October 2008


Hunkering down in tough times

John started his career selling local insurance products. Eventually through perseverance, charm, good business acumen, and the strong support of his wife, he started his own insurance brokerage. At the height of his success, his company was raking in over US$5 million in insurance premiums. For a small company with under 40 employees, John was the epitome of success. You could argue that his strategy to stay focused on a specific market segment and narrow band of products (he only sold products from one principal) paid off.

Today his company is on the brink of failure. What went wrong? As a business, you could surmise that greed and pride were at the roots of the impending demise of his company. He and his wife decided to take a back seat and let the children run the business. The children were inexperienced at managing people much older and more experienced than they. The company elected to diversify its product portfolio approaching several principals and using the company’s track record to secure lucrative deals. Sibling rivalry pulled the company into different directions as employees lost direction, drive, interest and loyalty. John’s dream of building a dynasty is in the brink of oblivion. At this very moment, he is trying piece together plans to resurrect his business. Is he too late?

John’s fate is not an exception. Nor is it the stuff of local soap dramas. Rather it is endemic of business cultures that fail to use initial success to drive growth and innovation. It is also a lesson in separating personal interests from those of the business. Neither is his company a norm. AllBusiness.com, a D&B company lists 10 reasons for failure:

  • Overexpansion
  • Poor capital structure
  • Overspending
  • Lack of reserve funds
  • Bad business location
  • Poor execution and internal controls
  • An inadequate business plan
  • Failure to change with times
  • Ineffective marketing and self-promotion
  • Underestimating the competition

(more…)

Bold by any other name

What’s in a name? As a former marketer I have learned to understand and believe the power of brands. Take away the shareholder equation ($$$) associated with brands and what you have at the very core of a brand is Trust. The old adage in IT was “no one ever gets fired for buying IBM”. While this may still hold true in some business quarters in many parts of the world, the “trust” a brand builds over time can easily be thrown out by a single, badly managed incident.

But that is not my point here. My point is that sometimes marketers can get carried away with the exercise of creating a brand name that they lose sight of a deeper goal – maintaining the level of trust a brand has established over the years.

Anyway, you’ve probably read two of my product reviews (Samsung Omnia and HTC Touch Diamond). I would not be surprised if after reading both you’d think of me as being patently pro-BlackBerry. I can assure you that while I like some of the technologies that RIM has created over the years, I am still very much not in favor of some of their current business practices. But this is a another product review so let me get that off the table and come back to my RIM issues towards the end.

I use a BlackBerry Pearl (8120). I’ve used a BlackBerry Curve (8310) earlier this year – sorry it got stolen during a holiday in Manila. Recently I was loaned a BlackBerry Bold (9000) to try out. As before, this is not an exhaustive review. If you want a technical dissertation, click on the list towards the end of this blog.

Likes about the BlackBerrys

  • Rugged form factor (I’ve dropped each model on a few occasions – unintentionally of course – and each survived mostly unscathed – yes, minor scratches – you should see what a 3 foot drop can do to an iPhone 2G – the model with an aluminum case. Imagine what would happen to the plastic iPhone 3G)
  • Simple to understand user interface plus the ability to hide functions you don’t need or don’t use. (I firmly believe that a true test of a consumer device is to use it effectively without ever reaching for the manual)
  • Syncing with MS Outlook is easy as is installing/uninstalling the software – BlackBerry Desktop Manager
  • Screen is crystal clear – but the Bold beats everyone – iPhone, all previous BBs, SonyE, Nokia, HTC, MotoQ, in fact everyone except the Samsung Omnia i900 series.
  • Power-up is almost instantaneous (except when you remove the battery)

(more…)

So why do customers buy from whom they buy? Depending on who you ask the response can be different. Marketers will tell you it’s because of the effort the company puts into creating a trusted brand. Sales will tell you it’s all about relationships. Consultants will want to credit the effort placed in educating the customer on the uniqueness of the solution.

Most of my career was from the vendor side of the fence but I did spend a number of years on the user side. So allow me to share with you my own personal view gained from years of selling to customers in the region, as well as more recent discussions with large corporations in Asia about their decision-making criteria that eventually lead to a sale.

Obviously not every customer buys for the same reason but in many cases there are some key common considerations:

Buy everything from the server vendor

This is an easy and potentially safe solution. It may not be the most price-competitive on offer and it may not provide the best product for the job. The point here is you have throat to choke, one supplier accountable for everything.

Buy more of what is already installed

Often times we come to situations where we just need a little more juice, or additional disk space, or perhaps new employees mean additional licenses are needed. It is so much easier to expand on what is installed than to go out and buy something new. It has, potentially, has the same downside as the first point in that it maybe not the lowest cost and not necessarily the best product.

Buy on brand or company name

During the days of the mainframe era, many years ago, there used to be a saying that no-one ever got fired for buying from IBM. These days the same may apply to buying from EMC, the largest independent storage vendor. But this may not give you the best solution and price.

Support

For the larger vendors this generally is not an issue. It should be more of a consideration for a new vendor or small in the region or if you have a need to install in a remote location. Another issue to bear in mind is support in a heterogeneous environment, It can happen that when something goes wrong, vendors like to point to the other vendors components as the cause of the problem.

Buy on Price

Some enterprises know exactly what they want. They define the specifications of what they need and then buy the lowest cost solution that fits the requirements.

Buy because of feature

In a dynamic business environment, there will be occasions when you need to deploy a new feature that is recently introduced into the market and this is only available from one or maybe two vendors. A good example is flash memory for storage arrays.

Let me stress the point that decision-making is never simple. There will not be just one reason that will be considered but usually a combination.

Even within Asia there can be a different bias depending on the country or culture.

For instance, in China there is a focus on brand; name, image and reputation. In Japan quality and reliability are very important. Koreans look at feeds and speeds — what has the fastest throughput, the biggest cache, or the largest capacity. In India price is very high on the list of decision criteria.

I spoke to two large customers in Hong Kong and received two very different opinions. Michael Leung, Senior Vice President & Chief Information Officer for China Construction Bank (HK Branch) looks for “value” in any purchase. He believes in competition and does not like to be tied in to buy storage from the server vendor as in the case with the IBM AS/400’s CCB has installed, which has many benefits because of the closed architecture, but has also some drawbacks. Leung added that the decision making process takes into account features, functionality, reliability and support.

On the other side of the spectrum is Andrew Ling, the Director of IT and Supply Chain for the Bossini Group. He told me that his preference is to buy storage from the same vendor as the server. Ling believes that Bossini will get better discounts as well as fewer integration and support issues. The other important consideration is the vendor’s reputation, which includes support and their research and development.

Whatever you do and whenever you can, get at least two quotes. And make sure the vendors you are talking to know what you are doing. This way you will get a better deal.

There is one other factor that I have not mentioned yet although I first heard this more than 20 years ago from one of the best account managers I’ve ever worked with.

People buy from people they know and trust

From my experience as long as the vendor has a good-enough product and a good-enough price, the key differentiator is the customer relationship with the account manager, the company’s management and the support staff. To be honest for over 90% of user requirements most products from reputable vendors will do the job.

This is the same anywhere in the world, not just Asia.

Three months ago I had an opportunity to meet an ex-SUN storage evangelist – Robert Nieboer – who spoke elonquently about the concept of Open Storage. According to Nieboer, Open Storage suggests that you buy standard, commodity products like controllers and hard disks, and install an “Open Source” operating system that includes storage resource management, and you get a storage subsystem that will perform pretty much everything that a similarly configured storage solution from IBM, EMC, HP, HDS, NetApp or Fujitsu, but at a fraction of the cost – 10% to be precise.

Certainly at 10% of the costs of a convention storage solution from mainstream storage vendors, you’d wonder why there is no mad rush to get into the open storage bandwagon.

I took the opportunity to broach the concept of open storage to three CIOs. The response were unanimous – “no, thank you!”. Why?

Michael Leung, CIO for China Construction Bank (Hong Kong branch), notes that banks are probably some of the most conservative businesses on the planet. Highly regulated, all activities are monitored and audited. Every piece of technology the bank is using has likely got the auditor’s seal of approval. Any changes to the type of infrastructure would warrant long meetings, supported with lengthy documentation, with auditors. Its ok to pay through the nose as long as CCB complies with set standards and regulations.

Like Leung, Raymond Ngai, Head of IT Infrastructure for the Hong Kong Jockey Club (HKJC), meeting government regulatory requirements is just as important as keeping data secure 24x7x365. The Jockey Club sites on 35TB of data housed across the main data center and the disaster recovery (DR) site. Like CCB, the Jockey Club likes to stay with old and reliable (I prefer to call it predictable).

One head of IT who bucked the perception was Thomas Lee, Computer Operations Manager at HACTL (Hongkong Air Cargo Terminal Ltd). Lee says HACTL is constantly on the lookout for IT solutions that would deliver significant ROI. Certainly if you can save 90% of your storage budget, that warrants a label of significant ROI. But you have to pay attention to the fact that HACTL’s business isn’t as highly regulated at CCB or HKJC.

Apart from SUN, none of the other major storage vendors in Asia (EMC, IBM, HP, NetApp and Dell) have an open storage story to tell. Why should they? Such a story could potentially cannibalize their “open but proprietary” storage offerings. SUN is not invulnerable either. IDC ranks SUN as 5th in terms of storage sales, with double-digit growth – like everyone else. Much of this growth is attributable to SUN’s storage business derived from OEM partnerships with Hitachi, LSI and Dothill.

Certainly SUN’s proposition that storage should not cost as much as it does today has it merits. The question that CIOs and business managers need to ask is ‘whether the technology is mature enough today to warrant taking the plunge.’

The likely answer is ‘no.’

It will probably take a few more years before open storage becomes a viable solution for mission critical applications. Like Linux and the open systems platform, early adoptors can take the opportunity to test the solution either on development platforms or applications that live on Tier 3 storage platforms.

Today the verdict is out – open storage is not ready for prime time. But like the probervial Gartner Hype Cycle, the technology will reach a point where it becomes mature enough to consider. Until then, stick with the tried and tested, albeit expensive and proprietary solutions available from everyone else.

For more on Open Storage, check out the following sites:
SUN Open Storage
OpenStore
DotHill Open Storage
SGI Open Storage

Consider this situation:you heard about this latest product from vendor A. It is still in development stage but your sales rep from Vendor A is confidentially leaking information to you about the product. Given that the purported new product meets a specific requirement you’ve been looking for, you “confidentially” indicate the potential of a sale coming into the horizon.

Along comes another sales rep from Vendor B. He, too, is aware of the rumored new product from Vendor A. In fact, he and his colleagues have been briefed about the new developments at Vendor A more than many of the people at Vendor A. He brings you some “secret” documents that purportedly claim to debunk the new product. The new information looks damning. What do you do?

Welcome to the real world of competition. The tactic illustrated above is called Fear, Uncertainty, Doubt or FUD. FUD is a commonly used tool to slow or stop a competitor from closing a sale. But it is not limited in its use to new products. It is also used in ‘combat’ situations where a sales opportunity is being hard fought by everyone. Sales rep throw FUD documents to instill a sense of fear in the would-be buyer.

The old adage that no one gets fired from buying IBM does not always work anymore.

These days competitors will try to stop a sale simply by debunking the competitor’s claims about their product. Consider you are buying the latest solution from Vendor A. But reps from Vendor B show you that the offering from Vendor A is flawed. What do you do with this information? If you want to keep your job, you would do well to investigate further. The additional time to investigate will slow down the sales process. It may even give you time to launch a new counter-offer, perhaps a new solution of your own.

Sales reps are hoping the FEAR of failure will create UNCERTAINTY in your decision-making process. At best, they hope this will create DOUBT, which will result in either totally throwing out the proposal from Vendor A. At worst, it will slow down the sales process long enough for the competition to make their own counter offer. Is it ethical? In reality it is bad marketing practice and bad business practice. That said, it is a often used sales strategy or tactic. 

Not all FUD is true. But then again, not all FUD is false either. The best option is to investigate the claims from both camps. Ask around from consultants, experts and your peers. Perform due diligence. Remember, the diligent one keeps his job and becomes the hero. And everybody loves a hero.

Check-out the formal and more detailed definition on the following sites:
Wikipedia: Fear, Uncertainty and doubt
Whatis.com: What is FUD?

Finally decided to unbox the HTC Touch Diamond that a friend loaned to me to test. The packaging is catchy although I, personally, don’t like the design on the back – whoever designed this must have thought he or she was being imaginative. The HTC Diamond design is unique but not innovative (in my humble opinion).

Again I am not doing a comprehensive review of the Diamond. You’d be better of going to one of the sites below. I’m here to tell you what a non-geek would like and dislike about the new product from HTC.

What I like about the HTC Touch Diamond

  • Small form factor, fits my hand and my pants pocket (also shirt pocket) very nicely
  • ActiveSync software ran very smoothly and syncs my Outlook data to the Diamond (no worries)
  • Bright screen
  • Windows platform means, in theory, I can open standard office apps when I have to (and for once Windows Mobile 6.1 worked better than its predecessor the Windows Mobile 6 on the HTC device).

I have a HTC Touch (gen 1) and when you load even a small excel spreadsheet, the phone runs like a snail pulling a dead weight. With the Diamond, I ran the picture slideshow, open a spreadsheet, called another phone number, and ran Bubble Breaker and the phone still worked “almost” flawlessly.

What I don’t like about the HTC Touch Diamond

  • It is designed to power-off (you can program it for up to 5 minutes). I think this is to save battery but the during first day I used the phone, I tell you it freaked me out that the phone kept switching off. I had to run through the innards of the operating system to come to the conclusion that there is the built-in power off mode. Just to be safe I asked a friend to call my number to see if the phone rang when it was “powered off”. The Diamond wakes up when a call comes in.
  • The Diamond touts the new TouchFlo 3D but I tell you the version I got, (ROM 1.93.707.1 WWE), is quirky to say the least. There are times when I had to keep repeating movements to get the darn thing to do what I want it to (doesn’t always though so I had to keep pressing the HOME key every now and then).
  • I can’t use my standard headset with mini-jack to listen to the music although bluetooth was ok.
  • Fingerprint magnet
  • The processor can, at times, be slow (like trying to watch some photos, scrolling through the favorite phonelist).

Other HTC Touch reviews
Geek.com – Review: HTC Diamond
CNET Australia – HTC Touch Diamond
MobileTech Review – HTC Diamond

My first product review was the Samsung Omnia – another Windows Mobile 6.1 device. After holding this HTC Touch for a couple of days I have to admit that the Touch wins hands-down versus the Omnia. GSM Arena has done a great comparative review of the Omnia versus the HTC Touch Diamond. Read it if you are trying to decide between these two devices.

Personally which one would I consider buying? If I really have no choice I would pick the HTC Touch Diamond. But if I have to choose a new phone to replace my BlackBerry Pearl, I’d probably try the new BlackBerry Bold first before I make any commitments. In case you are thinking I’m overly biased towards the BlackBerry, I was once an avid Sony Ericsson customer with the P900 being my last SE smartphone. I am curious to try the SE Experia but that would be for another day. I’ve also used the Nokia E70 – that was also a painful experience.

One last point to ponder. The true test of a consumer product is the ability to use it out of the box without reading the manual. To be fair I was able to switch the Diamond on and make a call. But to do other stuff like look for a phone number, send SMS, or get connected to the web, those took time to figure out and get used to the way the Diamond wants to be handled. Beautiful it may be but the HTC Touch Diamond is not as intuitive as the vendor makes it out to be.

Oh well, back to my BlackBerry Pearl – the no fuss, no hassle, smartphone.

PS: I recently met up with Mark Russinovich. He asked if I switched off TouchFlo to see what my experience would be like. At the time of review, I wasn’t aware this was possible. Oh well, my lost.