The New Digital Economics Silicon Valley Executive Brainstorm & Innovation Forum, which is organized with the support of the World Economic Forum, Cisco, and Bain & Co, will bring together senior executives from across communications, media and technology sectors. Already slated to attend include executives from companies: American Express, AT&T, Cisco, Dell, Deutsche Telekom, FOX, Google, Mastercard, Microsoft, MIT, Sony, T-Mobile, and Warner Bros.

Macheen has been a part of previous Executive Brainstorm events hosted by STL Partners, and we can say with certainty that this event is unlike any other you’re likely to attend this year. If you’d like to see for yourself, take a look at what makes this event different. The agenda is stimulated by new market research and case studies and every session is highly interactive. Richard Schwartz, our CEO, is leading a special “Connected Devices 2.0 – Beyond the Phone” panel conversation discussing how embedding constant connectivity gives device manufacturers new, ongoing revenue streams.

If you’d like to attend this event, please let us know. As a friend of Macheen, we’re able to provide you a 50% discount from the registration fee—just contact us directly before you register online.

The media lit up when AT&T CTO John Donovan floated a trial balloon about having wireless app developers pick up the tab for customers’ data use. Plenty has been written about whether app developers would sign up, the potential negative impact on innovation and other implications. An aspect that gained less attention but jumped out at me was the unnecessary complexity such a model would impose. If you do accept that there may be times when not just app developers, but content providers and device makers as well, see business value in sponsoring connectivity, there’s a much easier way. It’s called the Cloud. Or in our case, “service by Macheen,” which is Cloud-enabled.

More specifically, the AT&T proposal would mean app developers would have to code into their apps the ability for the network to monitor data usage. But that’s an unnecessary hoop to jump through if you view this from a different angle. It is great for users to get free access to services and applications – that is a good thing. But it is a pretty high barrier to expect developers to modify their apps to enable upfront what is essentially only an emerging opportunity. We see a different answer. Cloud-enabled, always-on connectivity, with the “control gates” in the cloud rather than in the code. Let a service like Macheen’s figure out how to deliver the right bandwidth for the task. So app developers (or network providers, for that matter), don’t need to re-write anything–the Cloud handles it all. And meanwhile the network operator is optimizing network resources to deliver only what’s necessary, while tapping new revenue streams with customers who otherwise wouldn’t be connecting at all.

Further, if you make it easy enough, those users are often quite happy to pay for a session, whether it’s 15 minutes, an hour or a month. See www.dellnetready.com or think Gogo for in-flight connectivity.

But “user pays” doesn’t have to be the only model. Any number of businesses will increasingly see value in “sponsoring” connectivity. This is what Amazon has long done with the Kindle–they take care of your connectivity, you buy books. Why wouldn’t a content provider consider, say, sponsoring connectivity to a free service to entice you to pay for a premium one? Or a device maker connect you to its online shop?

Point is, if you keep it simple–e.g., think Cloud models–and focus on content, apps, and services, everyone can win.

We couldn’t agree more.  It’s a virtuous cycle – a win-win for device makers, carriers, cloud and content service providers and, of course, the end-user.

Here is an excerpt:

“According to Richard Schwartz, CEO of Macheen, cloud-based services give device makers the opportunity to profit from value-added features. “Once you have a connected device that is ‘hot out of the box’—meaning always connected whether the user is doing anything with it or not—you can add at a later time cloud-based features like streaming music or cloud storage,” Schwartz says. “You can begin to add new features and invent new capabilities that have a great business model for producing revenue over the lifetime of the device.”

You can read the full article by clicking HERE, and it’s well worth the read if you want to get a handle on the state of affairs in the M2M market. From our perspective, it’s particularly exciting to see the continued growth and development of the ecosystem of companies that are opening the door to an ever-increasing array of connected devices and applications. It just goes to show that we’re entering an environment where connectivity will be viewed less as a service you have to manage and more as a feature that you simply access whenever and wherever you need.

Three UK has signed an agreement with Macheen Inc., a global cloud service provider for connected devices. The Macheen platform is now available, with individual device manufacturers pending but yet to be announced.

The Three – Macheen agreement extends Macheen’s comprehensive turn-key platform to include the UK’s fastest growing 3G network. Macheen is the white label connectivity provider and enabler for some of the world’s largest device manufacturers, enabling them to embed 3G connectivity at point of device manufacture under their own brand and control.

“Device makers are looking to turn lower-margin hardware into constant customer connections—without the heavy lifting,” said Richard Schwartz, President and CEO of Macheen Inc. “That transition begins with simple, seamless connections to the cloud, followed by on-going offers of new content and services. We are seeing a significant improvement in both the purchase and connection rates for device makers who build in connectivity into their devices.”

Macheen enables 3G connectivity for device manufacturers that produce anything from laptops, tablets, and satnavs, to gaming devices and other portable consumer electronic devices. End customers will benefit from seamless ‘out of the box’ device connectivity and manufacturer value-added-service delivered over the UK’s fastest growing 3G Network.

Commenting on the deal, Lynda Burton, Director of Wholesale, said: “This is a fantastic deal for both Three, Macheen and the ever growing connected device market.”

“The combined package of the UK’s fastest growing 3G Network with Macheen’s proven platform and customer base is a very exciting prospect that will be a major catalyst for the embedded 3G connectivity market.

Ends

About Three UK
Three is a communications company focused on bringing the benefits of the internet to mobile communications. We offer attractive pricing and give our customers the widest choice of ways to stay connected. To do this we’ve built an award-winning high-speed mobile broadband network. Three UK is a member of the HWL group of companies, which include 3G operations in Austria, Denmark, Hong Kong, Ireland, Italy, Macau and Sweden.

About Macheen
Macheen Inc. enables connected device makers and retailers to deliver products that are ”hot-out-of-the-box”—shipped pre-connected to the Internet via mobile networks—with private label services under their control. Macheen’s multi-tenant, cloud-based platform supports new business models for device makers, retailers, cloud service providers, content partners, and network operators alike. Macheen delivers breakthrough value by significantly increasing adoption rates and market penetration of connected devices and cloud services. Headquartered in Austin, Texas, Macheen is a global corporation with services active in multiple continents and with wholly owned subsidiaries in Germany (Macheen GmbH), and the UK (Macheen Limited).

• Two-thirds of those surveyed listed a mobile device as the most important technology in their lives (only 6% said TV—the times they are a’changin’).
• One in three said the Internet is as important as food, water and sex.
• Two out of three would choose the Internet over a car.
• Half would rather lose their wallet or purse than their mobile device.

Based on those findings and the ongoing explosion in connected devices (as reported here by RCR Wireless), it’s hardly a leap to see that increasingly, connectivity is everything.
So … if the customer values connectivity this much, why is it sometimes so hard?

If connectivity is everything, make it a given
Connectivity matters more than ever. So how can we make it a given for the user? Why shouldn’t someone be able to unpack a device and have it be “hot” — i.e. connected to the Internet—from the moment they turn the device on?

In fact, that’s exactly the experience some people have. Think Amazon Kindle. From its inception, the Kindle made connectivity a given. Want to buy a book? Click. Done.

But wait — how is that happening? I’m not on Wi-Fi. I didn’t sign a contract with a carrier. I’m not being asked if I want to “connect.”

No matter. (As Steve Jobs liked to say, “It just works.”) What users don’t know (unless they care enough to actually look into it), is that Amazon built a custom service, Whispernet, that makes it all happen. Incredible complexity in the background, a simple “click-and-buy” for the user—no wonder eBooks now outsell paperbacks six to one.

Consumer M2M is different
M2M is about devices (of all sorts—traffic lights, health monitors, trucks … so on and so forth) exchanging information with other devices, with zero human intervention. But when humans intervene, things change. How so? Traditional M2M is narrowband, while “consumer M2M” typically mixes broadband and narrowband requirements within the same product. Some of the technologies and systems and APIs that worked for “background M2M,” don’t work so well for broadband. The questions are different. How does the amount of connectivity change based on where the device is located and what the user is doing? Does connectivity need to be constant? How much connectivity and who should pay for it? How can bandwidth costs be bundled within a content offer to keep it simple? How do I roll out in multiple countries?

We need to get our heads in the clouds, where the services live
Cisco’s report makes it clear that current and future customers love their devices. But don’t forget, as elegant as the device may be, ultimately, the customer is buying services.

Even Apple introduced its latest iPhone 4S with the service as the centerpiece. “S” is an obvious reference to “Siri,” the cool voice recognition software that Apple has baked in to the iPhone 4S. But it could just as easily stand for Services, with a capital “S.”

It just so happens that when an iPhone 4S user clicks a button and activates Siri, the voice recognition happens in the cloud — that’s the magic of it all. The device is just a portal (albeit a beautiful one) to a world of increasingly powerful (and profitable) cloud services. Think about it — no connectivity and it’s just the iPhone 4 — without the defining “S”! Likewise, when Amazon CEO Jeff Bezos announced the Kindle Fire, he said, “We don’t think of the Kindle Fire as a tablet. We think of it as a service.”

Consumers and business users are increasingly reaching to the cloud for their content, applications and services. Whether it’s a public cloud for their e-mail, music, games or software services, or a private cloud from their company for access to services inside the firewall, access is essential.

And that, in a nutshell, is the opportunity. In the cloud, all of the players in the ecosystem can build the connections, APIs and services that make connectivity a given for the user, and enable myriad new business models for the enablers. The cloud is where consumer M2M’s unique requirements will be met.

Connected devices make for connected customers
Constant connectivity is a fundamental advantage in the marketplace. Certainly for device makers’, the future success of their products and brands depend upon it. Today, more and more devices have a chipset built in, but the vast majority of customers aren’t connecting! But by ensuring continuous access to the cloud — “attaching” those customers from the second the device boots—device makers have constant customer contact. And a constant channel to deliver new services well beyond the purchase of the device itself.

Network operators win, too—by tapping new “consumer M2M” revenue streams via the customers who wouldn’t otherwise connect. John Elliot at Accenture wrote a piece in this space a while back citing his company’s research, which found consumers “prefer a connectivity charge built into the price of the device, rather than a separate, monthly bill.” That preference, combined with the billions of connected devices coming to the market, represents a massive opportunity.

And content providers of all stripes are presented with myriad new opportunities as well. Imagine “sponsored connectivity” from a company with a hot new app or service they are introducing to the market. Constant connectivity means the device is on and the audience is there—now it’s just a matter of delivering great value from it.

“Consumer M2M” at its core is about turning connected devices into connected customers. More than half of those college kids and recent working grads from Cisco’s Connected World report cite the Internet as an “integral part of their lives.” It’s time everyone in the mobile wireless ecosystem come together, in the cloud, to make connectivity a given — and to build a bigger and more profitable marketplace, for device makers, operators and content providers alike.

View the article on RCRWireless.

Lines are Lame. Shop From Home.

So says the marketing from Dell, which will be offering Black Friday deals on laptops, desktops, monitors and other products.

It will be interesting to see how many people choose laptops with Dell NetReady mobile broadband service, powered by Macheen. Dell NetReady is fully integrated into the notebooks and “hot” out of the box. That means as soon as the notebook is booted up, it can connect to the Internet, without a wired network or a wireless hotspot. Signing up to use the service is quick and easy. Best of all, there are no hassles, service contracts, or long-term commitments.

We agree with Dell–lines are lame. We’d just add a related sentiment–so are connectivity hassles! Let us know if you’re considering an “always-on” device.

“M2M is more than a buzzword — for some companies, machine-to-machine is a business strategy. Technology veteran Richard Schwartz founded Austin’s Macheen Inc. on the belief that consumers and enterprises will increasingly want devices that connect to the Internet “hot out of the box.” Macheen is starting with laptops made for Dell, but Schwartz sees an opportunity for many other devices to connect to the cloud.”

But you’d never even consider that notion if you accepted the conventional wisdom that’s being touted in so much of the coverage of Hewlett-Packard’s recent decision to keep its PC division. “PCs carry slim margins; servers don’t,” said All Things D. It’s worth accepting those slim margins, the thinking goes, because of the negotiating power HP gets with suppliers like AMD, Intel, etc.

But let me say it again—PCs don’t have to be low-margin products. In fact, you can increase margins and enjoy recurring revenue streams far beyond the initial purchase.

Here’s how:

• Make broadband connectivity a given. The second your customer unpacks the product and turns it on, it’s connected. “Hot-out-of-the-box,” as we say here at Macheen.
• Offer compelling content and/or services. If you’re the Amazon Kindle, you might want to sell some books (and how—Kindle books are now outselling paperbacks). Or what fits your device and segment – music, apps, cloud backup, or secure customer connectivity to inside their firewall. What can you offer?

We’ve seen one device manufacturer nearly double margins by offering constant connectivity for a modest, upfront fee. And those customers are connecting at dramatically higher rates. Those “low-margin” products are now connected devices; the users are connected customers.

So don’t accept the conventional wisdom. Your personal computer is increasingly a “portal connector”— a window uniquely yours for profitable, branded content and services. What will yours be?

The Wall Street Journal reported today that customers have snatched up more than four million iPhones in the first three days on the market. While it shouldn’t surprise anyone at this point that Apple continues to churn out blockbuster products, I’d argue that what’s different this time around is that for the first time, the appeal is less about the hardware—e.g., sleek new design, new display, faster processor—and more about the service. As I’ve said before—connected devices make for connected customers. And Apple is connecting more customers than ever before.

Most seem to agree the “S” is an obvious reference to “Siri,” the cool voice recognition software that Apple has baked in to the iPhone 4S. (PCMag.com just published a good article about how to take advantage of Siri.) But it could just as easily stand for Services, with a capital ‘S.’ It just so happens that when an iPhone 4S user clicks a button and activates Siri, the voice recognition happens in the Cloud. But that’s the magic of it all—the device is just a portal (albeit a beautiful one) to a world of increasingly powerful Cloud Services.

Provided—of course—that the broadband connectivity is there. No connection, it’s just the iPhone 4—sans the defining ‘S!’

So, just as with Amazon’s recent Kindle announcements, Apple’s latest wonder has been driven to a large degree by marquee Cloud services. The success of these products should have every consumer device maker on the planet asking themselves: what are the services that will define our upcoming devices? How can we ensure connectivity is seamless, and a given?

If you want higher margins, recurring revenue streams and always-connected customers, look no further than the lines outside your nearest Apple store.