Two Big Outfits Knee Jerk Forward in Mobile Apps

January 5, 2012

We track the enterprise applications market on a daily basis. I keep the content separate, but I noticed two unrelated stories this morning and both of them triggered thoughts about information access. In my opinion, one cannot easily do “work” today unless it is possible to access, find, tap into, or otherwise get one’s mental paws around digital information. Those struggling with information overload are desperate for solutions; hence, the Big Data boomlet. There are companies which are increasingly isolated from where the information action is, and increasingly these companies are taking actions that would have made little sense just three years ago. Today crazy acquisitions do not raise a pundit’s blood pressure.

Example 1: Point your browser to “FT Buys Its Web App Maker; CEO Ridding’s Memo.” The Financial Times publishes the orange business newspaper and has a juicy chunk of the Economist, the touchstone of the MBA subculture. A couple of years ago, the FT dumped the wax museum, and I thought the outfit was going to focus on its brand and content. After an exciting brush with digital craziness in the now offline Newssift service, the FT is embracing mobile applications or apps.

I found this passage notable:

Assanka launched the HTML5 Web app with the paper’s in-house product team in June 2011, declaring “the craze for native apps is a short one and we are already seeing it on the wane”.

Wow. Never mind that Thomson Reuters has mobile apps which enjoy a modest audience. Ignore the fact that the Bloomberg app for the iPad is a case example of interface excitement. The FT purchased a mobile app development company. After my spin through a recent mobile app conference in London, I can report that the cultural blend of the FT and its interesting view of online information will interact in some interesting ways with the good folks at Assanka. Yes, interesting.

Example 2: Now navigate to “Confirmed: Deloitte Buys Ubermind, Looking to Play a Bigger Role in Mobile Apps.” This article asserts:

Joining Deloitte gives us a chance to be part of something big—something bigger than we could ever accomplish on our own. By combining our creative and technical chops with Deloitte’s global reach, industry insight, and deep talent, we have the ability to make an unmistakable impact in the industry.
We are also focused  on maintaining what was working. The key elements of our business that make us unique will remain the same: our people and culture. We look forward to continued success as part of Deloitte Consulting LLP.

Blue chip consulting and services firms are facing a tough challenge.

First, the best and brightest don’t automatically flock to these companies any longer. Google and Facebook, for example, have more magnetism. Second, the emergence of outfits like Gerson Lehman Group have sucked money from the Blue Chips. GLG offers blue chip expertise at a much more attractive price point. Third, clients are pinching pennies and sometimes are quite happy to hire people who have been terminated with extreme prejudice and will work for less money than a full time equivalent. Fourth, it is tough to market the old fashioned way. Some of the traditional big spenders are retiring and the 20 and 30 somethings prefer to get their business advice without a detour through carpet land. How will a professional services firm leverage Ubermind? My view is that it will not because the culture of what is left of the Big Eight is going to find few protein snack bars in a professional services firm. Accounting is one thing; coding apps is another. Bean counters and coders can be a challenge to blend.

What is the relationship to information retrieval? I see three points which we shall attempt to follow:

First, big outfits are buying companies with core competencies not shared by the purchaser. Management is not exactly the trump card for publishing or accounting firms. You recall News Corp. and its alleged misdeeds. You also my recall the accounting firm which muffed the job at Enron. Now the management skills of these types of professionals will tackle digital information via apps. Long shot I think.

Second, keeping coders on the is difficult. Google goes to great lengths to retain its programmers. How is that working out? About 20 percent of Facebook is former Xooglers. Coders play musical chairs and often end up competing with their former employers. How will publishing and consulting companies cope with these employment behaviors. Maybe sue a programmer?

Third, apps are an interesting development in information access. More importantly, coding an app is an invitation to keep writing checks. The work is never really done. Most apps don’t generate much traction. In the enterprise, apps are making headway, but the consumerization of information access is moving quickly, and I think it is unlikely that outfits like the FT and Deloitte can react quickly enough or sustain the appetite to invest in app cultivation for very long. Yep, I am skeptical.

Why, then, are these firms buying app development companies and not signing a deal for the company to solve a problem? The answer is, in my view, that large companies do not know what to do. Buying a company gives MBAs and clueless managers something to occupy their time. Once the acquisitions have been completed, the real work begins. For the FT and Deloitte, it will be trying to sell enough work to pay for the purchases, sustain technical investment, and manage the technical professionals.

Will information access be affected? Nope.

Stephen E Arnold, February 5, 2012

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