Today, Facebook CEO said that they want to create a dial tone for the internet with Whatsapp acquisition. Analysts and market tried to understand the same of Motorola for $3B to Lenovo.
Sometimes headlines make all the news.
Nokia succumbs to Android appeal in low-cost phone battle
Mozilla plans ‘$25 smartphone’ for emerging markets
Apple’s Smartphone Market Share Drops as Samsung’s Edges Up
I found 2 interesting observations in Nokia’s announcement today.
In 2007, Nokia with its Symbian OS had 70% market share in India which was fastest growing market in terms of mobile devices. They designed and built phones locally to meet local market needs and blackberry was close 2nd. Microsoft still commands over 90% market share in desktops. Microsoft made hundreds of billions just by being the underlying operating system. Microsoft started to hit its limit as mobile devices are gaining adoption and it is struggling to be relevant in emerging devices.
Android has a market share of 70% in global mobile device market and now Nokia which is to be acquired by Microsoft is launching android devices for markets like India to compete with Samsung. By signing an agreement with Samsung to commit to Google on Android, the new leader has emerged.
Apple itunes disrupted the business model with an entire ecosystem generating billions. Nokia’s reason to move to Android is Google play. Nokia is modifying android services to use Microsoft apps to stay relevant in emerging market. If Blackberry decides to switch to Android devices, we will have 2 ecosystems. Apple ios with itunes and Android devices with play. Sun had similar success with Java but, GOOG strategy to change the landscape is flawless.
While FB can create a new dial tone, the phone with the dial tone may run on Android.
Today marks the largest VC backed acquisition of whatsapp by facebook. I thought Google would make a serious move but, they are making different waves. I read a lot of people questioning the price tag and I thought it would be fun compare the numbers between skype and whatsapp.
Skype founded – 2001
Last Acquisition – MSFT
Price Tag – $8.5B
Number of users – 170M
Revenue – ($7M)
Average price paid per user – $50
Whatsapp founded – 2009
Acquisition – FB
Price Tag – $19B
Number of users – 450M
Average price paid per user – $42
While, the price tag for Whatsapp maybe high, the price per user is still less considering there billions of mobile phones. One could argue that Skype has paid subscribers but, Skype was primarily built for laptops and with MSFT owning it, the numbers may not scale. With FB focusing on mobile, Whatsapp built for mobile messages, the potential and customer touch outnumbers Skype.
FB could dominate the mobile footprint for social apps which can lead to big ROI on Whatsapp acquisition. I think the disruption in messaging revenue for mobile carriers can add an interesting revenue stream for FB. Considering $1.1B for Tumblr and all the social app acquisitions by Yahoo, Whatsapp is a winner. I am sure if FB did not make the move, GOOG would have taken a shot.
Some side notes:
Accel Partners invested in $12.7M in FB in 2005 and made over $8B in 2012 while Sequoia missed the boat. The cofounder of Whatsapp Brian was rejected by FB for a job.
Fast Forward 2014, Sequoia’s investment in Whatsapp included $8M in 2011 and another $50M. Their $60M investment returned $3B from FB in less than 3 years. Brian now has a $3B signing bonus.
Over several weeks, there has been a lot of talk about the Target breach and the need for changes. I have several views in this regard but, one fundamental point is the need for financial institutions and networks to take ownership to upgrade the entire antiquated payment network.
The networks having been calling for change in technology at point of sale which now adds to the retailer cost. I have heard companies talk about biometrics, chip based technology secured by a pin and every security solution provider has an answer. The recent skimming of Paypal CEO credit card in UK shows the touted EMV technology may not be secure.
Retailers like any enterprise are attacked every day and in the digital connected world, every device is a target of attack. In case of Target, if credentials were comprised to gain access, the breach can occur at any part of their network resulting in other types of data breaches.
I think it is time to take a holistic view of changing customer behavior with mobile, online and alternate payment models and see how the credit card industry can work with different point of sales be online checkout, mobile wallet or a terminal in a store to offer same protection. User experience is key here balanced with innovation.
Credit card data like any financial data is going to be breached but, the protection should be on personal information. Identity theft, loss in SSN, drivers license, email addresses can lead to greater breach in trust and there is no zero liability for loss of personal information.
Lessons for credit card industry is to help retailers protect personal information and delink with credit card information on their databases. Second, for government to pass a federal breach notification law for credit card frauds as they also involve personal information. If the health care industry is working with regulations to protect our personal information, the credit card industry has no excuse to have similar regulations.
How must a CISO articulate the maturity of information security to senior management? The common notion of “don’t worry if it is not broken” may not accurately reflect the security posture of an enterprise. The decline in perimeter breaches, the reduction in security incidents and compliance to applicable regulations does not mean information security can go to the back burner.
The maturity demonstrates a trust that the enterprise has developed between its customers, partners and employees with a level of commitment. This also indicates that information security department has now moved from managing firewalls and managing vulnerabilities or malware to managing enterprise risk.
Enterprises are working on new areas of growth like digital, social, mobility both from revenue and productivity perspective. Products and services that involve new product delivery channels, marketing with digital initiatives drive the need for information security to align with business strategy. So, now information security becomes an important stakeholder. This now requires information security professionals to partner with the business team to raise awareness and help change the culture on incorporating security controls. This can be successful happen if security professionals learn to speak the business language, appreciate the business controls and put a positive spin not fear. Education, awareness and specific contexts help the cause.
The growing demand to use 3rd party vendors for business process, software, infrastructure and rise in privacy laws also increases the enterprise risk as many security policies and standards do not address technology and business transformation. Hence, it is important to revisit these policies to ensure they not only meet new requirements but, also are consumable by the business and IT stakeholders. Awareness and training on corporate polices audience should extend from employees to partners and customers.
In conclusion, information security has morphed from infrastructure/asset protection to safeguarding data, mitigating business risk, building trust when customers and employees share their personal information to balancing security with user experience. This is a journey many IT security leaders started early on and earned the title CISO along a seat at the table and possibly moved out of IT. Next stop BISO (Business information security officer)!