Young Gun

Online Storage, Your Next Tech Play

With Box secretly announcing it is going public, the storage games have begun.

online storage

For quite some time I have been wondering where the tech plays of the next few years were coming. We had a product stage, we had a social media craze, we had a review site craze, a 3D printing craze and now we are going to have a storage craze. Technology will continue to advance and getting ahead of the curveball for the next “big thing” will only serve to pad your pockets.

Most tech savvy individuals use products like dropbox, box, cubby, etc. A larger majority of you have no idea the real benefits of those products in the business environment. Have you ever calculated the cost of building out the necessary networking infrastructure just to share files in the corporate environment? Do you know the cost benefits and ease of use capabilities of these online storage companies to small and medium sized businesses? Most importantly unlike the consumer purchase cycle for technology, the business purchase cycle is elongated.

This means that as the movement to the cloud has come into existence, many small and medium businesses are far from making their next storage purchase or moving towards the cloud. Take the small business I was at the other day, still using a decade old server to run multiple aspects of their business. Why pay to upgrade when you can wait? Most savvy business owners will put off capital expenses as long as possible. Add the fact that the cloud is still foreign to many business owners even in the 21st century and you have an area ripe for growth over the next five years.

When we talk cloud, storage and business companies like Google jump into the mix. What is great about Google is their ability to create great products and experience for their users. What is bad about Google (and Microsoft) is that no small or medium sized business is interested in placing all their tech needs in the hands of one technology giant. We all know gmail uses our emails to feed us ads. If they do that what else can they use against us? That may seem on the extreme side, but those thoughts enter customers minds every day.

So keep an eye on the online storage space, all fingers point to the space being hot in the next 24 months.

 

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The P/L Of Starbucks Calorie Count

How does one define health obsessed? Does it refer to one counting calories? Does it refer to avoiding red meat? One can define health conscious individuals in a myriad of ways. Can one define Starbucks core customer base as “health conscious?” The mindset those are using to portray that Starbucks will gain from voicing their calorie count suggest they can easily define their customer base. This ideology is flawed.

starbucks cup

Today’s customer base for any national or multinational corporation is broad. Not everyone that is an organic connoisseur shops at Whole Foods and not everyone that shops at Starbucks is a health nut. Every individual that enters into the Walmart’s across the world does not make below the mean national salary. In a nutshell if you are defining your customer base in one word you are not appropriately defining your customer base. Those analysts that use a few words to define the customer base in lack the introspective approach to make any analysis. Refer to this article about how Starbucks will profit from calorie counts.

Do not get it twisted. The Starbucks gravy train has been a play I have supported for years. Starbucks has been part of our lifestyle for quite some time. In the recession they came out resiliently and will continue to do so as they go international. The global movement will likely be more challenging, but they have revolutionized beverages in the U.S. and there is no reason why they cannot do it abroad. Yes international has its challenges, but the ROI could be legendary.

At the end of the day Starbucks customers are proponents of the company for 50% brand and 50% taste buds. Starbucks is considered a treat, a splurge. That is why the company made it through the tough times. Instead of going out for lunch the business class of America went and grabbed that 2 dollar cup of Joe or that 4 dollar frappuccino. So as much as these so called analyst want to make the case for Starbucks hitting its stride due to a calorie count, its hitting its stride due to the overall company. Do not make a stock decisions on one element and do not forget  the overall challenges of the company faces.

For those that like comparisons, just take a look at the trend-line for McDonald’s. It has been far from a straight run up since the implementation of calorie counts. Yes perhaps the Starbucks customer base varies a bit, but stating that a calorie count can change the business is more than foolish. A calorie count before the mandated time will likely boost Starbucks image, Though it will not outweigh the challenges internationally. Starbucks is a strong company that has mastered their model in the U.S. To have that continued success and return to investors, they need to be able to adjust and succeed with that model worldwide. The challenges globally are what needs to be focused on, not some idiotic calorie count.

Photo by MyLifeStory

 

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Not so Amazon-ing Groceries

So Amazon wants to play in the grocery market.

Amazon has successfully revolutionized many industries. We now take the retail sectors that Amazon has changed to be the new norms. So perhaps we should thank them and move on. While moving on one should be sure to observe the endeavors of Amazon as an investment portfolio. Some of the moves Amazon makes will be winner, large winners, while other will be horrific losers. You get where I am going.

Now that we are all on the same page, AmazonFresh screams AmazonMess.

Amazon Fresh

Don’t get me wrong, the grocery business is a large industry. As the entrepreneurs say the sector is ripe for disruption. Though if you take a look around you will see that often times disruption is better left as an idea. The main items in a grocery store have a margin of somewhere around 1 percent. Yes Whole Food does well and deserving so, its Whole Foods. For those of you who do not understand basic business: Whole Foods operates in a niche (organic) and can charge a premium for their products.

By far the strongest argument against this move is the scale is just nonexistent. By focusing on a few items like Amazon has done in Seattle they just do not have the scale. If you can only deliver my egg rolls but not my General Tso’s chicken, I am not ordering. For any real scale to occur Amazon will have to offer everything and with everything comes horrible margins that barely support the fleet of vehicles to deliver their goods.

Many people have made the argument that the populous will fail to move away from the brick and mortar due to the sensations of shopping. The American obsession of touching what you buy is no more prevalent than in the grocery industry. Mom wants to pick the fruit she puts in her children’s mouth. Just like the kiddies want to go to the store to pick out goodies for the week. In the fast paced 21st century that Amazon has built its empire on last minute decision making(one-click shopping), not planning out the weeks grocery list to be delivered by a courier.

By simply stating that Amazon will outperform competitors because they always have many have rationalized the tech giants movement into the space.

Amazon has been known the yield an iron fist in the realm of eCommerce. They are now going up against the big and the baddest at their own game. They are literally going after the bread and butter of Walmart, Target, and the like. This billion dollar bet will be sure to be a tech tale for the books. Last time Amazon tried to step outside their realm and challenge a big player, Apple, they had good reason. They were promoting their entire brand and position in the cloud space. Their move was merely a means to an end. This was to promote the amazon music, movies, and ensure everyone was registered for one-click shopping.

Harris Teeter here on the East Coast is already geared up and ready to giver them a run for their money. I have personal experience with this service and by far am not impressed, nor am I impressed by the cars lining up to pick up groceries at their many location. Essentially HT lets you pay a fee and pick up your groceries without leaving your car. For those who are into channel checks, the number of motor vehicles in line is always zero. Harris Teeter has essentially used this as a way to compete with Whole Foods who is stealing their market share quickly. By offering an additional premium service Harris Teeter can ensure they keep repeat customers.

Amazon has a great business model not based on groceries. They do not need to enter the grocery business to ensure the success of their eCommerce business. So in layman’s terms I am not seeing the risk reward of entering this super competitive market when their are other ventures ripe for disrupting.

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Apple of My Eye

Everyone remembers hearing “with Apple goes the market.”

Well any savy investor knows that correlations change. The game changes, no matter what business you are in. The smart investor, the good businessman knows what the next play is. The game has officially changed and Apple will make new correlations. It will likely have an inverse relationship to the market (refer to fly’s post a la noche: How Does the $SPY Perform in June?)

In a few days Apple will be launching its rebooted line of Macs and an updated interface.

Will it set itself up to change the game?

My anticipation is that Tim Cook is done “cooking” himself over the roaring flame. It is time he wowed us. This moment is the make or break for Apple and contrary to my normal beliefs, they shall impress. Tim’s job is on the line so for his sake he must impress.

The market and the consumer have been disappointed time again with the recent line of Apple products. Read any tech blog about the most recent iPhone or the retina display. Yeah they were cool but they did not make you say whoaaaaa. We are entering that phase. We are going to be wowed again.

If not Apple’s heyday is done. Tech is exponential. Apple will continue to push the limits or they will  be pushed aside.

There is no need to run out tomorrow and buy the stock. Let us see how the announcement goes. If we are in awe then we will likely continued to be amazed as we come to the iPhone and iPad updates. If WWDC goes as planned by Mr. Cook and his staff, we will be impressed. If we are impressed the stock will continue to climb into the summer as we near the next update cycle.

You want verification? You want a footing to stand on? Look at Apple historically:

Apple Stock

When Apple gets the hype momentum behind it, it runs. Apple will get its hype back or it will spend billions trying.

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Vine That

The weekends are full of thoughts and ideas.

For example: whats next, whats big, and where should I put my money.

A while ago I mentioned this new and exciting thing called Vine. I went on to stress that this would flop, because the challenges of recording and making videos would overwhelm the user.

I completely underestimated the potential.

Vine has been the new thing. Who would have thought that those guys at Twitter could create a hot product again? Does this mean that Facebook is no longer hot? Does this mean that Google+ is barely in existence?

Facebook remains a constant. It is that court house in your local community, it has been and it will remain. They are the umbrella which all the new and hot social media companies will be kept dry under. People are still fearful of an exodus from Facebook — it won’t happen. It has become a staple of the technology life. Though they no longer have those crisp and refreshing attributes that make it the “thing” the kiddies discuss at recess, replacing it remains impossible. Facebook remains the icon of social interaction on the internet. Which means profiting from it remains the only logical solution.

Death is near the opponents suggest. They are wrong like those that suggests the sun will not keep shining. Think about Facebook as an investment for the user. Not an investment as putting your money here or there to garner a return, rather as building a business. You invest time and money to build a business; you build products, acquire customers, update your product and then acquire more customers. The time you invest in your business is similar to the time invested into your online profile, ask the bloggers, keeping up that persona year after year is a full time job, a rather large investment. Those that build businesses, personas, or any analogous example you brilliant mind can think of are unlikely to vanish due to the work required to bring about its existence. Facebook shall remain.

Snapchat is hot, vine is hotter. This will change in a few months. Remember when everyone was on Farmville and you had to have that cow? What about when grandma was on Words With Friends? Yes the hot items will come and go, more importantly the constants will remain constant. Apple will continue to be the BMW of cell phones and Facebook will continue to be the platform that everyone builds upon. To solidify that statement just ask any developer if signing in with Facebook is a required aspect in their app or webpage, they will answer with an unequivocal yes. Ask anyone who likes technology if they aren’t looking forward to the WWDC to see what Apple has up its sleeve.

I can admit I was wrong about Vine. More importantly we can all take this as a learning experience, whats hot can be a nice ride for a while. You can make some pennies to feed the meter. The better investment for long term rewards is the titan of the industry, the one that will leave a lasting impression long after everything else has come and gone. The giant of industry will put a Bentley in front of that meter.

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