Street Strategies


The central tenet of outsourcing is that you don’t know everything, others do, and that it only makes business sense to outsource what you are not good at and focus on what you are good at. Businesses of all sizes, shapes and industry have been doing this since the industrial revolution. What has changed is that the big boys have made the outsourcing practice into a religion and in the process have also made the concept expensive-sounding to implement if not sustain. Take IT outsourcing as an example, consultants use the term “proven best practices” to sell you concepts like “understanding your business requirements and aligning technology around these”. Sounds complicated right? Let’s add one more line to this: “get SLA metrics right!”

Now imagine you are a small-size business in Singapore, Hong Kong, Malaysia or the Philippines with a staff of 10 maybe 20 people. Your concept of IT is a computer connected to a printer and maybe a small network setup. Your latest technology investment is an iPad. Suddenly friends and business partners are telling you to get into e-commerce and use social media to reach out to a new audience. What do you do?

For starters, IT outsourcing, like all other outsourcing exercises, starts with knowing what you want to achieve. Simple goals like “keep the business running smoothly” or “reduce cost by automating what is practical and economical for the business” are universal needs.

Next, realize that you are not an IT expert so get someone who knows what they are talking about. There are many providers out there so ask around. Don’t be afraid to ask questions. There is no such thing as stupid question especially if you are the customer. Remember the golden rule: he who makes the gold makes the rules.

Entrepreneurs and business people often pay too much focus on money and costs. IT outsourcing is about keeping your business running so smoothly you won’t even know it’s not there.

Communicate your needs clearly so that the service provider knows and understands what you want. As in marriages, communication is key to achieving a win-win scenario.

Remember the cardinal rule? You get what you pay for! Don’t cut to close the bone lest all you get is bare bone service. IT outsourcers are not charities. They, like you, are in it to make money.

Let your service provider that you are watching him, maybe not like a hawk but close enough, so he doesn’t slack off! Remember the old adage: when the cat is away the mouse will play. Same here!

Also, just because you outsourcing something to someone else, doesn’t mean you wipe your hands clean of responsibility. It is your money, your business, so your responsibility!

Advertisements

I just read Steve Duplessie’s take on the HDS acquisition of Bluearc. If I had a dollar for every time I read about HDS buying a NAS appliance, I’d still be poor. They tried it a few times with some small OEMs over the years and in most cases the problem was part technology and part a sales issue.

Let’s face it… HDS is used to selling humongosaur-like systems to the very large enterprises who can afford to buy big iron. Much of HDS’ traditional hardware (manufactured by parent Hitachi) is designed around block-based storage (yes, agree with Steve on this).

Unfortunately for HDS, and lucky for NAS-behemoth NetApp, there are still customers out there, even the big ones, who need file storage  because companies still store a lot of information in the form of files – probably a lot more than you feel comfortable with. I have a 1.5TB redundant NAS appliance at home serving the four members of my family. Yes, applications like ERP, CRM and SCM have limited use for NAS systems and will run a lot faster if the database is running off a powerful SAN engine. But for 100% of employees in any company, they will need to store their files in the network somewhere – and a NAS is a perfect place for that.

So back to HDS… why does HDS need a NAS solution? Likely because customers are hinting they need it. But more importantly lacking a NAS  solution gives competitors like NetApp a window to get in and slowly eat through the HDS armor that surrounds Mr Enterprise customer.

Will this ever work for HDS? I think the bigger challenge for HDS is understanding the technology and being able to sell it convincingly.  From history, this is where the rubber meets the road. This is where all those countless NAS technologies that HDS tried to sell got buried. The good news is HDS has had a few years of history selling BlueArc. Now its just a matter of getting the sales people (in Asia) to get moving.

Our website is down! It takes too long for the website to get served! Why is the video playback so choppy? These are complains I hear all too often as head of the web team and the guy responsible for ensuring that our websites are up and running. As a business that has moved online in a slow but measured way, we now see the importance of staying up 24×7. But why 24×7? In the publishing world, our readers are globally located and working at local hours wherever they may be. And since one of the metrics for our success is the number of page views and unique visitors, we need to make sure that every experience readers have with our websites is flawlessly executed most of the time.

A friend suggested I consider a content delivery network (CDN) as a better way of serving our readers in a more reliable fashion. In this case reliable is not just about uptime but also about fast load times.

Wikipedia defines a content delivery network or content distribution network (CDN) as a system of computers containing copies of data, placed at various points in a network so as to maximize bandwidth for access to the data from clients throughout the network. A client accesses a copy of the data near to the client, as opposed to all clients accessing the same central server, so as to avoid bottlenecks near that server. In the context of the World Wide Web, the ‘network’ is the Internet and therefore client access is anywhere in the world.

There are many CDN service providers today. Amazon CloudFront, Microsoft Windows Azure, and Akamai Technologies are probably the most recognizable brands. It should be noted that BitTorrent (more recognized for its peer-to-peer networks) commercially sells CDN services.

The use of CDNs is not restricted to the publishing industry. CDN is ideal for businesses that require fast, accurate and reliable connection anywhere in the world with the emphasis on delivering similar service experience regardless of location.

I recently met some executives at Akamai Technologies to try and understand how the CDN business is moving forward in Asia. In a follow-up discussion, I touched based with Bruno Goveas, Head of Products for Asia Pacific at Akamai Technologies.

Are today’s network infrastructure geared to support the globally dispersed nature of customers?

Bruno Goveas, Head of Products for Asia Pacific, Akamai Technologies

Bruno Goveas, Head of Products for Asia Pacific, Akamai Technologies

Bruno Goveas: In recent years, with companies expanding into new geographies and having employees, partners and suppliers distributed across the globe, extending a company private network to support such a large user-base can be an expensive proposition, which is neither cost-effective nor scalable. Hence companies are enabling their applications to be accessible via the Internet to leverage its ubiquity and cost-effectiveness. The use of the Internet as a platform for business applications, to support the globally dispersed nature of customers, is critical for business agility and competitiveness.

Can having a cloud infrastructure setup of the scale of Google or Microsoft or Amazon be sufficient to deliver the availability/performance that customers expect from someone like Akamai? What makes Akamai different from the others?

Bruno Goveas: As Google or Microsoft or Amazon or other companies, offer public cloud solutions like Apps, Azure, BPOS, EC2 and S3, the reality of the cloud itself comes to bear. These applications are accessed over the Internet.  Without optimization services, cloud offerings are at the mercy of the Internet and its many bottlenecks — and the resulting poor performance has a direct impact on user adoption and hence the bottom line.

In order for companies to realize the potential of cloud computing, they will need to overcome the performance, reliability, and scalability challenges the Internet presents. That’s where cloud optimization services from Akamai comes in.

Combining Akamai cloud optimization services with cloud services from Amazon, Microsoft or Google, can help customers deliver the necessary levels of application performance and availability, that will be expected from their end-users, thus helping companies fully realize the ROI from their public cloud computing initiatives.  In addition, Akamai recently extended its cloud optimization capabilities towards security helping companies defend against network and  application-specific attacks,  further enhancing the integral need of cloud optimization services for any public cloud initiatives.

Akamai claims an SLA of 100% availability. How does the company ensure this is achieve and what performance guarantees does the company provide?

Bruno Goveas: This gets to the core of Akamai’s value proposition. Akamai has a global network of over 73,000+ servers in over 1,100 networks in 71 countries around that world. We leverage the intelligence we collect from our distributed platform, and apply a variety of proprietary and patented route, protocol and application optimization techniques to overcome inherent Internet challenges – peering/transit limitations, congestion issues, cable cuts caused by accidents and natural disasters like earth quakes and protocol inefficiencies – to accelerate the delivery of dynamic transactions, rich media content and software.

Is Akamai unique in this business? Probably not! For CDN providers like AT&T, Amazon or Microsoft Windows Azure to flourish, they must deliver comparable service quality at equal, if not better, price points.

Other CDN providers:

Free CDNs

Commercial CDNs

Commercial CDNs using P2P for delivery

 NOKIA, the European rubber boots maker that transformed itself into a mobile phone powerhouse in the 1990s is in trouble. So much so that it hired a non-Finn to run the global giant – something unheard of in 145 years.

Flash back to the 1990s when Nokia was seen the company to work for, the mobile phone to covet,and the darling of European politicians who used the Finnish phone maker as the benchmark of what a European company can achieve in the global stage.
So what went wrong? Simple! NOKIA forgot to innovate. It sat too long on it’s winning streak perhaps hoping that it would last forever. It banked on it’s marketshare and brand to keep it going. Wrong mistake!
If history is ever to teach us anything is that early success doesn’t guarantee the future. Several forces disrupted this winning streak. NOKIA should have seen it coming with the success of Research In Motion with it’s BlackBerry phones and proprietary mail service that won over the corporate world. NOKIA tried to emulate BlackBerry’s success but it’s failure to deliver a similar compelling service brought limited success to the company’s E Series phones.
Next came Apple with the iPhone. The iconic computer vendor delivered a two punch blow with an innovative new service delivery model in it’s twin strategy of iTunes and AppStore. A series of strategic moves on the part of Apple – from securing the cooperation of the American music industry (some might call it differently) to cajoling the software developer community to write applications built for the iPhone, and all delivered/sold via AppStore on iTunes created instant success for the burgeoning consumer electronics giant (yes, I would think by now people should stop thinking of Apple as a computer maker but as a consumer electronics manufacturer.
For sure Nokia wasn’t blind to the winning streak of Apple. It tried to create a music (LOUDEYE and TWANGO) and gaming (SEGA.COM) distribution platform. It also tried it’s hand at enterprise services via a JV with Siemens to form Nokia Siemens Network.  Taking it’s queue from Microsoft Windows Mobile, it sought to create an ecosystem of handset makers loyal to Symbian by acquiring the operating system and to give it back to the developer community as a platform from which to develop mobile applications. But this strategy was less than successful partly due to the arrival of Google Android – a new mobile operating platform many perceived as the true competitor to Apple’s growing dominance in the mobile OS platform. NOKIA stayed way too long on the ‘phones are for calling only’ concept producing phones that ‘connected’ people the way POTS did it and added a music player to amuse the musically inclined.
It failed to notice a crop of Asian brands like Samsung and LG inching their way aggressively at the low end of the spectrum while Windows Mobile and Android phones were coming in from Asia.  Unlike Sony Ericsson and Motorola which now offer at least two mobile OS as part of their portfolio of handsets, Nokia has stood it’s ground on Symbian even as the Finnish giant tries to update it’s smartphone strategy with an upgraded OS and a new line of handset products.
On the management front the departure of NOKIA board member Anssi Vanjoki on news of the appointment of Canadian Stephen Elop, former president of Microsoft’s Business Division to the top post. Elop faces a tough challenge ahead of him, changing a culture rooted in consensus, a development cycle that appears to slow to react to market forces, and an organization likely not thrilled at the prospect of working for a foreigner.
The new line of NOKIA phones announced in London will not turn heads at Apple or the Android community. They represent more of the same old, same old with some improvements in functionality and features. But they do not represent any significant shift in the company’s strategy.
Of course we have to give Elop a break since he’s only been in the job for less than 30 days and he still has to get a handle on the company’s assets. To be honest there is no honeymoon period in this job. If he even pauses to think too long, he will find the climb out of the hole NOKIA has rugged for itself even harder than when he first entered the hallowed halls of NOKIA land.
Is there hope for NOKIA? Will we finally see NOKIA delivering a multi-OS product strategy much like Sony Ericsson, Motorola, HTC, Samsung and LG? Will it try to replicate the success of Apple by creating a new OS that is on par with what Apple has done? (good luck on that). At the moment, we have to just wait and see. In the meantime, I will keep using my BlackBerry even as my swoons over the possibility of owning her first non-Nokia phone – the iPhone.

Some months back I spoke to a senior executive discussing about their product strategy. At one point in the discussion, he quoted an old Arabian Proverb: “the enemy of my enemy is my friend”. It is his interpretation of how partnerships are created in the business world. What scares me is that I understood what he meant and see its practical applications.

A week ago I wrote about SAP’s acquisition of Sybase and its implication to the software arms race. I follow this rant with a twist that comes in the form of new partnerships that are shaping up, not directly as a result of SAP’s acquisition, but as a progression of what’s been happening in the IT industry over the last five years.

And it begins with an interesting article written by Gavin Clarke (the UK Register) around the budding relationship between SAP and HP, as they go after Oracle in a more concerted effort. For HP, its because Oracle dumped its technology (Exadata 1) in favor of Sun (Exadata 2), following Oracle’s acquisition last year of Scott McNealy’s company. And to think that at the 2009 Oracle OpenWorld there was scant anonymity between HP and Oracle despite the Sun relationship.

So with all the knowledge gained from the first Exadata, HP brings a lot of knowledge to bear. Still I think the new SAP appliance will have a tough time competing with the Oracle product (now on Gen 2). SAP will likely integrate its expertise around in-memory architecture (NetWeaver Business Warehouse Accelerator) to market a “powerful calculation engine” for data modeling applications.

SAP Co-CEO  Bill McDermott told Informationweek’s Doug Henschen that SAP had briefed partners including IBM, HP, EMC and Cisco on its plans. Partners are eager to embrace the innovation, he said, and said they will find opportunities to build new products and services around the engine.

Granted that HP, IBM and EMC are interested in building an appliance to compete with the Exadata (with HP having a leg-up at this point in time), at this point IBM would be in the best position given that it has a strong database business, has a captive “mainframe” market, and the resources to spend on R&D. All this without necessarily working with SAP assuming that the German software giant will want to push its Sybase database as part of the bundle. HP may be more interested in this although it would hurt its relationship with Oracle big time (we’ve seen this with HP’s relationship with Cisco).

Speaking of which, a Cisco-EMC-SAP triumvirate may present the best opportunity to run against Oracle.

For the moment, Oracle has the upper hand, having created an opportunity with the Exadata and the rest of the industry is playing catch-up. Larry Ellison is having a ball.

SAP [7] agreed to buy Sybase [8] for US$5.8 billion further accelerating the software arms race that appears to have no end in sight. The acquistion is just a tad bit shy from the German software giant’s 2007 acquisition of Business Objects [9] for US$ 6.78 billion.

The Sybase acquisition gives SAP two things: a database of its own, and a foothold into the mobile marketplace by way of Sybase 365.

For years SAP has been content on selling its ERP applications to interested Oracle [10] database customers. The co-opetition scenario benefited both companies as it allowed them to ride on each other’s brands to grow their business. Ray Wang, an analyst with Altimeter Group [11], estimates that SAP sells about US$1 billion of Oracle databases annually. With the Sybase acquisition expect that number to come down a bit in the long term as the German giant uses its size to sway customers away from Oracle.

But not everyone thinks SAP can dance their way around the Oracle strangledhold on customers. WSJ quoted Peter Goldmacher, an analyst with Cowen & Co [12]., said the deal seems to be a desperate move by SAP. “Their business is terrible,” he said. “They’ve been out-executed at every turn by Oracle.” Goldmacher said he believes SAP will have a hard time convincing customers to move from Oracle database software to Sybase offerings.

IBM [13] benefited on this as well but mostly through its systems business and middleware offering. But with Oracle beefing up its middleware stack and offering a single-box solution, IBM should start feeling the pinch from the Oracle Exadata offering. The selling point for many business executives is still faster, better and cheaper – all the elements you will find in the Oracle Exadata product brochure.

The Sybase365 [14] business should be an interesting new field for SAP as it is aimed squarely at the mobile market – an area many analysts agree should get very hot very fast, not only in the consumer space but in the enterprise arena as well.

IBM CEO Samuel Palmisano is quoted on Wall Street Journal as indicating software is the top priority [15] for Big Blue. Palmisano is aiming to have software account for about half of the company’s pre-tax profit by 2015. IBM has spent US$13 billion over a period of seven years acquiring a total of 57 software companies.

One particular area on Palmisano’s analytics. Itself a broad segment of the software industry although around the area of business intelligence and analytics, there is only one vendor left standing by itself – SAS [16].

Wang believes that this acquisition is good for SAP [17]. It allows the vendor to prepare for the next generation of applications that are heavy into mobile and cloud technologies.

At the same time, the Sybase acquisition gives it better access into the financial services and public sector markets. The bonus for SAP is China. Sybase has a strong presence in that market.

M&A, a gentler way of saying takeover, continues to be the norm. I’m not seeing any changes to this strategy anytime. It is the goal of many a small or mid-sized niche software vendors to get rich quick by being acquired and retiring to the Bahamas.

Which leaves me to wonder, what is Microsoft [18] doing?

Most of the people I’ve met over the last 10 years say I am a driven person. According to ‘thefreedictionary.com’ driven means ‘motivated to succeed.’

 To be honest I don’t think this is true of myself. I don’t believe what I do is largely because I want to succeed. I don’t even know what success means. Is it money? I have some but not enough to qualify me to be listed. Is it academic accomplishment? I didn’t graduate with honors nor was I recognized for having done something noteworthy at my alma mater. Is it position at work? If you strip down the flowery honoraries on my businesscard, I am a writer, photographer, videographer, editor, and a whole slew of other types of work. I am also a delivery person being asked to carry stuff for people to other people. I may have people working in the group I belong to but I am just another employee.

I know I work long hours at times to the dismay of my family. But like all the things I’ve ever done in the past, I do what I do because I love what I do. And this is what I tell anyone willing to listen, give of yourself 100% in the things that you do only if this is what you really want to do. Steve Jobs said it very nicely during the 2005 Commencement address at Stanford University.

Steve Job’s 2005 Stanford University Commencement Address

“You’ve got to find what you love. And that is as true of your love as it is of work. Your work is going to fill a large part of your life, and the only to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you will know it when you find it. And like any great relationship, it gets better and better as the years roll on. So keep looking. Don’t settle.” Steve Jobs, CEO, Apple Computer.

I’ve never heard Steve’s speech until moments before I started writing this blog. He is right. If you love what you do, no matter how hard, it is going to be easy (huh?).

Next Page »