Tag Archives: Google

Waiting for additional research will make us 3rd to market, but I really think we need to test the font size

Analysis paralysis is a myth

Waiting for additional research will make us 3rd to market, but I really think we need to test the font size

Cries of ‘analysis paralysis’ are more often fiction than fact. Every time I’ve heard someone call out the phrase in a meeting it’s to end a argument over some particular solution preference rather than an attempt end to an overly long analysis process. The problem isn’t too much analysis, it’s too little. Surrounded by weak, muddy and conflicting information we often fail to find a clear call to action that we can easily latch onto and end up playing what if with the weak solutions that we can find, unable to commit to one. We need to take a more structured approach to traveling from problem to solution – scan, focus and then act – and apply our judgement rather than trying to skip directly to the end of the book and then arguing about the conclusion.

Continue reading Analysis paralysis is a myth

We saw the future, and there wasn’t an e-wallet to be found

Do NFC payments – with their tap-and-go simplicity – herald a revolution of the shopping experience? Or is NFC just an attempt to force more of our daily transactions onto payments platforms where their owners can claim a usage tax? The sales pitch is a promise of simpler, faster and more secure payments, allowing us to grab our goods and quickly get on with what we were doing. The reality is that the payment is only responsible for a small portion of the time wasted during the buying journey. Other trends we're seeing have much more potential to revolutionise the shopping experience, and they do this by moving the purchase away from the till to allow consumers to transact where and whenever they need. The huge investment in NFC means we can expect to see NFC terminals at most of the shops we frequent. However, at the same time we can expect NFC to be quickly eclipsed by other solutions which do a much better job of streamlining the buying journey.

Continue reading We saw the future, and there wasn’t an e-wallet to be found

Have we reached peak SI

Have we hit the peak for systems integrators (SIs) (just as we appear to have reached “peak oil”), and it’s all downhill from here? While SIs are doing well at the moment, structural changes in the IT market suggest that the long term forecast is not all sunshine and roses as some pundits are predicting. With IT spend migrating from IT departments (the SI’s traditional buyer) into the lines of business, the ongoing shift to smaller projects delivering on-demand (rather than on-premesis) solutions, and the replacement of traditional support arrangements with outsourced and managed services, it’s hard to see how SIs will continue to grow when demand for their services seems to be tipping into decline. Globalisation, software as a service (SaaS) and cloud computer are reconfiguring the IT landscape and SIs look like they will be the big losers.

Predictions for the continued growth of the SI market are based on the understanding that companies are consuming more IT today than they were yesterday, and the assumption that increased IT consumption will result in tidy profits for SIs. Predictions are a funny things though, based as they are on historical trends. Guess that the market will continue to rise when you’re in the midst of a bull market and you’ll be right, most of the time. That is until something happens, something you didn’t anticipate, something that catches you unawares. The assumption that SI revenue is tied to IT consumption might no longer be true. New tools such as SaaS and cloud computing are enabling line-of-business leaders to step around the traditional IT department and engage with technology directly, bypassing the SIs traditional relationships in IT and providing them with fewer opportunities to sell their wares. At the same time the shift from on-premises to on-demand solutions – solutions which the business is happy to rent rather than own – is slashing the effort required to install, configure and integrate these new solutions, often by as much as seventy to eighty percent. On-demand solutions also have much lighter support needs relying on self-help wikis, users forums and power users, leaving the SI with little more than a small help desk to manage. With only limited access to this new class of IT buyer, dramatically smaller projects, and lower support revenue, the SIs role as IT enabler seems to be in decline. All good things come to an end though, and you usually only realise that the end has come after it has already passed. IT consumption might be going up, but there’s a good chance that SI revenue could soon be going down at the same time.

SIs are fundamentally sandwich shops{{1}}. When we don’t have the time or money to maintain our own kitchen or make our own sandwiches it can be more efficient to head over to the local sandwich shop to pick up what we need. Their margins are thin and revenue is largely tied to the size of the sandwich you just bought, so they’d really like you to buy a larger and more expensive sandwich. (Notice how sandwiches have grown so much bigger over the years, and everything is now gourmet?) And, of course, pre-made sandwiches are always a lot cheaper than special orders. This sandwich shop model is something that was established early on in the history of business IT. How else could companies afford to access the rare (and expensive) IT skills they needed to create all the systems they need? This might be a payroll system, or stock management, sales pipeline reporting, or the dreaded enterprise resource planning (ERP). Consuming IT used to mean hiring an SI to build and integrate something for you.

[[1]]Business models for the old rules of IT @ PEG[[1]]

The world has changed since then. Back when I started in the industry my home computer couldn’t hold a candle to the beast I was given at work. Today, however, my shiny new 17″ MacBook Pro makes the locked down Windows XP laptops I’m offered seem like a bit of a joke. A new breed of business manager has crept into the business while the world has changed, these are people who grew up with technology and are comfortable solving their technology problems on their own. They know that there are alternatives to the expensive solutions proposed by the IT department (solutions that IT will engage an SI to deliver), and they’re happy to use these alternatives. Why spend a seven figure sum and wait a year for the IT department’s perfect, enterprise-wide project portfolio management solution when there’s one that is good enough, one you can buy on-demand via a company credit card, and one which you know will be up and running in a couple of weeks? We might argue about the regret cost{{2}}, but the art of business is to make a timely decision and then make it work; it’s not to sit on your hands and wait for the perfect solution which will be delivered sometime in the distant future. While demand for new IT solutions might be growing, every time a business manager steps around IT to engage and on-demand solution SIs have one less opportunity to sell their wares.

[[2]]The price of regret @ PEG[[2]]

At the same time we find that these on-demand solutions – when SIs do get their hands on them – only provide a fraction of the revenue that a tradition on-premisis solution does. Time is money for an SI (literally, as most avoid risk by sticking to time and materials contracts) and fielding a SaaS solution takes only a fraction of the time required for a more traditional solution. There’s no hardware to commission with SaaS or cloud computing, nor are there disks to wait for or backup strategies to create. (You still need to worry about business continuity, but that’s another post.) There’s also little chance for customisation, and integration tends to be via standard APIs or pre-built adaptors. It’s not uncommon for a SaaS project to be eighty percent smaller than the more traditional solution. Fewer resources on ground and fewer billable hours means that that the SI can expect their revenues to head in the same direction: south.

We’re also seeing the erosion of SI support revenues. Support used to encompass both the application – in terms of application maintenance, patching and security – and the users – with training and a help desk. Many SaaS and cloud providers don’t want to provide traditional support services as it erodes their margins, margins based on huge scale and little human contact. One solution is to engage an SI to provide these services for them, either on a client-by-client bases or as part of some sort of alliance. A more attractive solution is to move – as much as possible – to a self support model where clients support each other via user forums or a Google search. We soon find that a much smaller help desk will suffice as it’s only required to be the point of last resort, or to support the more technologically illiterate users.

Taken together, these trends – reduced access to buyers, lower project revenues, and lower support revenues – seem to show that the future is not as rosy for the SIs as we first thought. Demand for IT might be growing, but growing demand for IT no longer implies growing demand for the services provided by SIs. The final nail in the coffin is the fairly recent move into SaaS by established IT application vendors. Microsoft has gone on record as wanting to capture a greater percentage of IT spend as license revenues, converting SI installation and customisation costs into licenses by providing clients with prepackaged configurations which can be turned on at the flick of a switch. Rather than pay for a SaaS CRM and then engaging an SI to configure it to your liking, you pay for the SaaS CRM along with a canned sales methodology (Miller Heiman{{3}}? Holden{{4}}?) which works out of the box (as it were). Integration between SaaS solutions is also being converted into a configuration option as SaaS vendors sign alliances – just as Google and Saleforce.com did with GoogleForce – enabling these alliances to offer complete application suites which work together out of the box.

[[3]]Miller Heiman: The Sales Performance Company[[3]]
[[4]]Holden International: Outsell You Competition[[4]]

Whichever way you look at it, now is not a good time to be a SI.

It’s effectiveness, and not ideas or execution, which is the strongest determinant for success

We’re told that execution is everything. While a good idea might be useful, execution is seen as the factor that will determine the success or failure of our business venture. Many people find this comforting as good ideas are rare, seemingly springing from nowhere, and few of us hold little hope of having a really good idea in our lifetime. (One definition of “genius” is someone who manages to have more than one good idea before they die.) Execution, however, is something we can control. We can practice, improving our skill, making us more likely to succeed.

Our focus first on ideas and then execution distracts us – possibly intentionally so – from the real driver for success in business: luck. Brilliant ideas – ideas who’s time has come – are obviously rare. And then there’s our natural proclivity to overestimate our own abilities. (Such as the vast majority of drivers who think they are better than average drivers. Some of them must be wrong). While we don’t like to admit it, finding ourselves at the right place at the right time with a good enough solution is more important than any other single factor.

Google is a case in point. We can admire skill of Larry Page and Serge Brin, and the search algorithm they developed was obviously better than what came before, but neither of these is sufficient to explain the success that is Google today. Something else was required; luck had a large part to play in their success. If they hadn’t been turned down when they tried for sell a young Google for something like one million dollars, if the didn’t have access to the venture capital community on Sand Hill Road, if they …

We don’t like to talk about needing luck, as allowing luck into the equation implies that something is outside our control, that a success was not the result of our skills alone. If we rolled the Google dice again, from a starting position where the world was slightly different, would Google float to the top? Or would someone else find themselves at the right place at the right time with a good enough idea?

Many business leaders have penned biographies which highlight how their skill – and their skill alone – drove their organisations ever higher. A few are brave enough to admit that they were lucky, and that they were smart enough to to make the most of luck when it flowed their way.

Business is a numbers game. While each throw of the dice might be random, across a number of rolls we can can identify trends which we can use to tip the odds into our favour. An effective player realises this and works to exploit the trends they see and increase their luck. Or as one smart and lucky golfer was heard to say:

The more I practice, the luckier I get.

— Gary Player

The large innovative move from an established company, or the disruptive startup that become a billion dollar company at the founders first attempt, is the exception. There is no silver bullet, a single thing they did and which we can replicate.

Most of us need to play a longer game if we want to see success. Each time we roll the dice we need to ensure that the odds move a little further into our favour by:

  • being frugal with our resources
  • moving to a position where we have a better chance of success
  • make the most of the opportunities that are presented to us
  • learning from our previous mistakes

It’s not ideas or execution that determine our success. Both are important but neither is sufficient. It’s our ability to increasingly become more effective with each action we take – our ability to learn from our mistakes, rather than our ability to improve our skills – increasing our luck to the point that one day it overflows and we find ourselves with a success.

Innovation [2010-07-05]

Another week and another collection of interesting ideas from around the internet.

As always, thoughts and/or comments are greatly appreciated.

Innovation [2010-03-01]

Another week and another collection of interesting ideas from around the internet.

As always, thoughts and/or comments are greatly appreciated.

Private clouds are (not) the future

Google (well, James Hamilton) has weighted in on the question of private clouds. As expected from a large cloud provider, James takes the position that private clouds make no sense. His reasoning is straight forward: private clouds will never have the scale of public clouds, therefore private clouds can never achieve the same price point as their public brethren. Ergo, there’s no point in building private clouds.

As I’ve pointed out before, there’s a lot more to cloud than simply reducing costs. The biggest benefit is probably the agility that cloud can bring to your IT estate, leveraging a cloud platform’s ability to codify and automate many of the management practices and create a target platform that can work across a range of deployment options, as well as streamlining hardware provisioning. Companies are also increasingly having to deal with the realities of political boundaries, a situation where the best technical solution might not be acceptable due to legal requirements (such as privacy legislation). Developing a private cloud can be a sensible move in this context.

Of course, if you want to compete purely on cost then private cloud will never hit the same price point as public cloud. But this misses the point that for many companies IT flexibility/agility is more important than cost.

Note: I was going to post this as a comment on James’ post, but comments appear to be broken.

Posted via web from PEG @ Posterous

Reducing costs is not the only benefit of cloud computing & SaaS

The wisdom of the crowd seems to have decided that both cloud computing and its sibling SaaS are cost plays. You engage a cloud or SaaS vendor to reduce costs, as their software utility has the scale to deliver the same functionality at a lower price point than you could do yourself.

I think this misses some of the potential benefits that these new delivery models can provide, from reducing your management overhead, allowing you to focus on more important or pressing problems, through to acting as a large flex resource or providing you with a testbed for innovation. In an environment where we’re all racing to keep up, the time and space we can create through intelligently leveraging cloud and SaaS solutions could provide us with the competitive advantage we need.

Sameul Insull

Could and SaaS are going to take over the world, or so I hear. And it increasingly looks that way, from Nicholas Carr‘s entertaining stories about Sameul Insull through to Salesforce.com, Google and Amazon‘s attempts to box-up SaaS and cloud for easy consumption. These companies massive economies of scale enable them to deliver commoditized functionality at a dramatically lower price point that most companies could achieve with even the best on-premises applications.

This simple fact causes many analysts to point out the folly of creating a private cloud. While a private cloud enables a company to avoid the security and ownership issues associated with a public service, they will never be able to realise the same economies of scale as their public brethren. It’s these economies of scale that enables companies like Google to devote significant time and effort into finding new and ever more creative techniques to extract every last drip of efficiency from their data centres, techniques which give them a competitive advantage.

I’ve always had problems with this point of view, as it ignores one important fact: a modern IT estate must deliver more than efficiency. Constant and dramatic business change means that our IT estate must be able to be rapidly reconfigured to support an ever evolving business environment. This might be as simple as scaling up and down, inline with changing transaction volumes, but it might also involve  rewriting business rules and processes as the organisation enters and leaves countries with differing regulation regimes, as well as adapting to mergers, acquisitions and divestments.

Once we look beyond cost, a few interesting potential uses for cloud and SaaS emerge.

First, we can use cloud as a tool to increase the flexibility of our IT estate. Using a standard cloud platform, such as an Amazon Machine Image, provides us with more deployment options than more traditional approaches. Development and testing can be streamlined, compressing development and testing time, while deployed applications can be migrated to the cloud instance which makes the most sense. We might choose to use public cloud for development and testing, while deploying to a private cloud under our own control to address privacy or political concerns. We might develop, test and deploy all into the public cloud. Or we might even use a hybrid strategy, retaining some business functionality in a private cloud, while using one or more public clouds as a flex resource to cope with peak loads.

Second, we can use cloud and SaaS as tools to increase the agility of our IT estate. By externalising the the management of our infrastructure (via cloud), or even the management of entire applications (via SaaS), we can create time and space to worry about more important problems. This enables us to focus on what needs to happen, rather than how to make it happen, and rely on the greater scale of our SaaS or cloud provider to respond more rapidly than we could if we were maintaining a traditional on-premises solution.

And finally, we can use cloud as the basis of an incubator strategy where an organisation may test a new idea using externalised resources, proving the business case before (potentially) moving to a more traditional internal deployment model.

One problem I’ve been thinking about recently is how to make our incredibly stable and reliable IT estates respond better to business change. Cloud and SaaS, with the ability to shape the flexibility and agility of our IT estate to meet what the business needs, might just be the tools we need to do this.

A nice visual argument for the value of mash-ups

As I’ve mentioned before, I would like a nice, clear, crisp definition for mash-up. A definition which captures the benefits that mash-ups can bring, rather than detailing a collection of tools, technologies and standards that we happen to find interesting at the time. For me, this is the TQM argument of fusing data and process to eliminate unnecessary decisions—make-work or swivel chair integration—to create a more efficient and effective work environment.

It’s Just a Bunch of Stuff That Happens has done a brilliant job of capturing this visually (included below). I like the usability aspect this highlights. A mash-up’s focus is cross-application usability—removing the annoyances of dealing with separate information sources. We could simply take these sources and squish them up against the glass, delivering the content into iGoogle or NetVibes gadgets. But what those original push-pins on a map mash-ups did was improve the usability of these information sources by eliminating the decisions required to navigate across them. Just as Apple did with the iPod and iPhone, eliminating or fusing functions to eliminate the (unnecessary) decisions required to navigate the overly complex and confusing interfaces of the mobile phones that came before them.

iGoogle and NetVibes are the Symbian to a mash-up’s iPhone.

Symplicity

Posted via web from PEG @ Posterous

Innovation [2009-10-05]

Another week and another collection of interesting ideas from around the internet.

As always, thoughts and/or comments are greatly appreciated.

This issue: