan.

I don’t actually know how each of these works in detail, but if I were buying, I’d want to know that they can trap previously unknown threats in real time. If you’re under regulatory scrutiny, you’d probably do best to go for an appliance or service option because they’re more likely to be programmed for professional logging and archiving.

With rocketing fuel prices, our minds are all being focused on what we can do to shrink our energy bills. Some look to the government to solve the problem, through lower duties or investment in indigenous power sources. But the government has its own money problems, which I won’t go into here, for fear of getting political.

As with most things in life, it’s better to be self-reliant if it is within your capabilities. And that goes for all aspects of life, not just energy.

Until recently, the ‘green’ argument was the one most used to encourage us to change our ways. Of course, that had very little effect, except among those paragons and young people, who were untroubled by long payback times.

Suddenly, the equation is changing. Whether the oil madness will continue, we have no idea, but it makes sense to consider where we go from here. When I say ‘we’, I’m thinking of the British Isles. Local oil has served us well but we seem to be on the downward slope. We still have masses of coal under the ground, but no way to exploit it cleanly. Our nuclear power stations are creaking and need replacement. We don’t have enough sun or space to warrant solar collector installations. I could go on: waves, wind, tides, geothermal… But you get the general picture. We either need more power or we need to use less.

And the ‘use less’ does seem to offer the quickest answer, although it still doesn’t change the underpinning structural and political issues concerned with energy availability and security of supply.

Some of the answers are easy - when replacing vehicles, use more energy efficient ones. The same for computer and communications equipment. In fact, it’s the same for everything except you’ll hit the law of diminishing returns.

‘Dematerialisation’ is a word that has been bandied around in legal and environmental circles for many years. But it has a particular resonance now because dematerialisation means less fuel and resources consumed during manufacturing, less power needed during operation and a lower impact at end-of-life. In fact, many IT companies that are committed to dematerialisation are also maximising the recyclability of their products.

Examples of dematerialisation are the switch from printed to electronic money, the replacement of travel with the telephone or videoconferencing, the expansion of the mobile phone as a computing device, the switch from full scale desktop computers to ‘thin clients’ and their derivatives. Wherever you look, opportunities to dematerialise your operations exist.

It’s not a case of rushing out and changing everything now. But it is a case of bearing in mind the possibilities so that when the time comes to change your technologies, ask yourself a few questions:

Can I keep this going longer?

Can I reuse it elsewhere in the organisation?

Can I donate it to a charity that can reuse it?

If it has to be recycled make sure it goes to an organisation that will handle this responsibly.

Do I need a replacement?

What do I really need?

No-one’s going to do this for the love of the planet. But if things last longer, cost less to buy, cost less to run and deliver environmental bonuses, what’s not to like?

It’s just a case of making it part of your consciousness.