Advice

Smallbiztechnology.com suggests you do just that unless they can answer three questions:

• What books have you recently read?


• What industry conferences have they been to?


• What tech industry relationships (and certifications) do they have?

Those questions aren't bad in and of themselves; you should satisfy yourself as to the qualifications of any contractor you hire. The justification presented for asking them, however, is terrible and exposes the number one unquestioned assumption both among these so-called "consultants" and many of the businesses they cater to. The assumption is exposed in one concise sentence in the post:

SMB Nation East took place this weekend in New Jersey and one of the big lessons learned at the 3 day event, of which I attended Friday, was the differentiation between those IT consultants who still are "only" able to fix your computers when things go wrong, but not able to provide strategic insight to help you grow your business.

Where did anyone ever get the idea that in something as complex and dynamic as information technology, the same person who is well-qualified to fix your technical problems would also be even remotely qualified to provide strategic insight into your business operations? Why would anyone imagine they could get both of those very specialized skills in a one-person package for the low-end rates that most of these people charge? It's like saying your neighborhood EMT should be able to also do heart surgery, and at the same mid-five figure salary he's already getting paid!

I suggest you put some thought first into whether you actually have an IT consultant, or have just hired a technician. Frankly, there's nothing wrong with just hiring a technician, and by default, that is what most small businesses have done... they don't like the price tags on real consultants. Where the problem comes in is when the assumption is made, as above, that your tech janitor should be making (and that you should be listening to) strategy suggestions.

This isn't to disparage those technicians; they simply have a different focus, and different motivations, than real IT consultants. But the motivations make all the difference.

Case in point is item three on the question list: tech industry relationships and certifications. You absolutely want your technician to have certifications these days for the technologies they are working with. But consider what that means for that technician. Unless he has all the certifications, for every technology, then what technology do you think he is going to recommend you use to solve your next business problem? And if, for whatever reason, he didn't suggest the one that was going to get him more business, what basis might he have for doing so without any certification in it?

A consultant doesn't have an investment in your choice of a given technology, because they aren't supporting it over the long run. This leaves them free to make strategic recommendations unencumbered with concerns over future revenue. Their goal can be exclusive to finding the best solution to meet your particular challenges.

If they can't do that, by all means, fire them. And ask more than three questions; you're paying top dollar, make sure you're getting the best. But don't expect them to come fix your printer. And don't expect your technician to provide you with top-flight strategic advice, and don't fire him if he doesn't give it to you. It was your mistake asking in the first place, not his in answering. If you need strategic insight to help grow your business, go find someone who is an expert in providing such advice, not someone who worked hard to get their Microsoft certification papers. An MCSE is an accomplishment, but hardly one that indicates a deep understanding of the broad panoply of technology options facing the modern business.

So, I read this morning that new startups are starting up with fewer and fewer staff over time. Apart from the implications that this might have for job growth in our already shaky economy, it also suggests that, just perhaps, the much-vaunted efficiency of technology in business operations is finally being realized.

The advantages of technology were posited long ago, in the sixties and seventies as big business began to invest in information technology with the goal of making their operations more efficient. It didn't. Throughout the eighties and nineties, studies of the relationship between technology investment and productivity failed to show any significant improvements in efficiency associated with technology. Only in the late nineties and the early part of this century have researchers began to uncover subtle gains in efficiencies coming from IT investment.

With those early failures to improve efficiency came a sort of solace to those who had worried that new, hyper-efficient computers would result in massive unemployment, as us poor, pokey old human beings couldn't keep up and would necessarily be kicked out on the streets by our heartless corporate masters. Computers were everywhere, but job growth still boomed, fueled in no small part by the failures of the computers themselves... the support burden of keeping IT systems up and running was no small factor in its failure to introduce real productivity improvements.

But, as it does, technology has evolved, and IT systems today are faster, more stable, and easier to use than ever. As they start to fulfill their original promise, it looks like the original threat, that jobs would disappear, may also be starting to emerge.

This isn't great for the national economy or job-seekers, of course, but for the small business owner or IT manager, it has another set of threats. It means that your competitors are figuring out how to use IT to run a more lean operation, and if you want to stay in the game, you are going to have to do so as well. Years of cruising along with the blanket understanding that IT was difficult, expensive, and ultimately dysfunctional have led to a sort of complacency with the status quo that may now be fatal to small businesses. Technology that breaks, costs inordinate amounts, or does not actually improve your business processes in the ways that it should, can no longer be tolerated. The excuses are disappearing... it's time to make technology, make good.

This is the question posed on Small Business Technology last week. To be fair, the actual question is both a statement and a question: "Google Apps (Cheaper and More Features): Is it time to stop using MSFT Exchange?"

As with most such questions posed without any articulation of the desired end-state of the arrangement, there's no one right answer, of course. But the initial assumptions are a little worrisome and I would suggest if you pose the question while holding them, you're almost certainly going to come up with the wrong answer.

Does Google Apps have more features? On a bullet-point list, obviously, yes; you have a spreadsheet, word processor, and collaboration site together with Gmail and Google Calendar software, so it's as if you got Exchange plus Microsoft Office together. Sort of. Because if you actually break down each of those products and compare it to the opposite feature by feature, you'd find that in fact, Microsoft offers a lot more features. And between Exchange/Outlook and Gmail, an awful lot more. Features are, in fact, the one big reason to stay with Exchange for most companies, because Gmail doesn't yet come close to implementing many of the business and collaboration features Exchange offers. Mind you, I am not suggesting that bundles of features are necessarily a plus; that's another unquestioned assumption from the original. But both are wrong.

Next, is it really cheaper? The original article compares the $60 a month the author pays for Exchange hosting with the $50 a year Apps charges. I don't dispute either of those numbers, but I will say you're getting taken for a ride if you are paying $60 a month for a single user Exchange host. Ten dollars a month is closer to the market rates. While that is still twice as expensive as the $5 a month that Apps breaks down to (both rates being per user), it's not nearly as expensive as the comparison being made... and in some cases, well worth it for those extra features Exchange offers that Apps does not.

On the whole, I am an Apps fan, because I actually believe that most of the features offered by Exchange and Outlook are under-utilized and rarely worth the money. But I don't think it's an option that should be ignored based on erroneous assumptions.

So you have certainly heard of Blackberry, the evil, addictive, original wireless e-mail device crafted by those cunning Canadians at Research In Motion. You may even have one yourself, but if you are small business-person, then most likely you are using it entirely apart from any Microsoft Exchange Server that your organization may have (unless, wisely, you have outsourced your Exchange Server services to a large hosting company like, say, MyHosting.com) because until recently, the Blackberry Enterprise server software necessary for integrated wireless sync directly from Exchange was prohibitively expensive and difficult to manage for small IT shops.

Someone at RIM must have noticed this, because they have recently begun offering a version of Enterprise Server, called Enterprise Server Express, for free to small organizations, with reduced license fees for users. That takes care of the prohibitively expensive part; unfortunately, no one thought to address the "difficult to manage" problem.

We had the tremendous displeasure recently of having a client who decided to take advantage of this offer and asked us to help install the server software and get their devices configured. Thus began a twelve-hour odyssey, half of which was spent on the phone with RIM support, which ultimately proved unsuccessful, and exorbitantly expensive for the client despite the software having been "free."

The installation process is complex, unnecessarily so for the small business environment (and perhaps, I suspect, even for larger businesses, although those will certainly have the internal resources to cope), and poorly understood even by RIM's support staff, who passed us back and forth with misdiagnosed issues time after time.

Ultimately, they weren't able to figure it out before our fees got to be more than the whole thing was worth to the client. They are still using the desktop sync capability; we recommended outsourcing Exchange hosting or moving to next-generation phones that will work with Exchange out of the box, like Android, iPhone, or Windows Mobile devices.

Blackberry represents a not uncommon story in information technology, a revolutionary device that breaks all previous boundaries on its release, which then rides its success right into the ground. For other examples, see Novell, VisiCalc, or AOL. You can still find these things around in pockets, with loyal adherents who will use them till death do them part, but for the most part they took the market by storm, failed to adapt, and dwindled. Not infrequently, once it becomes obvious that they have been lapped, these companies offer products which once would have commanded premium prices to customers outside the core market at a ridiculous discount. However, it's a gimmick; the value isn't in the price but the capabilities, but if the capabilities have been outmoded, then any price is excessive.

And that's the case with Blackberry Enterprise Server Express. There are newer solutions, less costly, easier to implement, with more functionality. Don't let the cachet of days past influence your decisions.

Phil Wainewright writes today on why the freemium model is bad for business. Phil's blog tracks Software as a Service so as you can imagine he sees quite a few vendors for whom freemium is an integral part of their model. The term, in case you aren't familiar with it, describes the process of structuring offerings with services that are primarily free, but which offer extra features or upgraded levels of service for customers who choose to pay for them.

This is a risky approach for vendors, requiring a fine sense of what is and is not of value in one's product line, but it has proven popular in the market and can be a means of honing in on exactly the thing that users are willing to pay for. Presenting an exact value proposition represents an extremely accurate way to establish pricing and focus in on the parts of customer service that really matter.

Wainewright makes his arguments from the customer perspective, though, generally focusing on the truism that there is no such thing as a free lunch. If you aren't willing to pay for service, he argues, how can you expect it? He points out the poor track record of success for freemium services over the past decade, and questions why you would want to rely on them in the future.

Wainewright's charges are all true, of course, but they over-simplify the decision-making process you should use when selecting any service for your business that you will rely upon. The key isn't whether or not you pay; any small business owner who has been around more than a year or so can tell stories about getting burned by vendors to whom they have paid very good money. Similarly, most will have stories of free services they use which have been solid and indispensable, be they ever so simple.

The real key isn't to focus on whether or not you are paying, but on where the vendor is getting paid. That is the secret to determining their motivation, and knowing their motivation is essential to establishing an alignment of your interests with theirs.

Classically, businesses make money by providing good, well-priced services to customers who feel they get their money's worth and will return for more and make referrals. There's nothing wrong with that model and it still works pretty well in many situations. But it's not the only working model out there. There are businesses that make money today by over-pricing and providing shoddy utter crap, and there are those that make money by giving things away and providing excellent products.

The reasons behind this are all about where the next dollar is coming from. The company that has no reason, even if it provides excellent service, to expect that you will ever send them another dime or refer anyone to them, probably isn't going to focus on making you happy. They want to cash your check and move on; their margins come from finding the next sucker.

A freemium-driven business, on the other hand, frequently has every incentive to provide good service... once they get you in, even as a free customer, you represent that next dollar because it comes from upselling the next level of service to you. The free was to get you in the door. The real sale doesn't happen until the company converts you somehow. While it's true that a lot of freemium-based companies have failed, so have plenty that decided they should charge up-front.

There is also the possibility that the freemium vendor is getting what they want simply by your presence; Google is a good example of this: they make their money from advertising. Your eyeballs are a necessary part of that, but your wallet isn't. They have every incentive to keep you coming back to their services and viewing their ads, even if you never give them a dime.

Don't mistake anecdotal examples of poor planning or execution for a problem with the model itself. The right things to look at are whether or not the vendor is capable of providing the service you want, and whether or not they can make money at it... whether the money is coming out of your pocket or not.