The Magic of the Internet of Things

Posted on December 16, 2012 by Zia Yusuf

images-1When I joined Streetline almost 2 1/2 years ago there were three macro trends that drove my decision. First, was a strong belief that I wanted to find an industry that was relatively untouched by new technology and one where there was a real problem to be solved that could impact the lives of millions – I choose to engage in the smart city / smart parking industry. Second, it was painfully clear that mobile technology and applications were going to be pervasive and become the primary way we engaged with the internet. The final bet was on the “internet of things” – the belief that sensors were getting good enough and cheap enough to fundamentally alter the way we interacted with our physical environment. Over the last 2 1/2 years I have learnt a lot about how to actually make the internet of things a reality – how do we you create a full technology stack from the sensors and the hardware all the way to the consumer and enterprise applications that can actually take advantage of this new data and information.  This is not an easy task,  but the results I believe will do nothing short of change how we all live and work.

Much has been written about the internet of things recently, but over the last 2 weeks there have been 2 specific announcements that I think will in retrospect be viewed as a tipping point. The first was a report issued by GE titled “The Industrial Internet: Pushing the Boundaries of Minds and Machines” .  The first couple of lines in the executive summary says it all “The world is on the threshold of a new era of innovation and change with the rise of the Industrial Internet. It is taking place through the convergence of the global industrial system with the power of advanced computing, analytics, low-cost sensing and new levels of connectivity permitted by the Internet.”  GE goes on to describe what in their view are the 3 major periods of innovation in our history : The Industrial Revolution, The Internet Revolution and now the Industrial Internet.  GE believe that the Industrial Internet will add $10-15 trillion to global GDP.  This is a grand statement by a world class company that can actually influence the evolution of the internet of things.

The second announcement came last week from Cisco System when they unveiled their new corporate strategy focused on the “Internet of Everything”. (disclosure: Streetline is proud to partner with Cisco as recently announced ). According to John Chambers, CEO of Cisco, by 2015 over 15 billion devices will be connected to the internet. Cisco is betting its future on the internet of things and I believe they are well positioned to take advantage this massive opportunity.

Of course there are other major companies that see this future and are positioning their companies for success – IBM has for several years driven its “Smarter Planet” strategy that also has at its heart the analytics that use all this device data to drive greater insight. (disclosure again – IBM is a strategic Streetline partner).

So in my mind there is no doubt that the internet of things will have a profound impact on our lives, our cities, our companies and our planet. This is not a future vision thing – this is happening now !

To all the VC’s out there that in the past have been hesitant to fund start-ups that had a hardware component, I would encourage them to revisit this traditional hypothesis – as you can imagine it is tough to have an internet of things “without things” .  The value creation opportunity for start-up in this space is immense – but you need to make sure the solution solves a real world problem.

To aspiring entrepreneurs I would encourage you to be bold and to explore the many aspects of daily life where new data from objects connected to the internet can enhance our experience.  For companies, the revenue and cost saving implications are massive (the GE report has some great examples) so see how connecting what you build (eg. printers, cars, planes, ovens, thermostats etc.) to the internet can change the service and value proposition of what you provide.

A recent CNET Smarter Plant article titled “The internet of things: does it start with parking?” asked if smart parking was going to be one of the drivers of the internet of things – the answer of course is yes !!

But what else ?  There are such a broad set of opportunities to be captured.   So again, here is my question for all of you – if you were starting a new company today in the broader realm of the “internet of things” what would you do. As always welcome the feedback and input.

Zia.

Filed under: Big Picture, Data & Analytics, Enterprise Software, Government, Industrial Internet, Innovation, Internet of Things, Mobile in the Enterprise, Sensor, Smart Cities, Uncategorized | Leave a Comment »

HW vs. SW: Do you have to choose ?

Posted on August 19, 2011 by Zia Yusuf

Yesterday’s decision by HP to sell of its PC business prompted me to consider this question of HW vs. SW. I believe the decision by HP to sell of its PC business is the right one (IBM made the same decision in 2005 and was able to transform the company into a highly profitable services and sw giant). Though HP was much more successful in consumer HW than IBM and so watching this transition is going to be interesting to see if they can pull it off.  HP CEO Leo Apotheker’s perspective on the future of HP is clear and he is making the bold moves to execute against it – as usual company culture will be the biggest hurdle (disclosure Leo was my direct boss for 4 years before I left SAP).

But I digress – the conventional wisdom seems to have become HW = Bad, low margin, low growth business & SW = Good,  high margin, high growth and what smart companies should focus on.  This seems also be true in the venture capital community – start up’s that have a HW component to their business are encouraged to ditch the HW piece and focus only on the high margin SW aspects.

You could view the decision by IBM and now HP to ditch their “low margin HW PC business” in favor of higher margin SW and services as a good example of that.  After all HP with $120 bn + in revenue has a market cap of $49 bn and SAP that is a pure play enterprise SW company has revenue’s of $20 bn and a market cap of $58 bn – this must be because of the HW margin drag that HP has to carry.  This is partly due to the margin differential – but does not explain the real issue.

Newsflash for my no-HW friends – our current poster child for technology and innovation Apple has at the core of its success both a HW and a SW business and is now the company with the largest market cap in the world.

Another newsflash – SW needs to run on HW to make it work.

It is absolutely correct that over time HW becomes commoditized and will have a lower margin than SW – this is a no brainer analysis. If you are in the commodity HW business and are simply selling dumb pieces of HW that becomes valuable with SW from other companies then yes you are much better off having our friends in China build this piece of the stack as they can do it much cheaper and better.

But this conventional analysis misses a much more subtle  and critical point – an integrated HW and SW product that is compelling, easy to use, that leverages the strengths of this combination in unique ways and understands the value that each brings to the end user experience is unbeatable.

Could iTunes have been successful without the iPod or in reverse could the iPad have been successful without the apps in the AppStore. Gaming consoles have a combination of both HW and SW packaged in a way that creates a compelling experience.  Even the printer division that HP is keeping is a compelling product because the combination of the HW and SW for that product providers the consumers with a winning package.

To make this point even more powerfully – I think the distinction between HW and SW is becoming less and less relevant.  The only way to make an object “smart” is by adding SW to it.  The number of devices in our lives that have embedded SW is growing dramatically (yes this is partly the “Internet of Things” point).  Your local BMW is basically a SW platform now with a car attached to it.

So yes I acknowledge that a HW business that is only  a box (to put it simply) has little value and must be produced by the company that can do it for as low a cost as possible – but the real magic is in combination of elegant HW and compelling SW.

So the Right Question in this case is “How can you build a compelling product that combines the best of HW with the best of SW in an experience that is magical” not the simple wisdom of HW is bad lets only focus on SW.

As always, thoughts and comments are welcome.

Zia.

Filed under: Big Picture, Consumer Technology, Enterprise Software, Innovation, Technology, Uncategorized | 5 Comments »

Rethinking the Technology & IT Analyst Industry

Posted on February 20, 2011 by Zia Yusuf

Over my last twelve years working as a senior executive in the technology industry I have had an opportunity to engage with a broad section of technology and IT analysts and researchers – both from established firms (eg. Gartner, Forrester etc.), smaller more focused firms (eg. Altimeter Group) and of course the more recent phenomena of the blogger/independent analyst.

For the most part the people I have encountered are smart, have a good deal of  domain knowledge, are good communicators and care about providing timely and accurate analysis and advice.  But with all other things, there is a bell curve, there are some people that have amazing insight and I always learn from then, there are a whole bunch in the middle that are solid and sometimes can add good value and as always there are some that really should look to do something else with their time.

This post is not about the individual analysts it is about the analyst industry.

So the issue is not the people – the issue is the structure of the industry and the inherent incentives that lead to sub-optimal analysis and advice that is tainted by accusations of “pay to play”.  This is a topic that is not new, and has been discussed before.  The general complaint that analysts play both side of the game, they write about vendors and the industry but then also get paid by the vendors thus tainting their advice is an old one.

The reason I thought this topic was important to revisit is because (1) there have been some structural changes to the technology industry that make the current IT analyst model seem archaic and (2) I have some specific thoughts on how we might try and reform the industry.

Why Change is Even More Relevant Today: There are several important changes that have taken place in the technology industry that will require some rethinking of the traditional IT Analyst Industry.

Lack of Defined Categories:  Traditionally we have had very specific functional domain experts – the CRM expert, the BI expert etc.  I don’t think customers buy in categories any more – they buy solutions that transcend software category boundaries – thus making research papers focused on these categories less relevant.

Integration of Consumer & Enterprise: This is one of the bigger changes in the industry – the “consumerization of the enterprise”.  Now more than ever there is no classic enterprise software play.  As such, analysis and advice based on deep enterprise background, without the latest thinking on consumer sw trends (and just focusing on social media does not cut it) misses integrating a fundamental change in the industry.

The Rise of the Consumer as the Buyer: Traditional analyst work has focused on providing insight to the CIO and associated IT teams in enterprises.  Analysts spend a great deal of time with vendors and CIO – but the decision makers are increasingly the end users.  We still see very little end user based research at traditional analyst firms

Not Enough Focus on Start Ups: Research coverage is still based on large and medium sized vendors.  This is partly due to the influence of these vendors, partly because they can afford to pay consulting fees and therefore get more attention.  The reality is that startups is where the innovation happening and there is no effective model today to provide customers the timely effective insight on the innovation taking place with smaller companies.

What Can We Do – Some Suggestions: IT/Technology Analysts can play an important part in acting as sources of unbiased and informative research and analysis.  Here are some suggestions for the industry to consider.

Focus on Industry Segments not SW Categories: The buyer of software is seeking the solution to a problem. These challenges arise out of specific dynamics of an industry (eg. Retail, Banking etc.).  Analyst firms should build up much stronger expertise in industry knowledge to make the advice more relevant and specific.

Rate Analysts and Firms: The financial analyst industry has it partly right (notwithstanding the failure of analysis in the financial meltdown).  Equity analysts provide very specific recommendations and then based on their insight and accuracy they get a rating.  Top analysts and firms get paid more and have more influence – this seems the right approach.  I agree that it is marginally easier to rate the accuracy of financial analysts – but I am sure the industry can come up with a standard rating system that provides customers and consumers some insight on this topic.  There are plenty of examples and methods to choose from  - Yahoo even has a “Analyst Performance Center” for this purpose.  This would be a great business idea for an independent firm to provide analyst ratings for IT/Industry analysts – I bet customer and vendors would buy this research.

Transparency of Relationships: This will help address the “pay to play” topic.  I think specific analysts and firms should clearly make transparent their economic relationship to a vendor and this information must be attached to every report and visible on the firms website.  I think the preference would be to provide the dollar amount but that is probably going to far. A more radical approach to this problem – use “Buy Side” and “Sell Side” analysts.  You either work with customers only to advise them on deals etc. or you work with vendors only to write on their innovations.

Stop Using IT Lingo:  I have written about this in a previous blog posting “Why Words are Killing the Adoption of Innovation” Somehow we think that the more complicated the words the more insightful and important the analysis.  This could not be further from the truth.  The industry would be much better placed if they focused on the clarity and simplicity of the analysis.  Vendors already make it impossible to understand what they are really selling – sometimes analysts add to this confusion.

Foster Independent and Small Analyst Firms: The consolidation in the analyst industry has resulted in bigger firms with more market power – this is fine, but it should be balanced with smaller and independent firms that innovate on how they are trying to bring new research and analysis to the market.  Constellation Research is a new firm that is seeking to innovate in this area and I look forward to following their progress.

These are just a few suggestions for us to consider.  I am sure not everyone will agree with me and I am sure my analyst friends will have a relevant point of view based on their experience – I would welcome the feedback.

Hope this fosters some interesting discussion and “analysis” !

Zia.

Filed under: Big Picture, Consumer Technology, Enterprise Software, Innovation, Social Media, Social Media in the Enterprise, Technology, Uncategorized | Tagged: , , , , , , , , | 13 Comments »

A Growth Strategy for Yahoo – the (Social) Enterprise ?

Posted on October 24, 2010 by Zia Yusuf

Yahoo is a company that has always intrigued me.  Over the past few years we have all read about the issues facing Yahoo – lack of a clear strategy, management challenges, the on again off again romance with Microsoft and a stock price that has gone from about $35 about 5 years ago to $16 today. And even todays stock price has built into it a significant value from China’s Alibaba.

Clearly Yahoo needs a growth strategy. So here is the “Right Question”  Should Yahoo develop and execute on a strategy to provide a comprehensive set of services for the enterprise ?  I think they should seriously explore this as an option.

Lets review what some of the current trends are in enterprise software – let me throw out some buzz words – cloud computing & SAAS, social media in the enterprise, social CRM, crowdsourcing, structured and unstructured data, Enterprise 2.0 and so on. In essence, many of the innovations in the enterprise are being driven or inspired by innovations in the consumer web.  This is the core of the Enterprise 2.0 approach.

On one hand you have the pure consumer focused companies – Facebook, Google, Twitter etc. On the other hand a new generation of enterprise focused companies are extending these new approaches and seeking to integrate them into the enterprise, SocialCast, Yammer, Ning, Jive etc.

Now lets take a look at Yahoo.  Despite its challenges the company is still a consumer technology leader.  Some ideas – if a consumer online store – Amazon – can create the leading cloud platform for the enterprise  Amazon EC2 then why cannot Yahoo leverage its data center and web management expertise to provide an enterprise cloud infrastructure and apps.  Yahoo Finance is a strong product and has interesting potential to be connected with other enterprise apps to provide integrated structured and unstructured information.  Yahoo knows how to build communities (maybe not as good as Facebook) but still good enough.  Yahoo can be a strong player in providing social media capabilities for the enterprise.  You can even consider integrating Yahoo Jobs into enterprise HR systems to provide an end 2 end business process for talent management.

I know that Yahoo has considered some of these options in the past and considered partnerships with enterprise software firms – but these plans never took off and the company focused on its consumer roots. Maybe some of these ideas are currently being discussed in the company – I hope they are.

So I don’t know if a more enterprise focused strategy (to complement the consumer work) is a viable option for Yahoo at this stage but I think it is certainly something that the Yahoo management should explore carefully – certainly if there is any truth to a private equity buyout of Yahoo this should be part of the strategy.

As usual, I appreciate your thoughts and comments – especially from current and past Yahoo employees and experts.

Thanks,

Zia.

Filed under: Consumer Technology, Enterprise Software, Innovation, Social Media, Social Media in the Enterprise, Uncategorized | Tagged: , , , , , , | Leave a Comment »

Changing How We Buy Enterprise Software !

Posted on October 17, 2010 by Zia Yusuf

I recently looked up the definition of Enterprise Software in Wikipedia and saw the following description: ”Enterprise software, also known as enterprise application software (EAS), is software used in organizations, such as a business or government, as opposed to software chosen by individuals.”

The first part of the definition seemed good enough. It was the second part that struck me.  Enterprise software is something other than “software chosen by individuals”.

So here is the problem.  Enterprise software is usually purchased by the IT department and the Office of the CIO but is used by the average business or general user.  Now there are good reasons why the IT department needs to be involved, compatibility, integration, security, scalability etc. etc. etc.  However the voice of the end user seems to play a much smaller role than the case should be – it is not always “software chosen by individuals”.

So this is what creates the principal – agency problem in the purchase of enterprise software. The “Principal” (the IT Department) is supposed to fully represent the interests of the “Agent” (the end user or individual) and purchase software that always fully meets the needs of the end user – this often does not happen as evidenced by frequent complaints from end users.

So how can we solve this problem – how can those who are the primary users of business software gain more power to control what software is purchased by the IT department on their behalf.  Here are some logical suggestions.

1- The budget for enterprise software purchases should be controlled by the business units. This may seem like a radical suggestion (though it is tried sometimes) and has potential issues.  However, I am a strong believer in the theory that those who are most impacted by a decision should own the resources that dictate that decision.

2- A software decision team of 5 should make the decision – 3 users, 1 IT & 1 Finance Representative. The number can be different but my point is that the decision should be weighted towards the voice of the end user.  Now before some of you quickly point out that the end users don’t have all the knowledge or skills to make a decision – you can simply manage this by IT selecting from a list of solutions pre-approved by the end user representatives

3- Conduct a minimum 3 month pilot with at least 5% of the users. Yes I know this can be expensive, but vendors may want to consider having demo systems that can actually be used by potential users.  Nothing like actually using the software to determine if it will do the job. If it is possible to have two parallel demo systems in place by competitors that is even better.

4- Have minimum user experience ratings as part of the acceptance and payment criteria. One of the challenges of non-SAAS software is that once you have purchased it you are stuck with it whether you like it or not. Having a payment schedule over a year that partially rests upon user “happiness ratings” may be a good idea.  For SAAS software you could argue this is built in as you can stop paying after a couple of months if you don’t like the software.

Now before my vendor friends get upset that any or all of these suggestions will make the sales process longer and more complex I would say the following – the enterprise software industry has to finally realize that the “customer” is not a faceless corporate entity or even the IT department – it is the end/business user that will use the software on a day to day basis.

If you make the end user happy – you will sell more software – it is as simple as that.

So the “Right Question” is what can we do to ensure that the needs of end users are not only met but their wildest expectations are exceeded.  This is what drives consumer software and this is what should drive enterprise software because we are selling to the same people !

As always I appreciate your comments and input on this post.

Thanks,

Zia.

Filed under: Design Thinking, Enterprise Software, Innovation, Technology, Uncategorized | Tagged: , , , , , , , | 4 Comments »

Can Cities Talk ?

Posted on October 6, 2010 by Zia Yusuf

Can cities talk ?

It has been a couple of months since my last post – but I think I have a good reason. As many of you know I recently took on the CEO role at a company called Streetline Inc. Going into any new company takes its time and effort and hence the delayed posts. But here I am again – for better or worse !

So lets get to it. My “Right Question”. Can cities talk ?  Well first what do I mean by that.  I am talking about the exciting world of sensors aka “internet of things”, aka “smart grid”, aka “rfid tags” and the list goes on.  Sensor are a normal part of our every day existence.  We have sensors in cars, washing machines, phones, planes, elevators, machinery etc.  Sensors provide a pretty basic service – they “sense”.  What they sense can vary – it can be movement, temperature, magnetic level, pollution, and again the list goes on.

Over the years sensors have become more sophisticated and have had a significant impact on how we work and live.  In the 1990′s a movement began called the “Internet of Things”.  Started by the Auto ID Center (originally based in MIT) the idea was to create a network of objects that can talk to each other and to the internet.  This concept and its offshoots have continued to gain speed.  Originally there was a lot of excitement around RFID tags that could project object information and could be tracked through the supply chain, into supermarkets and even into your home.   So it is clear that we are now living in a world where objects are talking to each other and to us.

However, over these past years the proliferation of sensor technology has had its ups and downs – technology challenges, adoption issues, some times privacy concerns and many times a lack of focus on creating true economic value for stakeholders. Over the last 3-5 years though there has been a resurgence of sensor based technology popping up in areas where its potential impact is massive.

One area area that has gotten a lot of attention recently is the “Smart Grid”.  Essentially utility companies with the help of innovative start ups are starting to deploy sensors at electricity and gas meters, along the grid and even down to your appliances in your kitchen.  The primary purpose of this investment is to generate data or information. This information can then be used by consumers, utilities and companies to manage a “smarter grid”.  There are some exciting companies in this space – here are just a few you can look at for more information: Silver Spring Networks, eMeter, Tendril etc.

So now lets talk about cities – and specifically “Smart Cities”.  Well first question is how does a city become a “smart city”.  As usual when in doubt go to Wikipedia (I do it more so that we don’t have to waste time on definitions !)

“Smart cities can be identified (and ranked) along six main axes or dimensions. These axes are: a smart economy; smart mobility; a smart environment; smart people; smart living; and, finally, smart governance. These six axes connect with traditional regional and neoclassical theories of urban growth and development. In particular, the axes are based – respectively – on theories of regional competitiveness, transport and ICT economics, natural resources, human and social capital, quality of life, and participation of citizens in the governance of cities.

A city can be defined as ‘smart’ when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic development and a high quality of life, with a wise management of natural resources, through participatory governance”

That is a long and somewhat complicated definition – but does capture the essence of a “smart city”.   So here is the rub.  For any of the six dimensions we need one vital component – data/information.  How do you know if you have smart mobility or a smart environment if you cannot measure it and gather data.

So many of the smart city activities depends on two vital components – new sources of data that inform us and software that collects this data and allows us to make smarter, quicker and more informed decisions.

There is some great information and thought leadership from IBM on this topic. I have found IBM to have the most comprehensive vision and plan around their  Smart City initiatives – it leverages the use of sensors (both human and electronic), data and software to bring amazing new solutions to bear on the parts of the world that are growing the fastest and will pose the biggest challenge of our time – our cities.

So in order for a city to be smarter – it has to talk to us – it has to provide us new types of data so that we can better manage it. Let me use Streetline as a great example of a new technology that is helping cities talk to us (yes I know I am promoting my own company – but I know its technology and can talk about it in context).

Not smart parking !

Streetline is the leader in deploying ultra low power mesh sensor networks.  The idea is that these mesh networks can deploy sensors that allow a city to provide amazing new sources of data and information.  Our first focus area has been around smart parking.  Over 3o% of the traffic in a city is caused by people looking for parking – I am sure you have personally experienced this.  Streetline has developed a parking sensor that gets installed at every parking spot. Together with meter sensors we now have real time access to both parking payment information and vehicle presence information.  This is just the first step – in the future we hope to deploy sensors to monitor traffic, water pressure in fire hydrants, and to keep a real time track of if street lamps are working (when you have 50,000 + street lamps the saving potential is significant). All of these sensors provide real time data that can change the way a city operates.  This video by Good illustrates this concept much better than I can.

I will be writing more about this topic in the weeks ahead. We are entering a new phase of the “internet of things” where the technology is getting cheaper and better and the software (both web and mobile) is getting more sophisticated and easy to use.  I predict we will see a revolution in smart city technology over the next 5-10 years.

S0 yes I do think cities can talk and they can give us amazing new types of information that will change how we work and live.

As always your thoughtful comments and input are welcome.
Zia

Filed under: Data & Analytics, Enterprise Software, Government, Innovation, Smart Cities, Smart Grid, Uncategorized | Tagged: , , , , , , , , , | 6 Comments »

Pareto and Software !

Posted on June 21, 2010 by Zia Yusuf

 Vilfredo Pareto is one of my all time hero’s.  His famous 80/20 rule has on numerous occasions saved me a lot of time and effort.  It is actually quite incredible how often this simple rule that 80% of effects come from 20% of the causes shapes our thinking and our actions. 

It is equally incredible how often we ignore this powerful theory and continue to hope that the results will be different if we only keep throwing resources at a problem.  The reason I wanted to invoke the memory of Pareto and his famous principle was to explore its application towards the benefits we get from software solutions.

Now I am a firm believer in the benefits of software and how it can and does improve our lives, our businesses and our global economy.  But here is the Right Question:  At what point do additional improvements or added functionality in a software product make little or no difference in enabling a user to get his/her job done.

Let’s take MS Excel as an example.  I would consider myself a moderately sophisticated user of Excel.  I have been using Excel for many years especially during my time as a investment banker.   Excel was first released in the mid- 1980′s so it has been around for over 25 years.  There have been significant improvements in Excel since those early days in user experience, functionality, integration with other programs etc.

But here is the issue. I cannot quantify this but I am pretty sure that in my best Excel moments I do not use more than 10-15% of Excel’s vast capabilities.  Yes there are probably some people who use maybe 30-40% but it is more likely that the vast majority use only a small fraction of its formidable capability.

Now let’s look at an example from the world of enterprise software – in particular CRM (Customer Relationship Management software).  Now the only goal of CRM is to drive sales in a cost effective manner.   There should be no other objective for deploying CRM software.  If your company does not have CRM software you can certainly benefit from CRM software at the appropriate stage of scale (no a two person company does not need CRM they just need a piece of paper and a pencil !).  But similar to my example of Excel, at what point do you already get the 80% benefits from CRM software ? Is it at the first purchase, is it on release no. 4,  or do you ever get there ? 

I don’t know the answer and many will rightly argue that “it depends”.  This is always a difficult argument to win because it is a powerful argument – especially when you don’t have the courage to make a decision.  But as an executive or as a technology professional we are paid to make decisions not live in a land of “it depends economics”. 

So here is my assertion.  The right software can play a critical role in driving growth and managing costs for any business – here I have no doubts.  However, I would also argue that it is more important to have a broader and integrated technology footprint than to go deep (read deploying new versions) in any specific functional category.  So, better to have an integrated suite (eg. CRM, financials, supply chain, procurement, HR, mobile workforce etc.) than to buy the version 4.0 of any specific product.

If Pareto is right – and he almost always is – we probably use only 20% of any given software application capability to generate 80% value created. Interesting thought.  

I am sure many will disagree with me and I look forward to the comments and input.

Regards,
Zia.

Filed under: Big Picture, Enterprise Software, Innovation, Technology, Uncategorized | Tagged: , , , , , , , , , | 2 Comments »

The Innovator’s Dilemma meets the Sales Dilemma !

Posted on April 13, 2010 by Zia Yusuf

 There are tens of thousands of business books published each year.  Some provide useful new insights, but most repeat the obvious in new fonts, colors and charts.  However sometimes a book or theory comes along that wakes you up and provides an amazing new perspective into building and managing companies.  The Innovator’s Dilemma by Clayton Christensen  tops my list as one of the most influential and relevant modern business books.   During my time as head of corporate strategy @ SAP I had the privilege of engaging with Prof. Christensen and came to respect even more the timeless nature of his thinking.

As a quick refresher the Innovator’s Dilemma asserts that incumbent companies can only do “sustaining innovations” as they seek to protect their existing customer base, margins and business models.  “Disruptive innovation” comes about when new entrants develop technologies that initially target markets that are unattractive (eg. smaller markets, lower margins, simpler products) but over time that innovation moves up to the higher-end and eventually dislodges the incumbent.  This has happened over and over again.  On demand/SAAS software is a recent example in the technology industry.

There are several other notable books that have over the years have made significant contributions to our thinking – for those short on time and attention span may I suggest you read “The 100 Best Business Books of All Time”   to get a crash course in business strategy and insight.

The purpose of this blog post is not to explain the Innovator’s Dilemma nor is it to provide my views on the merits of various business books.  Rather the intent of this post is to explore the impact of disruptive innovation on the go-to-market or sales channel strategy of a company.

For simplicity sake, let us focus on the software and technology industry as an example.   The pace of innovation is breathtaking – both by large incumbents but especially by start-ups.  The bulk of this innovation is what I would call product innovation – think iPad, smart phones,  chip and memory technology, voice recognition etc. 

In certain situations there has been a business model innovation – think software as a service, online advertising, and “freemium” (though this one I still have doubts about as the “premium” part often does not happen).

In a few cases there have been significant new advances in the sale/go to market models, mostly in the consumer space – think eCommerce (Amazon) , iTunes (Apple) , mail order movies (Netflix – now of course online).   In each of these consumer models companies were able to create new ways to access the customer – the person paying for the product.

So far so good.  Great new innovation, new business model and in some cases new sales channel for consumers.

So here is the challenge – there has not been much innovation in selling to the enterprise. Over the last couple of months I have met tens of companies and talked to them about a range of topics related to starting and running a disruptive business.  The overwhelming challenge faced by those seeking to sell to a business is not the new product they have developed, it is not that the product is difficult to understand, it is not that it take a long time to implement – rather the challenge is the enterprise sales process.

Especially with the heavy consolidation in the enterprise software industry the incumbents have a significant advantage that is not impacted as much by the pace of start-up  innovation – this is their direct distribution channel.

Is the “Sales Dilemma” overtaking the Innovator’s Dilemma ?  That is the Right Question…

As always, I welcome your comments and insights.

Zia.

Filed under: Big Picture, Enterprise Software, Innovation, Sales, Technology | Tagged: , , , , , , , , , , , | 7 Comments »

Your “Experiencing Self” vs. Your “Remembering Self” and the Implications for Software Design !

Posted on March 15, 2010 by Zia Yusuf

I have been attending TED for a couple of years and again this year was amazed by the speakers and their insights.  For those of you not familiar with TED I would suggest that you visit the TED website  where you will find a treasure chest of the most amazing talks on a broad range of subjects – I guarantee that you will be inspired.

TED 2010 did not disappoint – far from it.  Several talks inspired me personally but there was one that stood out for its simple yet profound insight – Daniel Kahneman’s talk on “The Riddle of experience vs. memory”.  Widely regarded as the world’s most influential living psychologist, Daniel Kahneman won the Nobel in Economics for his pioneering work in behavioral economics — exploring the irrational ways we make decisions about risk (TED description).  I have the deepest respect for people who can take the most complex of subjects and explain them in the most simplest of ways – this is was Daniel was able to do.

Now I will certainly not try to summarize or fully explain Daniel’s talk in this blog – for that I suggest that you visit the TED website to listen to the talk first hand.  Let me though try and provide you with the basic premise of his talk.  Daniel talks about  the “confusion between experience and memory: basically it’s between being happy in your life and being happy about your life or happy with your life”.  He provides several examples of the difference between the two. In one example Daniel talks about a person who listens to 20 minutes of glorious symphony music yet at the very end there is a dreadful screeching sound.  In reporting this incident the listener said that the screeching sound had “ruined the whole experience”.  Yet, as Daniel notes, the experience had not been ruined – ” What it had ruined were the memories of the experience. He had had the experience. He had had 20 minutes of glorious music. That counted for nothing because he was left with a memory; the memory was ruined, and the memory was all that he had gotten to keep.”

“What this is telling us, really, is that we might be thinking of ourselves and of other people in terms of two selves. There is an experiencing self, who lives in the present and knows the present, is capable of re-living the past, but basically it has only the present. It’s the experiencing self that the doctor approaches — you know, when the doctor asks, “Does it hurt now when I touch you here?” And then there is a remembering self, and the remembering self is the one that keeps score, and maintains the story of our life, and it’s the one that the doctor approaches in asking the question, “How have you been feeling lately?” or “How was your trip to Albania?” or something like that. Those are two very different entities, the experiencing self and the remembering self and getting confused between them is part of the mess of the notion of happiness. Now, the remembering self is a storyteller. And that really starts with a basic response of our memories –it starts immediately. We don’t only tell stories when we set out to tell stories. Our memory tells us stories, that is, what we get to keep from our experiences is a story. ” (quoted text is an excerpt from transcript of Daniel Kahneman’s 2010 TED Talk)

Implications for Software Design:  Daniel Kahneman’s talk and insights provide important lessons for the technology industry.  I think that we in the technology industry – especially the enterprise software industry – have forgotten how  important it is for users to be happy when using our software products.   Consumers take for granted that the software product will deliver on the basic function that it is designed to achieve - complete a purchase request, format a document or manage a supply chain.   However, all to often the software is difficult to use, not intuitive and requires too many steps to complete a simple task.

If you view Daniel’s full TED Talk you will note that in essence what he is saying is that your memory of a particular situation or event  matters more than the experience of that event or situation.  This insight can have important implications on how we design software to ensure that the memory of the use of the software is positive – even if the experience during the use was painful.  Maybe Apple had this figured out a long time ago !

I welcome your thoughts and ideas on this topic.

Thanks,

Zia.

Filed under: Design Thinking, Enterprise Software, Innovation, Technology, Uncategorized | Tagged: , , , , , | 5 Comments »

Open Government – are Data.Gov and Apps.Gov delivering on their promise ?

Posted on February 10, 2010 by Zia Yusuf

There is certainly a long list of challenges facing the Obama administration – the economy, healthcare, and two wars just to name a few.  Regardless of your politics, I think there is one aspect of the Administration’s efforts that require further discussion and exploration.  On his first day in office President Obama signed the Memorandum on Transparency and Open Government.  The memorandum outlined a commitment to “creating an unprecedented level of openness in Government…” It promised to “ensure the public trust and establish a system of transparency, public participation, and collaboration.”  My intent in this post is not to have a broader discussion on the topic of the Administration’s openness, but rather to explore two very specific components of that pledge – the launch of Data.Gov and Apps.Gov

As part of his focus on technology as a key driver of government effectiveness, openness and efficiency President Obama appointed two impressive and accomplished executives to lead this effort:   Vivek Kundra (Federal CIO) and Aneesh Chopra (Federal CTO).  I have had the privilege of meeting and talking to both Vivek and Aneesh and have been impressed with their plans to leverage technology, especially Web 2.0 and Social Media, to provide enhanced services to citizens.  Data.Gov and Apps.Gov are two important components of that effort.

Data.Gov was launched in 2009.  The stated objective of Data.Gov is to” increase public access to high value, machine readable datasets generated by the Executive Branch of the Federal Government.”  Data.Gov provides three kinds of data catalogs.  “Raw” Data Catalog: a catalog with instant view/download of platform-independent, machine readable data (e.g., XML, CSV, KMZ/KML, or shape file formats).  Tools Catalog: a catalog to provide the public with simple, application-driven access to Federal data with hyperlinks. This catalog features widgets, data mining and extraction tools, applications, and other services. Geodata Catalog:  a catalog that includes trusted and authoritative Federal geospatial data. This catalog includes links to download the datasets and a metadata page with details on the datasets, as well as links to more detailed Federal Geographic Data Committee (FGDC) metadata information. (source: data.gov faq)

Currently the data set includes 1,078 Raw Data, 484 Tools and 167,394 Geodata records.   A review of the data currently available” by Agency” provides some interesting insight.  The US EPA had 6,151 downloads of data the week prior to Feb 8th, 2010.  The Department of the Interior and the US Treasury came in second and third with 4,352 and 4,079 downloads,  respectively.  The US EPA also had the most raw data sets at 426 while the lowest number of data sets came from the US Consumer Product Safety Commission at zero (yes that is zero – somehow this made me a little nervous !).

The US Government and its many agencies produce massive amounts of data each year.  By providing academics, researchers and companies access to this data we may enable  individual researcher to find a cure for cancer or a college department to discover a weather pattern that can prevent natural disasters.  This is the power of open access to data – for the people, by the people !

Apps.Gov  is a very interesting and potentially powerful initiative.   Essentially this is a private cloud for the US Government.   Managed by the General Services Administration (GSA), Apps.Gov includes Business Apps, Productivity Apps, Social Media Apps and Cloud IT Services. The platform/exchange is similar to other successful private sector application exchanges such as the  SAP EcoHub , the Salesforce AppExchange and of course the  Apple Iphone App Store.

Apps.Gov provides government agencies a single marketplace to buy and use a broad range of applications.  In the Business Apps section for example  HP has 526 solutions listed, Microsoft has 65, VMWare has 716 and Salesforce has 67.  Several other companies have multiple solutions available.  Apps.Gov could have a profound impact on how the US Government buys and consumes software. 

So here is the Right Question:  Have data.gov and apps.gov delivered on their promise of fostering an open, efficient and effective government ?   Are they on the right track and what would you do different ?

I would welcome your views and opinions and especially your stories if you have used data from these sites or have any other experience related to this effort.

Thanks.

Zia.

Photo Credit: Ian-s

Filed under: Data & Analytics, Enterprise Software, Government, Innovation, Social Media, Technology, Uncategorized | Tagged: , , , , , , , , , | 3 Comments »

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