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Nigerian Startups, Examine Your Business Model And Get Ready, Tech Bubble Is Near, Precisely 2015

By
Tekedia Editors
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0

Tekedia Intelligence has looked at many data and we can conclude one simple thing – the tech bubble is near. We estimate that it will happen within the next five years. We have extended the date from 2014 because investors few months ago were putting money in winners, avoiding 2nd tier companies. But our recent research, especially the numbers we see in SecondMarket has convinced us that the bubble is near. They will jack up the valuations to the late 1990s rates and by 2015, we will have a tech bubble. Simply, now is the time to examine your business model and get your Plan B ready.

Typically, bubbles are bad for the investors and companies, but over time, it enables a new phase of technology adoption.When bubble happens, prices of tech gadgets drop, making them affordable for people that would not have afforded them few months before. So, as more people use those technologies, they quickly rebuild the sector or industry. So, bubbles are not necessarily that bad. Without tech bubbles, many cannot afford most gizmos as nothing will bring down the prices.

That said, you must not allow your company to become the victim of the bubble. You need to plan and execute to mitigate any potential impact it will have. We are certain that a bubble is on the way. The numbers do not lie:

  • LinkedIn had a 2010 revenue of about $243m but closed on its IPO date at  $8.9 billion

  • Yandex was $440m but ended with $12.5 billion

  • Pandora was $138m but ended with $2.8 billion

By historical standards and date available to Tekedia, we see these numbers as very outrageous. Recall that eBay had $5.7m revenue in 1997 and ended on IPO day in 1998 at $1.9billion. Yahoo was moderate because it was too far from the late 1990s bubble; it had a revenue of $1.4m in 1995 and raised $848 million on the IPO first day.

While the numbers above do not show good judgement on the value of the stocks with the earning power, open an account in Second Market and see the valuations on Facebook, Zynga and Groupon. Facebook generates about $2b and is worth excess of $80b (You can pick Facebook over Amazon or Cisco as they are largely the same value now. It is already bigger than Boeing and other iconic firms); Groupon, the commerce site and heavy cash burner is a $713m revenue firm and worth $20b. Zynga ends the top flights at $597m and valued at about $20b for making FarmVille, CityVille, Coffee-Ville, etc. Twitter is worth $8b in SecondMarket, a secondary market. The valuations in SharePost for these companies are not different.

These evaluations do not depict reality. You can also see that these numbers are pushing real estate high in the Silicon Valley environs. We think for the investors to overlook that LinkedIn is trading at 750 times its next year’s earning is wrong. S&P and Dow valuations average around 12x of the forward earnings.

LivingSocial is certain to go public soon. It was a mixed one for Chinese Youku which is expected to become what Youtube is to the English world in China. It reached $70 before it came down to $25. But our biggest sign of bubble is color.com that received $41m to make an app for photo sharing. We think the domain value is more valuable than the product. Investors are discounting risk and valuing companies with reckless abandon.

Recall that Bebo was bought for nearly a billion dollars (more than $800m) but got dis-invested at few million dollars ($10m?). Myspace is a case in point; News Corp bought it for $580m in 2005 but sold it for $35m few weeks ago.

Do not be deceived thinking that a bubble in Silicon Valley will not affect you in Nigeria or Kenya. No. It will because most of the services we use now are cloud-based and any bubble could take those companies away with your data.  So watch carefully as these changes unfold. Tekedia will be giving updates.

Canonical Launches Cloud-Based Support For Ubuntu

By
Ejiofor Agada
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1

Most people, who like Linux, love Ubuntu (like yours sincerely). Though we may object to Ubuntu’s new Unity desktop, but at day’s end, they still use Ubuntu. Technology businesses though have a more jaundiced view of Canonical, Ubuntu’s parent company. Canonical, though, is now taking steps now to make its potential hardware and software partners happier.

 

First, Canonical is trying to become better friends with its reseller partners. Their new channel partner program, Ubuntu Advantage (UA) is “designed to help resellers bring a new set of support services for Ubuntu server, desktop and cloud installations direct to businesses. The program is launching with global partners, including CSS in the US, Asia and Europe, Middle-East and Africa (EMEA).”

 

The name of the game, according to Canonical, is to “provide enterprise customers with access to the tools and support they need to get maximum return from their Ubuntu infrastructure including round the clock support, Ubuntu Landscape management and monitoring tool, knowledge base and legal cover. Ubuntu Advantage helps to minimize any impact on mission-critical services and reduce the cost of system downtime. The Ubuntu Advantage partner program extends the availability of these services beyond Canonical and, for customers, adds local resources and responsiveness to the expertise that Canonical continues to provide.”

 

What resellers will get out of this is the usual additional revenue streams from new services. In addition, Canonical promises that they’ll get “marketing, technical, commercial and pre-sales support and an assigned account manager as part of the UA program.”

 

Canonical has offered enterprise software stacks in partnership with IBM; the Ubuntu distributor also briefly tried a retail, open-source software package; and has long been targeting Red Hat and the other server operating system giants for the Linux server market. While Canonical has had some success with that last mission-albeit Red Hat continues to be server Linux’s 800-pound gorilla–over the years its partners have been happy with it.

 

As The VAR Guy Website observed, Canonical has lots of good partner ideas but they haven’t pulled them off because “Canonical experienced multiple management changes and product launches that pushed – and pulled – the company into new directions.”

 

In addition, Canonical is simplifying its hardware certification program. In the past manufacturers had a choice of two levels of endorsement for systems: “Ubuntu Certified” and “Ubuntu Ready.” Canonical recognized that this was confusing so starting with October’s Ubuntu 11.10 release there will only be one Canonical-endorsed hardware certification program: Ubuntu Certified.

 

Just like resellers and corporate customers, original equipment manufacturers (OEM)s and original design manufacturer (ODM)s much prefer simple and stable over constant small changes and tweaks.

 

If Canonical is successful in doing all this, and in stabilizing it own management structure, then Canonical, and Ubuntu, will have a much better chance of moving from Linux lovers’ desktops to corporate offices and server rooms. That’s easier said than done though.

 

Canonical has also announced the launch of Ubuntu Advantage Cloud Guest, a set of technical support services, management tools and legal cover for businesses running Ubuntu in public cloud environments. Cloud Guest gives businesses running public cloud instances access to round-the-clock technical support and a comprehensive knowledge base for rapid resolutions as well as Landscape, Canonical’s systems management and monitoring tool. A single Cloud Guest subscription covers up to 100 public cloud instances offering businesses the flexibility to adapt to changing business demands.

 

“As the public cloud looks to take its place alongside the data centre as a standard IT resource, organisations are looking for the reassurance of support, which guarantees the same service levels as they expect from other IT implementations.”

 

Public clouds like RackSpace, Amazon’s AWS and GoGrid, are popular due to their flexibility to adapt and scale to changing demands. Start-ups, tech companies and enterprises alike are using these environments for a variety of workloads spanning development to deployment. Ubuntu Server has proven immensely popular as a guest operating system across all these environments. With Ubuntu Advantage already providing support for Ubuntu as the Infrastructure as a Service layer in cloud platforms, Cloud Guest provides the next level of reassurance for businesses who choose to also run Ubuntu instances in public cloud platforms. Additionally the systems management tool (Landscape) will provide more control and optimised deployment of Ubuntu instances on the cloud.

 

Businesses are realising the importance of support and management of their IT environments as they become more complex with cloud instances. In fact, according to Gartner, worldwide IT spending on public cloud is expected to grow four times faster than overall spending as companies shift to the cloud.

 

 

Nick Barcet, Cloud Solutions Product Manager at Canonical comments; “As the public cloud looks to take its place alongside the data centre as a standard IT resource, organisations are looking for the reassurance of support, which guarantees the same service levels as they expect from other IT implementations.”

Acer Iconia Tab W500 Review – Embrace Windows 7 OS And SocialJogger

By
Tekedia Editors
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0

The Acer Iconia Tab W500 is bucking the current tablet trend by opting for an operating system other than Google´s Android. There have been many critics of Microsoft´s touch sensitive version of Windows, Windows 7, which they claim is still based on the old principles of mouse and keyboard interaction. While it has been claimed that some of the icons on Windows 7 are too small to be put to good use on such a device, Windows 7 has the benefit of being easy to use for the many people already familiar with Microsoft´s operating system. It also provides a lot of freedom and functionality than other operating systems that have been designed for tablet use.

 

Windows 7 is also a great asset on the Iconia Tab when you consider the additional docking port that is available for it. This is a feature quite unique to the Iconia Tab, in that it allows you to transform the tablet device into a more familiar laptop like device. With this you can be afforded with a physical keyboard and mouse as an alternative means of operating the tablet.

 

The Acer Iconia Tab W500 has some excellent hardware power behind it including a dual core processor, 2GB RAM and hardware acceleration for graphics. The Iconia Tab comes with Wi-Fi for web connection and 3G is available on some models. There are also two 1.3 megapixel cameras, one on the front for video calling and one on the back for traditional usage.

 

With a 10″ screen the Iconia Tab is in the larger range of tablet devices with a spacious screen that makes it ideal for video and web entertainment. Running on capacitive technology the Iconia Tab comes with support for multitouch input gestures as well.

 

Along with running Windows 7 the Iconia Tab comes with some of Acer´s software installed too. This includes Acer Ring, which provides a much more touch friendly means of loading applications, and SocialJogger, which can pool information from all of your social network accounts like Facebook and twitter.

 

The Acer Iconia Tab W500 is an excellent tablet device with a spacious screen making it ideal for all forms of visual entertainment and web browsing, and the device really stands out for its additional laptop docking port that can provide you with a means of interaction that is not available on other tablet devices. The physical keyboard available with the docking port should compensate for the claims made by some that they find some icons on the Windows 7 OS too small for proper finger use.

 

You can buy this phone from our UK partner Best Mobile Contracts

Why Customers Rule In This Internet Age – Information Is A Click Away

By
Tekedia Editors
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0

Few decades ago, firms ruled supreme in getting the best profit margins out of their customers. It was an era of optimizing for the maximum possible profit. Market was very opaque because information was very expensive and untimely. Customers could not track price changes in real time. Even when they get the comparative prices, the distance to the other shop was a huge barrier. So in most cases, customers would knowingly pay high prices because of the need to save time.

 

This was the era when airlines maximized prices on tickets. When you leave your house to a travel agent, you have made up your mind to come back with a paper ticket.  The travel agent was serving the airlines and the higher you pay, the better is his business.

 

Though he may offer some choices among the competing airlines, there was no major price pressure on him since at the end you would be forced to buy from him. Why? You may need to drive another twenty minutes for another travel agent. Under this model where you either buy from the airline offices or travel agents, your choices are very narrow and the airlines were in control.

 

Then came the Internet era; from Priceline to Expedia, the customer for the first time had the power to make decisions based on price without even leaving the house. Go online; describe the trip and airline choices will roll down; usually, the cheapest one comes first. This market is a commodity business, especially for an average traveler. Who cares the airline you flew from Boston to Baltimore? Without that brand loyalty, the cheapest ticket always wins. The travel agents have lost the power to control the price. The airlines suddenly must compete on price resulting to lower profit margins.

 

There was price-war and it was very combative in the industry. Personally, I still think that the greatest competitor to airlines is the Internet. Without the Internet that destroyed the pricing model, they would still be doing much better compared to how they are doing today. At least, the Internet allowed the low-cost carriers to have direct access to customers. The Internet was the most important factor that enabled these low-cost carriers to get into the industry. It provided a platform through which they connected to customers directly and competed on price effectively.

 

As we celebrate the 25 years of .com, we will continue to see major transformations and disruptions arising from the Internet.  Bookstores are going to become history in the next few years. The model of buying books and setting price for the local community is dead. The local community is no more ‘local’; they can buy from any part of the world. The local bookstore is competing with shops in China, India, Canada, etc because Amazon and ebay have provided platforms on the web that make such possible.

How To Incite Innovation And Sustainable Economic Prosperity In Nigeria

By
Tekedia Editors
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1

Nigeria is on the move. It is making progress. Though there are many challenges, the new team of economic experts assembled by the President is poised to redesign the nation and move it to the path of prosperity. In this report, Tekedia offers insights and perspectives which if considered could put Nigeria towards growth and sustainable progress.

 

We identified industrial clusters in the nation and we recommend that Nigeria focuses the development efforts around them.

  • Transportation and logistics
  • Health systems and healthcare
  • Business services
  • Energy services
  • Agriculture and food processing
  • Chemical products and plastics
  • Entertainment and tourism

 

Nigeria must come with a diversified strategy where each state or region must develop a plan that will work for it. We cannot run a fix all approach because each of the regions has different strategic opportunities. So, we want to examine  the development efforts based on specific regions.

 

Transportation Hub

The middle belt of Nigeria offers a opportunity to build a transportation as they link the South and North. Plateau state should be transformed into a hub that can enable an advanced transportation network in the country. Most of the luxury buses pass through this region of middle belt and most of the goods move through them. With better facilities, the state can become a domain that will generate revenue and boost economic growth in the nation.

 

Industrial Clusters

Tekedia recommends efforts to facilitate formation of industrial clusters in the state.  Harvard Business School Professor, Michale Porter, coined the term “industry cluster” on the idea that once an industry achieves a critical mass of businesses, it will give the region an advantage over other areas in the given sector. That way other businesses will come to that region.

 

Tekedia sees the necessity of developing modernized clusters in Aba for shoe, Kano for leather , among other areas. The government must carefully look at all the regions and enable the creation of the right ecosystem that will help them succeed. Lagos has taken the position for ICT, we can get Sokoto to become the powerhouse of the solar systems development sub-sector. Other regions will focus on sectors they have natural competence.

 

It must be emphasized that jobs base camps must be developed to have the right manpower in the nation. The country must understand that each of the regions have unique opportunities. Expertise must be locally matched.

 

Top federal universities in the country must be anchors for new ideas and growth and the nation could play a role to invent and sustain the clusters.

 

Energy and Sustainable Energy

Our universities could play major roles in this area. There is also an opportunity in the Northern part to help jumpstart solar technology business. Government should expand the focus of government labs to making them innovation platforms where research outputs are taking to the market.

 

Healthcare

Nigeria has an opportunity in this sector. The national university teaching hospitals must be anchored to drive innovation and build a cluster of health focused private companies in the region. We need to get beyond services to encouraging local product development and design.

 

Inciting Innovation

Nigeria must develop and implement what is called INCITE Initiatives. INCITE means INnovation, Commercialization, Investment, Technology, and Entrepreneur. We recommend a modernized and better executed StepB Nigeria project that does not focus on federal agencies and institutes to any organization with innovation capacity, including private. Tekedia recommends $500 million to help drive this project, nationwide. Entrepreneurship and commercialization of ideas must be paramount in any plan.

 

Friendly Ecosystem

Nigeria remains a toxic place for business because the cost of business is high. Nigeria needs to provide basic amenities to help companies have opportunities to prosper. Also, the IPR must be strengthened so that companies can do real creative works with assurances that their works will be protected.

 

Foreign Direct Investment

Nigeria has a duty to make the nation to be seen within the lens as a good place for FDI. Understanding that most of the states are not economically viable without government support, Nigeria needs to invent a new process to make sure that development is not localized within Lagos, Abuja, Ibadan, PHC and other states. We have to use local tax incentives and laws to expand FDI into other regions of the nation.

 

Reviewing Regulations

Nigerian business ecosystem is tough. More companies collapse within ten years than succeed. Multiple taxation is common and excessive bureaucracy is rampant. While it takes few minutes to register a company in some advanced nations, it needs more than three months in Nigeria.

 

This is an executive summary developed by Tekedia Intelligence.

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