Build, Buy Or Rent!!

The very distinguished industry watcher Erik Keller writes that build is back inside enterprises. He sees that when the enterprise software industry speaks of growth, it is growth only of cash-oriented expenditures (SaaS, maintenance payments, training, servicing bug fixes) and non-license fee capital expenditures (services to modify existing packages, custom application extensions, and so on). As software license growth stagnated during the last five years, custom applications rather than pre-packaged ones have represented the lion's share of enterprise software growth.
As I see it, we are now in a world where the economic dynamics have changed substantially - offshoring and contracting have made maintaining and extending applications a much more viable option. The packaged software vendors are in many ways charging their customers far too high – particularly the maintenance cost – it still baffles me that the walking dead, small, big or pathbreaking software company – all alike charge maintenance in a similar band. The so called rapid implementation of packages look more like a brochureware(though I should admit based on empirical evidence that the rollout times have come significantly in the last five years), but the number of funcationalities that need to be implemented probably offsets any great advantage. Vertical solutions prophesises by package vendors more often than not fall short of expectations. Packaged software is getting more and more complex to manage. Enterprises may not have a choice but to buy for core transactional application but all extensions/add-ons would find build an attractive option . Needless to say strategic applications would get built with lot of custom code –in some cases the entire lot, in some cases atleast the icing in the cake. I see that banking & financial services, one of the most prolific spender on IT services atleast – sees a lot of custom development – the trend is increasing.

Erik keller parades impressive statistsics in support of his argument – I think some more discussion may be needed over the impact opensource or SOA has on the application landscape that we see today but offshoring is definitely helping to bring down costs. Some classification data may also need some discussion – say the case of iLog implementation that Erik highlights – where to classify deployment efforts – build or buy – given that the kernel – in this case the rules engine is a prebuilt product – if we are to take a view that extending/integrating this need to be classified as build solution then by definition a majority of packaged applications may get shifter there – in these instances my argument is look at what adds strategic value and classify accordingly – here Ilog’s scheduling algorithm brings more value than the java code used in building the applications. Nonetheless an impressive article.
I think that buy,build & rent all shall co-exist and enterprises would have to make appropriate choices based on their need. The package industry's future would be determined by its own conduct and not by any new build wave. But clearly the build movement shall continue to retain/slightly expand in its share of business volume. I shall come out with a follow up post on this in the near future. As an aside, Boeing connexion is not exactly the service to rely upon for involved blogging!!

Mini Microsoft : Good Bye Or Substantial Hibernation

Mini Microsoft hints that like all good things, this may come closer to an end – atleast as this version. No doubt, this will be sorely missed in the blogosphere and beyond.

“Back in 2004, I took a lot of time to plan and think before I started putting up the first few posts. And now I assess myself to be at a crossroads. Time for Mini-Microsoft 2.0? Or to do something else, and let the bits here cool off and fade from attention? The 2.0 road isn't going to happen overnight - more like six months if it's going to hit the ground running like the first time I started this up. Another consideration, as I stand at these crossroads and hope that Mr. Willie Brown's deal maker doesn't show up, is that great changes are indeed afoot at Microsoft. And these changes are going to take time to grow and I'm not going to poke them with a sharp stick until they've had their chance to prove themselves”.

Come to think of it, it's very likely the case that mega corporations shall have so much of cross currents and the resultant inertia/inaction could be appalling just as highlighted here in the case of Microsoft. Microsoft also did well to respond to a lot of what got written here and that shows the power of blogosphere (while some may diagree with the model chosen(of being anonymous) – in plain terms I do not see any other alternative than this (while personally I may not do anything like this) , given the nature of content and discussions covered in the blog. Considering that the next posting happened quickly, hope mini-microsoft's existing version continues to have an active life till the planned next release becomes a reality.

Software & Services Ranks Top In The Bweek 100 Hotlist

As I begin my travel out of china, saw this article in the Shanghai Pudong international airport and pointing to it rightaway
.(Am just moving out of china and had no means to blog while being behind the firewall inside the dragon). The Vibrancy shown by the software, services & tech industry is best captured by this businessweek list. Those speculating the future of the software industry need to watch this – that includes investors, customers, university students etc. . Bweek finds that out of the 100 companies on its list which come from all parts of the economy, but at any particular moment certain hot sectors dominate and software & services dominate right at the top besides the tech hardware sector which figures separately in the list! (The number indicates the number of companies in the sector forming part of the 100 list).

Offshoring : Sustainable Resource Edge

While the popular concern about talent availability in India is talked often, the wachovia weekly services report declares that resource availability for top tier Indian headquartered offshoring companies shall be a manageable risk while it has to be noted that the US headquartered service companies are ramping up their offshore presence quite significantly.
Very recently when covering the Mckinsey -Nasscom study on looming Indian IT labour shortage, I wrote that the problem is not non - fixable & that with concerted efforts from Government, educational institutions & corporates.
The Everest Research Institute predicts the wage differentials will remain attractive for the next 20 years in most locales.
- Labor arbitrage is dependent on more than just wage inflation in the offshore location. An analysis of other factors led the Institute to predict offshore will make economic sense for quite awhile.
- While labor arbitrage is currently the core of the offshore value proposition, other factors-like productivity increases-will become increasingly predominant, and further increase the viability of offshoring.
The findings are based on many factors that include the recognition that wage changes need to be measured at various levels and the level inflation is more relevant than individual inflation as well as the fact that macroeconomic and currency exchange rates clearly favour offshoring as the currencies of developed countries will continue to strengthen against those of developing countries.. The study points out that the reported numbers often talk about the maximum wage inflation in an area rather than the corrected average numbers. For example, in Indian call centers last year, senior customer care executives enjoyed the largest rise in wages: 13 percent. But the vast majority of employees (over 60 percent) are entry-level staffers; their wages rose just six percent. So the average wage inflation at call centers was much more muted than widely reported. An interesting study – I can confirm based on practical experience with smart recruitment teams – scaling up even in current times in India is certainly happening at healthy rates. Time to focus on offshoring producing spectacular game changing results and pathbreaking innovation

IBM & IBM Global Services

Robert X. Cringely continues his discussion on IBM which I covered earlier. As he sees it,IBM has entered a death spiral of under-bidding and then under-delivering. The attraction of services to IBM was based on the inherently high profit margins of that sort of activity. Claiming that DOING things turns out to be a lot more profitable than MAKING things, and a LOT more profitable than inventing things, he points out IBM's gross profit margin is around 36 percent, which means in the very simplest terms that for every three dollars the company takes in, one dollar in profits are generated. (Those complaining of higher margin for offshore providers – please note and traditional definition of offshore providers looks anachronistic, given the scale up reported by US headquartered majors!!) Inventing things makes IBM a lot less money than that. For IBM inventing things - while still seen as vital to the identity of the corporation - was actually a drag on earnings. Quoting insiders,he writes that IBM is no longer providing training to their consultants, expecting consultants to pick things up on one’s own, which leads to a much lower quality of work on projects. Adding that many people are quitting IBM, and IBM is now in a hiring crunch because it can't fill projects. The result is that they're stuffing anyone available onto projects (regardless of skill level), again lowering the quality of our deliverables. So IBM is sacrificing the long-term health of IBM Global Services, to keep up the quarter-to-quarter results. Delivery quality is down, employees aren't getting trained in newer technologies because of the crunch to get more billable hours, and people are leaving IBM because of the impact on pay and overall low morale. (I have to definitely concede that in most large consulting & service organizations, a similar culture may be prevailing as well, going by insider information).
No body can complain IBM of not moving fast though.Businessweek has a related perspective - For IBM, globalization is about reorganizing its 200,000-strong services workforce along skill lines, not just geography, and about coordinating operations worldwide to deliver services that are better as well as cheaper. In essence, it's all about revamping the people supply chain. IBM has even devised math formulas to tell it just who should be plucked from those various centers to work on any given contract. Researchers came up with a standard way of describing skills within the company and algorithms for optimizing the use of individual employees. That work has been put to use in a project, Professional Marketplace, which helps consultants put together teams from among 70,000 IBM résumés. IBM has brought together its global services and research organizations to bring automation to bear on services. Fifteen projects are under way and two of them are already being piloted in Bangalore. One is a system for turning each kind of service into a series of standardized processes. The tasks are broken into pieces and moved electronically between people who perform them. If it works, the company believes automation will allow it to slash more than 10% from overall outsourcing costs, giving it an advantage that others can't easily match. Only IBM customers can say what is true ( a recent analyst survey rated IBM high in customer satisfaction), but I have reasons to beleive that most of Cringley's view may be closer to truth.

Private Equity Play : Hummingbird Acquired

Romesh Wadhwani's Symphony is all set to acquire Hummingbird for 465 million USD, subject to all clearances. With this Hummingbird becomes a part of the list of symphony group companies. Private equity players are getting more and more bold and are expected to move in fast and begin acquiring medium and large technology companies. I personally believe that a lot more midtier companies particularly in the ECM space are likely to look at opportunity to get acquired. In the last few months, Broadvision has been desperately trying to get acquired. There is speculation about the fate of Opentext, the other canadian player in the ECM space.

Coming to Hummingbird, they were clearly early movers in several areas of ECM. In fact in was also amongst the first to buy out related companies like Fulcrum etc. long back and some of the alignments they had (like the one with Microsoft) clearly showed focus. It might not have had the same mindshare of say a Vignette or Interwoven but was a strong player. Amongst the ECM players Hummingbird was amongst the first to focus on verticalised solutions. In fact I more or less thought that Hummingbird was losing share when I got bolted when I heard of a few wins that they have managed to clock recently. A leading industry analyst expressed surprise in a recent interview that I chose to exclude them in my ECM market movers and shakers list . Coming to the acquisition, I think that the pricing was slightly more but I think symphony has made a good pick. If symphony manages to leverage Hummingbird’s strength and give it the chance to expand into a platform – it would be good. For now customers would have nothing to worry about.Symphony is also promising to continue with Hummingbird as it is – the additional resources could help the company substantially. Look at Documentum -post EMC acquisition,it has tremendously helped them grow. Hummingbird has to just continue innovating and reposition, beef up its market image. After all none of the big Enterprise players – SAP, Oracle, Infor + SSA have any credible offering in this space.

Verdict On Enrons Chiefs : Guilty Of Fraud & Conspiracy

(Via NYTimes) . The most followed court case in recent times has come to an end this stage -Enron Chiefs Found Guilty of Fraud and Conspiracy. Kenneth L. Lay and Jeffrey K. Skilling, the chief executives who guided Enron through its spectacular rise and even more stunning fall, were found guilty of fraud and conspiracy today in a case that led the parade of corporate scandals in recent years that emerged from the get-rich-quick stock market excesses of the 1990's.The eight women and four men on the jury reached the verdicts after more than six days of deliberations. Mr. Skilling was convicted of 18 counts of fraud and conspiracy and one count of insider trading. He was acquitted on nine counts of insider trading. Mr. Lay was found guilty on six counts of fraud and conspiracy. He was also convicted of four counts of bank fraud in a separate case.The conspiracy and fraud convictions each carry a sentence of 5 to 10 years in prison. The insider trading charge against Mr. Skilling carries a maximum of 10 years. Sentencing is set for the week of Sept. 11. For a company that once seemed so complex that almost no one could understand its arcane accounting or how it actually made its money, the cases ended up being nearly as simple as could be. Mr. Lay and Mr. Skilling were found guilty of lying to investors, to employees and to government regulators in an effort to disguise the crumbling fortunes of their energy empire."C.E.O.'s can't hide behind accountants, behind lawyers," said John Hueston, a prosecutor in the case, "especially when they make tens of millions of dollars."The sentence that each has to serve could well be 20 years or more, ratcheting up the probability that Lay, 64, and Skilling, 52, could spend the rest of their lives behind bars.

New Innovation Networks & Crowdsourcing

I recently covered on the theme of emerging innovation networks, wherein I brought out that in this age of contribution economy – a phenomenon that we are seeing ever since the Internet started to connect everyone to everyone else all the time, people from around the world can more easily contribute leading to exploding results - caused by the coming together of energy, ideas, and knowledge. Some of the more familiar examples of these collaborative efforts include blogs, open-source software, podcasts etc. We are also seeing customers leading the charge of innovation and the economist article on user led innovation exemplifies a new form of collaboration. The rise of online communities, together with the development of powerful and easy-to-use design tools, seems to be boosting the phenomenon, as well as bringing it to the attention of a wider audience, says Eric Von Hippel of MIT, author of the well known book Democratizing innovation. A recent issue of HBR has an excellent article on P&G’s new model off innovation.

Wired in a new article calls this phenomenon as "crowdsourcing". So sold on the idea, Jeff Howe even has a blog on the theme. Pointing to the fact that technological advances in everything from product design software to digital video cameras are breaking down the cost barriers that once separated amateurs from professionals. Hobbyists, part-timers, and dabblers suddenly have a market for their efforts, as smart companies in industries as disparate as pharmaceuticals and television discover ways to tap the latent talent of the crowd. The labor isn’t always free, but it costs a lot less than paying traditional employees. It’s not outsourcing; it’s crowdsourcing - The new pool of cheap labor: everyday people using their spare cycles to create content, solve problems, even do corporate R & D .

India & China : Role Model For Each Other ?

Stephen Roach brings out the fact that the contrast between the Indian & Chinese approaches is dramatic. The industry share of Chinese GDP has gone from 42% to 47% over the past 15 years - maintaining a huge gap over India’s generally stagnant 28% manufacturing share over the same period. By contrast, the services share of Indian GDP has risen from 41% in 1990 to 54% in 2005 - well in excess of the lagging performance in Chinese services, which has gone from 31% of GDP in 1990 to 40% in 2005.
China’s macro character fits its manufacturing-led growth dynamic to a tee. Exports and fixed investment now account for over 75% of China’s GDP - and are still growing at close to a 30% rate today.
India currently has over 25 world-class companies, well-developed capital markets, a modern banking system, and a deeply entrenched rule of law. China is lacking in all of those key respects, and very much wants to move in those directions. China is also seeking to implement an Indian-style expansion of labor-intensive services in an effort to provide the job and income support to its nascent consumer sector. However, given the high degree of precautionary saving sparked by the massive layoffs arising from state-owned enterprise reforms, China may well encounter considerable difficulty in establishing a broad-based consumer culture. At the same time, India very much aspires to match China’s progress on the manufacturing front. India’s political leadership is convinced that manufacturing is the answer to high unemployment in impoverished rural areas.

China and India represent the future of Asia - and quite possibly the future for the global economy. Yet both economies now need to fine-tune their development strategies by expanding their economic power bases. If these mid-course corrections are well executed - and there is good reason to believe that will be the case - China and India should play an increasingly powerful role in driving the global growth dynamic for years to come. With that role, however, come equally important consequences. IT-enabled globalization has introduced an unexpected complication into the process - a time compression of economic development that has caught the rich industrial world by surprise. Out of that surprise comes a heightened sense of economic security that has stoked an increasingly dangerous protectionist backlash. This could well pose yet another major challenge to China and India - learning how to live with the consequences of their successes.

As I see it, while, India is trying to imitate the chinese model, I would like to point out that while all these make interesting reading, what’s generally overlooked in discussions about china is the enormous pollution that I noticed in China during my recent visit. Some alarming data:
- State estimates suggest that china’s pollution is 12 times the world average.
- The sulphur dioxide emission is 22.5 million tones as against 12 million tonne carrying capacity
- Two-Fifths of the seven major river basins are polluted
- Ninety percent of rivers passing through cities are fully polluted
- Three hundred million residents have no access to purified water
- One-Third of chinese territory suffers from acid rain
- Two-thirds of the population suffer from poor air quality
- Inestimable number of potential cancer patients(mostly young) in the country
In fact Morgan Stanley’s best china watcher Andy Xie writes that china’s environment catastrophe is poorly understood. He points out that if the relocated factries had to subscribe to the same environmental standards as in the OECD countries, goods made in china may not be that cheap and adds that the lesser costs for pollution have been important than cheap labour in the deflationary pressure from china. Cleary India would have to chart its own balanced model of growth rather than blindly imitating the chinese growth formula.

The Indian Experience

The offshore environment is always quite intriguing to those who have not expereinced it. James Murray makes a trip to India(may be his first trip) and shares his impressions in two parts. While this is the view of those visiting india, we now see that there is an increasing trend of western executives moving to work out of India. Ed Cohen, my colleage and Ex Booz Allen Hamilton maintains a blog, where he writes about his new life working out of india. I found his perspective of Singapore quite interesting. Just in case if India continues to be intriguing some pointers to understand it better.

Broadband Economics

The just released ITU statistics show global broadband penetration per 100 inhabitants at the start of this calendar year 2006. Iceland has taken over as this year's leader from Korea with Netherlands, Denmark and Hong Kong, China occupying the top five. I just notice based on my empirical evidence that broadband infrastructure has not created the much anticiapted support industry as much as was expected (except in Korea & Japan) - just a thought only, certainly not to say that broadband penetration is not beneficial to society. I would love to see HongKong & China data reported separately.

Supply Chains As Information Chains

The supply chain management techniques of the global tech majors are indeed the envy of a large section of industry players – Dell, Apple and their supply chain management techniques are celebrated case studies.
Outsourcing parts of the supply chain has disrupted the flow of critical data. Targeted IT investments can restore what's missing ,claims the Mckinsey quarterly article titled Recapturing your supply chain data. The experience of leading tech company who manage global supply chain suggests three important themes: tailor information flows according to demand and the type of product; reconsolidate supply chain data; and determine how closely to monitor critical information with each partner. Some of the well known problems include the likes of information and action falling in cracks between supply chain elements, errors/inconsistencies owing to differences in coding standards and different IT environments that pervade the entities inside a supply chain – all contributing to poor visibility across the supply chain.Suggesting fitting information flows to supply chain types as a guideline, it notes that some data from the supply chain are more important than others, depending on the type of product. Companies must recognize the significance of this differentiation and focus their investments on IT systems that track and monitor information critical to each product's success. With an established focus on critical elements in supply chain , consolidation of relevant data across the enterprise gets easier directly helping the business to benefit. While reassembling the information flow throughout supply chains won't be easy, given the players' different capabilities and misaligned incentives, it is clearly worthwhile for manufacturers to invest in cooperation & the article establishes the fact that leading-edge companies that did so have reduced their inventories while enhancing their performance – with direct impact on bottomlines.

Category :Supply Chain Management, Emerging Trends

Business As Growth Platform

Sometimes the strategy for building growth in mature industries means more than simple product extensions or acquisitions. The answer? Develop "growth platforms" that extend your business into new domains. Researchers at Harvard Business School and INSEAD helped Boston-based consulting firm Oyster International study how executives of twenty-four successful companies achieved organic growth over time. The answer: by creating "new growth platforms, on which they could build families of products, services, and businesses and extend their capabilities into multiple new domains." eg UPS, Medtronics.
The article notes that sooner or later, most companies can't attain the growth rates expected by their boards and CEOs and demanded by investors. To some extent, such businesses are victims of their own successes. Many were able to sustain high growth rates for a long time because they were in high-growth industries. But once those industries slowed down, the businesses could no longer deliver the performance that investors had come to take for granted. Often, companies have resorted to acquisition, though this strategy has a discouraging track record. Over time, 65% of acquisitions destroy more value than they create. So where does real growth come from? The authors have researched and advised companies on this issue. With the support of researchers at Harvard Business School and INSEAD, they instituted a project titled The CEO Agenda and Growth. Their twelve year research shows that the businesses grew by creating new growth platforms (NGPs) on which they could build families of products and services and extend their capabilities into multiple new domains. Identifying NGP opportunities calls for executives to challenge conventional wisdom. In all the companies studied, top management believed that NGP innovation differed significantly from traditional product or service innovation. They had independent, senior-level units with a standing responsibility to create NGPs, and their CEOs spent as much as 50% of their time working with these units. The payoff has been spectacular and lasting.
- Platforms as Business Models require a different approach : Specifically, they:
- Put credible chief growth officers in charge.
- Believe that the team is more important than the idea.
- Have NGP units that are independent and embedded.
- Guarantee financial independence.
- Systematize the NGP creation process.

100 Billion USD Private Equity Deals In Tech Sector

Business Week's Justin Hibbard writes about Silver Lake Partners co-founder Jim Davidson quipping at the JPMorgan Technology Conference in San Francisco: "No one in the private equity industry knows that Intel trades at 8.2 times EBITDA, so let's go do that!" The idea that a gang of private equity megafunds could buy a $105 billion icon such as Intel is not beyond the realm of possibility these days - after all no deal is too big in the tech sector. Gosh!!! where are we headed!!

NDA's , IP's & Protection

I recently wrote an article on offshore product development titled-"The Invisible Wave", pointing to increasing business of outsourced software product development. Infoworld has an article on IP theft and the difficulty in bringing in justice when such a thing happens. As usual, the information has been selectively used by a few to spread the word of danger against alleged IP theft in countries like India and its consequences. While the issue is a serious one - I was a little intrigued when I saw reference made to event that had allegedly happened years back and so much more work is getting outsourced and all indications points to more growth in outsourced business.
As the CIO magazine noted even in this case, "Indian prosecutors (in the SolidWorks case) appear to have decided to charge the suspect in part to establish firmer support for IP rights. India does not have laws against trade theft, so prosecutors filed charges against Verma under a general civil theft law, with a secondary charge of criminal breach of trust against his employer, GSSL. Another charge, pertaining to copyright law under India's recently enacted IT Act, was added later".Solidworks and GSSL continue to work together even as of now with more security put in place.The Indian government is already working to change its traditional reputation of being guarded and difficult to work with, but clealry much more may need to be done.
I referred Nishith Desai's views and actually come to think of it, with international treaties such as the Berne Convention, the Paris Convention and TRIPs, the seeming gap between IP laws of developing and developed countries are getting bridged. Today, multilevel protection to software is made availbale through patent, copyright and trade secrets. Trips provides for computer program be protected under copyright as a literary work. There is no global agreement in TRIPs regarding patent protection. Recognizing the limitation of the fact that copyright accords limited protection, more and more countries are according patent protection to the software. Different nations have different standards for criteria of patentability. India too is moving in that direction of providing patent protection for CP. In the EU software as such is not patentable and Indian law mostly follows EU law and Indian law says CP ‘per se’ is not patentable, but perhaps CP with unique technical flavour may be deemed patentable. Western companieds meed to realise that Indian vendors, typically have IP assignment and confidentiality agreements with their employees.There could be civil as well as criminal action against the employees who breach such obligations.

Bloggers, Analysts & Professional Executives

A new breed of IT analysts is sharing insights over the Internet, leaving traditional research firms trying to catch up using the same methods says the informationweek article. The article starts by pointing out that a new breed of technology analysts has emerged: They use blogs to spread their insights, and they're not afraid to pick a fight with IT vendors or one another. These E-pundits want to shake the foundation of IT analysis and influence the market, forcing conventional firms such as Forrester, Gartner, and Yankee to adapt or get left behind, much the same way the packaging and reach of cable TV newscasts forced network news to rethink its role. But for businesses to navigate these new information streams, they must understand how the new analysts work, what motivates them, and, ultimately, when they can or can't be trusted. The article notes that the new-generation analysts have a long way to go before they give Gartner and its kind a run for their money. The 10 largest IT analyst firms, which include Gartner and Forrester Research, account for 80% of the $2 billion in revenue generated by the industry. I agree with James governor's views that the old-school model for research and advice isn't necessarily broken, but it would be better served by more visibility into how information is gathered and conclusions are derived and that success and credibility come from reaching not just a large number of readers, but also reaching the right readers. The coverage of ideas by the bloggers and mindshare that they have are increasing rapidly. Part of the charm of being a blogger comes out of the fact that you can be doi8ng something else in your professional life and still choose to be a blogger - after all I run a large business and still manage to blog regularly(thats is if you exclude the last 12 -15 days of very limited blogging). I stronlgy beleive that insights come from being activley involved in running business and I write blogs based on reflection of happening around in the industry and with a spirit to share.

Travelling : China & India

In the last ten days, I had been travelling extensively in china & India. Everytime I come back from both these two countries ( well am leaving chennai sunday midnight) - what strikes me is the abundant dynamism that pervades the air. China's infrastructure growth needs no mention - Shanghai is now the global standard for megacity development. While travelling in the Maglev - this is a testament to china's determination to adopt the best in the world(it can travel at 400+km/hr- connecting shanghai city and the Pudong airport) - one can see the phenomenal growth that the city has managed to clock in the last two decades. The government continues to push growth of infrastructure and cities. Beijing today boasts about great growth-the current claim in the city circe is that the Per capita income in the city now equals waht existed iin europe in early 80's( this is the claim of the chinese authorities). China has huge problems to grapple with - the desert is advancing towards Beijing, 300 million rural people need to be moved to cities in the near future - it is coming under pressure internationally on economic counts. India in contrast is moving at its own pace - but what characterizes the country today is the phenomenol spirit of entrepreneurism that pervades the air therein. I was watching the CNBC india program on awards for indian SME enterprises- almost all the names that came up there for discussions have sprung up in the last 10-15 years - the story that I heard about most of the were simply inspiring to say the least. While people take a dim view about the slow pace of infrastructural growth - in its own way the country is coping up with advancements - every place that I visited in India has seen significant change in the last three years( no comparison to chinese growth) but the entrepreneurial dynamism seen in india is perhaps unmatched in most parts of the world(china included) - execution speed would obviously make the difference here, but shades of success are clearly felt. I was touched when I saw Sandhill Group'sMR writing on how even social organizations create history with energy, passion and leasdership. Most of indian corporate success when analysed shows almost similar traits. More on the topic later - got to leave to the airport - with choked traffic can't take chances. I need to go to singapore and fly out a few hours later to KL for important meets!

IT As A Non Growth Industry!

In the run up to the Gartner symposium at Barcelona,Gartner's Ken McGee declaresIT is now a "non-growth industry" .He sees that with spending lagging behind general economic growth as user organisations lose faith in the returns on their tech investments. This trend, he warns could put the future of the CIO and the existence of the IT department under threat.Not sure whether this is plain sensationalism or based on careful analysis - while I await his presentation at Barcelona to get over,pending a full review, I want to point to Mckinsey's recent presentation that in developed countries, the more and more IT investments get directed towards supporting tacit transactions (this is around 40% of total transactional volume), the outcomes could be significantly different. As I wrote earlier, data from other sources -Forrester, CIO show increasing spend for the year forward. My today's scan shows that tech sector dominates VC investments in Ireland and I can say based on my extensive first hand insights into big markets like Japan, Australia,China & India that IT investments are definitely headed north. As of last year the total IT investments were in the region of $2.1 trillion dollars and the stakes are high to make these investments fetch better returns and technological changes and global competitive pressures are bound to make companies invest lot more in IT. Charles calls the reported findings of Ken as a result of goofy analysis. The fate of europe losing out is there for all to see. (I was in a conversation yesterday with the global head of sales of a fast growing software product company - and he had this to say while speaking in a different context- the lag between IT investments that used to be seen between the US and Europe is more or less gone) - such being the bullishness on IT investments, the connect looks weak. Shall come with an update post after getting a chance to review Ken's presentation in detail.

Dell On India Support : Came For Quality & Stayed There For Innovation

Noshir Kaka of Mckinsey India’s IT practice is a well known name in the in IT circle and here he interviews Dell India head operations Romi Malhotra on its support facilities in the country – how they are performing and what makes them different. Dell’s support facilities always get extreme ratings – best to bad depending on whom you speak to - but few would dispute Dell’s pioneering status in online selling and in setting up global support. He believes that in India, the company can leverage a pool of extremely gifted workers and managers, in numbers far greater than would be possible anywhere else and that cost was the least of the consideration in setting up the support center(s).
Romi shares some perspective here :
Excerpts from the interview that appeared in the Mckinsey quarterly.

The Quarterly: Dell outsources some of its customer service work, but you also have some captive centers—ones that you own and run. Can you tell us why that works for you?
Romi Malhotra :
- One reason we outsource some work is that we have seasonality in the business, so outsourcing gives us the ability to ramp up or down without having to change our employee count.
- The second reason is that outsourcing helps us benchmark our service quality and costs. You know exactly how much you are paying a third-party vendor, and that gives you a good standard to compare your own costs against.
- A third thing is that these vendors work for multiple clients, so working with them gives us an opportunity to learn what could be done better.
- Perhaps a fourth reason is risk mitigation. By spreading our centers out, we may gain a bit of control over something like a natural disaster that impacts one area.
- Finally, working with partners lets us tap into new labor markets without setting up our own centers in those locations.

The Quarterly: What was it about these Indian centers that enabled you to do new things that Dell traditionally did not do in its home base?
Romi Malhotra: The people we hire in India are often overqualified for the job, so we asked ourselves how we could leverage that. And one answer is that we can create deep domain knowledge, which allows for reengineering skills. In addition, just to survive in India, I think we need to innovate every day. It's a way to channel inherent cultural qualities and to keep employees focused and interested. And innovation encourages us to move away from a cost center mentality and toward a revenue mentality.

Category :Emerging Trends, India, Outsourcing

Global Commoditization Of Higher Education :Creative Differentiation Not Competitive Confrontation

Micheal Scrage writes that it may not be the case that high technology and higher education are supposed to be the west's magic elixir for perpetual growth.The educational quality of indian and chinese universities are becoming comparable far faster than anyone predicted and they roll oout 1 mn engg graduates every year. Higher education is becoming as much a high-tech commodity as circuit boards and mobile phones. Roughly 170,000 graduates come out of the universities in the US and Europe. Even if one (arrogantly) presumes that only the top 10 per cent of Indian and Chinese students are as talented as the top half of Americans and Europeans, the two Asian giants now graduate more quality engineers than the west. Western students clever enough to succeed in science or engineering are clever enough to know they will compete against growing global armies of educated rivals trained to work hard for less. He points out that high-bandwidth networks further amplify corporate capacity more easily to outsource their science and engineering processes. Innovative companies will chase "cheap smarts" as relentlessly as today's cost-conscious multinationals pursue cheaper manufacturing and call-centre capacity. Pointing out there is no premium wage as a post-doctorate in that marketplace, he adds,Knowledge is not power; it is on sale.
This he thinks leads to a scenario where there is more likely a glut of technically sophisticated human capital. For the US and Europe, increasing the numbers of science and engineering graduates seems a policy prescription for economic despair. Creative differentiation - not competitive confrontation - is the real human capital challenge.Of course, a wealth of scientists and engineers is not the wealth of nations. University dropouts such as Microsoft's Bill Gates and Apple's Steve Jobs persuasively demonstrate that global technology leadership does not require top degrees. He is right when he points out that technical education is a necessary - but insufficient - condition for continuing growth. While rising tides of cheaper technical talent create greater innovation opportunities, transforming educational capacity into sustainable economic prosperity is difficult.Without the institutional courage and cleverness to differentiate themselves, he adds, tomorrow's Harvard, Imperial, or École Polytechnique may confront a comparable fate to today's General Motors and Ford.I still beleive that entrepreneurism and dynamic readjustements would help the US to be a very competitive nation in future as well. I do not think that it needs to be seen as one-or-zero situation. As I wrote earlier, the US is the economic engine of the world – lets hope that it continues to innovate faster, better and emerge stronger. Collaboration in innovation is always a workable solution. Together with the Asia let more innovation blossom and let the world prosper a lot more - innovation and prosperity are closely related.

Consolidator Acquiring The Consolidator : Infor To Acquire SSA Global

Infor announces the intent to acquire SSA global. Its a case of a consolidator acquiring a competing consolidator. Infor itslef has been assembling best-in-class enterprise software solutions and SSA itself is in the process of integrating its recent acquisitions - Baan & Epiphany. Infor beleives that its becoming the third largest enterprise software provider in the industry with approximately $1.6 billion in revenue. The Infor-Goldengate-Geac-SSA connect is an interesting aspect - that should have in a way helped engineer this deal.For sometime, Infor was going after SSA customers.The coming together shall definitely play at the mid-market segment.This acquisition may be closely watched by the combined Lawson + Intentia team besides countless number of small firms . No doubt, that in a rapidly consolidating marketplace,size and scale matters a lot. As I see it, some good products are there in this new stable - besides Baan, Ephiphany,BPCS,Datastream,Brainweb and a few more products are well known in the marketplace with satisfied customers. It is going be a critical thing to watch in terms of what level of support and growth gets provided for the variety of products rolled up as part of this acquisition. No doubt this is an architect's nightmare to bring all these as part of a homogeneous platform - which Infor will have to work towards to leverage the strengths - in the interim they may be supported as standalone products. Infor may also choose to keep a few as part of their enterprise but still available as standalone best-in-class. Its interesting and challenging journey ahead. Just guessing what could be running in the minds of the 30,000 plus customers of the so-many-acquired, integrated-to-be-integrated and superconsolidated software products.

IBM - A Disaster In The Making: Cringley

Robert X. Cringely sees IBM as a disaster-in-the-making.In the article discussing Google's future opportunities, Bob hides these well thought out observations about the world' largest service player- must read for all interested in the global consulting industry to reflect and respond with their thoughts. As he puts it, Big Blue as a total enterprise is running primarily on customer inertia and clever advertising. Claiming that IBM is in trouble, he sees lots of his friends inside IBM to be unhappy. The company is not going anywhere, but it is also going nowhere. He lists a number of facts to support his argument :
- The disconnect between the traditional public image of the company (basic research, advanced R&D, patents, patents, patents) and the fact that most of their revenue-generating businesses aren't about hardware or software products at all, but services.
- Looking at the compensation system, he sees that IBM's major incentives right now are for signing business and cutting costs. In many IT firms, IBM included, billable hours are important. This results in a system where little is done to improve service efficiency, because doing so would lead to fewer hours and less revenue. Efficiency kills, so at today's IBM it is generally avoided. With costs going down, quality suffers!. (Enlightened/ Bitten organizations now are increasingly beginning to recognize services as a differentitator and are beginning to reward equally or more in a few cases as with sales - today in this opportuntunity abundant world - sales is sort of given - rewards need to be for consistent growth and delivery frameworks need to be robust to factor in productivity and rapid rollouts. Isn't true that every consultant is a sales guy as well).
- The result is that an increasing number of customers are unhappy with IBM, signings are harder, so there is less return business. To get that signing incentive, IBM's sales folks are now under-pricing deals. The people who do the actual work are still expected to show a profit though, even if one wasn't designed into the contract in the first place. So to still be profitable, they under-deliver on the contract, and this leads to an even lower quality of service (People in the know of things can easily relate to this - Costs, Quality, Productivity are interrelated). This he contends is a death spiral that top IBM management either doesn't see or simply doesn't want to admit.
- IBM's primary innovation has been to move as many jobs offshore as possible, cutting costs for now, but at a horrible long-term cost to the company (This may be debatable though).
- IBM’s Global Technology Center - has spent millions of the company's money, are masters at promoting themselves, but have delivered very little of real value back to the services organization.
Losers, he thinks of IBM ..
Come to think of it - substitute IBM with any other known name from consulting & services industry – would it look any different –unlikely barring a few.(I do know of a few really having different models, metrics and approach). The whole service industry and enterprise software industry plays on the customer inertia and lack of an alternative. Whats that disruptive model that would shake up the services industry – clearly offshoring played that role to an extent but the laggards seem to be catching up here/atleast make up an appearance of catching up. Seen from a service industry perspective, next technology breakthrough heralding new opportunity could help them rejig their model – like what BPR/ERP wave did earlier or the dot com era – SOA is still many years down the line. Seen from a customer perspective, how does one lock themselves out of this ? Seen from an investor perspective, how to value service companies where increasingly the differentiation factors seem to be just the scale and historical presence.These are definitely key concerns. Innovation inside consulting and service organization needs a different mindset to foster and manage - clerical approah shall have deleterious effects. Perhaps in respect of IBM and a large number of others - Bob has really nailed it.

Television 2.0 In The Age Of Digital Covergence

Some feel looking at the disruption happening in this convergence age,that this is going to be the most disruptive period in the past 50 years. It appears that practically every machine in the wide realm of communications - every gadget that sings, talks, beams images, or messages - will sport a powerful computer and a network connection. And every bit of digital information, whether it's a phone call, a song, a Web page, or a movie, will flow among these machines in the very same river of data.. The dramatic shifts ahead are likely to shake up age-old concepts at the foundation of our economy. This as the linked article shows open up interesting questions and possibilities - In the coming markets of moving bits, who owns what? Will people buy their programming and machines? Or will they rent and subscribe? Innovative companies will sort out these questions, leading the way in building new business models for the coming age. Clearly, those who figure out how to reach through the networks to deliver customized information and services will be the architects and kings of the converged economy. Craig Barrett,said sometime back,"After 20 years of talking, this so-called convergence of computing and communications is happening"
But this digital convergence instead of consolidations was predicted to open up new set of opportunities for upstarts and challenges for tech icons

Courtesy of Paul Kedrosky, came across this interesting piece by David Cowan of Bessemer on Television 2.0. David writes, “It was only a matter of time before the internet changed TV in a way more profound than color or cable”. But being strategically positioned between the audience and the talent, TV networks protected their cash flow by resisting the growing economic pressure to bring the interactivity, e-commerce, and community of the web to TV's huge, loyal audiences. But Tivo cracked that dam, and over ten years the crack expanded to jeopardize the integrity of that industry structure. This structural damage and shift enable the talent agents today to tune the contractual fine print to carve out rights for online and mobile syndication, merchandising. endorsement, ringtones, screensavers. games, etc. Soon enough, new revenue streams will subsidize Desperate Housewives and Scrubs so they're always an RSS feed away. This quadrapule play and the resulting disruption, progress and transformation opens up new vistas for growth and investment - Bessemar, he adds has made six new investments in this space!!

Tim O' Reilly On The Darker Sides Of Web 2.0

Courtesy of Nick Carr saw this address by Tim O’Reilly on the darker sides of Web 2.0. Tim O’Reilly who had earlier came up with a set of business models for Web 2.0 (almost the magnum opus for Web 2.0) makes an insightful commencement address for the UC Berkeley School of Information - quite a significant speech – rolling back the hype element of Web 2.0. and its future.
Amongst the dark side of Web 2.0 is the concern of concentration of power. While it's easy to see the user empowerment and democratization implicit in web 2.0, it's also easy to overlook the enormous power that is being accrued by those who've successfully become the repository for our collective intelligence. Who owns that data? Is it ours, or does it belong to the vendor? If history is any guide, the democratization promised by Web 2.0 will eventually be succeeded by new monopolies, just as the democratization promised by the personal computer led to an industry dominated by only a few companies. Those companies will have enormous power over our lives -- and may use it for good or ill. Already we're seeing companies claiming that Google has the ability to make or break their business by how it adjusts its search rankings. That's just a small taste of what is to come as new power brokers rule the information pathways that will shape our future world. As a result, I urge you to think hard about the consequences of new technology. Don't just take for granted that technology will bring us a better world. We must engage strenuously with the future, thinking through the dark side of each opportunity, and working to maximize the good that we create while minimizing the harm.
Next concern : Greed. Web 2.0 has ignited a new feeding frenzy among venture capitalists and entrepreneurs. It's perhaps too early to call it a bubble, but once again, enormous fortunes are being created by people with little more than a bright idea and an instinct for how to harness the power of new technology. You are among those who have a place at the starting gate of the new race for wealth.
So, seemingly different ages have alarmingly similar set of concerens!!

Beyond Vista : A New World

The launch of Vista, will probably mark the end of the road for Windows as an all-in-one operating system writes Stephen Wildstorm. Projects on the scale of Vista - updating and writing tens of millions of lines of interlocking code - are becoming impossible to debug fully. The challenge facing Microsoft is not simply its massive size but the fact that its pieces interact in ways that are beyond human comprehension. With typical installation of Windows XP Professional, running into the range of 1,600 "dynamic link libraries –bringing in potential cause for cause troublesome unanticipated interactions. The hope lay in new technologies that can herald a new paradigm for software – those that can divide a large and complex operating system into a number of smaller, simpler units that run on one computer but function independently of each other exist today. Such a software look much like today's software, but it will be less prone to glitches, crashes, and attacks. A single computer might be split into three "virtual servers" - one to handle Web pages, one to process e-mail, and the third to run a database. An immediate benefit is improved reliability, because a software crash on any one virtual machine does not affect the others. Intel’s scenario shows one virtual machine might handle ordinary applications. A second could be optimized to handle digital media: music, videos, or photos. Both of these systems would link to the network (and Internet) through a third virtual machine that would handle the actual connections. This division of labor could make PCs safer, since the communications module would be solely dedicated to secure networking and need to be updated only to fend off viruses and other malware. Except for the networking part, which will be supported on new Intel chips solution is available using software from Microsoft or VMware. But each virtual machine would have to run its own copy of Windows, making the whole system spectacularly inefficient. The post-Vista computer will probably use a far more streamlined operating system that loads only the components needed by each virtual machine. Linux has this sort of modularity today, but Windows does not. These require many processors to run the OS and today nearly all the chips produced by Intel and Advanced Micro Devices will have at least two processors. The Sony PlayStation 3 is built around a nine-processor IBM chip, and Intel has plans for chips packed with thousands of processors. This is a truly disruptive change likely to materialize in next 6 years and the post-Vista world could see the first real competition for the desktop sinceg Windows 95 cemented Microsoft's dominance a decade ago. Amazing view of things expected to come – though we may have to wait for a while. It would be interesting to see which vendor would roll out such a system – at least three/four are fully capable of undertaking such massive initatitive – unlike Stephen, I still think that Microsoft may also play a role here as in the runup to the launch of vista – it said that vista is being rearchitected differently. Clearly better times await us.

Open Source, Web 2.0, Enterprise Software :The Battle Of Mindshare & Criticality

I recall being in a conversation with a well known IT industry expert almost an year back about Sugar CRM – while he thought that this embodies the new trend in enterprise software(opensource), I totally disagreed with him and as such never thought that it would gain traction within the enterprise world.
Jeff Nolan writes,"valley is so radically removed from mainstream enterprise software".He thinks that owing to its strategic nature, maintenance is the primary function of enterprise IT, not innovation and this is antithetical to Valley people like you and me, and especially investors. He takes the example of SugarCRM and writes that Sugar is a startup that is not profitable and hasn’t been catapulted into the mainstream CRM business arena. Out of the 35,000 customers that SAP has, he is aware of just one SAP customer who has approached us about Sugar integrating with our ERP suite. Fully agree Jeff – Enterprise software typically takes lot more time to build, market,gain mindshare amongst potential buyers, makes slow entry into enterprises and remain there for along time –core enterprise software is not a plug and play for enterprises – it embeds within themselves so much of process related to the enterprise and become more or less like an infrastructure to the enterprises adopting it and as such may not suffer from the churn factor seen in the consumer segment. Also size plays an important factor - even valley's yesteryear heroes - Sun & Novell are not seen to be as innovative as it used to be seen to have been several years back. But having said that, it is imperative for the enterprise software ecosystem to foster innovation lot more, spend more on R&D, offer better pricing models and value to enterprises – am aware of many many “WALKING DEAD” enterprise software companies who could phenomenally better, if only they were as dynamic, innovative and risk taking as several small web 2.0 startups. One of the reason that SOA adoption has not happened at the pace expected is owing to lackadaisical approach shown by the enterprise software industry. The disruptive wave that every industry gets hit in their lifetime seldom affects the enterprise software industry with similar force - that I suppose is because of the stranglehold that the enterprise software players have on their customer base. That in my view is the only connect between the Web 2.0 ecosystem and the enterprise - but not the new upstart living for a few weeks hyped/trying to show off as the next best thing. Enterprise software is a critical element of IT and success of global business is intrinsically tied up to this sector – this should never be overlooked.

The US As The Most Competitive Nation In Future

Courtesy of Kaps saw this interview with Azim Premji in the stanford magazine. Excerpts from the interview:
“You’ll rarely find today a CEO, CFO, CIO of an American corporation who’s not heard of Wipro because virtually every CEO, CFO and CIO is looking at a global delivery model for services, whether that’s software [design] services, voice services or back-office processing services.” Answering a question If China has taken the blue-collar jobs, is India going to finish America’s “hollowing out” and take its white-collar jobs, Premji replies, “There are several aspects to managing a company. Many activities such as manufacturing an end product, doing due diligence for a business or a product, etc. can be easily outsourced. “In every business there are functions which require deep customer intimacy and market knowledge . . such as conceptualizing a product or a product line, feature trade-offs in products, consultancy to set up a business and one can’t outsource these core management activities,” he adds. “The thought leadership cannot be outsourced.” Yet what is “core” can always be narrowed and redefined. “In the future we will see an increased variety of products that are personalized as opposed to standardized. It will take time for this concept of personalization to reach maturity, and only then will outsourcing of this effectively begin”. But if Americans have a sense of doom about the future, Premji doesn’t share it. “Their culture of innovation and resilience is incomparable and unlike that of any other. And they will find a way to remain the most competitive nation, albeit with a new set of alliances and partners.” Nicely put - fully needed to be understood when some are concerned about the rising marketshare of indian headquartered service providers growing faster than global majors and gaining more marketshare in the process - the indian technology system shall largely remain a part of the US ecosystem and just that.

SOA : The Vision & The Hard Part Of Adoption

Accenture's Donald Rippert believes that with SOA, the building blocks of a simpler future are in place . He imagines a future where SOA will make it possible for business managers to create instantly the IT functionality they need to support business initiatives, instead of submitting a technology request that disappears into the IT department’s backlog. At the same time, SOA will force IT to begin speaking the language of business rather than technology – driving corporate productivity by putting technology in lockstep with the business. As he sees it with an SOA, business applications are constructed of independent, reusable, interoperable services that can be reconfigured without vast amounts of technical labour. Soon it will be common – at least in high-performing organizations – for business managers to assemble technology services, drawing upon reusable components developed by their counterparts in IT. The maturing standards set SOA apart from previous generations of integration technrologies, which were largely proprietary to each vendor. He believes that SOA adoption would increase with standardization just as standardized browsers fuelled the adoption of the worldwide web. As SOA delivers the promise of solutions that transcend lines of business – and the organizations themselves – IT managers, newly decoupled from applications they manage, will have a broader view of the potential they can deliver. Once IT speaks the same language as business, it will be primed to design services that help companies bring distinctive capabilities, products and services to market quickly and companies and government entities that adopt SOA have the chance to drive substantial productivity gains and higher levels of performance.
Brenda Michelson brings in a reality check in adopting SOA. Amongst the key concerns:
- Many enterprises find it difficult to determine the correct bounds (job and tasks) and granularity (collaborations) of business services. Enterprises have erred equally on creating services at too fine a grain, and too large a grain. Industry specifications for true service interactions, rather than information hand-offs, are the exception rather than the norm.
- In most cases, architects and business analysts are relying on service definition practices from SOA technology and/or solution providers, or adopting best practices from experience, gut feel, and a wide range of published methods.
- A publicly available, cohesive, services definition methodology is missing. Its a challenge to deploy SOA program while balancing the natural tension of executing business projects (today, on-time, on-budget) with the need for architectural integrity.
As I see it in terms of SOA adoption amongst other things issues like several critical problems like communication mismatch between business and technical architects, ever evolving standards and a lack of a visible wave in embracing this technology all come in the way. Further, as I see it, the lasting value through SOA deployment is not just in empowering the business manager, but in fostering and creating a new global business framework where disruptive technologies /methods like outsourcing, offshoring, SaaS & Open source shall meaningfully intersect creating new value chains.

SaaS 2.0 : Next Generation Business Platform

Bill Mcnee, Bruce Guptill, Mark Koening & Jim Cassell at Saugatech have come up with an excellent report on SaaS – this qualifies to be amongst the best research report on this subject. They argue that the stage is set for the advent of SaaS 2.0, which would significantly extend and fundamentally change the conceptions about SaaS as we know today. SaaS 2.0, as they see it will incorporate advanced SOA and business process management technologies to provide a next-generation business management platform that competes with, and in many cases, replaces, traditional enterprise applications. I liked the discussion about the evolution of SaaS as covered in the report but particularly their prescription for SaaS vendors to serve customers better makes interesting reading :

SaaS vendors will increasingly need to provide customers with greater choice across the following dimensions
– Deployment Choice: Provide both net-native and behind-the-firewall options (as many large enterprises need an on-premise option, especially in the Financial Services and Government sectors).
– Payment Choice: On demand does not always have to equal pay-as-you-go. This applies to both the frequency of payment, as well as the license type (which can be either term or perpetual with maintenance – depending on the financial preference of the customer).
– Upgrade Choice: Forced upgrades don’t work, mandating that SaaS applications be both multi-tenant and multi-version – supported by a automated upgrade process (all controlled by the user, in terms of when they want to upgrade).
– Integration Choice: Provide multiple paths and methods to integrate seamlessly through web services, which helps remove any location constraints.
– Customization Choice: Go beyond providing a richly configurable environment by providing an architecture that supports customization (e.g., user interface) within the context of a multi-tenant environment.

I also liked their idea of SaaS integration Platforms – such platforms will function as a solution “hub” providing integration, delivery and management services such as:
– Application sharing and integration services to support multiple applications simultaneously (as well as to provide tight linkages to remote and or behind-the-firewall applications),
– Common interfaces and data models
– Bundling, provisioning and configuration services
– User management and administration (e.g., authentication, authorization, auditing)
– System performance optimization
– Fee-based or commission-based aggregate licensing, billing, invoicing and payment services for software and services vendors
• The SIP platform creates the potential for value-added services such as analytics, vertical application bundling, managed services, vertical or domain-specific best practices consulting, and business process-specific services. These can be delivered to the customer base by SaaS solution providers, aggregators, SIs and/or VARs.
• Ultimately, it will be large enterprises who will demand richer SaaS integration and management services for the increasing complexity and mission-critical nature of SaaS 2.0, rather than much of the market today which is around servicing SaaS start-ups.

Overall, a very impressive coverage of the state of the SaaS market today besides looking at the future of the SaaS ecosystem , its evolution and implications make this report a compelling reading for all interested in SaaS. The report is available here.

Indian Exit Polls: Some Less Wrong & Others More Wrong

The national media in India is full of assessments from various agencies with projected results based on exit polls. The technology and the process needs lot more strenghtning - at the moment, it is probably far from it. Seen in the Indian context, there is no doubt all the exit polls have been wrong, some less wrong and some others more wrong. In the recent US elections, the discrepancies between exit poll results and actual results were indeed telling. Global audience of this blog may find how complex it is to administer and work on the election machinery(this time some provinces in India went to polls) in this continent size population - the country taken as one is unarguably the largest democracy on earth.The indian provincial elections also saw lot of blogs active - writing, debating, predicting and assessing issues and prospects. I am off to china in a few hours from now and won't get the chance to update(this domain is blocked in china) when the actual results are out - but things are unlikely to have improved given the levels of rigor seen in conducting the exit polls in the country.

Silicon Graphics : The Fallen Hero

WSJ reports that Silicon Graphics has filed for chapter 11 bankrupty protection. Silicon Graphics is known for desktop workstations and larger server systems capable of rendering great graphics and used to be expensively deployed for animation centered applications – that include the likes of Hollywood studios. Some say that the company has suffered a long slide, partly due to competition from machines based on standard components used in personal computers. Darwin seemsto have played its part in this downfall. I think that in the last 24 months when things were indeed getting worse,they should have pursued a course of action to merge witha bigger firm. It is indeed sad to see the fate suffered by silicon graphics and one only hopes that the other tech giants take adequate note of this – the promising strong players of yesterday and today need not necessarily have a strong tomorrow.

Category :Emerging Trends, Silicon Graphics

The Green Alliance Towards Green Data Center Push

The Green Grid Alliance plans to reduce the energy use of servers in corporate data centers. This is enabled through the establishment of server power measurement standards and influencing product designs. Dell, HP, IBM and Sun Microsystems are coming together to promote greener corporate data centers. Dell,along with American Power Conversion and VMware, on May 2 joined the Green Grid Alliance, founded on April 19 by companies including Advanced Micro Devices, HP, IBM and Sun. AMD officials have said that the Green Grid Alliance will address data center power consumption and cooling, in part by looking at data center design and server deployment, as well as by fostering the creation of more energy-efficient computers and networking and storage gear. The group will also work toward creating standards for measuring server power consumption, which it says companies could use as tools to make better decisions about the machines they buy or other ways of fine-tuning their operations. The Green Grid's first goal is to raise awareness about data center power, with the work on efforts to create power measurements and influence product designs coming later, AMD officials have indicated.Meanwhile, the alliance may align with other like-minded groups, such as one—known loosely as the Eco Forum—that has been working on universal server power consumption measurements. Commendable, given the fact that the tech sector needs to do its bit towards making the earth more green.

Google As The Enterprise Interface: Bad Dream

Nicholas Carr writes,"What Microsoft is trying to do with its new Duet partnership with SAP - provide a user-friendly way to tap into data from a complex enterprise system - Google is trying to do on a much grander scale. It wants to be a front end for everything. One wonders if the big application providers will really want to forfeit the user interface - and the power it represents - to Google. One also wonders whether they'll have a choice". Google's Dave Girouard's interview explains it further:

"Yes, because it's a development environment. Any given company mayhave all sorts of infomation that they would like to make available ,and they can make it all keyword triggered. You could type the word "contact" and then a name and it would go to Exchange. It's really upto the administrators to decide how they want to trigger it. But the user experience — and this is really important to us — entirely mimics how Google.com works. So,you don't have to get training; you can discover it over time; a friend can show you a OneBox that they think is particularly useful. For example, one of our partners is Oracle, and you'll be able to look up a purchase-order in your Oracle financial system because Google will recognize what a purchase order number looks like. Just like Google.com recognizes a UPS tracking number. The Enterprise system will know what an Oracle purchase order looks like, and it will insert that information right at the top"

Sukumar Rajagopal amplifies this further when he writes, "We have been using WIMP as the User Interface design strategy since the days when Xerox Parc and Apple Macintosh pioneered the GUI and subsequently made ubiquitous by Microsoft Windows. As everyone will attest software development costs time and money, so my argument has been that by eliminating development on the Read part of the application, we can save time and money. Search will make the WIMP interface obsolete for basic Information Retrieval/Foraging purposes. Of course, for more advanced information retrieval applications you will use business intelligence tools".

My Take: Somehow, on many fronts, I have reservation in endorsing Nick Carr's view amplified by Sukumar Rajagopal.
A. Google’s application centered interfaces are not that great – for example , its do not sort when you can search philosophy with Gmail is not exactly a great hit – I suspect that with my limited experience of using it, I end up spending more time in accessing information – this when I use my mailbox to 20% of its capacity.

B. Enterprise Information architecture is far more complex than what it seems to suggest ( generally speaking enterprise level rollouts are lot more sophisticated than consumer centric rollouts)– I have sat through/chaired numerous exercises/workshops/walkthroughs of taxanomy development inside large enterprises – several times getting to accept a common taxonomical structure itself could be elusive. I know of organizations (which are rated amongst top 3 best knowledge management organization in the world repeatedly) struggling to even converge on a common taxanomy framework – they are using three –four different frameworks (all in use simultaneously). The search/synthesis needs of large enterprises using multiple information repositories are best addressed through better information architecture frameworks and not on any technological standardized bruteforce approaches.

C. More enterprises uses specialized search engines like Verity, Autonomy, Fast Search etc for specialized retrieval and synthesis. One organisation that I am involved in consulting has sophistictaed web services deployment to power search across multiple repositories. An idea of complexity involved in workings of such solutions are best exemplified by this – Autonomy has bought Verity some months back – Their architectures and information retrieval mechanisms are quite different – integration challenges loom large at the product level itself – at organizations retrofitting new framework into established implementations – very tough. One may be surprised to see many organizations(who are otherwise amongst early adopters of technology) not even attempting to upgrade search implementations even under normal circumstances for several years for fear of disruption and deleterious loss in productivity owing to changes.

D. Even if we assume that technology improves and offer better results, I just want to point to Jakob Nielsen referring to Office 12 preview shows that the will be based on a new interaction paradigm called the results-oriented user interface and he has the best insight here –"If anybody else introduced a new user interface paradigm, it would probably remain a curiosity for years, but Microsoft Office has a special status as the world's most-used interaction design. We know from user testing that users often demand that other user interfaces work like Office. When you're used to one style most of the day, you want it in other applications and screens as well". If anything Outlook could become the light version of the elusive portal dashboard, so many enterprises seek.



E. Even in desktop search, one may find that Google is not the numero uno that it is seen as in the web world - lot many people still prefer search engines like Copernic over Google Desktop

F. Security concerns that enteprises may have would also be a critical impediment in adopting such frameworks across - this is not to say that solutions may not be found but this would be a big deterrant.

I do not think that the user world would accept a common interface – a google centric one that easily – the questions of demonstrated value would be far more difficult to answer.


Category :Google, Emerging Trends

Impressive List Of Web 2.0 Lists

I was speaking to someone known to me last week and I was stumped when he asked me to point to one source where all info about Web 2.0 applications and reviews can be found - his point is, in the Web 2.0 world, its a natural expectation to find such information over the web. Richard MacManus comes closer to meeting the expectation with this impressive list of web2.0 lists . Indeed well researched - as he says, for somebody trying to analyse the Web 2.0 movement, he /she shall have to go much deeper than the high level product data and digg out/ synthesise findings into practical insights, recommendations, knowledge, etc..

The Tech Industry Bigwigs Gearing For A Spend Competition

Microsoft seems to have recognized they have to invest heavily in infrastructure and compete aggressively or risk losing to Google & other providers of software as a service. David Kirkpatrick captures the changing nature of the software industry- consumer software is increasingly taking the form of Internet services and software is becoming a capital-intensive business. Microsoft intends to spend staggering amount of money in building data cents to buy, build and manage the data centers that are the heart of the Internet economy. Long term, one can envision a world where most of the planet's 6 billion people are online most of the time. And we will all likely be communicating and being entertained with bandwidth-intensive video. Not for nothing we are beginning to see shriller views getting exchanged between Microsoft & Google. The beleaguered Microsoft is investing in being part of such a future where Google is clearly in already. Clearly, the changes Microsoft has to make to compete with Google are neither easy nor certain to succeed. I liked the views shared by Cisco’s Dan Scheinman speaking on the changes being attempted at Microsoft, - " You've moved from the tyranny of the application to this massive scale of infrastructure - this is a disruptive change in the computer industry. "Microsoft has to be willing to throw out everything they've done and change religion from Catholic to Protestant” .
In this rapidly changing world, it is definitely clear that while infrastructure alone will not be enough to give any one of the giant Internet companies advantages over another, while in this arms race, the rest of the crowd may end up left behind as the giants battle for supremacy in the race for Internet infrastructure. The storage market is indeed creating huge impact all around – The iPod economy, gmail & amazon’s storage services are all trailblazing initiatives created on the back of the advancing storage technology coupled with falling storage size and price. This opens up interesting possibilities as well – Sun can begin to dress up to get acquired by Google – after all it already uses Sun’s technology.

Update : These developments open up possibilities for the folks at Sun as Sramana Mitra sees it to create an enterprise strategy if Sun's massive tech infrastructure capabilities and Google's massive online presence can come together.

Oracle & The Ascending Power Of The Enterprise Software Buyers

The enterprise software buyers look to be asserting themselves a lot these days – particularly the set of buyers using a myriad number of oracle’s enterprise applications. Oracle App’s roadmap seems to be full of never ending bends & twists. Niel reports after attending the Collaborate 06 conference which brought together three different Oracle Users Groups: Quest Direct (traditionally the JD Edwards users group but now extends to include PeopleSoft), IOUG (Independent Oracle Users Group) and OAUG (Oracle Applications Users Group) that the new approach seems to be one centered around the theme - "Protect, Extend, Evolve". This actually signals a pretty dramatic shift in strategy for Oracle with regard to its installed customer base of PeopleSoft and JD Edwards. The wait and watch attitude of oracle customers seem to be paying off – given the concerns of very high potential cost to migration to Fusion, Oracle seems to be coming around to the point of supporting these applications as these remain and are making some announcements of new releases around these products. Neil points to a few announcements in this direction in respect of Peoplesoft & JDE.

As I see it, people in the industry know very well that in respect of other point acquisitions, Oracle’s focus is just to rename the products as oracle xm1, xmII etc.We are also seeing for the first time in recent years the return of power to enterprise software customers as this case exemplifies – any upgrade/switch happen on customer terms. As I wrote earlier, Oracle has a huge integration challenge ahead but had promised its worried customer base to provide long-term support for new and existing versions of its applications. While oracle is moving fast to potentially
own the application stack and trying to redefine the expectations on software companies, the enterprise software buyers seem to be having the last laugh – even traditional license frameworks look susceptible for change.
Interestingly whats the price for acquiring marketshare in enterprise market - I % share is 1 Billion USD!! Anyway wishing the New-New Oracle all the best and hope that its depressed stock prices get a filip. Clearly enterprise software buyers and users have to thank oracle - for helping them relaise their power - for a different set of reasons than what Oracle would have originally envisioned.