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There’s Gold In Them There Files – Alternative Data, Emerging Technology, Monetize Data

Sam Walton founder of Wal-Mart would famously count cars in the parking lot as a barometer of both his business and the relative performance of rivals. He once got so engrossed in the task that he crashed his car into the back of a Wal-Mart truck.

Sam may therefore, not have been so surprised by a University of Berkley study which used historic satellite imagery to monitor parking-lots across multiple US publicly traded stores. It showed that buying shares when parking-lot traffic increased abnormally and selling when it declined would earn a return that was 4.7% over a retail sector benchmark.

Satellite imagery is not the only way to get an understanding of client visits. As highlighted in an article by Matt Turk geo-location data allowed Foursquare to predict Chipotle’s 2016 Q1 results ahead of the company announcement. Foursquare predicted correctly, that sales would be down nearly 30% based upon their analysis of changes in footfall at the food chain’s outlets. The ability to use timely data that gives a more current indication of performance, rather than waiting for backward looking quarterly updates is clearly of enormous value to investors.

Another example from 2018, concerns the much-watched company Tesla. When Elon Musk announced that the car maker was having to work around the clock to meet demand for the model 3 there was, some would say understandably, some scepticism from the market. Thasos Group which analyses trillions of geographic coordinates collected by smartphone apps set about tracking smartphone pings from inside the boundaries of the Tesla Fremont campus. Using their analysis of numbers of phones active on the Tesla site they were able to share data with hedge-fund clients showing that the night shifts grew by 30% between June and October 2018. In this way investors had independent evidence indicating that Musk was neither exaggerating demand nor Tesla’s determination to increase production to meet it.

Unsurprisingly, therefore the investment industry has become extremely interested in sourcing and using “Alternative Data” to gain competitive advantage and generate alpha. According to Alternative Data, buy-side firms are expected to spend $1.7 bn on alternative data in 2020. The University of Pennsylvania found that 20% of hedge funds with more than $1B in assets under management have multiple analysts dedicated to identifying alternative data sets and understanding their correlation to companies’ earnings.

It’s not only investors that can gain financial advantage from using alternative data. In the book “Outside Insight: Navigating a world drowning in data”, Jorn Lyseggen highlights the potential benefit to management from utilising external information that can give a more forward-looking perspective on which to make decisions. Lyseggsen says “Running a company looking only at internal information is like driving a car while looking in the rear-view mirror. Every day, competitors leave behind online breadcrumbs filled with valuable external data. Outside Insight is a business strategy for forward-looking companies that leverages AI and machine learning technology to distil valuable insights from this information for better, more informed decisions.” The key argument in the book is that senior management should be incorporating external data into their decision-making process to help them understand external environmental factors that internal data alone cannot. Examples include macro-economic indicators to help understand the health of the global economy; social media data to understand relative brand sentiment; data on the production and supply of raw materials; and current and forecast weather patterns that may impact on food production. For example, Minute Maid use data on predicted and actual weather conditions to plan and adjust the production process for its Orange Juice. By understanding both the likely future conditions and actual weather events from around the globe, they can make timely adjustments to supply chains and production processes to cope with bad summers in one region and unexpected events like an early heavy frost in another.

The desire of investors and senior managers to source data that will help them make better investment and strategic decisions is one side of the story. These are the factors that are generating ever increasing demand for data.

But what of the supply side. All firms generate data in the course of their business. Much of this is “by-product” data that is not proprietary to their core business, but which may have real value to others. Any data which a firm generates that can give insight into the activity of a particular sector or market may well be of value to others.

Based on market feedback provided by Alqami (a specialist in the monetisation of data), the value drivers for data are:

Transactional: Providing a granular view of economic activity such as orders, invoices, payments, fulfilment data, applications for services or permits.
Volume/Depth: Providing a sufficiently material insight into one or more business area that will create genuine insight.
Multi-Dimensional: allowing different insights and correlations.
Frequency: The data should be refreshed on a consistent, frequent basis, providing up to date insight into current levels of activity.
History: The history of the data should be available to allow year on year, month on month and trend analysis.

There are also a number of constraints that Alqami identify for firms to consider:

Regulatory/Legal Restrictions: Does a firm have the legal right to distribute data and what constraints are there (for example anonymity)?
Ethical: Is there any ethical concern around the supply of data and how does this impact on the content of data (for example the need to mask and aggregate certain data)?
Accuracy/Timeliness: Does the firm have the capability to meet commercial SLA conditions regarding accuracy and timeliness of supply?
Format: Raw data is of greater value than aggregated data, though that may need to be considered given the constraints mentioned above.
Valuation: There is no consistent and recognised methodology for valuing data. It requires the input of specialists.

The types of data content that may be of interest is very broad. Bloomberg for example is committed to both sourcing and distributing alternative data and segments this under multiple categories.

Multi Asset: Corporate Flight activity, App Usage, Supply Chain, Public Sentiment.
Consumer: Consumer reviews, consumer intelligence, retail traffic.
Energy: Oil & Metal storage, natural gas flows, shipping data.
Financials: Equity analytics, employment, short interest data.
Healthcare: Clinical trials, Regulatory milestones, prescription data, drug and disease-level forecasts.
Industrials: Public contracts.
Real Estate: County data, building permits, construction projects.
Technology: Technology spending intentions.

In terms of reward, the value at stake can be significant. Mastercard’s core business is processing payment transactions globally. However, they also make significant revenue from the insights that this view of payment flows provides. Based upon their Q3 2019 investor report they currently earn revenues of over $4bn per annum in their Data and Services business, a significant part of which is focused on alternative data, providing analytics on current consumer spending and comparison to historic spending trends across industries.

Whilst most firms will not be looking at $bn opportunities, the rewards for providing data can be significant. In most cases data provision will be on a licensed arrangement that will generate recurring annuity revenues. So long as the contractual arrangements and initial operational set up are well managed, then the provision of the data will not be a significant overhead. The incremental value to your firm for licensing data could therefore flow direct to the bottom line. This is something the NHS may have considered before (as reported in the Times (10/12/2019) giving Amazon the rights to a veritable treasure trove of data for free.

There may indeed be gold in them their files (of data). If you think you may have data that could be valuable and want to join the gold rush, please do get in touch. Can you afford not to explore this further?

Disclaimer: This article has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Steve Webb Advisory Limited, its directors, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

Authored by Steve Webb, Senior advisor Envorso

M&A: Expectations in Venture Integration

Steven Sinofsky

With M&A a key to successful venture integration are mutual expectations regarding operational and product strategy. What can go wrong?

M&A is super important in tech. So many huge successes but also many disappointments coming from a mismatch of expectations regarding integration. This thread expands upon an “integration expectations” matrix. How to avoid misalignment. 1/many

M&A Expectations from perspective to acquired looking at product and operational integration.

Throughout the rise of conglomerates through the 1980s, there was a wave of M&A activity and a body of research that showed how the majority of deals, especially heavily integrated deals, “destroy shareholder value”. All along the tech industry viewed M&A particularly at smaller scale as crucial to the generation of experiments and renewal of people. The rise of Innovator’s Dilemma as “canon” combined with the data on M&A failures is perhaps the root of how modern SV approached M&A — a necessity that needed a new type of venture integration. This is, perhaps, what led to successful integrations from Facebook, Google, VMWare, and more where the modus operandi was a bit hands off for quite some time. Let’s explore.

At the same time, it is fair to wonder why founders or founding teams often don’t stick around at BigCo after deals. For the most part, it goes without saying that founders and founding teams like that work environment. Even though they built something and want to scale it, the opportunity to do so in a large company just feels like a different journey. That said, there is also a mismatch between parties on the expectations of venture integration. This post looks to how these expectations are set and what they might mean.

Most people think about getting deals done — price and terms. Reality is that as either buyer or seller, once “deal fever” settles in those are easy and you can’t really “contract” or LOI terms of subsequent integration. Why?

It is always important to consider that M&A is two distinct phases and almost always two sets of people: doing a deal and integrating a deal. Very rarely are deal makers responsible for post-close integration and measures, though quite often a failure of deal terms is placed on the acquiring business unit.

Too many (unintentionally) scuttle deals by trying to negotiate future — how will things work, what will be asked of team, etc. Truth is you can’t contract these b/c they can’t be enforced, but also negotiating may leave bad taste and lead to failure of deal.

It is natural for parties to try to minimize risk. Founders want to negotiate the future downstream implementation while acquirers may want to encode their strategic goals. In almost all cases, there’s almost no ability to negotiate future behaviors at the time of the deal. The deal should focus on overall trust and alignment that exist a priori, not on trying to contractually obligate alignment.

Venture Integration (VI, not vi) is process big companies go through when acquiring. It might be heavy or light weight, might involve central VI teams or be left to the business unit. Key is that there are mechanics and also strategy — separate.

Acquiring companies and consultants that work on M&A all have processes and workflows for deals and some even claim to have playbooks for venture integration. Much of this is important though straight forward (integrating IT systems, real estate, salaries, performance reviews, budgets). Rarely are there processes for what really matters which is actually getting alignment in the ways the deal envisions. That’s primarily because every deal is relatively unique in how it might integrate.

VI doesn’t start after deal is done but even before parties talk. If BigCo initiates a deal, then from the start are plans for how the target will be “integrated”. The mechanics will just happen, good or bad, but strategy is what matters.

Big companies have very clear and often quick answers to how a startup should integrate once acquired. Often this has a feeling of “we will plug it in here” (for sales, R&D, marketing especially positioning, etc.) Unfortunately this is often idealized and not often informed by the state of the startup’s code, execution capabilities, etc.

Important to recognize that even the very best M&A BigCo either have a VI playbook they rarely vary (eg Cisco) and/or the plan for VI is set before the deal really progresses even if there is never really total clarity/communication.

Most companies have either a requirement or convention for the acquiring business unit leader/exec to document a venture integration plan. Surprising to most founders is the reality that much of this focus might be on how to budget for operating expenses, how to account for revenue, whether the deal is accretive or dilutive to the P&L, and especially in enterprise, how does the acquired technology get positioned and integrate with the existing product line and go to market.

As the target, you may or may not have optionality for how a deal is integrated as you likely won’t have the ability, desire or even time to turn that into deal terms. Even if you did those sorts of terms are practically not enforceable.

For example, most deals have “key people” identified and if they don’t join deal falls through. But really we all know that you can’t make people work but people will hang on to vest. So VI (for bigco) needs to be more than that.

Ultimately, as the acquiree you have to be mostly focused on where you have optionality. If you have multiple suitors chances are you are considering different price and structures, not different downstream integration scenarios. Even if suitors are pitching different approaches to integration, for better or worse you have to take these with a grain of salt (and a lot of human trust) because once the deal is complete all bets are off. Remember in big companies, people move around, divisional structures change, overall budgets are never fixed, and so on. No contract can really account for those realities of running a big company.

When I think about good/bad deals (from either perspective) I think about dimensions of operations (how do things work) and product (what gets done). With those question is then is strategy pushed by acquirer or pulled by acquired.

The push/pull is the key dynamic. When viewed from the position of the acquiree the idea is whether you get to pull or bring in “as needed” help with operations or product or whether you have requirements pushed on you for how to operate or develop products.

Operations is about place in organization, who is the boss, what resources are allocated, how are people treated, reporting structure and job titles, salaries, policies, and so on.

Culture super important to startups, founders emphasize this a lot. In practice, some bigco view these as “gimme” and don’t stress — they are playing a long game or even a bit cynical b/c they will just change the rules once a deal is done.

Startups should play a long game too. Fighting to keep culture may or may not be helpful. If you’re going to be a stand-alone subsidiary then it might ok, but if your “team” needs to work with company then normalizing is better long term.

The key to venture integration, from either perspective of acquirer/acquired, is the play the long game and to do “battle” on topics in the order that they must be. If you can postpone something then you should. This goes for all parties. For example, the acquirer might have worries about a proposed feature on the roadmap and some specific concerns about the code — focus on the code now since that is the asset you are actually going to own whereas roadmaps were just as likely to change before the change in ownership.

You might think Bigco wants your startup culture and ways of working, but that is almost never realized or operationalized in any way. Everyone is very “busy” — too busy to change how to work.

Example, imagine a few years down road and key engineering leader wants to move to “other side” of a deal (acquirer BU). If you kept titles and org structure that doesn’t blend with bigco, then that valued person is at a disadvantage.

OTOH, if how you work is super tied to what gets done AND what is getting done is really not so native to bigco (eg cloud startup for on-prem bigco) then maintaining operations is key. BUT make that case with data/examples not emotion or soft ideas.

Time and time again, part of the pitch of getting acquired is the BigCo suggesting how it needs more startup innovation and a “big role” will be to infuse agility and a startup “way of thinking and operating” into the big company. This almost never happens because big companies are a collection of diverse and loosely connected business units that are all fully occupied until the next budget/planning cycle. In addition, the startup is almost always going to be very busy just getting done what it needs to that it won’t have time to be an evangelist across a company and set of people you don’t know.

Product are my shortcut for “work that gets done”. This includes not just product features but go to market features, selling, marketing approach/budget, etc. especially if company successfully scaled these.

Most bigCo M&A have a clear view of “slotting” in a product/tech. Almost all cases monetization is through existing channels. Almost never is case that a startup with sales & mktg, keeps those independent when bigCo has a channel already. Customers get one touch point!

One of the biggest mismatches is when a startup thinks there are both “open arms” and “resources” waiting to execute a growth strategy when in fact the acquirer has an entirely different plan. Most all of the time the acquired product is an addition to an existing product strategy and sales motion and will be filling a hole (example, when Accompli was purchased by Microsoft it fit right into the Office 365 email strategy filling a mobile client hole). Every once in a while the acquisition is a whole new business such as when VMWare acquired Nicira and entered software defined networking as an adjacency (note VMWare also did this with Airwatch, so there’s a pattern there).

Many times this is a huge win-win — eg, eons ago Visio acquired by MSFT specifically to add to existing channels for selling that Visio didn’t have — no overlap. Visio added hundreds of million in incremental revenue with little “effort”.

Visio was at a growth stage where it did not have a direct sales force and faced the expensive and daunting task of building one out (we see this quite a bit today with SaaS offerings that have worked at mid-market and are on the verge of entering the managed account space). The decision was quite clear for Visio — build out a direct sales force (and perhaps watch Microsoft entering diagramming) or join forces. Once joined, from day one there was access to a large network of Microsoft sellers (though as a longer version of this note would say, it was not like 10,000 account reps were all of a sudden dedicated to Visio).

BTW, I like using really old examples like Visio (and below FrontPage) because they happened so long ago they are free from debating the facts of the situation and one can focus on the lesson — a key learning from teaching the HBS case method.

OTOH too often product development integration is a big mismatch. Bigco has unrealistic ideas for how much/how fast the bigco strategy will get added to the startup code base.

AND at same time, startup has unrealistic expectations for how many teams and assets a bigco will just commit to *helping* startup achieve goals it was trying to achieve.

BigCo resources are scarce! (really, not a typo) and all accounted for. When acquisition shows up it takes years to integrate planning. AND when it does expectation is about startup helping each bigco team (really not a typo!)

Often BigCo expects a lot of integration of a startup across an enterprise software offering. Imagine a new member of your favorite product suite (CC, 365, SN, etc.) and think of how all the modules/apps are integrated across each other and all the shared infrastructure they maintain (identity, management, scale/recovery, etc.) The first headwinds a startup will face are all the “work” that shows up on day one. To say this is massive is an understatement. This is often described as “strategy taxes”.

This can happen with consumer offerings too. Youtube is a great example of this — there were existing YT accounts, comment system, and more. Those remained in place for years before changing. This was a deliberate effort on the part of Google.

The recent changes in WhatsApp (proposed) and Instagram show the tensions of moving what appear to be too quickly to integrate. We don’t know from the outside what the agreement was at time of deal but I don’t think anyone really believes these properties would be free of (perhaps aggressive) monetization “forever”.

Yet when the startup shows up it is the new shiny thing within the bigco. Everyone wants a piece of it and wants the magic dust of startup to fall on the old/boring thing. This happens for each business unit. Sort of overwhelming.

It is really incredible to see this when it happens. When a deal is done, especially in a really hot area, the whole company wants a “piece”. I remember ages ago when FrontPage was acquired by Microsoft and the internet was relatively new — I must have been asked to 200 different group meetings to show up and do a demo and explain this magical internet stuff and how it could possibly relate to Office. I had a canned demo (build a “Party of Five” fan site) that could be tacked on to the end of a group meeting.

This is why most VI involves putting a trusted bigco leader as “integration” leader. On one hand they help keep everyone at bay. On the other they help execute on the implicit agenda of the deal. And also help startup navigate bigco. So be careful 🙂

The role of venture integration is always key to success. This person wears many hats. They advocate for the acquired company while also protecting it. They articulate the company strategy while also lowering expectations. They are truly “in the middle”. That is really important when considering how to leverage this asset. The case study on FrontPage/Vermeer mentioned below goes into great detail on the challenges of inserting a foreign body into a startup culture that wasn’t entirely trusting.

Key to all of this is being realistic about what is going on when deal is done and rationale for the deal as VI begins to unfold. It isn’t realistic to know all up front but keep in mind everything can be made to work. Things change too!

Now the 2×2.

From perspective of the startup/acquired if both operations and product are pushed on the team, this is a fully assimilated M&A. This can be acqui-hire but can also be a strategic “tuck in”. Prepare to scale quickly and change a lot.

If the product being acquired will not be sold or offered independently and/or if the company has not scaled to have sales and marketing then this is the most common approach. This is often a technology deal or acquihire.

If acquirer maintains (pulls) operational freedom but is immediately thrust into having product pushed on them, this can be very tricky. Usually this is a short term state and one day (or 24 months), operational freedom ends, hence pwned.

This is a type of deal where the startup is given “cultural” freedom but not product freedom. Sometimes this can sound very appealing as it can often be the way to maintain people immediately upon close of the deal. Rapidly though the acquirer introduces a lot of product demands which can be rather disheartening. This is rarely a sustainable state and often the acquirer is on a fast path to assimilation but leaves the culture in place in order to have a shot at retaining people.

Conversely, if early stages are to maintain feature work and pull as needed from bigco, but operations is pushed this is a very good spot. This is a true integration — it is the best way to scale a company. Your mission is intact.

This structure is often the most preferred. Essentially this distills down to the product direction of the company continuing on the current path with permission to pull in support as needed (for example, help with that long-desired integration). The acquirer pushes the operational elements on the startup which will facilitate communication and coordination across the bigger company.

Many strive for the autonomous integration. This is a bit of a St Elmos Fire deal b/c really why would a deal get done if there is no operational efficiency or product integration.

This rarified spot is usually for large deals. A huge role in these is the VI partner running as a bridge. Since in big deals CEOs don’t often join, this can be the new “VP” or a staff role.

This is often the dream deal for startups in that you are acquired by a big company but retain full autonomy with the ability (through your VI partner) to pull resources and product support as needed. This is almost always reserved for large deals and at the same time almost always has a “big shift” down the road when the acquirer sort of says “ok, time to integrate”. It is important to consider that no matter how large the deal or how unique the assets acquired, at some point autonomy is no longer an option — there was a reason the deal was done in the first place rather than just an investment.

Deals are like snowflakes and are often unique. What is most important is, honestly, getting a deal done with the most goodwill. Bigco never have a single voice or point of view and so much gets learned along the way.

Fixating on any specific term, sponsor, or item is usually a way to add stress and uncertainty. Deals should feel good even though it is a roller coaster. There’s asymmetry because founders talk to corpdev who won’t be doing integration.

Best advice is talk to as many people as you can at the company (without causing deal to leak!) and try to build a picture for the deal. That’s a tall order but best way to build trust.

This is a huge topic. Will expand and clarify in the @medium version of this post based on discussion.

Here is an @HarvardHBS case to consider: Microsoft Acquires Vermeer from the late 20th century 🙂

There is a lot that was learned in this deal and for many years served as the role model for Microsoft M&A when it came to acquiring, integrating, and execution. All was not smooth. While the many on the team are still at Microsoft and have senior leadership roles, the product long ago became more of an ingredient and shared experience than stand-alone business. In a world populated by Wix, Webflow, WordPress, Squarespace, and more it is interesting to think about.

This is 20 years ago and from the peak of dot com bubble but was cornerstone of teach tech M&A for many years at HBS — it is a super fun case that goes through every aspect of deal and venture integration, incl product and operational.

The 10th Anniversary of the iPad: A Perspective from the Windows Team

While the press and friends of Apple gathered for the launch event, the Windows team fresh off Windows 7 launch watched from afar. An annotated twitter thread.

1/The announcement 10 years ago today of the “magical” iPad was clearly a milestone in computing. It was billed to be the “next” computer. For me, managing Windows, just weeks after the launch of Microsoft’s “latest creation” Windows 7, it was a as much a challenge as magical.

2/Given that Star Trek had tablets it was inevitable that the form factor would make it to computing (yes, the dynabook…). Microsoft had been working for more than 10 years starting with “WinPad” through Tablet PC. We were fixated on Win32, Pen, and more.

3/The success of iPhone (140K apps & 3B downloads announced that day) blinded us at Microsoft as to where Apple was heading. Endless rumors of Apple’s tablet *obviously* meant a pen computer based on Mac. Why not? The industry chased this for 20 years. That was our context.

4/The press (two here), however, was fixated on Apple lacking an “answer” (pundits seem to demand answers) to Netbooks — those small, cheap, Windows laptops sweeping the world. Over 40 million sold. “What would Apple’s response be?” We worried — a cheap, pen-based, Mac. Sorry Harry!

5/Jobs said that a new computer needed to be better at some things, better than an iPhone/iPod and better than a laptop. Then he just went right at Netbooks answering what could be better at these things.

6/“Some people have thought that that’s a Netbook.” (The audience joined in a round of laughter.) Then he said, “The problem is…Netbooks aren’t better at anything…They’re slow. They have low quality displays…and they run clunky old PC software…They’re just cheap laptops.”

7/“Cheap laptops”…from my perch that was a good thing. I mean _inexpensive_ was a better word. But we knew that Netbooks (and ATOM) were really just a way to make use of the struggling efforts to make low-power, fanless, intel chips for phones. A brutal takedown of 40M units.

8/Sitting in a Le Corbusier chair, he showed the “extraordinary” things his new device did, from browsing to email to photos and videos and more. The real kicker was that it achieved 10 hours of battery life — unachievable in PCs struggling for 4 hours with their whirring fans.

9/There was no pen. How could one input or be PRODUCTIVE? PC brains were so wedded to a keyboard, mouse, and pen alternative that the idea of being productive without those seemed fanciful. Also instant standby, no viruses, rotate-able, maintained quality over time…

10/As if to emphasize the point, Schiller showed “rewritten” versions of Apple’s iWork apps for the iPad. The iPad would have a word processor, spreadsheet, and presentation graphics.

11/Rounding out the demonstration, the iPad would also sync settings with iTunes — content too. This was still early in the travails of iCloud but really a game changer Windows completely lacked except in enterprise with crazy server infrastructure or “consumer” Live apps.

12/ iPad had a 3G modem BECAUSE it was built on the iPhone. If you could figure out the device drivers and software for a PC, you’d need a multi-hundred dollar USB modem and a $60/month fee at best. The iPad made this a $29.99 option on AT&T and a slight uptick in purchase price.

13/Starting at $499, iPad was a shot right across the consumer laptop. Consumer laptops were selling over 100 million units a year! Pundits were shocked at the price. I ordered mine arriving in 60/90 days.

14/At CES weeks earlier, there were the earliest tablets — made with no help from Google a few fringe Chinese ODMs were shopping hacky tablets called “Mobile Internet Devices” or “Media Tablets”. Samsung’s Galaxy was 9 months away. Android support (for 4:3 screens) aways.

At CES, Microsoft also announced dozens of Windows 7-based Tablet PCs. All of these were very high priced and essentially sold as niche products for executives. The idea of the Pen and touch being mass-market was far from the minds of the PC makers who were fighting for their share of lower-priced consumer PCs.

More here:

via CultOfMac

15/The first looks and reviews a bit later were just endless (and now tiresome) commentary on how the iPad was really for “consumption” and not productivity. There were no files. No keyboard. No mouse. No overlapping windows. Can’t write code!

16/In a literally classically defined case of disruption, iPad didn’t do those things but what it did, it did so much better not only did people prefer it but they changed what they did in order to use it. Besides, email was the most used tool and iPad was great for that.

17/ Wrote @waltmossberg “Laptop Killer? Pretty Close — iPad is a Game Changer”

“This is a serious content creation app…pleasure to use…less and less interest in cracking open my heavier thinkpad or MacBook…probably used the laptops about 20% as often…”

18/In first year 2010–2011 Apple sold 20 million iPads. That same year would turn out to be an historical high water mark for PCs (365M, ~180M laptops). Analysts had forecasted more than 500M PCs were now rapidly increasing tablet forecasts to 100’s of million and dropping PC.

19/The iPad and iPhone were soundly existential threats to Microsoft’s core platform business. Without a platform Microsoft controlled that developers sought out, the soul of the company was “missing.”

20/The PC had been overrun by browsers, a change 10 years in the making. PC OEMs were deeply concerned about a rise of Android and loved the Android model (no PC maker would ultimately be a major Android OEM, however). Even Windows Server was eclipsed by Linux and Open Source.

21/The kicker for me, though, was that keyboard stand for the iPad. It was such a hack. Such an obvious “objection handler.” But it was critically important because it was a clear reminder that the underlying operating system was “real”…it was not a “phone OS”.

22/ Knowing the iPhone and now iPad ran an robust OS under the hood, with a totally different “shell”, interface model (touch), and app model (APIs and architecture) had massive implications for being the leading platform provider for computers. That was my Jan 27, 2010. // END

PS/ This is a great story from today showing the rumors around the Mac-based tablet that was “expected” at the time of the iPad launch. by @johnvoorhees