cloud computing

To RIM: Don't Change The Strategy, Change The Rules

2012-01-31T07:26:00.000-08:00

A lot has been said and discussed about RIM's downfall: indecisive leadership, inability to innovate at fast pace, and no clear path to recovery. I don't disagree at all with the analysis and the interpretation of the situation, but I do disagree with the conclusion that many people are drawing and vehemently disagree with their advice to RIM to keep trying to regain the smartphone market share. That train has left the station and RIM doesn't have a chance to catch up, even if they do everything that they could.

But RIM may have stumbled upon something that they probably least expected. It's the BlackBerry Messaging, popularly known as BBM. We got to see the power of BBM during the London riots. During my recent trip to India, I firsthand witnessed how much of people's lives depend on BBM. These people were sad, upset, and depressed due to a RIM infrastructure outage. This is a phenomenal success. The recipe behind this success is quite simple: provide free messaging that looks likes SMS that supports groups in a network. RIM has significantly leveraged network effects; BBM got better as more and more people used it. The sale of BlackBerry in India has gone viral. The consumers buy Blackberries since their friends have it so that they can chat with them for free and perhaps do their emails. These consumers don't use any apps at all! Their needs are quite simple. These phones are also priced well - the median price is somewhat around $200 for an unlocked phone. The Indian middle class and upper middle class have no issues shelling out this money to buy a BlackBerry. I talked to quite a few people and they are moving away from Android and iPhone to BlackBerry. Yes, that's right. If RIM can manage to introduce lower end versions of BlackBerry this will further fuel the growth.

May be, just may be, there's a category between smart and non-smart phones. For a large number of people in emerging economies making a phone call and staying in touch with their friends and family via text messages and email, and not paying too much for doing that are the driving reasons to purchase a right kind of a phone.

Let's briefly look at the history of RIM. It was the device of choice for email and calendering and perhaps still is for a lot of people. RIM myopically focused on going after the enterprise customers while iPhone and Android pulled the rug underneath them. RIM initially ignored and later underestimated the disruptive nature of this innovation. What started out as a consumer market, iPhone and Android easily crossed the chasm and entered into an enterprise and started replacing BlackBerry. We all know this story. But, something happened during this era of RIM: they ended up building a massively scalable and reliable enterprise class messaging infrastructure. This is an amazing feat of technical excellence. Building BlackBerry Messaging was a logical extension of leveraging this infrastructure. What if RIM uses this as a strength and not worry about competing in the smart OS area.

It's time to pivot.

Build a robust phone that is primarily driven off by BlackBerry Messaging and double down in emerging economies. Change the rules of the game and beat Nokia at its own strategy. Even better, spin off BlackBerry into two separate businesses: one that exclusively focuses on this strength and the other that embraces innovation by OEMing either Android or Windows or both and defend the handset as well as the services market share. I don't believe BlackBerry is cut out to innovate on a new smart phone OS quick enough to beat iOS or Android or an emerging contender, Windows phone. That would mean playing by your competitors' rules. If you learn one thing from Apple, it would be not to do this.

I don't need to tell you how many cellphones the Indians own and how many of those can buy a BlackBerry. This may not be an intended move, but this social effects driven business in emerging economies such as India as well as in other developed countries could be the second act for BlackBerry. Can other vendors replicate this? May be. Not many companies in the world can do what BlackBerry does with emails and messaging in general. Group messaging on a mobile device is a killer app in itself to drive the sales of handsets. Also, this works across the carriers and the geographies, essentially allowing RIM not to be threatened by a provider. SMS GupShup in India has been an extremely popular group messaging service. It's a validation that there is significant untapped potential for RIM.

Photo courtesy: NoHoDamon

Subscribe To Own As New Lease To Own

2012-01-19T10:20:00.000-08:00

The Beatles are timeless and so is music and enterprise software.

There's been an ongoing innovation in the music services. iTunes with iPods disrupted the traditional CD business model and in the ever connected cloud world Pandora, Spotify and countless others are challenging the very concept of "owning" music. Spotify gives you access to a wide range of music on all their clients as long as you're a paid subscriber. This is like Netlfix model for music except that there's no ad-supported free Netflix (Spotify is rumored to cap the free version after six months of usage). Pandora also has a similar model but it's a "radio" service. You can't tell Pandora what exactly to play but give preferences and it will find, play, and tune music based on your preference.

Pandora is serendipitous and Spotify is spontaneous.

One of the challenges with these services is that you only have access to music as long as you pay for it. When you stop using it you don't own anything (from them). iTunes and Amazon, on the other hand, are a music "marketplace". You buy songs and keep them. But these services are not designed for you to explore and experiment endlessly.

I wonder whether there's a middle ground.

What if there's a subscribe to own business model? The services would stream all the music that you want for a fixed price (like Spotify) and users will get a choice of receiving certain number of DRM-free songs — like options being vested, at the end of the subscription plan — say annually. The studios may never agree to this, but it's a great value proposition. What if a service is designed to actually sell MP3s and the streaming is just a draw to get people discover new music? Also, imagine if Netflix were to give out credit to their streaming customers to own a set of movies on DVDs. "Lease to own" is a very popular way of buying a car (at least in the United States). Why not apply that to music?

It is very difficult to change human behavior. The studios are powerful, want full control, and see technology innovation as a threat as opposed to an opportunity. On the other side, consumers are willing to pay and experiment but they do want to own music so that they can play on any device any which way they want without getting locked into a specific service and its supported clients.

What about SaaS subscription models for enterprise software? Are there any issues when customers don't "own" the software that they are using?

I have blogged about SaaS escrow and inverted OEM channels before. We haven't yet seen any spectacular failures of large SaaS companies. Today, even if you're a large unprofitable SaaS vendor with a decent customer base, you will be acquired before you shut your doors for good. But once SaaS becomes the de facto mode of delivering software, the "hotness" will fade away and you are as likely to go out of business as any other ISV. What happens then? The customers have their business continuity plans and a SaaS vendor going out of business could become a serious concern.

As far as music goes, there's a clear separation between content and process. We listen to music which is content and everything else — streaming, matching, discovering, and recommending — is a process to get to the content. This clear separation is not that clear in enterprise software. SaaS escrow could guarantee the content (of course if vendor supports it) but not the process and without process there's not much of business continuity. You could take your music and go some place else but I doubt you can do much with your enterprise data without any process around it. Is there an analogous flavor of lease to own in enterprise SaaS business? I guess, it's too early to say.

Going back to music, I think, we're ready for a radical shift and disruption in existing business models. Lease to own your music may not be a bad idea after all.

Loving What I Do For Living

2011-12-30T12:23:00.000-08:00

A few months back, I was helping a very large customer of ours to help simplify as well as automate their process of trading financial instruments. During one of my many visits to their office, I met a person who was trying to explain to me his job in supporting the people that are involved in this super complex process. I always ask a lot of questions — until they're totally annoyed and ready to kick me out of the room — to get a complete understanding of the business rationale behind whatever they're thriving for and their personal motivation behind it. Something unusual happened at this meeting. Instead of getting into the gory technical details of how they get things done, he chose to tell me a short and simple story.

"You know, um.. there's this early morning meeting everyday that Peter goes to with a bunch of other people. They all gather around a large table in a dimly lit conference room with a bunch of printed spreadsheets, a laptop, and a large calculator. Peter has a cup of coffee in one hand and a cigarette in the other hand talking to people who have coffee cups in their one hand and cigarettes in the other hand. This is their lives. I am concerned about Peter and I want him to stop smoking. Can you please help me?"

Now, this is the job that I love that makes me get out the bed and run for it. This is the human side of enterprise software. It's not boring.

Photo Courtesy: Jane Rahman

Design thinking: A New Approach To Fight Complexity And Failure

2011-12-14T09:29:00.000-08:00

Photo credit: String Theory by Michael Krigsman

The endless succession of failed projects forces one to question why success is elusive, with an extraordinary number of projects tangling themselves in knots. These projects are like a child’s string game run amok: a large, tangled mess that becomes more convoluted and complex by the minute.

IT projects fail all the time. Business blames IT, IT blames the system integrator (SI), who then blames the software vendor. After all this blaming and shaming, everyone goes back to work on another project without examining the project management methods and processes that caused the failure. And, so, they fail again.

There’s no one definition of design thinking. It’s a mindset and set of values that applies both analytical and creative thinking towards solving a specific problem. Design thinking is about how you think and not what you know; it is about the journey and not the destination.

Having followed Michael Krigsman’s analysis of IT project failures, it became evident that design thinking can play an important role in improving enterprise software development and implementation.

The design thinking approach offers a means to address the underlying causes of many project failures — poor communication, rigid thinking, propensity toward tunnel vision, and information silos.

I have distilled important lessons from design thinking into six principles that can help stop project failures. Along the way, we will draw comparisons with Agile development, since that distinction is often a source of confusion when discussing design thinking.

These six principles, based on design thinking, can help any project team operate more successfully.

1. Put a multi-disciplinary team in charge

You can’t pin down project failure on one person or one topic and yet we continue to use a person-centric method to manage projects. No one on a project team wants to fail. If you collectively put responsibility of the failure or success on the shoulders of the team and get them trained and motivated to think and behave differently you will mitigate much failure.

Multidisciplinary teams champion the user, business, and technology aspects of a project in a more comprehensive manner than would otherwise be possible. Typically, an IT team talks to business stakeholders who then talk to end users, which creates communication gaps, delays, and inefficiency. Far better to create a single team that includes participants from all areas, creating a single unit that includes multiple perspectives.

Try to staff your project team with “T-shaped” people, who possess a broad understanding and empathy for all the IT functions, but who also have deep expertise in one domain to champion that perspective. This approach can ensure that your solution is economically viable, technologically feasible, and delights the end users. A more balanced team also humanizes the project and its approach. Stay small and resist the temptation to set up very large teams. If you believe the “two-large-pizza-team” rule, those projects are team-driven and tend to be more successful. Start-ups can build something quicker because they are always short on people. As your group get bigger and bigger, other people tell you what to do and team members feel less connected to their work as it relates to the outcome.

2. Prepare for failure in the beginning

I recommend kicking off the project with a “pre-mortem workshop.” Visualize all the things that could go wrong by imagining that the project has failed. This gives the team an opportunity to proactively look at risks and prepare to prevent and mitigate them. I have sat through numerous post-mortem workshops and concluded that the root causes of failures are usually the same: abstract concepts such as lack of communication, unrealistic scope, insufficient training, and so on. If that’s true, why do we repeat the same mistakes, causing failure to remain a common situation? Primarily because many people find it hard to imagine and react to abstractions, but can relate much better when these concepts are contextualized into their own situation.

3. Be both vision- and task-driven

Design thinking emphasizes storytelling, shared vision, and empathy towards all stakeholders involved in a project. On many projects, participants focus exclusively on their own individual tasks, thus becoming disconnected from the big picture.

While design thinking strives to connect participants to the larger vision, Agile development can be very task-driven. Everyone gets a task without necessarily understanding the big picture, or vision, or even seeing the connection between his or her tasks and the final outcome. In this situation, a project can fail and people may not understand their role, thinking they failed due to someone else’s work. If participants don’t realize their tasks contributed to a failure, they won’t try to learn and change.

On the other hand, vision-driven approaches are very powerful. People perform their tasks, but the story and vision persist throughout the project; the same story gets told by different people throughout the lifecycle of the project to avoid that big picture fading away. All the tasks have a bigger purpose beyond their successful execution. Even good project managers miss this point. At review meetings, it is important to evaluate what the team did right but also revisit the vision and examine how recent outcomes fit the overall story.

4. Fail and correct then fail again

Design thinking contradicts other methodologies that focus only on success. In design thinking, failing is not necessarily a bad idea at all; however, we fail early and fail often, and then correct the course. In many projects, people chase success without knowing what it looks like or expecting to fail; therefore, they do not learn from the process.

One of the challenges with traditional project management is the need to pick one alternate and run with it. Turns out that you don’t know everything about that alternative and when it fails, due to the irreversible decision that you made, you can’t go back. Far better to iterate on a number of alternatives as fast as you can before deciding which one will work. This approach requires a different way of thinking and planning your project.

5. Make tangible prototypes

Agile proposed creating unstructured documentation as opposed to making structured requirement documents. But, unfortunately, that is not enough to solve many problems. One of the core characteristics of design thinking is to prototype everything, to make a tangible artifact and learn from it. The explorative process of making prototypes makes people think deeply and ask the right kind of questions. It’s said that “computers will never give a wrong answer but it will respond to a wrong question.” The prototypes encourage people to focus on what I want to know as opposed to what I want to say. This is very important during the initial design phase of the project.

One of the biggest misconceptions about prototypes is that people think they are too complex to make and are overhead or a waste of time. This isn’t true at all. Prototypes can be as simple as a hand-drawn sketch on a paper or as complex as fully functional interactive interface. The fidelity of a prototype is based on what kind of questions you want answered. People tend to fill in gaps when they see something raw or incomplete whereas hi-fidelity prototypes can be too complete to solicit meaningful feedback. As I already mentioned, most people respond better to an artifact as opposed to an abstract document. Prototypes also make the conversation product-centric and not person-centric. They also help to get team members on the same page with a shared vision.

6. Embrace ambiguity

One of the problems with traditional project management methodologies is that they make people spend more time in executing the solution and less time on defining the problem. Design thinking encourages people to stay in the problem space as long as they can. This invariably results in ambiguity, which is actually a good thing.

Ambiguity fosters abductive thinking — a mindset that allows people to explore what is probable with the limited information on their hands without concerns about proving or concluding that it actually works. It helps people define a problem in many different ways, eventually letting them get to the right problem they eventually should focus on.

This also supports the emergent approach that design thinking advocates as opposed to a hypothesis-driven approach. In a hypothesis-driven environment, people tend to focus on proving a premise created by a small group people. Rushing to a solution without defining the problem, and having no emergent framework in place to include the insights gained during later parts of the project, certainly contributes to failure.

ORGANIZATIONAL BARRIERS TO SUCCESS

Even the best methodology requires organizational commitment to success. For design thinking to work, it is also necessary to address these common organizational issues, each of which can impede progress and limit successful outcomes.

Lack of C-level commitment: Although design thinking is applicable at all levels in an organization, executive management must bless it by publicly embracing and practicing design thinking. Top down initiatives and training only go so far.

When the employees see their leaders practice design thinking they are more likely to embrace and practice it themselves. The same is true with adoption of social media and collaborative tools inside an organization. The best signal to your employees is by showing them a firm belief in the method by practicing it firsthand and sharing positive outcome.

Resistance to change: People in any organization are usually fundamentally against change, even if they believe it’s a good thing. They don’t want to get out of their comfort zone and therefore practice the same methods that have resulted in multiple failures in the past. Changing behavior is difficult but fortunately design thinking can help.

One of the ways I have taught design thinking is by taking people away from their primary domain and have them solve a very different kind of problem such as redesigning a ticket vending machine or a fast food restaurant. My team was hugely successful since it was a completely different domain and it didn’t interfere with their preconceived notion of how a project should be executed. People’s reservations are tied to their domain; they are willing to adopt a new method and new way of thinking if you coach them outside of their domain and then encourage to practice it in their comfort zone.

Lack of industry backing: Despite being informal, undocumented, and non-standards-based methodology, Agile experienced widespread adoption. I would attribute this success to two things: a well-defined manifesto by lead industry figures and organizations publicly committing to adopt the methodology. Design thinking lacks these attributes.

Even though industrial design companies such as IDEO has evangelized this approach, there’s still confusion around what design thinking actually means. This also makes it difficult to explain design thinking to a wider audience. If a few organizations publicly endorse design thinking, create a manifesto, and share the best practices to gain momentum, many of the adoption hurdles will go away.

Lack of key performance indicator (KPI) frameworks: Design thinking faces the same challenge that most Enterprise 2.0 tools face: lack of measurable KPIs.

For number-driven leaders, lack of a quantifiable framework to measure and monitor the impact of a new methodology is a challenge. Some leaders are good at adopting new ways of doing things and others are not. In these cases, isolate a project that you can’t measure and start small. Contain the risk but pick a project that has significant upside, to keep people engaged and motivated. You may still fail, or not achieve a desired outcome, but that’s what the design thinking is all about.

It’s worth noting that Agile, as a software project methodology, has well defined quality and reliability KPIs such as beta defects, rejected stories during a scrum cycle, and the delta between committed and delivered stories.

Fail early and course correct the next time. Remember that adoption and specific practice need correction and not the method itself. Don’t give up.

FINAL THOUGHTS

During my extensive work on design thinking - practicing, coaching, and analyzing — I often talk with people who believe that design thinking is merely a methodology or approach for “visual design.” This view is a false perception. Design thinking comprises a set of principles one can apply during any stage of the enterprise project lifecycle along with other project management methodologies. This approach is valid for the CEO and executive management all the way to the grass roots.

Another common point of confusion is the distinction between design thinking and Agile methods of software development. The primary difference is that Agile offers a specific set of prescriptive processes while design thinking encapsulates a set of guidelines and general principles. Although not the same, the two approaches are highly complementary (even on the same project), because both recognize the benefits of using iterative work cycles to pursue customer-centric goals.

Always remember that real people work on every project. The best methodologies are inherently people-centric and help participants anticipate likely causes of failure. Visualizing failure early in a project is an excellent means to prevent it from occurring. We’re all human and may make mistakes but certainly no one wants to fail.

Design thinking can make potential failure a learning tool and not a final outcome.

_______

I had originally published this post as a guest blog post on Michael Krigsman's IT Project Failures blog

Coming To A Place Near You: A Private Cloud Spiked With Big Data

2011-11-30T14:53:00.001-08:00

Netflix similarity map

Yesterday, I moderated a couple of panels at the Big Data Cloud event. I have been a keynote speaker, panelist, moderator, and participant for many conferences in the last few years. It has always been a pleasure to see the cloud and big data becoming more and more mainstream. Here are my quick observations and insights from the event:

Private cloud getting momentum: As a public cloud proponent I thought I would never have to write this. But lately I have seen more and more interest in private cloud; new start-ups, established cloud vendors, and large legacy vendors are designing private or hybrid cloud solutions. Vendors have recognized that prospects and customers have started to take cloud very seriously but they still have the same concerns what they had few years back: security, moving data to public cloud, and giving up control. I am not interested in the private/public debate (though I do love to mess with fellow clouderati on Twitter on this topic). My take on this trend is that the vendors should do whatever it takes to move the organizations to the cloud, private or public. Once companies dip their toes, they themselves will realize what's good for them.

Big Data as a serious category: A few days back, I blogged about big data going mainstream. Coming out from this event, it felt like, today Big Data is where cloud was a couple of years back. When I asked people a few years back "What's Hadoop?" They would reply "Huh?" Now, everyone wants to know more about Hadoop, Hive, HBase, S4, Oozie, Pig, Cassandra, and other big data frameworks. They're interested in analyzing and comparing available solutions. They're asking all the right questions. The VC investment in this category has been record high. Hadoop World was a sold out event this year with 1500 participants. Milind Bhandarkar, Chief Architect with Greenplum Labs, mentioned that in 2008, during the first Hadoop summit, they had to coax people to come to the summit. The people who willingly came to the summit either worked for Yahoo or Facebook. We have come a long way and there's a long way to go but this is a rock solid category. As the first set of big data infrastructure companies settle in we will see people building killer applications and PaaS solutions specifically designed to leverage big data. It is encouraging to see more and more companies and venture capitalists recognizing that the data is worth a lot more if they have the right tools and right people — the data scientists — to do something interesting with it. For example, Greylock partners have hired DJ Patil as a "data scientist in residence" to help them with evaluating their opportunities and advising their portfolio companies on big data strategies.

Rise in popularity of open source frameworks: If you follow the history of open source you'll realize that when a proprietary way of doing things become popular, commercial vendors pose a lock-in threat, and things don't work as expected, developers get frustrated and start to work on filling that gap by building open source technology. Linux started that way and so were many other open source projects. This is why I am excited to see OpenStack gaining rapid momentum. It's slowly becoming a de-facto standard to build a commercial cloud solutions. I also like Cloud Foundry since many companies that I know of, ISVs and large IT shops, won't use a public PaaS. They would prefer to launch their own PaaS solution in the cloud. Without an open source solution, it does become a big challenge.

Early Signs Of Big Data Going Mainstream

2011-11-07T16:06:00.000-08:00

Today, Cloudera announced a new $40m funding round to scale their sales and marketing efforts and a partnership with NetApp where NetApp will resell Cloudera's Hadoop as part of their solution portfolio. These both announcements are critical to where the cloud and Big Data are headed.

Big Data going mainstream: Hadoop and MapReduce are not only meant for Google, Yahoo, and fancy Silicon Valley start-ups. People have recognized that there's a wider market for Hadoop for consumer as well as enterprise software applications. As I have argued before Hadoop and Cloud is a match made in heaven. I blogged about Cloudera and the rising demand of data-centric massive parallel processing almost 2.5 years back, Obviously, we have come a long way. The latest Hadoop conference is completely sold out. It's good to see the early signs of Hadoop going mainstream. I am expecting to see similar success for companies such as Datastax (previously Riptano) which is a "Cloudera for Cassandra."

Storage is a mega-growth category: We are barely scratching the surface when it comes to the growth in the storage category. Big data combined with the cloud growth is going to drive storage demand through the roof and the established storage vendors are in the best shape to take advantage of this opportunity. I wrote a cloud research report and predictions this year with a luminary analyst Ray Wang where I mentioned that cloud storage will be a hot cake and NoSQL will skyrocket. It's true this year and it's even more true next year.

Making PaaS even more exciting: PaaS is the future and Hadoop and Cassandra are not easy to deploy and program. Availability of such frameworks at lower layers makes PaaS even more exciting. I don't expect the PaaS developers to solve these problems. I expect them to work on providing a layer that exposes the underlying functionality in a declarative as well as a programmatic way to let application developers pick their choice of PaaS platform and build killer applications.

Push to the private cloud: Like it or not, availability of Hadoop from an "enterprise" vendor is going to help the private cloud vendors. NetApp has a fairly large customer base and their products are omnipresent in large private data centers. I know many companies that are interested in exploring Hadoop for a variety of their needs but are somewhat hesitant to go out to a public cloud since it requires them to move their large volume of on-premise data to the cloud. They're more likely to use a solution that comes to their data as opposed to moving their data to where a solution resides.

Bangalore Embodies The Silicon Valley

2011-10-31T23:55:00.000-07:00

I spent a few days in Bangalore this month. This place amazes me every single time I visit it. Many people ask me whether I think Bangalore has potential to be the next Silicon Valley. I believe, it's a wrong question. There's some seriously awesome talent in India, especially in Bangalore. Don't copy the Silicon Valley. There are so many intangibles that Bangalore won't get it right. And there's no need to copy. Create a new Silicon Valley that is the best of both worlds.

If you want some good reading on what makes silicon valley the Silicon Valley, read the essay "How to be Silicon Valley" by Paul Graham. Bangalore does have some of these elements - diversity, clusters, a large number of expats etc. It's quickly becoming a true cosmopolitan city in India. You don't need to know the local language (Kannada) to live there. It does have a few good colleges such as IIM and IISC, but no IIT. The real estate boom in Bangalore is a clear indicator of what's going on in the city with regards to the spending power of the middle class and the upper middle class. Most large IT multinationals have a campus in Bangalore. The companies such as Accenture have more people in Bangalore than in the US.

So, what's wrong?

Lack of entrepreneurial mentorship

If you go back to the roots of the early success of the Silicon Valley you will find that the venture capitalists community mentored the entrepreneurs to bring innovation to life. Steve Jobs had an idea, but no business plan. Some of the entrepreneurs became serial entrepreneurs and some became the investors who in turn mentored other entrepreneurs. This cycle continued. I don't see this in Bangalore. Not only the VC funding is not easily accessible (more on this below), but there are no early investors that I see are spotting the trends and mentoring the entrepreneurs.

I spoke to many entrepreneurs in Bangalore. Let me tell you - they do not lack the entrepreneurial spirit. They are hungry and they are foolish. And they are chomping at the bit to work on an exciting idea, but they do lack someone to mentor them and take them through the journey.

Where have all the designers gone?

A couple of years ago I was invited at the National Institute of the Design (NID), a premier design school in India, for a guest lecture. They told me that design is not a discipline that easily attracts good talent in India. They are competing with the engineering schools. India lacks designers. This is the age of experience start-ups. A very few engineers have the right design mindset. If they want to be successful, they absolutely need to work with the designers who are impossible to find and hire. This talent gap is hurting to manifest the vision of a founder into a product that the consumers would love to use. Flipkart and Red Bus are my favorite start-ups but they are few and far between.

Math and Science would only take you so far

It's not just Math and Science that has created the Silicon Valley. It's the right balance of creativity, business acumen, and engineering talent. The schools in India, even today, are not set up to let students be more creative. They are still fixated on Math and Science since they guarantee good jobs. The Silicon Valley entrepreneurs followed their dreams. In the US, it's about studying what you like and chase a career that you are happy with and not to pick a certain kind of education just because they provide good jobs. Unfortunately, creativity is hard to teach. It's ingrained into the culture, society, and the systems. If India has to get this right, this needs to start at the education and a support system that has a place for jobs other than Math and Science.

I have been following the education reforms in India and private sector investment into K-12 schools. They are encouraging. I don't believe Bangalore or India for that matter will have math or science issue anytime soon, but it will certainly have entrepreneurial issues to jump start new companies and manage their ever growing engineering workforce. I was invited to speak at IIM Ahmedabad, one of the best business schools in India. During my conversation with the faculties, I was told that the most pressing issue for the elite business schools in India is to scale their efforts to create the new class of mid-management that can manage the rapidly growing skilled workforce.

Obama keeps saying more and more people in the US should study math and science to be competitive. I don't believe that's the real competition. The real competition is what can you do if you did know math and science or if you had access to people who knew it.

Lack of streamlined access to capital

A lot has been written about this obvious issue and I don't want to beat this further. I just want to highlight that despite of all the money that the individuals and large corporations have earned in India, a very little is being invested into venture capital since the VC framework, processes, and the regulations aren't as streamlined. It's not a level playing field. In the Silicon Valley, the venture money is commodity. If you have a great idea, team, or a product, the investors will run after you to invest into your company. Bangalore is far from this situation. But it shouldn't have to be. What's missing is not the available money but a class of people who can run local funds by investing into the right start-ups. Most US VC firms have set up shops in India, but I don't think that's enough to foster innovation at the grassroots level. Bangalore needs Indian firms to recognize the need for a local VC community that can work with the system to make those funds available to the entrepreneurs.

The picture: I took this picture inside one of the SAP buildings in Bangalore during the week before Diwali.

Make To Think And Think To Make

2011-10-27T09:44:00.000-07:00

I'm a passionate design thinker and I practice design thinking at any and all opportunities. Design thinking is part art and part science. John Maeda is one of my favorite thought leaders on design. He published a post talking about art as a form of asking "what do I want to know" rather than "what do I want to say."

As a product manager, making a product goes from what do I want to know — the requirements — to what do I want to say — manifestation of the requirements into a working product. I call it "Make to think and think to make". I make prototypes — make to think — similar to a form of an art, to help me think and ask the right questions to fulfill my needs of "what I want to know". The human beings better respond to tangible artifacts as opposed to abstract questions. These conversations stimulate my thinking to execute on those requirements — "think to make" — similar to "what do I want to say." The design thinking cycle continues.

Disrupt Yourself Before Others Disrupt You: DVD To Streaming Transition Is Same As On-Premise To Cloud

2011-09-30T09:45:00.000-07:00

Recently, Netflix separated their streaming and DVD subscription plans. As per Netflix's forecast, they will lose about 1 million subscribers by the end of this quarter. The customers did not like what Netflix did. A few days back, Netflix's CEO, Reed Hastings, wrote a blog post explaining why Netflix separated their plans. He also announced their new brand, Qwikster, which will be a separate DVD service from Netflix's streaming website. These two services won't share the queues and movie recommendations even if you subscribe to both of them. A lot has been said and discussed about how poorly Netlflix communicated the overall situation and made wrong decisions.

I have no insider information about these decisions. They might seem wrong in short term but I am on Netflix's side and agree with the co-founder Marc Randolph that Netflix didn't screw up. I believe it was the right thing to do, but they could have executed it a little better. Not only I am on their side, but I see parallels between Netflix's transition from DVD to steaming and on-premise enterprise ISVs' transition from on-premise to cloud. The on-premise ISVs don't want to cannibalize their existing on-premise business to move to the cloud even if they know that's the future, but they don't want to wait long enough to be in a situation where they run out of money and become irrelevant before the transition.

So, what can these on-premise ISV's learn from Netflix's decisions and mistakes?

Run it as a separate business unit, compete in the right category, and manage street's expectations:

Most companies run their business as single P&L and that's how the street sees it and expects certain revenue and margins. Single P&L muddies the water.The companies have no way of knowing how much money they are spending on a specific business and how much revenue it brings in. In many cases, there is not even an internal separation between different business units. Setting up a separate business unit is a first step to get the accounting practices right including tracking cost and giving the right guidance to the street. DVD business is like maintenance revenue and the streaming is like license revenue. The investors want to know two things: you're still a growth company (streaming) and you still have enough cash coming in (DVD business) to tap into the potential to grow.

Netflix faces competition in streaming as well as in their DVD business, but the nature of competition is quite different. For the enterprise ISVs competing with on-premise vendors is quite different than competing with SaaS vendors. The nature of business — cost structure, revenue streams, ecosystem, platform, anti-trust issues, marketing campaigns, sales strategy — is so different that you almost need a separate organization.

Prepare yourself to acquire and be acquired:

Netflix could potentially acquire a vendor in the streaming business or in the DVD business and that makes it easy for them to integrate. This is even more true in the case of ISVs since most of the on-premise ISVs will grow into the cloud through acquisitions. If you're running your SaaS business as a separate entity, it is much easier to integrate the new business from technology as well as business perspective.

Just as you could acquire companies, you should prepare yourself for an exit as well. Netflix could potentially sell the DVD unit to someone else. This will be a difficult transaction if their streaming business is intertwined with their DVD business. The same is true for the enterprise ISVs. One day, they might decide to sell their existing on-premise business. Running it as a separate business entity makes it much easier to attract a buyer and sell it as a clean transaction.

Take your customers through the journey:

This is where Netflix failed. They did not communicate to the customers early on and ended up designing a service that doesn't leverage existing participation of the customers such as recommendations and queues. There is no logical reason why they cannot have a contract in place between two business units to exchange data, even if these two units are essentially separate business entities. The ISVs should not make this mistake. When you move to the cloud, make sure that your customers can connect to their on-premise systems. Not only that, you need to take care of their current contracts and extend them to the cloud if possible and make it easy for them to transition. Don't make it painful for your customers. The whole should be great than the sum of its parts.

Run your business as a global brand:

Learn from P&G and GE. They are companies made up of companies. They do run these sub-companies independently with a function to manage them across. It does work. Netflix has a great brand and they will retain that. As an on-premise ISV you should consider running your on-premise and cloud businesses as sub-brands under single brand umbrella. Branding is the opposite of financials; brand is a perception and financials is a reality. Customers care for the brand and service and the street cares for the financials. They seem to be very closely related to each other for a company looking inside-in but from an outside-in perspective they are quite different. There is indeed a way to please them both. This is where the most companies make wrong decisions.

Freemium Is The New Piracy In The SaaS World

2011-09-07T12:13:00.000-07:00

It is estimated that approximately 41% of revenue, close to $53 billion, is "lost" in software piracy. This number is totally misleading since it assumes that all the people who knowingly or unknowingly pirated software would have bought the software at the published price had they not pirated it. RIAA also applies the same nonsense logic to blow the music piracy number way out of proportion. The most people who pirate software are similar to the people who pirate music. They may not necessarily buy software at all. If they can't pirate your software, they will pirate something else. If they can't do that, they will find some other alternative to get the job done.

Fortunately, some software companies understand this very well and they have a two-pronged approach to deal with this situation: prevent large scale piracy and leverage piracy when you can't prevent it. If an individual has access to free (pirated) software, as a vendor, you're essentially encouraging an organic ecosystem. The person who pirated your software is more likely to make a recommendation to continue using it when he/she is employed by a company that cannot and will not pirate. This model has worked extremely well. What has not been working so well and what the most on-premise vendors struggle with is the unintentional license usage or revenue leakage. Customers buy on-premise software through channels and deploy to large number of users. Most on-premise software are not instrumented to prevent unintentional license usage. The license activation, monitoring, and compliance systems are antiquated in most cases and cannot deal with this problem. This is very different than piracy because the most corporations, at least in the western world, that deploy the on-premise software want to be honest but they have no easy way to figure out how many licenses have beed used.

In the SaaS world, this problem goes away. The cloud becomes the platform to ensure that the subscriptions are paid for and monitored for continuous compliance. You could argue that there is no license leakage since there are no licenses to deal with. But, what about piracy? Well, there's no piracy either. This is a bad thing. Even though a try before buy exists, there's no organic grass-roots adoption of your software (as a service) since people can't pirate. In many countries where software piracy is rampant, the internet access is not ubiquitous and bandwidth is still limited. This creates one more hurdle for the people to use your software.

So, what does this mean to you?

SaaS ISV: It is very important for you to have a freemium model that is country-specific and not just a vanilla try-before-buy. You need to get users start using your service for free early on and make it difficult for them to move away when they work for someone who can pay you. Even though you're a SaaS company, consider a free on-premise version that provides significant value. Evernote is a great example of this strategy. It shouldn't surprise you that people still download software, pirated or otherwise. Don't try to change their behavior, instead make your business model fit to their needs. As these users become more connected and the economics work in their favor, they will buy your service. It's also important to understand that the countries where piracy is rampant, people are extremely value conscious.

On-premise ISV: Don't lose your sleep over piracy. It's not an easy problem to solve but do make sure that you're doing all you can to prevent it. Consider a freemium business model where you're providing a clean and free version to your users. If the users can get enough basic value from a free version, they are less likely to pirate a paid version. What you absolutely must do is to fix your license management systems to prevent unintentional license usage. Help yourself by helping your customers who want to be honest. The cloud is a great platform to collect, clean, and match all the license usage data. You have a little or no control over customers' landscapes but you do have control over your own system in the cloud as long as there's a little instrumentation embedded in your on-premise software and a hybrid architecture that connects your on-premise software to the cloud. In nutshell you should be able to manage your licenses the way SaaS companies manage their subscriptions. There are plenty of other benefits of this approach including the most important benefit being a SaaS repository of your customers and their landscapes. This would help you better integrate your future SaaS offerings and acquisitions as well as third-part tools that you might use to run your business.

Life Is Too Short To Remove A USB Stick Safely

2011-08-24T20:17:00.000-07:00

Today, Steve Jobs resigned as a CEO of Apple. I think I will remember this day and so will others.

“Your work is going to fill a large part of your life, and the only way 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’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.” — Steve Jobs

For me, Apple is not just a personal choice that is better than other alternatives, but it's also an ongoing proof of what's possible if you believe in what you think is the right thing to do. It's also about the elements of design and endless perseverance that I can thrive for. Thanks Steve for showing what's possible and wish you all the best with your health and a speedy recovery. I hope you can stay on and mentor others at Apple for what's going to be a great future of computing.

Parallelism On The Cloud And Polygot Programmers

2011-08-17T15:41:00.000-07:00

I am very passionate about the idea of giving developers the control over parallelism without them having to deal with the underlying execution semantics of their code.

The programming languages and the constructs, today, are designed to provide abstraction, but they are not designed to estimate the computational complexity and dependencies. The frameworks such as MapReduce is designed not to have any dependencies between the computing units, but that's not true for the majority of the code. It is also not trivial to rewrite existing code to leverage parallelism. As, with the cloud, when the parallel computing continues to be a norm rather than an exception, the current programs are not going to run any faster. In fact, they will be relatively slower compared to other programs that would leverage parallel computation. Robert Harper, a Professor of Computer Science at Carnegie Mellon University recently wrote an excellent blog post - parallelism is not concurrency. I would encourage you to spend a few minutes to read that. I have quoted a couple of excerpts from that post.

"what is needed is a language-based model of computation in which we assign costs to the steps of the program we actually write, not the one it (allegedly) compiles into. Moreover, in the parallel setting we wish to think in terms of dependencies among computations, rather than the exact order in which they are to be executed. This allows us to factor out the properties of the target platform, such as the number, p, of processing units available, and instead write the program in an intrinsically parallel manner, and let the compiler and run-time system (that is, the semantics of the language) sort out how to schedule it onto a parallel fabric."

The post argues that language-based optimization is far better than machine-based optimization. There's an argument that the machine knows better than a developer what runs faster and what the code depends upon. This is why, for relational databases, the SQL optimizers have moved from rule-based to cost-based. The developers used to write rules inside a SQL statement to instruct the optimizer, but now the developers focus on writing a good SQL query and an optimizer picks a plan to execute the query based on the cost of various alternatives. This machine-based optimization argument quickly falls apart when you want to introduce language-based parallelism that can be specified by a developer in a scale-out situations where it's not a good idea to depend on a machine-based optimization. The cloud is designed based on this very principle. It doesn't optimize things for you, but it has native support for you to introduce deterministic parallelism through functional programming.

"Just as abstract languages allow us to think in terms of data structures such as trees or lists as forms of value and not bother about how to “schedule” the data structure into a sequence of words in memory, so a parallel language should allow us to think in terms of the dependencies among the phases of a large computation and not bother about how to schedule the workload onto processors. Storage management is to abstract values as scheduling is to deterministic parallelism."

As far as the cloud computing goes, we're barely scratching the surface of what's possible. It's absolutely absurd to assume that the polygot programmers will stick to one programming model and learn to spot difference between parallelism and concurrency. The language constructs, annotations, and runtime need to evolve to help the programmers automate most of these tasks to write cloud-native code. These will also be the core tenants of any new programming languages and frameworks. There's also a significant opportunity to move the existing legacy code in the cloud if people can figure out a way to break it down for computational purposes without changing it i.e. using annotations, aspects etc. The next step would be to simplify the design-deploy-maintain life cycle on the cloud. If you're reading this, it's a multi-billion dollars opportunity. Imagine, if you could turn your implementation-specific concurrent access to resources into abstract deterministic parallelism, you can indeed leverage the scale-out properties of cloud fairly easily since that's the guiding principle behind the cloud.

There are other examples you would see where people are moving away from an implementation-centric approach to an abstraction that is closer to the developers and end users. The most important shift that I have seen is from files to documents. People want to work on documents; files are just an instantiation of how things are done. Google Docs and iPad are great examples that are document-centric and not file-centric.

Photo courtesy: bass_nroll on Flickr

Plotting for serendipity

2011-07-28T14:31:00.000-07:00

I rarely eat lunch at my desk. Eating lunch in a cafeteria is such a precious opportunity to waste. I plot for serendipity. That's right. Some of the best conversations that I have had with people — on my way to a cafetaria or in the cafeteria — are purely serendipitous, but they're not purely accidental. I even pick a cafeteria that requires me to walk a little more. I believe you can always create opportunities for good things to happen to you. When people say "It's a small world", they are so wrong. The world isn't small but they're at the right place at the right time to think it's a coincidence. The coincidences do happen but there's a larger force behind orchestrating the possibilities for such coincidences to occur.

The same applies to creativity. You can design an epiphany.

I have heard people say that they had an epiphany while they were in shower. It's not the shower but it's illumination followed by a prolonged incubation, two phases of creativity. The other two phases are preparation and verification. Preparation is a phase where you decide that you want to solve a specific problem. When you continue to work on a problem over a period of time, your brain, the unconscious, never stops working on it even if consciously you're not spending any time on it. This is called incubation. This lasts for a while. The "shower moment" is the illumination phase where you finally figured out a solution, after your brain unconsciously kept solving it for the entire night, and hence the metaphor of glowing bulb for innovation. What remains is the verification phase to prove that the solution works. We all do this, but we don't spend enough time on the incubation phase and hence many ideas don't go beyond that. You can plot for this epiphany by not letting a problem go for a while even though you think that you don't have enough time to work on it. I tell my students to start working on their projects early on for better results for that purpose. It feels counterintuitive that you could solve a problem by spending less time on it as long as you keep solving it for a longer duration off and on.

I have blogged about cloud being a natural platform to design tools that could create network effects. The tools that create network effects also offer an opportunity for digital serendipity. I have discovered many people through Twitter and learned quite a few things that I would have never explicitly made an attempt to learn. And, I'm not the only one who has had such an experience. I'm a big fan of social tools and platforms that enable opportunities for such serendipity to occur. There're only so many cafes and water fountains in the physical world; the digital world is far bigger in that sense.

Design your routine to plot for serendipity and epiphany and credit yourself instead of the shower. Creativity can be tricked. You will be positively surprised.

Cross-posted on my personal blog

Designing Terms Of Service Is As Important As Designing A Product

2011-07-05T15:28:00.000-07:00

Dropbox revised their Terms of Service (TOS) over the long weekend. That triggered a flurry of activities on Twitter. Dave Winer even deleted his Dropbox account saying that he would revisit it once the dust settles. A lot of people concluded that there's nothing wrong in the new TOS and that people are simply overreacting. And then Dropbox updated their blog post, twice, explaining that there is nothing wrong with new TOS and cleared some confusion. I would let you be the judge of the situation and the new TOS. This post is not about analyzing the new TOS of Dropbox, but it's about looking at more basic issue in product design. What we witnessed was just a symptom.

Let me be very clear - your product design includes getting the TOS and End User License Agreement (EULA) right before you open up the service. The way the most TOS and EULA are worded, an average user can't even fathom what the service actually does, what information it collects, what it shares, and most importantly what's that it absolutely won't do. It's ironic that the simplicity element of Dropbox's design — there will be a folder and that will sync — made it extremely popular and when they designed the TOS, they had to publish a blog post with two updates and 3000+ comments to explain and clarify the new TOS to the very same users. There's something wrong here.

For a product or a service to have a great experiential design, it's absolutely important to get the TOS and EULA right upfront and even validated by end users. People release their product in beta and go to a great length to conduct usability study to improve the product design. Why exclude TOS?

I have worked with some great lawyers, but they don't make a good product designer. I'm a big fan of constraints-based design. Lawyers are great at giving you constraints - the things that you can and cannot do. Start there. Get a clear understanding of legal ramifications, ask someone other than a lawyer to write a TOS, get it signed off by a lawyer, and most importantly validate by end users. Then, start the product design using those constraints. If you feel too constrained, go back and iterate on TOS. Drafting a TOS is not different than prototyping a product.

I would rather have bloggers, thought leaders, and end users critique the product design on my blog instead of TOS. I would love to work on that feedback as against getting into a reactive mode to stop the bad PR and legal consequences. Thomas Otter says "law exists for a reason." Don't exclude lawyers but please don't let lawyers drive your business. Educate them on technology and end users and most importantly, involve them early on. The lawyers are paid to be risk-averse. As an entrepreneur, you need to do the right thing and challenge the status quo to innovate without jeopardizing the end users. It's a tough job, but it can be accomplished.

I don't want to single out Dropbox. There are other companies who have gone through the same cycle and yet I don't see entrepreneurs doing things differently. In this process, the cloud gets a bad rep. What happened to Dropbox has got nothing to do with what people should and should not do in the cloud. That would be a knee-jerk response. The fundamental issue is a different one. Treating symptoms won't fix the underlying chronic issue.

5 Techniques To Deal With Spam: Open Letter To Twitter

2011-06-15T14:58:00.000-07:00

I love Twitter, but lately, I am getting annoyed by Twitter spam and I'm not the only one. I don't want Twitter spam to become email spam. I don't want to whine about that either, so I spent some time thinking about what Twitter could do to deal with spam. Consider this an open letter to Twitter.

Facebook's privacy settings are the new programming a VCR. Google has been criticized a lot about profiting from content farms. I believe that all the major players are playing a catch-up game. A lot of people have stared to complain about LinkedIn spam as well. Quora went into different direction — where they started out with a strict upfront policy regarding who can join Quora, ask questions, answer questions etc. — to maintain the quality of their service. Strict upfront policy hampers new user acquisition and adoption but could ensure better quality where as liberal policy accelerates the user acquisition with a risk of service being abused. I do believe that there's a middle ground that these services could thrive for by implementing clever policies.

Here are five techniques that Twitter could use to deal with spam:

1. Rely on weighted rank based on past performance: I ran a highly unscientific experiment. I kept a record of all the accounts that I reported as spammers on Twitter in the last few days. I went back every few minutes, after reporting an account, to see whether that account was suspended. It took Twitter some time before that happened. Every single account that I have reported so far has been suspended. I don't think Twitter is using that knowledge. If it did, my subsequent actions would have resulted into quicker suspension. Learn from Craigslist. Craig Newmark will tell you all about community-based flagging. Instrument the system to rely on reputation of power users — who are savvy enough to detect spam — to suspend a spammer's account. If it turns out that it's not a spam, give an opportunity to the account owner to appeal. Spammers don't waste time arguing; they simply move on.

2. Expand categories to match how people consume: Create a separate "unsolicited" category to receive mentions and replies from people whom you don't follow. This could be a separate window in a Twitter client that replaces the current "replies and mentions" window. Require Captcha for direct replies (and not mentions) for the conversations where both the accounts don't follow each other to stop automated spam. Everything else, including real spam, goes into "mentions", which is now a new category, that can be consumed in a separate window leaving the "replies" window clean.

3. Remove spam tweets from the stream: Many users don't consume their mentions or replies in real-time or even in near real-time. Mark the tweets spam once you suspend the account and require the Twitter clients to remove them from users' stream in real time. No API restrictions and no throttling. If you do it right and spam gets detected within a few seconds, the account can be suspended in no time, and the tweets are removed even before the most users would even see them. Emails can't be recalled, the tweets can be, if Twitter wants it to. Let's do it.

4. Focus on new accounts: Set a reasonably low limit on number of tweets per hour on a new account. A first-time genuine Twitter user doesn't go from 0-100 in a day, but a new spammer certainly would. Focus energy on new accounts; spammers don't wait for a few weeks or months to start spamming. The current "verified" account feature is a black magic. Open it up to all the people and use standard means such as cell phone, credit cards, and other identities to verify their Twitter accounts. These accounts enjoy the benefit of doubt - an upfront requirement of multiple signals before their accounts are suspended. Spammers don't want to verify themselves.

5. Find and fight bots with bots: There are a bunch of bots out there that look for the words such as iPad, iPhone, and XBOX in your tweets and then they spam you. Twitter can crate their own bots to tweet these words to catch these spam bots and more importantly harvest the links that they are tweeting to detect other spammers. Twitter's own bots would obviously be far more intelligent than the spam bots since they would have access to a lot more information that the spam bots don't.

The spammers do catch up, but if Twitter spends a little time and energy, they can stay ahead in this game. They can even lead the pact of social media companies on how to deal with spam.

Update: As soon as I published this post, I tweeted it and copied Del Harvey on it. She immediately responded to the post. You can read her response here. I really appreciate Twitter responding to this. My take on the response is that they seem to understand what the issues are and how they might solve them, but they haven't fully managed to execute on it, so far. I don't agree with their feedback on issue #2 calling it non-safety. Users see Twitter as one integral product where spam is very much part of it. Personally, I don't think of spam as a security issue for me. It's just plain annoyance. Executing on these ideas will matter the most. Let's hope Twitter gets behind this with full momentum and it doesn't become a "project".

Social Shaming

2011-06-06T14:58:00.000-07:00

An interaction designer, Joshua Kaufman, had his MacBook stolen a few days back. He is a smart dude. He had installed an app called Hidden on his MacBook before it was stolen. He tracked down the thief and asked the Oakland PD to catch him. They said no. He was frustrated, obviously. He published all the details regarding the theft including the picture of the guy who stole his MacBook on his blog. This story went viral on Twitter and Facebook and made it almost impossible for the cops to ignore it. Oakland PD found the guy and arrested him. Since then the story has been picked up by many major media outlets and became sort of a sensation.

Social shaming works.

There's a fine line between peer pressure and social shaming. Many car dealerships in the US have a whiteboard that tracks which sales reps sold how many cars. They also ring a bell every time someone sells a car. It's a cheesy thing to do, but it sends a clear message to other people to be more aggressive; it's indeed a form of peer pressure. It's also an efficient technique to motivate the kids.

In fact, it's one of the most important gamification elements.

Public shaming has been used in many different ways e.g. send an email out to all the sales people with a list of people highlighted in red that haven't updated the CRM system. I know of a company that had a practice in place to publicly give a "D'oh! award" to a developer who broke the nightly build. Social shaming is essentially public shaming using social media. During my discussion with many enterprise social software vendors, analysts, and thought leaders I have repeatedly argued that changing end users' behavior is less likely to succeed unless there's a significant upside for the end users. What is more likely to work is codifying the real life end user behavior in the software that they use. Social shaming is one of those. One of the ways to achieve this could be by designing software that promotes radical transparency, signals one's successes to the other, and nudges them to excel without embarrassing them.

Disruptive Cloud Start-Ups - Part 2: AppDirect

2011-05-26T14:14:00.000-07:00

Check out the first post of this series on NimbusDB, if you haven't already seen it. This post is about AppDirect. I met with Nicolas Desmarais, a co-founder and the CEO of AppDirect and had a long discussion regarding their current solutions and future strategy. AppDirect is an app store for small businesses. The developers can integrate their applications with AppDirect and AppDirect manages the experience of selling, provisioning, and billing with a 70-30 revenue split with the developers. They also have a white label app store solution that they sell to large customers such as ISPs who can sell these same applications to their customers.

Let's get the things out of the way that I didn't like about them.

The downside:

The target market that comprises of small businesses is extremely difficult to reach to and to market to. This gets even more difficult when the company trying to market is a young start-up and the customers are "S" in SMB. These customers have very different kind of requirements. They look for simple solutions that are not very expensive and have predictable SLA with a clear local support model and not the ones that come with enterprise grade features such as end-to-end integration, single sign on etc. Intuit has owned this channel for a while via Quickbooks and their SMB marketplace (the partner platform) is a great example of selling go-to-market services to other ISVs. AppDirect will have to work much harder if they want to work this channel.

So, why do I think they are disruptive?

The upside:

AppDirect is platform-agnostic. The developers can write applications in any language and run it on any platform as long as they integrate with AppDirect's end points (the APIs). The ISVs or PaaS providers have traditionally locked developers into their platform. That lock-in now goes away.

Even though the telcos are not the most innovative companies, they are laggards with a pile of cash, a ton of customers, and good margins. I believe that telcos can be great enterprise software vendors for SMB. Instead of spending money on the marketing efforts, if AppDirect can convince the Telcos and ISPs to bundle their white label solution, it's a win-win situation. This business alone can make them profitable. What you need is a small number of large customers. Long tail can always be an added bonus.

The team is talented and they have got a good product with some early customers. If they can execute on their vision and pivot as necessary, they're on to something,

Check out their slides and presentation:

Disruptive Cloud Start-Ups - Part 1: NimbusDB

2011-05-06T14:14:00.000-07:00

Being at Under The Radar (UTR), watching disruptive companies present and network with entrepreneurs, thought leaders, and venture capitalists is an annual tradition that I don't miss. I have blogged about disruptive start-ups that I saw in the previous years. The biggest exit out of UTR, that I have witnessed so far, is Salesforce.com's $212 million acquisition of Heroku. This post is about one of the disruptive start-ups that I saw at UTR this year - NimbusDB.

I met with Barry Morris, the CEO and Founder of NimbusDB at a reception the night before. I had long conversation with him around the issues with legacy databases, NoSQL, and of course NimbusDB. I must say that, after long time, I have seen a company applying all the right design principles to solve a chronic problem - how can you make SQL databases scale so that they don't suck.

One of the main issues with the legacy relational databases is that they were never designed to scale out to begin with. A range of NoSQL solutions addressed the scale-out issue, but the biggest problem with a NoSQL is that NoSQL is not SQL. This is why I was excited when I saw what NimbusDB has to offer: it's a SQL database at the surface but has radically modern architecture underneath that leverages MapReduce to divide and conquer queries, BitTorrent for messaging, and Dynamo for persistence.

NimbusDB's architecture isolates transactions from storage and uses asynchronous messaging across nodes - a non-blocking atom commit protocol - to gain horizontal scalability. At the application layer, it supports the "most" of SQL 99 features and doesn't require the developers to re-learn or re-code. The architecture doesn't involve any kind of sharding and the nodes can scale on any commodity machine on a variety of operating systems. This eliminates an explicit need of a separate hot back-up since any and all nodes serve as a live database in any zone. This makes NimbusDB an always live system, which also solves a major problem with traditional relational databases - high availability. It's an insert only database and it versions every single atom/record. That's how it achieves MVCC as well. The data is compressed on a disk and is accessed from an in-memory node.

I asked Barry about using NimbusDB as an analytic database and he said that the database is currently not optimized for analytic queries, but he does not see why it can't be tuned and configured as an analytic database since the inherent architecture doesn't really have to change. Though, during his pitch, he did mention that NimbusDB may have challenges with heavy reads and heavy writes. I personally believe that solving a problem of analytic query on large volume of data is a much bigger challenge in the cloud due to the inherent distributed nature of the cloud. Similarly, building a heavy-insert system is equally difficult. However, most systems fit somewhere in between. This could be a great target market for NimbusDB.

I haven't played around with the database, but I do intend to do so. On a cursory look, it seems to defy the CAP theorem. Barry seems to disagree with me. The founders of NimbusDB have great backgrounds. Barry was the CEO of IONA and Streambase and has extensive experience in building and leading technology companies. If NimbusDB can execute based on the principles it is designed on, this will be a huge breakthrough.

As a general trend, I see a clear transition, where people finally agree that SQL is still a preferred interface, but the key is to rethink the underlying architecture.

Update: After I published the post, Benjamin Block raised concerns around NimbusDB not getting the CAP theorem. As I mentioned in the post, I also had the same concern, but I would give them benefit of doubt for now and watch the feedback as the product goes into beta.

Check out their slides and the presentation:

Slides:

Presentation:

Gamification Of Enterprise Applications

2011-04-26T17:13:00.000-07:00

Gamification is a hot topic for consumer applications. It is changing the way the companies, especially the start-ups, design their applications. The primary drivers behind revenue and valuation of consumer software companies are number of users, traffic (unique views), and engagement (average time spent + conversion). This is why gamification is critical to consumer applications since it is an effort to increase the adoption of an application amongst the users and maintain the stickiness so that the users keep coming back and enjoy using the application.

This isn't true for enterprise applications at all.

For consumer applications, the end user and the buyer (if they pay to use) are the same. e.g. Amazon, eBay, Google, Facebook, LinkedIn etc. For enterprise applications, the end user is not the buyer. The buyers of enterprise applications write a check but don't use the applications, and even worse, the end users have a little or no influence on what gets bought. The on-premise ISVs don't directly benefit from user adoption, once the software is sold. This is also true for cloud or SaaS solutions except that there is no shelfware in SaaS. I would argue that the enterprise ISVs, on-premise as well as SaaS, would in fact benefit, in short term, from reduced user adoption since they would save money by supporting fewer users and reduced activity. Obviously, this is a very short-sighted and myopic view. I hope that the enterprise ISVs don't actually think that way since broader user adoption and deeper engagement are certainly important for longer term growth that allows the ISVs to build brand loyalty, develop stronger customer base, and gain an opportunity to up-sell and cross-sell.

The fundamental reason behind poor adoption of the enterprise applications is that they are simply not easy-to-use and they almost always come in the way to get the actual work done. In many cases, they are designed to be orthogonal to the actual business process that it is supposed to help an end user with. Also, in most cases, these applications are designed top-down to serve the needs of senior management and not the real needs of end users e.g. a CRM system that helps management to run pipeline reports but doesn't help a rep to be more efficient and agile. In cases where broader adoption for enterprise applications is required, it is typically achieved via a top-down mandate e.g. annoying reminder emails to fill out time sheets. The end users don't see themselves as a clear beneficiary of these applications.

Simply put, the approach to gain user adoption for consumer applications is a "carrot" and for the enterprise applications it is a "stick". But, it doesn't have to be that way. There's a significant potential to apply gamification elements to increase the end user engagement for the enterprise applications, make them sticky and fun to use, and make it a win-win situation for the buyers as well as the end users.

Cater to perpetual intermediaries:

Have you ever played Angry Birds? If not, I would highly encourage you to do so. It serves the category of people known as "casual gamers". These games have pretty much zero adoption barrier for a novice, but when you get serious, there are enough challenges in the game as you progress to keep you entertained and bring you back. The equivalent of casual gamers in the enterprise applications are known as "perpetual intermediaries". They don't want to become power users, but they don't want to stay beginners as well. The tool should have zero barrier for a first time user and should have affordances that encourages users to explore and learn more. Microsoft has done a pheneomenal job with Word and Excel. They are extremely easy to use for a person who has never used these tools before and they provide further discovery via contextual menus and reassurance via drop-down menus (and ribbon in later versions) in the journey of becoming a perpetual intermediary. That's exactly how I expect all the enterprise applications should behave.

Let users leverage serendipity:

One of the early features of Google Apps that I really liked: when user logs into Google Apps for a specific domain, she can see other people in the same domain (same company) who are also using Google Apps. This was not a task that someone explicitly wanted to accomplish, but sheer serendipity allowed them to discover other people and eventually helped collaborate with them. If there's an element of surprise in any app, that experience typically leaves positive impact on a user. How many times did you run into someone at a cafetaria or in a hallway and found that short and tacit conversation extremely valuable? The ISVs should thrive to create this experience in their applications. Foursquare's feature to let users know who else is at a venue, Facebook Places' push notification to notify when friends check-in at a place close by, and certain activity feeds that passively push information to users are all examples that leverages serendipity.

Design for teams over individuals:

The gamification elements for consumer applications target individuals, but that's not how corporations are run. In these corporations, the work gets done by a team and not by individuals — it's a team sport. It's the team and not the individuals that wins and loses. Also, for the most consumer applications, the individuals don't compete with other individuals on aspects beyond the application. The employees in a corporation aren't necessarily known for healthy competition and the gamification rewards might aggravate the existing rivalry. The badges are a digital reward, an accomplishment of some kind. Consumer companies are still struggling to take the badges beyond the reputation. I clearly see an opportunity to link the reputation, gained through some kind of contribution, to an economic reward. I know of a case where a manager had set aside 20% team bonus based on contribution to a group WIki as means to open up information and help others. It did work. However, I would be careful in setting up these kind of systems. The reward model, if not applied correctly, could backfire. But, on the other hand, it's a gamification element that holds significant potential. It'a dagger, use it carefully.

Balance simplicity and productivity:

Simplicity is one of the simplest (no pun intended) yet the most ignored and least understood gamification element. As I mentioned above, the systems that are designed for the perpetual intermediaries should be simple to get started. These systems could potentially get far more complex as you explore more and more features. But, there's another class of systems that people only occasionally use e.g. leave request, annual goal setting etc. It's far more important to keep these systems simple at all levels. Imagine the experience of going from one carnival stall to another and play all the games. You need very little or no instructions. These games at carnival are derived from a few basic games with a few twists, but these twists do not require people to go through a steep learning curve. That's how the applications that people rarely use should be designed; it should use the affordances and principles that the users have witnessed and experienced some place else and it should be broken down like carnival stalls to make the journey easy and fun.

The serious gamers prefer power over simplicity. They like to use shortcuts and a zillion combinations of all the keys on their consoles to get moving quickly inside the game. This is exactly the behavior of the power users of enterprise applications. An Accounts Receivables (AR) interface should not force an AR clerk to learn how to create an invoice every time she opens the application. She has learned the ropes and she expects to be productive and she wants to be faster and better than others. The tools should provide enough "power" features to such users to make them successful.

Photo credit: ccarlstead

Taking The Quotes Out Of "Design Thinking"

2011-04-10T22:24:00.000-07:00

Bruce Nussbaum, a design thinking thought leader and a professor of Innovation and Design at Parsons The New School of Design, recently wrote that Design Thinking Is A Failed Experiment.

He claims that:

"Design Thinking has given the design profession and society at large all the benefits it has to offer and is beginning to ossify and actually do harm."

Rubbish.

I would argue otherwise. Design thinking is not a catchphrase anymore, and that perhaps is an issue for someone like Bruce who wants to invent a new catchphrase to sell his book. When I tweeted his post, Enric Gili - a friend, co-worker, and a design thinker whom I respect - had to say this:

I couldn't agree anymore. I have learned, practiced, and taught design thinking, for living. I have worked with folks from IDEO, closely, very closely. I have mentored students at Stanford d.school and I live and breathe design thinking. I don't think of it as a method that goes out of fashion. For me, it's a religion, a set of values, and an approach that I apply to all things that I do on daily basis.

I have taken the quotes out of "design thinking".

Just as I don't get excited by the rounded corners and gradients of Web 2.0 I don't think of design thinking as voodoo dolls. To some, this appears to be a failure of design thinking. Design thinking has gone mainstream; it is not dead. What is dead is a belief that it's a process framework that can fix anything and can even cook dinner for you. Design thinking is an approach that codifies a set of values. Design thinking is not an innate skill. It can be taught, gained, and practiced.

"I place CQ within the intellectual space of gaming, scenario planning, systems thinking and, of course, design thinking. It is a sociological approach in which creativity emerges from group activity, not a psychological approach of development stages and individual genius."

Design thinking is ambidextrous; it advocates abductive as well as deductive thinking. The "design" in design thinking is an integrative discipline. As my boss used to tell me, you can't have Ph.D in design. Unless you're a smartypants clever clogs, it doesn't make sense. If CQ is a sociological-only approach, it fundamentally defies the inclusive and integrative values of design, which is a vital driver for creativity.

"It’s 2020 and my godchild Zoe is applying to Stanford, Cambridge, and Tsinghua universities. The admissions offices in each of these top schools asks for proof of literacies in math, literature, and creativity. They check her SAT scores, her essays, her IQ, and her CQ."

It's 2020 and IDEO has gone out of business and so is d.school. I am applying for a new job and they measure my CQ. I miserably fail at this CQ thing, perhaps. Do I care? Absolutely not. I have got my design thinking value system that may not be catchy to sell a book, but good enough to get my job done, spectacularly.

Creative Quotient? Give me a break.

It's 1999 Again: The Bubble 2.0 And Talent Wars Of The Silicon Valley

2011-03-31T22:15:00.000-07:00

I have been living in the Silicon Valley for a while, and sure enough I haven't forgotten the dot com days. A few days back, on my way to the San Francisco airport, I saw a billboard by aol advertising that they are cool (again!). I also observed that parking lots alongside 101 weren't that empty. I told myself "man! this does feel like 1999".

The smart people - entrepreneurs, VCs, and analysts - that I talk to, tell me that we're in a bubble. They call it Bubble 2.0. Perhaps, they're right. The company valuations are through the roof. Facebook is valued around $75 billion and Color, on the launch day, had $40 million in the bank. The angel, super angel, and incubator investment deal flow is bringing all the talent to the Valley and all these young smart entrepreneurs are working on some of the coolest things that I have ever seen. But, there's a talent side that I am worried about. What this influx of easy venture capital has ensued is companies waging talent wars. For companies such as Google, attracting and retaining talent has become very difficult. Facebook and Twitter are new Google and Quora is new Facebook. The talent acquisitions that worked in the past, such as Facebook acquiring Friendfeed, have started to fall apart since the founders realized that serial entrepreneurship is a much better option that allows them to control their destiny against trusting someone else's innovation engine.

I like the creative ways in which the start-ups try to attract the talent. When Google launched a sting operation against bing, they took the honeypot keyword "hiybbprqag" used in the sting operation to register the domain http://www.hiybbprqag.com and redirected it to the Google Jobs page. They received a few thousand resumes that week. I am seeing more and more creative techniques that the companies use to attract talent. The value proposition for a killer designer or a super-geek programmer to work for you has to extend beyond the basics in the valley. This is especially true under current circumstances where there is a stunningly short supply of designers and developers in the Valley.

The talent war is for real. It's easy to get money and get started on an idea, but a real success requires a great team composition that is not easy to achieve. But, that's the reality of the start-up world and we should recognize that the people are even more important than ever before. If you think retaining talent was hard, gaining talent is much harder. I also foresee that these new millionaires will most likely angel invest their money into new start-ups. This floodgate will result into more start-ups competing for talent and possibly with the marketing budget of the incumbents. But, then, if we believe, it's a bubble, it gotta burst one day, and when that happens, it won't be pretty.

Selling To Enterprise - Power Struggle Between IT And Line Of Business

2011-03-28T09:14:00.000-07:00

During my several interactions with - CIOs, senior IT leaders, and Line of Business (LoB) heads - I have firsthand observed the power struggle between LoB and IT and a slow but continuous tarnish in their relationship due to cloud and SaaS offerings. IT and LoB work for the same company but they build their little and in some cases huge empires within a company. Even if the end goal of a company is to leverage technology to gain competitive advantage, they all have orthogonal goals that appear to be conflicting from the outside. In a negotiation, it's imperative to recognize that both parties never want the same thing. It's about getting to a deal that's a win-win situation. Regardless of the kind of ISV you represent and who the buyer is, I suggest you make the both - IT as well as LoB - work in your favor.

The ISVs that typically face these challenges fall into one of these three categories: 1) On-premise vendors that sell into IT find it difficult to compete against SaaS vendors selling similar solutions to LoBs 2) SaaS vendors that primarily sell into LoBs find it difficult to get pass IT 3) On-premise vendors aspiring to sell on-premise as well as their new SaaS solutions to LoBs find lack of relationship with LoBs challenging. Not only the ISVs need to understand which category they belong to, but they also need to understand the conflicting goals between LoB and IT and have a strategy and a solution to overcome that. It's not black and white and there's no prescriptive approach. It does vary across customers, their IT maturity, industries, and regions.

The LoB is always about time to value. They want a solution today and they want it now. This is the reason SaaS has a compelling value proposition - nothing to install, no software to purchase, and relatively shorter implementation cycle - to serve the LoBs. On the other hand, IT wants governance, risk management, and integration. They see SaaS solutions as silo one-off solutions popping up everywhere in the company, keeping the CIO up in the night. IT sees technology and LoB sees solutions. This is also a function of how IT operates. I have seen many different variations of the same thing. If you have a clear value proposition for LoB, do cater to them, but don't bypass IT. It's tempting, but don't do it, instead make them your friends. Bypassing IT might help in the short-term but eventually you will run into issues.

I would recommend a few things:

Help IT scale: If you believe that IT wants control and hence wants to do everything on their own, you're most likely wrong. It turns out that IT doesn't mind at all if business can perform certain functions in a self-service way, as long as the IT is ensured that they have underlying control over data and (on-premise) infrastructure. The private clouds are flourishing for very same reasons. This is great news for on-premise vendors that are struggling to sell into IT with dwindling budgets. Focus your innovation on simplifying IT landscapes and making on-premise deployments more self-service for LoBs. For SaaS vendors, this is where you win over the on-premise vendors by providing instant value to an LoB and giving IT control over data security, governance, and integration.

Don't compete based on price alone: I have heard many times that compete based on price and you will win, regardless of whether IT or LoB is a buyer. Competing based on price could be a good thing, but it's not everything. Personally, I have observed quite a few bake-off situations and learned that price alone does not determine the final outcome. The IT as well as LoB do look for things beyond a vendor offering a cheap solution. If you're expensive, you need to have an end-to-end value proposition that is far better than your competitor and if you're cheap, you have to be cheaper by a magnitude to the second cheapest competitor for a customer not to ignore you. Also, the on-premise and SaaS offerings have not-to-easy price comparison since they have different CapEX/OpEx models resulting into potentially different TCO for a customer.

Follow the money trail: IT and LoB have their own budgets. Traditionally, on average, IT spends 80% of their budget on "keeping the lights on". The rest is spent on "innovation" or "strategic projects". While this is a broad generalization, this could vary from customer to customer. The most progressive CIO that I have so far worked with has the exact opposite number - 80% on innovation. As a vendor, not only you need to understand who has the power to write a check, but which bucket has the most money left with the least hoops to jump through. In some cases, IT has chargeback (to business) models and LoB-sponsored projects. Follow the money trail and understand the aspirations on both sides and position your solution accordingly. If there's no pain, there's no gain. Spend time on finding the biggest pain-point and a budget to fix it instead of educating a customer that they may have a problem.

Happy selling!

Making The Cut To Favorite Cloud, SaaS, And Tech Bloggers

2011-02-28T17:48:00.000-08:00

The Dealmaker Media has published a list of their favorite Cloud, SaaS, and Tech bloggers. Once again I am happy to report that I made the cut. I am also glad to see my fellow bloggers Krishnan and Zoli on this list who are the driving force behind Cloudave. I was on a similar list of top cloud, virtualization, and SaaS bloggers that they had published in the past.

Under The Radar is one of the best conferences that I go to. This is the best place for disruptive start-ups to pitch an get noticed. They make a great attempt to connect entrepreneurs with investors and blogger like me. I have blogged about the disruptive early stage cloud computing start-ups as well as the disruptive start-ups in the categories of NoSQL and virtualization. Most of these start-ups have either had a good exit or have been doing well. The best example so far is Heroku's $212M exit. I met the Heroku founders at Under The Radar a couple of years back.

I am looking forward to soaking up even more innovation this year!

SaaS And Inverted OEM Channels

2011-02-23T10:46:00.000-08:00

One of the things that I love to do: keep meeting the entrepreneurs to better understand the market and the challenges that they face. Recently, I met an entrepreneur that I highly admire. His company has SaaS components that other ISVs would OEM. Let's say, you are an ISV that would OEM his components and his company goes out of business. What are your options? We had a great conversation on SaaS escrow. Turns out that there is no real good solution. There are a few SaaS escrow solutions that ensure that the customers get their data back, if the company were to go out of business, and they also offer partial business continuity solutions. However, they won't be useful in this case.

One thing that he mentioned got stuck in my mind. He said, during his on-premise days (sigh!), the companies that OEMed his software wished that he goes out of business. The ISVs had his software working anyways and they won't have to pay him anymore. The same story is very different in the cloud. It's an inverted OEM model. If you're a SaaS ISV, you will do everything to make sure that your OEM partner stays in business for your and your customers' business continuity.

I have covered SaaS escrow before, but the solutions that are currently out there aren't perfect, and the OEM channel model makes it worse. The entrepreneur I met is attempting to solve this problem in a very creative way. I cannot discuss the specifics, but I will give you an update once he is done. SaaS changes not only the way the companies make, sell, and consume software, but it fundamentally changes how ISVs and customers need to think about their business and ecosystem. The legacy on-premise thinking won't translate well into SaaS.

5 Tips To Become An Influencer On Twitter

2011-01-28T11:08:00.000-08:00

I have been answering quite a few questions on Quora. The most recent one was "What are 5 tips to becoming an influencer on Twitter?" This post is a version of my answer on Quora.

Being an "influencer" means different things to different people, but I would attempt to describe this in the most general sense.

Be unique: Twitter has very low signal to noise ratio. You don't get others' attention if you cannot differentiate yourself and your contribution. Be passionate about the topics that you care for and work hard to craft high quality tweets. Go through a brutal qualifying process to discard the weak draft tweets and post the ones that are of the highest quality. Treat your Twitter account as your personal brand and think what makes any brand stand out. As Seth Godin would say, be the purple cow.
Be a great blogger: Let's not forget that Twitter is still a form of blogging; a microblogging. Ask yourself what makes a great blogger? Apply those qualities on Twitter such as extensive due diligence, passionate about your point of view, not afraid of picking up a fight when you think you are right, not afraid of taking criticism in public, ability to give constructive feedback, and importantly discovering, reading, and synthesizing the information. To blog and to tweet is the last mile to influence the people. There's plenty of legwork that happens before that.
Converse with the influencers: Being surrounded by smart people makes you smart. This is not only true in real life, but it is also true in social media. Don't just follow the influencers, but try to understand why they are the influencers. Retweet their posts with your insights, thank them, and reach out to them with interesting stories, insights, and comments. Also, make an attempt to meet them in real life at tweetups and other networking events. At times, they are more open to meeting people than you might think.
Hashtags: I cannot overemphasize the importance of following and tweeting the live events. Follow a few conferences remotely such as #tcdisrupt or #sxsw and be part of weird memes such as #lessambitiousbooks. Also, try following obscure events. This is how you will discover interesting people and people will discover you. Follow up with people, that you like, after the event. Don't be afraid of self-promotion as long as you are humble and adding value in the conversations and interactions.
Cross-channel pollination: Twitter is one of many social media channels. Author your own Tumblr or Posterous blog, answer questions on Quora, post interesting pictures on Flickr and Instagram, and importantly, use the channels to direct people to follow you on Twitter. There are many different ways people find other people to follow on Twitter. Use the low impedance nature of Twitter to your advantage by converting all the social media interactions to have rich conversations with them on Twitter.

You don't have to be an influencer in real life to be an influencer on Twitter. In fact, that's exactly the point. It's all about Twitter as a channel that empowers simple human-beings, that are not influencers of any kind, to do amazing things and become an influencer. Justin is a great example. He found Twitter and used the medium for what it was good for. Now, he has a book and a TV show. On the other hand, Eric Schmidt has 54 tweets but has 2.34 million followers, as of 01/27. I don't think of him as an influencer on Twitter. Is he an influencer in real life? Hell, yeah. There are also people like Padmasree and Chamillionaire that have effectively been using Twitter to amplify and extend their great influence in real life to social media.

Drupal On The Cloud, Beyond Content Management

2011-01-21T09:13:00.000-08:00

This post is co-authored by Manish Garg and Chirag Mehta

Drupal is widely recognized as a great content management system, but we strongly believe that Drupal offers a lot more than that – a framework, a platform, and a set of technology – to build and run enterprise applications, specifically on the cloud. This post is an attempt to explore the benefits and potential of Drupal on the cloud.

Elasticity

One of the last things the customers should worry about their websites is the performance degradation due to sudden spike in the traffic. For years, the customers had to size their servers to meet the peak demand. They overpaid, and still failed to deliver on promise, at peak load. Cloud solves this elasticity problem really well, and if you are using Drupal, you automatically get the elasticity benefits, since Drupal’s modularized architecture - user management, web services, caching etc. - is designed for scale-up and scale-down on the cloud for elastic load.

PaaS

If Heroku’s $212 million acquisition by Salesforce.com is any indication, the future of PaaS is bright. Drupal, at its core, is a platform. The companies such as Acquia through Drupal Gardens are doing a great job delivering the power of Drupal by making it incredibly easy for the people to create, run, and maintain their websites. This is not a full-blown PaaS, but I don’t see why they cannot make it one. We also expect to see a lot more players jumping into this category. The PaaS players such as phpfog and djangy have started gaining popularity amongst web developers.

Time-to-market and time-to-value

Drupal has helped customers move from concept to design to a fully functional content-rich interactive website in relatively short period of time using built-in features and thousands of modules. Cloud further accelerates this process. Amazon and Rackspace have pre-defined high-performance Drupal images that the customers can use to get started. Another option is to leverage PaaS as we described above. The cloud not only accelerates time-to-market and time-to-value, but it also provides economic benefits during scale-up and scale-down situations.

Application Management

The cloud management tools experienced significant growth in the last two years and this category is expected to grown even more as the customers opt for simplifying and unifying their hybrid landscapes. With Drupal, the customers not only could leverage the cloud management tools but also augment their application-specific management capabilities with Drupal’s modules such as Quant for tracking usage, Admin for managing administrative tasks, and Google Analytics for integration with Google Analytics. There is still a disconnect between the native cloud management tools and Drupal-specific management tools, but we expect them to converge and provide a unified set of tools to manage the entire Drupal landscape on the cloud.

Open source all the way

Not only Drupal is completely open source but it also has direct integration with major open source components such as memcached, Apache SOLR, and native support for jQuery. This not only provides additional scale and performance benefits to Drupal on the cloud, but the entire stack on the cloud is backed by vibrant open source communities.

Security

It took a couple of years for the customers to overcome the initial adoption concerns around the cloud security. They are at least asking the right questions. Anything that runs on the cloud is expected to be scrutinized for its security as well. We believe that the developers should not explicitly code for security. Their applications should be secured by the framework that they use. Drupal not only leverages the underlying cloud security, but it also offers additional security features to prevent the security attacks such as cross-site scripting, session hijacking, SQL injection etc. Here is the complete list by OWASP on top 10 security risks.

Search and Semantic Web

One of the core functionally that any content website needs is search. Developers shouldn’t have to reinvent the wheel. Integration with SOLR is a great way to implement search functionality without putting in monumental efforts. Drupal also has built-in support for RDF and SPARQL for the developers that are interested in Semantic Web.

NoSQL

The cloud is a natural platform for NoSQL and there has been immense ongoing innovation in the NoSQL category. For the modern applications and websites, using NoSQL on the cloud is a must-have requirement in many cases. Cloud makes it a great platform for NoSQL and so is Drupal. Drupal has modules for MongoDB and Cassandra and the modules for other NoSQL stores are currently being developed.

Drupal started out as an inexpensive content management system, but it has crossed the chasm. Not only the developers are trying to extend Drupal by adding more modules and designing different distributions, but importantly enterprise ISVs have also actively started exploring Drupal to make their offerings more attractive by creating extensions and leveraging the multi-site feature to set up multi-tenant infrastructure for their SaaS solutions. We expect that, the cloud as a runtime platform, will help Drupal, ISVs, and the customers to deliver compelling content management systems and applications on the cloud.

Research Report: 2011 Cloud Computing Predictions For Vendors And Solution Providers

2010-12-28T06:59:00.000-08:00

This blog post was jointly authored by @Chirag_Mehta (Independent Blogger On Cloud Computing) and @rwang0 (Principal Analyst and CEO, Constellation Research, Inc.)

Part 1 was featured on Forbes: 2011 Cloud Computing Predictions For CIO’s And Business Technology Leaders

As Cloud Leaders Widen The Gap, Legacy Vendors Attempt A Fast Follow

Cloud computing leaders have innovated with rapid development cycles, true elasticity, pay as you go pricing models, try before buy marketing, and growing developer ecosystems. Once dismissed as a minor blip and nuisance to the legacy incumbents, those vendors who scoffed cloud leaders now must quickly catch up across each of the four layers of cloud computing (i.e. consumption, creation, orchestration, and infrastructure) or face peril in both revenues and mindshare (see Figure 1). 2010 saw an about face from most vendors dipping their toe into the inevitable. As vendors lay on the full marketing push behind cloud in 2011, customers can expect that:

Figure 1. The Four Layers Of Cloud Computing

General Trends

Leading cloud incumbents will diversify into adjacencies: The incumbents, mainly through acquisitions, will diversify into adjacencies as part of an effort to expand their cloud portfolio. This will result into blurry boundaries between the cloud, storage virtualization, data centers, and network virtualization. Cloud vendors will seek tighter partnerships across the 4 layers of cloud computing as a benefit to customers. One side benefit - partnerships serve as a pre-cursor to mergers and as a defensive position against legacy on-premises mega vendors playing catch up.
Cloud vendors will focus on the global cloud: The cloud vendors who initially started with the North America and followed the European market, will now likely to expand in Asia and Latin America. Some regions such as Brazil, Poland, China, Japan, and India will spawn regional cloud providers. The result - accelerated cloud adoption in those countries, who resisted to use a non-local cloud provider. Cloud will prove to be popular in countries where software piracy has proven to be an issue.
Legacy vendors without true Cloud architectures will continue to cloud wash with marketing FUD: Vendors who lack the key elements of cloud computing will continue to confuse the market with co-opted messages on private cloud, multi-instance, virtualization, and point to point integration until they have acquired or built the optimal cloud technologies. Expect more old wine (and vinegar, not balsamic but the real sour kind, in some cases) in new bottles: The legacy vendors will re-define what cloud means based on what they can package based on their existing efforts without re-thinking the end-to-end architecture and product portfolio from grounds-up.
Tech vendors will make the shift to Information Brokers: SaaS and Cloud deployments provide companies with hidden value and software companies with new revenues streams. Data will become more valuable than the software code. Three future profit pools willl include benchmarking, trending, and prediction. The market impact - new service based sub-categories such as data-as-service and analysis-as-a-service will drive information brokering and future BPO models.

SaaS (Consumption Layer)

Everyone will take the SaaS offensive: Every hardware and system integrator seeking higher profit margins will join the Cloud party for the higher margins. Software is the key to future revenue growth and a cloud offense ensures the highest degree of success and lowest risk factors. Hardware vendors will continue to acquire key integration, storage, and management assets. System integrators will begin by betting on a few platforms, eventually realizing they need to own their own stack or face a replay of the past stack wars.
On-premise enterprise ISVs will push for a private cloud: The on-premise enterprise ISVs are struggling to keep up with the on-premise license revenue and are not yet ready to move to SaaS because of margin cannibalization fears,lack of scalable platforms, and a dirth of experience to run a SaaS business from a sales and operation perspectives. These on-premise enterprise software vendors will make a final push for an on-premise cloud that would mimic the behavior of a private cloud. Unfortunately, this will essentially be a packaging exercise to sell more on-premise software. This flavor of cloud will promise the cloud benefits delivered to a customer's door such as pre-configured settings, improved lifecycle, and black-box appliance. These are not cloud applications but will be sold and marketed as such.
Money and margin will come from verticalized cloud apps: Last mile solutions continue to be a key area of focus. Those providers with business process expertise gain new channels to monetize vertical knowledge. Expect an explosion of vertical apps by end of 2011. More importantly, as the buying power shifts away from the IT towards the lines of businesses, highly verticalized solutions solving specific niche problems will have the greatest opportunities for market success.
Many legacy vendors might not make the transition to cloud and will be left behind: Few vendors, especially the legacy public ones, lack the financial where with all and investor stomachs to weather declining profit margins and lower average sales prices. In addition, most vendors will not have the credibility to to shift and migrate existing users to newer platforms. Legacy customers will most likely not migrate to new SaaS offerings due to lack of parity in functionality and inability to migrate existing customizations.
Social cloud emerges as a key component platform: The mature SaaS vendors that have optimized their "cloud before the cloud" platform, will likely add the social domain on top of their existing solutions to leverage the existing customer base and network effects. Expect to see some shake-out in the social CRM category. A few existing SCRM vendors will deliver more and more solutions from the cloud and will further invest into their platforms to make it scalable, multi-tenant, and economically viable. Vendors can expect to see some more VC investment, a possible IPO, and consolidation across all the sales channels.

DaaS & Paas (Creation and Orchestration Layers)

Battle for PaaS begins with developers: Winning the hearts and minds will drive the key goals of PaaS providers. As mobile, social, and cloud intersect, expect new battle lines to be drawn by existing vendors seeking entry in the cloud. The first platform to enable write once deploy any how will win. PaaS vendors will seek to incorporate the latest disruptive technologies in order to attract the right class of developers and drive continuous innovation into the platform.
Vendors must own the platform (both DaaS and Saas) to survive: ISV’s who give up on investing in their own cloud platform to other ISV’s will be relegated to second class citizens. Despite the tremendous upfront cost savings, these platform moves cut-off future revenue streams as the stack wars move to the cloud. For example, ISV’s will avoid Java to mitigate risk with Oracle or IBM. The ability to control information brokering services will be limited to the platform owner.
Tension between indirect channel partners and vendors in the cloud will only increase: Cloud shifts customer account control to the vendor. Partners who wholeheartedly embrace the cloud risk losing direct relationships with their customers. In the case of .NET development in Azure, greater allegiance by partners to Microsoft will result in less account control with Azure.
PaaS will be modularized and niche: New PaaS vendors will focus on delivering specific modules to compete with end-to-end application platforms. One approach - dominate niche areas int the cloud such as programming language runtimes, social media proxies, algorithmic SDK, etc. Expect more players to jump into fill big gaps in big data, predictive analytics and information management.
Mobile app development will move to the cloud: App dev professionals and developers want one place to reach the mobile enterprise to build, mange, and deliver. The app dev life cycles will follow the delivery models and device management will prove to be the keystone in ensuring the complete development experience. Vendors should expect the cloud to be the predominant delivery channel for mobile apps to end users. Success will require seamless management of extensions and disconnected support.

IaaS (Infrastructure Layer)

Cloud management will continue to grow and consolidate: Cloud management tools saw significant growth and investment in the last couple of years. This trend will continue. Expect to see a lot more investment in this category as increasing customer adoption drives demand for tools to manage hybrid landscapes. Also expect consolidation in this category as several VC-backed start-ups seek profitable and graceful exits.
Cloud storage will be a hot cake: Explosive growths in information in many verticals for early adopters already factor into this fast-growing category. With more and more data moving to the cloud, customers can anticipate significant innovation in this category including SSD-based block storage, replication, security, alternate file systems, etc. Data-as-a-service and NoSQL PaaS category will further boost the growth.
NoSQL will skyrocket in market share and acceptance: Substantial growth in the number of NoSQL companies reflect an emerging trend to dump the infrastructure of SQL for non-transactional applications. The cloud inherently makes a great platform for NoSQL and that further drives the growth for data-as-a-service and storage on the cloud.

The Bottom Line For Vendors (Sell Side)

Cloud ushers a new era of computing that will displace the existing legacy vendor hegemony. Many vendors caught off guard by the shift in both technology and user sentiment must quickly make strategic course corrections of face extinction. Here are some recommendations for vendors making the shift to Cloud:

Embrace, don't wait, don’t even hesitate: Which is worse; cannibalizing your margins or not having margins to cannibalize? Faster time to market and greater customer satisfaction will pay off. The move to cloud ensures a seat at the table for the next generation of computing.
Begin all new development projects in the cloud: The rapid development cycles for cloud projects ensures that innovation will meet today’s time to market standards. Test out new projects in the cloud and experience rapid provisioning and elasticity. However, don’t forget to fail fast and recover quickly.
Avoid investing in platform led apps: Apps should drive platform design not the other way around. Form really does follow function in the Cloud. Platform designs must focus on agility and scale. Apps prove out what’s really needed versus what’s theoretical. Plan for social, mobile, analytics, collaboration, and unified communications but deliver only when it makes business sense.
Focus on developers, developers, and developers: Steve Ballmer is right. Success in the cloud will require bringing the developers with along on the PaaS journey. Don't make them wait until the platform is done. Otherwise, it may be too late for the company and developer ecosystem.
Prioritize power usage effectiveness (PUEs): As with the factories during the last turn of century, IaaS will be the heart of delivery. Companies with the lowest cost of computing will win and be able to pass cost savings onto their customers or pocket the margin. Further, data center efficiencies do their part in green tech initiatives.
Help customers simplify their landscape: Build compelling business cases to shift from legacy infrastructure to cloud efficiencies. Lead the race to optimize legacy at your competitor’s expense.

Disclaimer: The views expressed in this post are mine and not of my current or past employers'. This is my independent blog.

Salesforce.com's $212 Million Acquisition of Heorku - A Sparkling Gem In Radiant Future Of Cloud And PaaS

2010-12-17T13:23:00.000-08:00

I met James Lindenbaum, a founder of Heroku, in early 2009, at the Under The Radar conference in Mountain View. We had a long conversation on cloud as a great platform for Ruby, why Ruby on Rails is a better framework than PHP, and viability of PaaS as a business model. He also explained to me why he chose to work on Heroku at Y Combinator. I was sold on their future, on that day, and kept in touch with them since then. The last week, Salesforce.com acquired Heroku for $212 million. That's one successful exit, which is good news in many different dimensions.

PaaS is a viable business model

PaaS is not easy. It takes time, laser sharp focus, and hard work to build something that the developers would use and pay for. A few companies have tried and many have failed. But, it is refreshing to see the platform and the ecosystem that Heroku has built since its inception. Heroku did not raise a lot of money, kept the cost low, and attracted customers early on. I was told (by Byron, I think) that an average cost for Heroku to run a free Ruby app for a month was $1. They considered it as marketing cost to get new customers and convert the free customers to paying ones, as they outgrew their needs. I cannot overpraise this brilliant execution model. I hope to see more and more entrepreneurs being inspired from - simplicity, elegance, and execution of Heroku's model - to help the developers deploy, run, and scale their applications on the cloud. In the last few years, we have seen a great deal of innovation in dynamic programming languages, access algorithms, and NoSQL persistence stores. They all require a PaaS that the developers can rely on - without worrying about the underlying nuts and bolts - and focus on what they are good at - building great applications. If anyone had the slightest doubt on viability of PaaS as a business model, this acquisition is a proof point that PaaS is indeed the future. Heroku is just the beginning and I am hoping for more and more horizontal as well as vertical PaaS that the entrepreneurs will aspire to build.

Superangels and incubators do work

There have been many debates on viability of the investing approach of the superangels and the incubators, where people are questioning, whether the approach of thin slicing the investment, by investing into tens and hundreds of companies, would yield similar returns, as compared to return on traditional venture capital investment. I also blogged about the imminent change in the VC climate, and decided to watch their returns. The numbers are in with Heroku. It's a first proof point that a superangel or an incubator approach, structurally, does not limit the return on the investment. I believe in investors investing in right people solving the right problems. If you ever meet James and hear him passionately talk about Ruby, the Heroku platform, and the developer community, you will quickly find out why they were successful. Hats off to YC on finding this "jewel". No such thing as too little investment, or too many companies.

Ruby goes enterprise

I know many large ISVs that have been experimenting with Ruby for a while, but typically these efforts are confined to a few small projects. It's good to see that Ruby, now, has a shot of getting much broader adoption. This would mean more developers learning Ruby, cranking out great enterprise gems, embracing Git, and hopefully open source some of their work. I have had many religious discussions, with a few cloud thought leaders and bloggers in the past few months, regarding the boundaries of PaaS. The boundaries have always been blurry - somewhere between SaaS and IaaS - but, I don't care. My heart is at delivering the applications off the cloud that scales, delivers compelling experiences, and leverages economies of scale and network effects. To me, PaaS is means to an end and not the end. I am hoping that an acquisition of a PaaS vendor by a successful SaaS vendor will make Ruby more attractive to enterprise ISVs and non-Ruby developers.

I have no specific insights into what Salesforce.com will do with Heroku, but I hope, they make a good home for Heroku, where they flourish and continue to do great work on Ruby and PaaS. This is what a cloud and Ruby enthusiast would wish for.

10 Business Books In 2010

2010-11-15T08:55:00.000-08:00

These are the 10 business books published in 2010, that I would recommend you to read. Originally, I wrote this on Quora, in response to "What are must read business books of 2010?". Yes, I have read all of them, and no, they are not in any specific order.

1) What the Dog Saw by Malcolm Gladwell

I am a big fan of Malcolm Gladwell and his style. This is a compilation of his "The New Yorker" stories. Even though the articles are available on his website, this book makes it a great read.

2) Cognitive Surplus by Clay Shirky

The next time someone asks you how come people have so much time to blog, answer questions on Quora, or contribute to Wikipedia, ask them to read this book.

3) The Big Short by Michael Lewis

Want to know all about CDO and subprime mortgage and still be entertained? This is the book. Michael Lewis has great storytelling skills that makes serious and complex topics fun to read. I like this book as much as I liked Moneyball - http://amzn.to/b9YPx9

4) Open Leadership by Charlene Li

If you liked Groundswell - http://amzn.to/c8faH5 - you will like this as well. If you are interested in organizational transformation through social media, this will make a great read. Social media adoption can certainly make the leaders more credible, open, and transparent. Being a social media freak and an enterprise 2.0 strategist, I loved this book.

5) Engage by Brian Solis

This book is Seth Godin meet Social Media. It's a must-read if you are a marketer, trying to understand the impact of social media on your brand and working on engaging your customers using social media. Brian Solis has a fluid style with a lot of relevant examples.

6) The New Polymath by Vinnie Mirchandani

Vinnie is a great enterprise software analyst and a prolific blogger. I closely follow his work. This is an upbeat book that will excite the technologists as well as the business folks. If you think you have a stretch goal and want to change the world, this book will further stretch your stretch goals, and will give you a reason and purpose, to get out of bed every morning and run for it.

7) Rework by Jason Fried

I have followed 37Signals and Jason's blog. This book puts everything together with illustrations and a simple style making it easy to read, just like 37Signals. If you are itching to be an entrepreneur, this might make you take that leap. If you're starting out and want inspiration and design principles, this is the book. All design is re-design and so is this book.

8) The Facebook Effect by David Kirkpatrick

Some watch the movie, I prefer to read a book. The book is more accurate than the movie. Well, duh. David is a great writer, and he used the access that he had to Zuckerberg and Facebook, to produce a great book. It's quite insightful.

9) Gamestorming by Dave Gray

I love XPLANE. They do a great job and now they are part of Dachis group where I am expecting them to do even better. It's incredibly difficult to take complex concepts and simplify to communicate to any audience. The book outlines great approaches to accomplish the simplicity and facilitate learning, discovery, and decision making.

10) Delivering Happiness by Tony Hsieh

Zappos is a great company. I have learned a lot from its culture and from Tony's management style. This is a must-read, if you believe you want to excel in serving your customers and have your entire team live by those values.

And this is the first 2011 book that you may want to read:

The Capitalist Manifesto by Umair Haque

Knowing Umair, this will be a great book.

Challenging Stonebraker’s Assertions On Data Warehouses - Part 2

2010-11-09T10:02:00.000-08:00

Check out the Part 1 if you haven’t already read it to better understand the context and my disclaimer. This is the Part 2 covering the assertions from 6 to 10.

Assertion 6: Appliances should be "software only."

“In my 40 years of experience as a computer science professional in the DBMS field, I have yet to see a specialized hardware architecture—a so-called database machine—that wins.”

This is a black swan effect; just because someone hasn’t seen an event occur in his or her lifetime, it doesn’t mean that it won’t happen. This statement could also be re-written as “In my 40 years of experience, I have yet to see a social network that is used by 500 million people.” You get the point. I am the first one who would vote in favor of commodity hardware against a specialized hardware, but there are very specific reasons why the specialized hardware makes sense in some cases.

“In other words, one can buy general purpose CPU cycles from the major chip vendors or specialized CPU cycles from a database machine vendor.”

Specialized machines don’t necessarily mean specialized CPU cycles. I hope the word “CPU cycle” is used as metaphor and not to indicate its literal meaning.

“Since the volume of the general purpose vendors are 10,000 or 100,000 times the volume of the specialized vendors, their prices are an order of magnitude under those of the specialized vendor.”

This isn’t true. The vendors who make general-purpose hardware also make specialized hardware, and no, it’s not an order of magnitude expensive.

“To be a price- performance winner, the specialized vendor must be at least a factor of 20-30 faster.”

It’s a wrong assumption that BI vendors use specialized hardware just because of the performance reasons. The “specialized” in many cases for an appliance is simply a specialized configuration. The appliance vendors also leverage their relationship with the hardware vendors to fine tune the configuration based on their requirements, negotiate a hefty discount, and execute a joint go-to-market strategy.

The enterprise software follows value-based pricing and not cost-based pricing. The price difference between a commodity and a specialized appliance is not just the difference of the cost of hardware that it runs on.

“However, every decade several vendors try (and fail).”

Not sure what is the success criteria behind this assertion to declare someone a winner or a failure. Acquisitions of Netezza, Greenplum, and Kickfire are recent examples of how well the appliance companies have performed. The incumbent appliance vendors are doing great, too.

“Put differently, I think database appliances are a packaging exercise”

The appliances are far more than a packaging exercise. Other than making sure that the software appliance works on the selected hardware, commoditized or otherwise, they provide a black box lifecycle management approach to the customers. The upfront cost of an appliance is a small fraction of the overall money that the customers would end up spending during the entire lifecycle of an appliance and the related BI efforts. The customers do welcome an approach where they are responsible for managing one appliance against five different systems at ten different levels with fifteen different technology stack versions.

Assertion 7: Hybrid workloads are not optimized by "one-size fits all."

Yes, I agree, but that’s not the point. It’s difficult to optimize hybrid workloads for a row or a column store, but it is not as difficult, if it’s a hybrid store.

“Put differently, two specialized systems can each be a factor of 50 faster than the single "one size fits all" system in solution 1.”

Once again, I agree, but it does not apply to all the situations. As I discussed earlier, the performance is not the only criteria that matters in the BI world. In fact, I would argue the opposite. Just because the OLTP and OLAP systems are orthogonal, the vendors compromised everything else to gain the performance. Now that’s changing. Let’s take an example of an operational report. This is the kind of report that only has the value if consumed in realtime. For such reports, the users can’t wait until the data is extracted out of the OLTP system, cleaned up, and transferred into the OLAP system. Yes, it could be 50 times faster, but completely useless, since you missed the boat.

The hybrid systems, the once that combine OLTP and OLAP, are fairly new, but they promise to solve a very specific problem, which is real real-time. While the hybrid systems evolve, the computational capabilities of OLTP and OLAP systems have started to change as well. I now see OLAP systems supporting write-backs with a reasonable throughput and OLTP systems with good BI style query performance, all of these achieved through modern hardware and clever use of architectural components.

Let’s not forget what optimization really is. It means desired functionality at reasonable performance. A real-time report, that takes 10 seconds to run could be far more valuable than a report that runs under ten milliseconds, three days later.

“A factor of 50 is nothing to sneeze at.”

Yes, point taken. :-)

Assertion 8: Essentially all data warehouse installations want high availability (HA).

No, they don’t. This is like saying all the customers want five 9 SLA on the cloud. I don’t underestimate the business criticality of a DW if it goes down, but not all the DW are being used 24x7 and are mission critical. One size doesn’t fit all. And, if your DW is not required to be highly available, you need to ask yourself, whether it is fair for you to pay for the HA architectural cost, if you don’t want it. Tiered SLAs are not new, and tiered HA is not a terrible idea.

Let’s talk about the DWs that do require to be highly available.

“Moreover, there is no reason to write a DBMS log if this is going to be the recovery tactic. As such, a source of run-time overhead can be avoided.”

I am a little confused how this is worded. Which logs are we referring to - the source systems or the target systems? The source systems are beyond the control of a BI vendor. There are newer approaches to design an OLTP system without a log, but that’s not up for discussion for this assertion. If the assertion is referring to the logs of the target system, how does that become a run-time overhead? Traditional DW systems are a read-only system at runtime. They don’t write logs back to the system. If he is referring to the logs while the data is being moved to DW, that’s not really run-time, unless we are referring to it as a hot-transfer.

There is one more approach, NoSQL, where eventual consistency is achieved over a period of time and the concept of a “corrupted system” is going away. Incomplete data is an expected behavior and people should plan for it. That’s the norm, regardless of a system being HA or not. Recently Netflix moved some of its applications to the cloud, where they have designed a background data fixer to deal with data inconsistencies.

HA is not black and white, and there are way more approaches, beyond the logs, to accomplish to achieve desired outcome.

Assertion 9: DBMSs should support online reprovisioning.

“Hardly anybody wants to take the required amount of down time to dump and reload the DBMS. Likewise, it is a DBA hassle to do so. A much better solution is for the DBMS to support reprovisioning, without going offline. Few systems have this capability today, but vendors should be encouraged to move quickly to provide this feature.”

I agree. I would add one thing. The vendors, even today, have a trouble supporting offline provisioning to cater to the increasing load. On-line reprovisioning is not trivial, since in many cases, it requires to re-architect their systems. The vendors typically get away with this, since the most customers don’t do capacity planning in real-time. Unfortunately, traditional BI systems are not commodity where the customers can plug-in more blades when they want and take them out when they don’t.

This is the fundamental premise behind why cloud makes it a great BI platform to address such re-provisioning issues with elastic computing. Read my post “The Future Of BI In The Cloud”, if you are inclined to understand how horizontal scale-out systems can help.

Assertion 10: Virtualization often has performance problems in a DBMS world.

This assertion, and the one before this, made me write the post “The Future Of BI In The Cloud”. I would not repeat what I wrote there, but I will quickly highlight what is relevant.

“Until better and cheaper networking makes remote I/O as fast as local I/O at a reasonable cost, one should be very careful about virtualizing DBMS software.”

Virtualizing I/O is not a solution for large DW with complex queries. However, as I wrote in the post, a good solution is not to make the remote I/O faster, but rather tap into the innovation of software-only SSD block I/O that are local.

“Of course, the benefits of a virtualized environment are not insignificant, and they may outweigh the performance hit. My only point is to note that virtualizing I/O is not cheap.”

This is what a disruption initially looks like. You start seeing good enough value in an approach, for certain types of solutions, that seems expensive for other set of solutions. Over a period of time, rapid innovation and economies of scale remove this price barrier. I think that’s where the virtualization stands, today. The organizations have started to use the cloud for IaaS and SaaS for a variety of solutions including good enough self-service BI and performance optimization solutions. I expect to see more and more innovation in this area where traditional large DW will be able to get enough value out of the cloud, even after paying the virtualization overhead.

Bottom Of The Pyramid – Nokia’s Second Act

2010-11-03T09:17:00.000-07:00

The two-third of world’s 4.6 billon mobile users live in the emerging markets. Millions of these users live below the poverty line and are part of the bottom of the pyramid (BOP). Nokia is the market leader in these emerging markets, at least for now, with 34% market share. It’s clear from rapidly declining Nokia’s marketshare and an appointment of new CEO, Stephen Elop, that Nokia needs a second act. I believe the BOP is what could be the next big thing for Nokia.

The recent NYTimes story highlights a Nokia’s service, to supply commodity data to the farmers in India, using a text message. So far, 6.3 million people have signed up for this service. Nokia is planning to roll out this service, Life tools, in Nigeria as well. This is part of their Ovi mobile business.

I have written before on impact of cloud computing and mobile on the bottom of the pyramid and the importance of public policy innovation in emerging markets. The BOP is one of the biggest opportunities that Nokia currently has. Nokia has been losing marketshare in the smartphone category, and it is going to get increasingly difficult for Nokia to compete with Apple, Google, RIM, and now Microsoft. However, the very same vendors will find it equally difficult to move down the chain to compete with Nokia in the emerging markets.

One of the biggest business challenges to cater to the BOP is not a desire to market or a product to offer, but it is the lack of direct access to these consumers. The people at the BOP are incredibly difficult to reach. I have seen many go-to-market plans fail because it is either impossible or prohibitively expensive to market to these consumers. One of the biggest assets Nokia has is the relationship, the channel, with the people at the BOP. Now is the time to focus and leverage that channel by providing them with the content and the services that could be served on these phones via a strong platform, built for the BOP, and a vibrant ecosystem built around it.

My two cents: exit from the Smartphone category and double down the investment to serve the people at the bottom of the pyramid.

Nokia, that could be your second act.

Challenging Stonebraker’s Assertions On Data Warehouses - Part 1

2010-10-28T12:34:00.000-07:00

I have tremendous respect for Michael Stonebraker. He is an apt visionary. What I like the most about him is his drive and passion to commercialize the academic concepts. ACM recently published his article “My Top 10 Assertions About Data Warehouses." If you haven’t read it, I would encourage you to read it.

I agree with some of his assertions and disagree with a few. I am grounded in reality, but I do have a progressive viewpoint on this topic. This is my attempt to bring an alternate perspective to the rapidly changing BI world that I am seeing. I hope the readers take it as constructive criticism. This post has been sitting in my draft folder for a while. I finally managed to publish it. This is Part 1 covering the assertions 1 to 5. The Part 2 with the rest of the assertions will follow in a few days.

“Please note that I have a financial interest in several database companies, and may be biased in a number of different ways.”

I appreciate Stonebraker’s disclaimer. I do believe that his view is skewed to what he has seen and has invested into. I don’t believe there is anything wrong with it. I like when people put money where their mouth is.

As you might know, I work for SAP, but this is my independent blog and these are my views and not those of SAP’s. I also try hard not to have SAP product or strategy references on this blog to maintain my neutral perspective and avoid any possible conflict of interest.

Assertion 1: Star and snowflake schemas are a good idea in the data warehouse world.

This reads like an incomplete statement. The star and snowflake schemas are a good idea because they have been proven to perform well in the data warehouse world with row and column stores. However, there are emergent NoSQL based data warehouse architectures I have started to see that are far from a star or a snowflake. They are in fact schemaless.

“Star and Snowflake schemas are clean, simple, easy to parallelize, and usually result in very high-performance database management system (DBMS) applications.”

The following statement contradicts the statement above.

“However, you will often come up with a design having a large number of attributes in the fact table; 40 attributes are routine and 200 are not uncommon. Current data warehouse administrators usually stand on their heads to make "fat" fact tables perform on current relational database management systems (RDBMSs).”

There are a couple of problems with this assertion:

The schema is not simple; 200 attributes, fact tables, and complex joins. What exactly is simple?
Efficient parallelization of a query is based on many factors, beyond the schema. How the data is stored and partitioned, performance of a database engine, and hardware configuration are a few to name.

"If you are a data warehouse designer and come up with something other than a snowflake schema, you should probably rethink your design.”

Really?

The requirement, that the schema has to be perfect upfront, has introduced most of the problems in the BI world. I call it the design time latency. This is the time it takes after a business user decides what report/information to request and by the time she gets it (mostly the wrong one.) The problem is that you can only report based what you have in your DW and what’s tuned.

This is why the schemaless approach seems more promising as it can cut down the design time latency by allowing the business users to explore the data and run ad hoc queries without locking down on a specific structure.

Assertion 2: Column stores will dominate the data warehouse market over time, replacing row stores.

This assertion assumes that there are only two ways of organizing data, either in a row store or in a column store. This is not true. Look at my NoSQL explanation above and also in my post “The Future Of BI In The Cloud”, for an alternate storage approach.

This assertion also assumes that the access performance is tightly dependent on how the data is stored. While this is true in the most cases, many vendors are challenging this assumption by introducing an acceleration layer on top of the storage layer. This approach makes is feasible to achieve consistent query performance, by clever acceleration architecture, that acts as an access layer, and does not depend on how data is stored and organized.

“Since fact tables are getting fatter over time as business analysts want access to more and more information, this architectural difference will become increasingly significant. Even when "skinny" fact tables occur or where many attributes are read, a column store is still likely to be advantageous because of its superior compression ability."

I don’t agree with the solution that we should have fatter fact tables when business analysts want more information. Even if this is true, how will column store be advantageous when the data grows beyond the limit where compression isn’t that useful?

“For these reasons, over time, column stores will clearly win”

Even if it is only about rows versus columns, the column store may not be a clear commercial winner in the marketplace. Runtime performance is just one of many factors that the customers consider while investing in DW and business intelligence.

“Note that almost all traditional RDBMSs are row stores, including Oracle, SQLServer, Postgres, MySQL, and DB2.”

Exactly!

The row stores, with optimization and acceleration, have demonstrated reasonably good performance to stay competitive. Not that I favor one over the other, but not all row-based DW are that large or growing rapidly, and have serious performance issues, warranting a switch from a row to a column.

This leads me to my last issue with this assertion. What about a hybrid store – row and column? Many vendors are trying to figure this one out and if they are successful, this could change the BI outlook. I will wait and watch.

Assertion 3: The vast majority of data warehouses are not candidates for mainmemory or flash memory.

I am assuming that he is referring to the volatile flash memory and not flash memory as storage. Though, the SSD block storage have huge potential in the BI world.

“It will take a long time before main memory or flash memory becomes cheap enough to handle most warehouse problems.”

Not all DW are growing at the same speed. One size does not fit all. Even if I agree that the price won’t go down significantly, at the current price point, main memory and flash memory can speed up many DW without breaking the bank.

The cost of DW, and especially the cost of flash memory, is a small fraction of the overall cost; hardware, license, maintenance, and people. If the added cost of flash memory makes business more agile, reduces maintenance cost, and allows the companies to make faster decisions based on smarter insights, it’s worth it. The upfront capital cost is not the only deciding factor for BI systems.

“As such, non-disk technology should only be considered for temporary tables, very "hot" data elements, or very small data warehouses.”

This is easier said than done. The customers will spend significant more time and energy, on a complicated architecture, to isolate the hot elements and running them on a different software/hardware configuration.

Assertion 4: Massively parallel processor (MPP) systems will be omnipresent in this market.

Yes, MPP is the future. No disagreements. The assertion is not about on-premise or the cloud, but I truly believe that cloud is the future for MPP. There are other BI issues that need to be addressed before cloud makes it a good BI platform for a massive scale DW, but the cloud will beat any other platform when it comes to MPP with computational elasticity.

Assertion 5: "No knobs" is the only thing that makes any sense.

“In other words, look for "no knobs" as the only way to cut down DBA costs.”

I agree that “no knobs” is what the customers should thrive for to simplify and streamline their DW administration, but I don’t expect these knobs to significantly drive down the overall operational cost, or even the cost just associated with the DBAs. Not all the DBAs have a full time job to manage and tune the DW. The DW deployments go through a cycle where the tasks include schema design, requirements gathering, ETL design etc. Tuning or using the “knobs” is just one of many tasks that the DBAs perform. I absolutely agree that the no-knobs would certainly take some burden off the shoulders of a DBA, but I disagree that it would result into significant DBA cost-savings.

For a fairly large deployment, there is significant cost associated with the number of IT layers

that are responsible to channel the reports to the business users. There is an opportunity to invest into the right kind of architecture, technology-stack for the DW, and the tools on top of that to help increase the ratio of Business users to the BI IT. This should also help speed up the decision-making process based on the insights gained from the data. Isn’t that the purpose to have a DW to begin with? I see the self-service BI as the only way to make IT scale. Instead of cutting the DBA cost, I would rather focus on scaling the BI IT with the same budget and a broader coverage amongst the business users in an organization.

The Future Of BI In The Cloud

2010-10-25T15:30:00.000-07:00

Actual numbers vary based on whom you ask, but the general consensus is that the Business Intelligence (BI) and Analytics in the cloud is a fast growing market. IDC expects a compounded annual growth rate (CAGR) of 22.4% through 2013. This growth is primarily driven by two kinds of SaaS applications. The first kind is a purpose-specific analytics-driven application for business processes such as financial planning, cost optimization, inventory analysis etc. The second kind is a self-service horizontal analytics application/tool that allows the customers and ISVs to analyze data and create, embed, and share analysis and visualizations.

The category that is still nascent and would require significant work is the traditional general-purpose BI on large data warehouses (DW) in the cloud. For the most enterprises, not only all the DW are on-premise, but the majority of the business systems that feed data into these DW are on-premise as well. If these enterprises were to adopt BI in the cloud, it would mean moving all the data, warehouses, and the associated processes such as ETL in the cloud. But then, the biggest opportunities to innovate in the cloud exist to innovate the outside of it. I see significant potential to build black-box appliance style systems that sit on-premise and encapsulate the on-premise complexity – ETL, lifecycle management, and integration - in moving the data to the cloud.

Assuming that the enterprises succeed in moving data to the cloud, I see a couple of challenges, if treated as opportunities, will spur the most BI innovation in the cloud.

Traditional OLAP data warehouses don’t translate well into the cloud:

The majority of on-premise data warehouses run on some flavor of a relational or a columnar database. The most BI tools use SQL to access data from these DW. These databases are not inherently designed to run natively on the cloud. On top of that, the optimizations performed on these DW such as sharding, indices, compression etc. don’t translate well into the cloud either since cloud is a horizontally elastic scale-out platform and not a vertically integrated, scale-up, system.

The organizations are rethinking their persistence as well as access languages and algorithms options, while moving their data to the cloud. Recently, Netflix started moving their systems into the cloud. It’s not a BI system, but it has the similar characteristics such as high volume of read-only data, a few index-based look-ups etc. The new system uses S3 and SimpleDB instead of Oracle (on-premise). During this transition, Netflix picked availability over consistency. Eventual consistency is certainly an option that BI vendors should consider in the cloud. I have also started seeing DW in the cloud that uses HDFS, Dynamo, and Cassandra. Not all the relational and columnar DW systems will translate well into NoSQL, but I cannot overemphasize the importance of re-evaluating persistence store and access options when you decide to move your data into the cloud.

Hive, a DW infrastructure built on top of Hadoop, is a MapReduce meet SQL approach. Facebook has a 15 petabytes of data in their DW running Hive to support their BI needs. There are a very few companies that would require such a scale, but the best thing about this approach is that you can grow linearly, technologically as well as economically.

The cloud does not make it a good platform for I/O intensive applications such as BI: 

One of the major issues with the large data warehouses is, well, the data itself. Any kind of complex query typically involves an intensive I/O computation. But, the I/O virtualization on the cloud, simply does not work for large data sets. The remote I/O, due to its latency, is not a viable option. The block I/O is a popular approach for I/O intensive applications. Amazon EC2 does have block I/O for each instance, but it obviously can’t hold all the data and it’s still a disk-based approach.

For BI in the cloud to be successful, what we really need is ability for scale-out block I/O, just like scale-out computing. Good news is that there is at least one company, Solidfire, that I know, working on it. I met Dave, the founder, at the Structure conference reception. He explained to me what he is up to. Solidfire has a software solution that uses solid state drives (SSD) as scale-out block I/O. I see huge potential in how this can be used for BI applications.

When you put all the pieces together, it makes sense. The data is distributed across the cloud on a number of SSDs that is available to the processors as block I/O. You run some flavor of NoSQL to store and access this data that leverages modern algorithms and more importantly horizontally elastic cloud platform. What you get is commodity and blazingly fast BI at a fraction of cost with pay-as-you-go subscription model.

Now, that’s what I call the future of BI in the cloud.

Can A Product Manager Be Effective Without Product Design Skills?

2010-10-15T13:20:00.000-07:00

I am very passionate about the topic of design and design-thinking. When I saw this question on Quora, I decided to post my answer. Following is directly from my answer to this question on Quora:

The answer is "Definitely not."

It's not about the product design by itself, but it's about applying core and transferable product design skills to product management. Let's break it down:

1) Understanding users: Good product designers have great user research, observation, and listening skills to put themselves into the shoes of a user and understand the real, mostly unspoken and latent, needs of the end users.

2) Being self-critical: If you are a trained designer, you would stay away from self-referential design, which is a root cause for many failed products. Good product designers are self-critical about their approach and the deliverables and are always open to feedback to iterate on their design.

3) Working with designers: If you are a designer, you have great empathy for fellow designers. I have seen products fail, simply because, the product managers can't work with the designers and don't share the same mindset.

4) A "maker" mentality: The designers are makers. They make things. The product managers typically don't, the engineers do. For a product manager, it's incredibly important to have a "maker" mentality. They should continuously be making and refining, by themselves or with the help of the engineers. The product managers, who believe that their responsibility ends when they are done gathering the requirements are likely to fail, miserably in most cases.

5) A "T-shaped" product manager: If you're a product manager, the vertical line of the "T" is your core PM skills. However, successful product managers go beyond their core skills, the horizontal line in the letter "T", to learn more about product design, engineering etc. This ensures that they have a holistic perspective of the product. That leads me to my last point.

6) General Manager: viable, feasible, and desirable: A good product from a vendor's perspective is commercially viable, technologically feasible, and desirable by the end users. Many product managers stop at the business needs, but they truly need to go beyond that to work with the engineering to make it technologically feasible, and have a design mindset to work with the designers to make it desirable by the end users. The product managers should thrive for a "general manager" mindset, of which, product design is a core element.

Telcos Could Be The Future Enterprise Software Vendors For Small Businesses

2010-09-21T06:56:00.000-07:00

Having worked on enterprise software product and go-to-market strategy for SMB (small and medium businesses), I can tell you that these are the most difficult customers to reach to, especially the S in SMB. It’s an asymmetric non-homogeneous market for which the cost of sales could go out of control if you don’t leverage the right channels. The competitive landscape varies from region to region and industry to industry. In many cases instead of competing against a company you would be competing against a human being with paper-based processes.

Tomorrow I am speaking at the Razorsight annual conference on the topic of cloud computing. I am excited to meet their customers, the telcos. While I prepare for my keynote, I can’t stop thinking about the challenges that the telcos face and the opportunities that they are not pursuing. My keynote presentation is about how telcos can leverage the cloud, but this blog post is about how telcos can become successful enterprise software vendors and market their solutions to small businesses.

There are very few things that are common across small businesses. They own a landline (at least for now) and they have Internet access, in many cases from the same vendor. I believe that the landlines will be more and more difficult to sell to these customers, but losing a channel – a relationship – would be even worse. If leveraged well, these relationships could be worth a lot more compared to the landline business as it stands today. Just think about it. Selling to small businesses is all about leveraging existing relationships with them. This channel is priceless.

What will it take for the telcos to market products to small businesses?

ISV acquisitions or VAR agreements: If telcos are bundling software, on-premise or SaaS, the telcos, as organizations, don’t necessarily have the skills or resources to make software for small businesses. This would mean a series of small and niche ISV acquisitions across geographical areas and industries and VAR agreements with current ISVs.

What kind of software can telcos bundle?

There are two kinds: horizontal and vertical. The examples of horizontal software are accounting, payroll, point of sale etc. Ask Intuit and they will tell you all about the horizontal cash cow. The vertical software is industry specific for the business that you are in. One of my favorite companies in this area is OpenTable. If you have made an online reservation at a restaurant you have most likely used their software. They had a successful IPO last year and they are on track to become a $100 million company.

Telcos should be doing all these things. They have cash and they can borrow cheap money to buy companies. Telcos also have an option to leverage the cloud, their own cloud in many cases, to provide SaaS solutions to small businesses. They can leap frog the on-premise ISVs who don’t have access to these customers and are sensitive to margin cannibalization.

Lean Startup Customer Development And IxD Personas

2010-09-10T14:08:00.000-07:00

On Quora Steve Blank asked "Is it possible to use Lean Startup customer development findings to inform IxD personas?" This post is my response to Steve on Quora:

Absolutely yes.

Pivoting is not just about finding the right business model that works for a start-up but it is also about nailing down the persona that you are designing your product for. I have seen many start-up fail because they don't know who the end user is. Creating a persona is an iterative process by itself. Many people focus on persona as a final artifact but I believe that the journey is more important than the destination. While discovering a persona and iterate on it to make it crisp, the team - the dev, marketing, and UX - comes together with the shared understanding of the target end user. The journey brings in the empathy that they all internalize and that influences what they do. The journey includes getting out of the office and talk to the real people who you think would use your product.

Persona requires qualitative discovery as well as validation. It's an instantiation of your customer. The customer discovery, validation, and creation are all directly related to the persona. In fact I would argue that in many cases knowing the target audience, at a given stage, is far more important than having a perfect product. Plenty of people fixate on building the right product against building it for the right people.

A Laundromat Entrepreneur

2010-09-07T11:07:00.000-07:00

In my previous post “While Entrepreneurs Scale On The Cloud The Angels Get Supersized” I wrote about how cloud computing is disrupting the VC industry. Continuing on the thread of entrepreneurship I am seeing more and more entrepreneurs building applications who do not belong to any formal organization, start-up or otherwise. The definition of what used to be a start-up itself is changing, primarily because of two reasons - simple and easily accessible PaaS tools to design, run, and maintain applications on the cloud and access to a market place to sell the applications.

We have been witnessing this trend for the mobile applications for a while - Android as well as iPhone and now iPad. I see the same pattern for the cloud-based applications. I have seen many useful, productive, and successful applications that are designed by individual developers with no affiliation to any organization.

Google has done a great job in designing the tools for the developers to build applications that can run on their cloud and can be sold on their app store. This has democratized the application business to large extent that attempt to solve niche problems. At the same time the individual developers have started monetizing their work without going through an overhead of bootstrapping and running a company. While Google’s cloud platform is a generic one the application and stack specific PaaS providers such as Salesforce.com and Heroku are also attracting such developers. Intuit’s partner development platform is a great example of a channel platform that allows the entrepreneurs to market to an SMB segment, a very difficult segment to reach (a post on that later).

All these trends, collectively, have introduced a new category of an entrepreneur. A laundromat entrepreneur.

They are not full fledged start-ups but these individuals are also not developing just for fun. These businesses have steady revenue, positive cash flow, and require very little maintenance. The companies such as Help Me - located in Karachi, Pakistan - have created their business model to support such developers outsource customer support for their existing applications so that they can focus on building new applications. Some of these individual businesses could be worth a few million dollars.

This is a very different business model that combines the best-of-breed with long tail. I am quite excited about this new category since that puts in the developers directly in charge of the product and takes them closer to the end users. I am curious to see the life cycle of these laundromats and how they get bought and sold. Many people that I have had discussions with claim that we could expect to see plenty of individuals who will own such a laundromat portfolio worth five to six million dollars.

Attribution: I have shamelessly stolen the word “laundromat” from my friend Mike Ni after my discussion with him on cloud computing business models. I had told him that I would!

The picture credit to Michael Valli

While Entrepreneurs Scale On The Cloud The Angels Get Supersized

2010-08-25T08:04:00.000-07:00

Cloud computing is disrupting the venture capital industry in a big way. One of the obvious changes we all have observed is the reduced up-front capital expenditure to start a new venture. Things that used to require an array of expensive servers and an army of people to maintain them have essentially been replaced by a bunch of EC2 instances and a few smart developers. The tools and the technology stack for today’s applications are designed for cheaper and faster experimentation allowing the entrepreneurs to follow the lean methodology and pivot as fast as they can. I agree that some investors underestimate the people cost and overestimate the capabilities of the cloud but regardless this has caused a major shift in how the companies are funded.

The rise of an emergent category of super angel is all about leveraging the cloud computing. Fred Wilson closed a $30 million fund and Aydin Senkut closed a $40 million fund. These funds will invest into dozens of companies that can be bootstrapped with low up-front cost. More and more entrepreneurs prefer to raise as little money as possible in the beginning. This phenomenon has a few effects:

Raise AS you scale and not raise TO scale:

Founders have been able to raise money at good valuation without giving up large equity. This has been an uneasy situation for many venture capitalists and has crated strange problems while raising money. When Foursquare raised money the founders sold part of their equity to the VCs so that the VCs can earn money on a successful exit. The founders also decided not to sell out to Yahoo. Raising money as the company scales follows the cloud motto of scale-as-you-need and pay-as-you-go.

Build a product that you want and not what a VC wants:

The super angels typically stay on the sidelines and definitely don’t serve on the board. This means a lot more freedom to entrepreneurs to define and shape their product. This also allows the companies to take up-front risk, venture into new areas, and experiment where conventional wisdom would otherwise have prevented them. Fail fast and fail cheap is now a reality from a venture as well as technology perspective.

Prominent network effects in the start-up community:

I strongly believe that the cloud is the best participatory platform to create network effects of all kinds. I have seen similar kind of network effects occur in the new angel industry, especially in an incubator such as Y Combinator. The Silicon Valley start-ups have enjoyed the network effects for long time. These effects are even more profound when some of these start-ups are in an incubator setting. Such environments have a natural advantage for the entrepreneurs to leverage cross-pollination. Cloudkick is such an example of a YC company that was started by three entrepreneurs to build a solution to manage the Amazon EC2 instances that all other YC companies used at that time.

Competition in the portfolio companies could be a good thing:

The VCs do not prefer to have competing start-ups in single portfolio to avoid conflict of interest. As rational as it sounds this is simply not feasible when an angel or a super angel funds tens and hundreds of companies. I believe that it’s a good thing. At macro level the angels can see the patterns and advise the companies and at the micro level the companies can hone in their competitive differentiation before raising more money. This might also change how the founders pick and choose the angels. If the founders pick an angel who has similar companies in their portfolio they can expect better connections and mentoring from the angels despite of having the competing companies funded by the same set of investors.

It’s not that the entire VC industry has changed. The series A and B investors are as important as angels and super angels but the way the VCs operate and the expectations that the limited partners have would certainly change. I also believe that the VCs who are not stage agnostic will revisit their seed-funding strategy. The performance of the traditional VC funds that were raised in the last ten years is far worse than what an investor would expect from an alternate class assets, which is what the VC investments are. Time will tell whether doing more deals with same money will yield better return on the portfolio but, at least for now, the VC climate change is imminent.

Software Is The New Hardware

2010-08-19T23:24:00.000-07:00

Today Intel announced that it is buying McAfee for $7.7 billion. This acquisition made people scratch their heads. Why McAfee?

The obvious arguments are that Intel has hit the growth wall and organic growth is not good enough to satisfy the shareholders. But this argument quickly falls apart from margin perspective. Why dilute their current nice gross margin even if McAfee has steady revenue stream? [Read my update at the end of the post]

I believe there are two reasons. The first is that the companies need a balanced product and revenue mix regardless of different margins. Oracle bought Sun and HP bought EDS. Big companies do this all the time. The second, not so obvious, reason is a recognition that software is new hardware. The processors are processors – they are a commodity any which way you look at them. It is not news to anyone that the computing has become commodity which is the basis of utility style cloud computing. Software, embedded or otherwise, has significant potential to sell value-added computing. The security solutions could fit in nicely on a piece of chip. When you drive a few miles from Intel’s headquarters to meet folks at nVidia you will be amazed to see what kind of value a software tool kit can derive from the processors.

I don’t know how Intel will execute the merger considering the fact that this is their largest acquisition ever. But, I am even more convinced that software is the new hardware. Cloud computing, data center automation, virtualization, network security, and a range of other technologies can leverage software in a chip that is optimized for a set of specialized tasks. Time to move from commodity to specialized computing until specialized computing becomes commodity. Interesting times!

Update: Romit sent me a message commenting that how McAfee will dilute Intel’s margin since McAfee’s gross margin is more than Intel. I should clarify. The assumption on the street is that the cost of capital for this purchase is about 4% and Intel expects 8% return on the investment even after paying 60% premium for the purchase. The tricky part is that how long Intel can maintain the close to 75% software margin of a software company operating inside a hardware company. When I say diluting the margin I mean diluting the overall combined margin post-purchase. The analysts are skeptical about the success of the merger and so am I. Intel has no track record of integrating large software companies such as McAfee especially after paying significantly higher than average premium. Hypothetically if Intel were to buy a company with more synergies that can leverage existing channels and can fit into their culture they could have increased the gross margin and hence the return to their shareholders.

The Missing Half Of A Social Enterprise

2010-07-22T09:39:00.000-07:00

In my previous post “Social CRM Is Only The First Half Of A Social Enterprise” I started the discussion on why social CRM is only the first half of a social enterprise and how we can go to the core and build a true social enterprise. Continuing the discussion on the missing half on a social enterprise this is the part 2.

Transform productivity silos into collaborative content curation:

The social software gets better as more people use it but we need more people to make it useful. There is no easy way out. As Andrew McAfee’s rightly put it Email is a 9x problem. There isn’t significant juice in standalone social software to gain broader adoption due to the endowment effect. There is a huge adoption barrier for standalone social software to be successful since it is not contextualized into a business process. The users simply see it as yet another tool that increases their cognitive overload.

I suggest don’t go after social software that is designed to create a parallel universe. Instead design solutions that are contextualized within existing business processes and makes it very easy for the end users to curate existing content from several structured, semi-structured, and unstructured sources e.g. Email, Wiki, PowerPoint, ERP, CRM, SharePoint etc. The nature of the content could be any artifacts such as an invoice, purchase order, strategy document, pipeline report, documentation etc. Describing what collaborative content curation can actually do for enterprise software would require a blog post by itself. I suggest you read democratised curation by JP and "The Seven Needs of Real-Time Curators” by Scoble. But in nutshell if designed correctly it offers significant potential to help people find, nurture, and syndicate the enterprise content with collaboration on steroids. The users continue using the tools that they like. However suddenly these tools start feeling more and more social with collaborative on-ramps and off-ramps. Social media, cloud computing, and collaborative content curation will be peanut, butter, and jelly for a social enterprise.

Use social tools to challenge and rethink management practices:

Efficient tools are not a proxy for an efficient management. The tools of the past did bring the automation and productivity but did very little to influence the way the organizations are being managed. Adding social fabric to existing processes may bring in some additional benefits but a true social enterprise should thrive for the tools that completely make them rethink the management practices almost to the point to cause disruption.

How about opening up the cost structure to the entire organization, democratize the decision making process, run bottom-line based prediction markets – not how much we will sell it for but what will it cost us to build it. It’s an endless list. This will be unsettling in the beginning for some but it would eventually yield great results.

The generational shift is already ready for this disruption. The baby boomers are on their way out and the current mid-level and senior gen X managers will be replaced by the millennial very soon. Millennial is a born-social generation. As one millennial told my friend when asked what does career mean to him – “I want to have awareness of what’s going on around me, have micro-conversations on social tools, and create context. This context is my career”. Such philosophy will challenge the current management practices and put organizations in a difficult situation.

But this is an opportunity as well. The organizations can completely rethink the management practices as they start their journey to be a true social enterprise. This is not just about asking a CEO to use a blog to communicate with the employees but to have a social-first attitude at every single step of the management.

Earn your user base by leaning in with a consumer start-up mindset:

One of the biggest differences between the enterprise and the consumer software is that the user is not a buyer in the enterprise software. Enterprise software vendors don’t attempt to win the end users since they don’t have to. The end users have no choice. I suggest that if you are an enterprise software company that designs social solutions lean in with a consumer start-up mindset where you really have to earn your user base.

The cafeteria menu is my personal favorite example. One of my friends’ company spent $600k to redesign their intranet and the most popular page on the new Intranet is still the cafeteria menu that gets updated every week. Why not solve that problem? Provide cafeteria information that is fresh and accessible from mobile devices. Now, you have my attention. Add social and location-based functionality to help me find other employees to network and have lunch with. This is the new HCM. Well, not exactly, but you get the point.

If you attempt to design an IT-driven top-down solution to enforce “socialness” it simply won’t work. You need to win your users to use your solutions even if, in theory, they don’t have a choice.

Having fun and being productive should not be mutually exclusive.

Podcast: The Next Cloud: Emerging Business Models

2010-07-02T10:45:00.000-07:00

I was a guest on Novell's radio/podcast series, the Cloud Chasers. The topic was "The Next Cloud: Emerging Business Models And Their Impact On The Enterprise". It was a great conversation! You can download the podcast here or tune in below:

Social CRM Is Only The First Half Of A Social Enterprise

2010-06-11T07:00:00.000-07:00

Social CRM has arrived. My fellow bloggers and analysts friends Jeremiah Owyang, Ray Wang, Esteban Kolsky, Paul Greenberg, Sameer Patel, Oliver Marks, Jeff Nolan, and countless others have done a great job in defining the attributes, characteristics, and value proposition of social CRM. The recent acquisitions - Lithium acquiring Scout Labs, Attensity acquiring Biz360, and Jive acquiring Filtrbox - have clearly indicated the market interest in social CRM. There are also tons of emerging start-ups in this domain solving specific problems in niche sub-categories of social CRM.

However, social CRM is only the first half of a social enterprise.

Let me be that idiot for a minute who over-simplifies enterprise software and its evolution. The traditional ERP, MRP, and SCM software were designed for automation and productivity to improve the bottom-line, scale the business, and make informed decisions. The CRM was essentially designed to sell and market better and eventually to support the customers whom you sold to. Then comes the social CRM that is designed as an extension of CRM to help understand customers better, have rich conversations with the customers, increase the impact of the brand, prevent customer churn etc.

Unfortunately social CRM is only the half part of the equation primarily designed to influence the top-line of an organization. The other missing half is the social solutions that support the bottom-line of a company. Together they form a social enterprise. I don’t like the word “social business”. In case you didn’t get the memo, the business has always been social. What is not social is an enterprise. A combination of social CRM that supports the top-line and a set of solutions that supports the bottom-line can truly transform an enterprise into a social enterprise.

Some vendors have attempted to introduce “socialness” in some of the edge applications but I believe there is a need to go to the core and build a true social enterprise. In my two part series I would like to share my thoughts on how this could be accomplished. This is part one.

Focus on the means and not the end:

I can talk about plenty of ERP processes but let’s discuss a specific process that is perceived my many people as dry and not social. It’s the “closing the books” financial process. I would encourage the folks, who think that the financial processes are not social, to spend some time in a large organization to observe and shadow the controllers and a CFO in the last few days and the first few days of a quarter. The software that “closes the books” is the very last step in the process, the end, designed to keep the CEO and CFO out of the jail. Everything that leads up to closing the books, the means, comprise tacit social interactions such as calling cost center managers for their numbers, asking for clarifications, communicate not to do certain things etc. The list goes on. This social system certainly works. However there is one problem – it is highly inefficient.

This is where I see the opportunity to provide a social toolset designed for a specific process – a social vertical – to help all the stakeholders. The social tools should not be designed to replace the face-to-face interactions and should not just be limited to encode the interactions. Instead they should allow people to scale their social interactions, leverage discovery, and experience serendipity. The social tools become the context for the core processes.

Find an internal business process that is inherently social where employees spend most of their time outside of a destination tool. Run with it.

Don't fight the system, instead cater to emergent roles:

As the nature of business changes the great organizations that are on forefront of this change are good about creating new roles that never existed before. Some the examples are Chief Sustainability Officer, Chief Privacy Officer, Chief Customer Churn Officer etc. Enterprise software vendors are often criticized as “pouring concrete into existing business processes”. It’s not a surprise that existing processes are hard to change and existing human behavior is even harder to change but providing a “social-first” experience to these new emergent roles could potentially trigger a positive change in an organization. The people in these new roles don’t typically have a rigid set of pre-defined processes and tools. That’s good news. Work with these people to identify how social software can enable some of these new business processes and functions. As a vendor you are likely to get more traction working with them against working with a CFO or a purchase manager.

Turn involunteer collaboration into social interaction:

Let’s be very clear that being collaborative does not mean being social. Unfortunately the existing collaboration tools help people collaborate once they have decided to collaborate. Well, duh. But when you think about it, if people get along well before they decide to collaborate they have a higher chance of success while they collaborate. The problem is that people neither have motivation nor time to find and get to know the folks that they might be required to work with. This is where social enterprise can do wonders.

The solution that powers the social enterprise does not have to solve a specific business problem. Imagine an enterprise social network that has algorithms to find the like minded-people based on their skills, interest, extra curricular activities, the departments they work for, the cars they drive, the neighborhoods that they live in etc. The real advantage of using such a network is to bridge silos without having an explicit goal of collaboration. This is an antithesis of collaboration.

You don’t collaborate with your neighbors before you socialize with them. You greet them, go to the block party, and have beer and BBQ. And then if you need to collaborate on chopping that tree you do so. It isn’t very different when it comes to enterprises. End of the day the enterprises have human beings that behave like, well, human beings.

Coming up in the next post:

Social enterprise enablement through collaborative content curation, democratizing the management, and earning instead of buying adoption.

Delphix Is A Disruptive Database Virtualization Start-up To Watch

2010-04-27T14:48:00.000-07:00

This is my second post on my impressions from the Under The Radar conference. Check out the first post on NoSQL.

Virtualization is not cloud computing. However virtualization has significant potential when it is used to achieve cloud-like characteristics such as elasticity, economies of scale, accessibility, simplicity to deploy etc. I have always believed that the next wave of cloud computing is going to be all about solving “special” problems on the cloud – I call it a vertical cloud. These vertical problems could be in any domain, technology stack, or industry. Raw computing has come long way. It is about the right time we do something more interesting with the raw cloud computing.

Delphix is attempting to solve a specific problem - database virtualization. I met the CEO Kaycee Lai and the VP of sales Jedidiah Yueh at Under The Radar reception the night before. They have great background in understanding the cost and flexibility issues around de-duplication from their days at EMC. They have assembled a great team including Alok Srivastava from Oracle who ran Oracle RAC engineering prior to joining Delphix. Most large database deployments have multiple copies of single database that customers use for purposes beyond production such as staging, testing, and troubleshooting. This replication is expensive from process, resources, and storage perspective and takes long time to provision instances. The founders saw this problem first hand at EMC and decided to solve it.

At the core their offering is a read-write snapshot of a database. That’s quite an achievement. The snapshots are, well, snapshots. You can’t modify them. When you make this compromise they occupy way less space. Delphix took the same concept but created the writable snapshots and a seemingly easy to use application (I haven’t used it) that allows quick de-duplication based on these snapshots. You can also go back in time and start your instance from there.

Delphix has great value proposition in the database virtualization - help the customers reduce their hardware and people – DBA and system administrators - cost at the same time accelerate the IT processes. I like their conscious decision not to go after the backup market. Sometimes you have a great product but if it is marketed in the wrong category with vendors fighting in the red ocean you could die before you can grow. They had the best pitch at the conference – very calm, explaining the problem, articulating the value proposition, emphasizing right people on the team, and identifying the target market. If you are an entrepreneur (or even if you are not) check out their pitch and Q&A. There is a lot you can learn from them.

Disruptive Cloud Computing Startups At Under The Radar - NoSQL - Aspirin, Vicodin, and Vitamin

2010-04-22T11:33:00.000-07:00

It was great to be back at Under The Radar this year. I wrote about disruptive cloud computing start-ups that I saw at Under The Radar last year. Since then the cloud computing has gained significant momentum. This was evident from talking to the entrepreneurs who pitched their start-ups this year. At the conference there was no discussion on what is cloud computing and why anyone should use it. It was all about how and not why. We have crossed the chasm. The companies who presented want to solve the “cloud scale” problems as it relates to database, infrastructure, development, management etc. This year, I have decided to break down my impressions into more than one post.

NoSQL has seen staggering innovation in the last year. Here are the two companies in the NoSQL category that I liked at Under The Radar:

Northscale was in stealth mode for a while and officially launched four weeks back. Their product is essentially a commercial version of memcached that sits in front of an RDBMS to help customers deal with the scaling bottlenecks of a typical large RDBMS deployment. This is not a unique concept – the developers have been using memcached for a while for horizontal cloud-like scaling. However it is an interesting offering that attempts to productize an open source component. Cloudera has achieved a reasonable success with commercializing Hadoop. It is good to see more companies believing in open source business model. They have another product called membase, which is a replicated persistence store for memcached – yes, a persistence layer on top of a persistence layer. This is designed to provide eventual consistency with tunable blocking and non-blocking I/Os. Northscale has signed up Heroku and Zynga as customers and they are already making money.

As more and more deployments face the scaling issues, Northscale does have an interesting value proposition to help customers with their scaling pain by selling them an aspirin or vicodin. Northscale won the best in category award. Check out their pitch and the Q&A:

GenieDB is a UK-based start-up that offers a product, which allows the developers to use mySQL as a relational database as well as a key-value store. It has support for replication with immediate consistency. Few weeks back I wrote a post - NoSQL is not SQL and that’s a problem. GenieDB seems to solve that problem to some extent. Much of the transactional enterprise software still runs on an RDBMS and depends on the data being immediately consistent. The enterprise software can certainly leverage the key-value stores for certain features where RDBMS is simply an overhead. However using a key-value store that is not part of the same logical data source is an impediment in many different ways. The developers want to access data from single logical system. GenieDB allows table joins between SQL and NoSQL stores. I also like their vertical approach of targeting specific popular platforms on top of mySQL such as Wordpress and Drupal. They have plans to support Rails by supporting ActiveRecord natively on their platform. This is a vitamin, if sold well, has significant potential.

They didn’t win any prize at the conference. I believe it wasn't about not having a good product but they failed to convey the magnitude of the problem that they could help solve in their pitch. My advice to them would be to dial up their marketing, hone the value proposition, and set up the business development and operations in the US. On a side note the founder and the CEO Dr. Jack Kreindler is a “real” doctor. He is a physician who paid his way through the medical school by building healthcare IT systems. Way to go doc! Check out their pitch and the Q&A:

In Case You Didn't Know Twitter Is Growing Fast - Very Very Fast

2010-04-14T14:38:00.000-07:00

I have been following the Chirp conference today where Evan Williams, who goes by @ev, disclosed Twitter growth numbers in his keynote and shared their pains, gains, and priorities. We all know that Twitter is growing fast – very, very fast – but here is the summary of those numbers that tells us what that growth actually looks like:

105 million registered users and they add 300k uses every day
3 billion API request a day (equivalent to Yahoo traffic)
55 million new tweets every day
600 million search queries every day
175 employees
75% traffic comes from third party clients
60% tweets come from third party clients
100,000 registered apps
180 million unique visitors on Twitter.com (you don’t have to be a user)
FlockDB, their social graph database that they just open sourced, stores 13 billion edges
They started using “Murder” a new BitTorrent platform to transfer files during development. This reduced the transfer time from 40 minutes to 12 seconds
Made deals with 65 (telco) carriers
37% of active users use Twitter on their phone (@ev wants this number to be 100%)

Emergent Cloud Computing Business Models

2010-03-15T10:50:00.000-07:00

The last year I wrote quite a few posts on the business models around SaaS and cloud computing including SaaS 2.0, disruptive early stage cloud computing start-ups, and branding on the cloud. This year people have started asking me – well, we have seen PaaS, IaaS, and SaaS but what do you think are some of the emergent cloud computing business models that are likely to go mainstream in coming years. I spent some time thinking about it and here they are:

Computing arbitrage: I have seen quite a few impressive business models around broadband bandwidth arbitrage where companies such as broadband.com buys bandwidth at Costco-style wholesale rate and resells it to the companies to meet their specific needs. PeekFon solved the problem of expensive roaming for the consumers in Eurpoe by buying data bandwidth in bulk and slice-it-and-dice-it to sell it to the customers. They could negotiate with the operators to buy data bandwidth in bulk because they made a conscious decision not to step on the operators' toes by staying away from the voice plans. They further used heavy compression on their devices to optimize the bandwidth.

As much as elastic computing is integral to cloud computing not all the companies who want to leverage the cloud necessarily care for it. These companies, however, do have unique varying computing needs. These needs typically include fixed long-term computing that grows at relatively fixed low rate and seasonal peaks. This is a great opportunity for the intermediaries to jump in and solve this problem. There will be fewer and fewer cloud providers since it requires significantly hi cap-ex. However being a "cloud VAR" could be a great value proposition for the vendors that currently have a portfolio of cloud management tools or are "cloud SI". This is kind a like CDO (‘Cloud Debt Obligations’ :-)) – just that we will do a better job this time around!

Gaming-as-a-service: It was a while back when I first saw the OTOY demo. Otoy is scheduled to launch in Q2 2010. I believe that there is significant potential in cloud-based rendering for the games. Having access to an online collection of games that can be rented and played on devices with a varying degree of form factors is a huge business opportunity. The cloud also makes it a great platform and a perfect fit for the massive multi-player collaboration. Gaming-as-a-service could leverage everything that SaaS today does - frequent updates, developer ecosystem, pay-as-you-go etc. This business model also improves the current monetization options such as in-game ad placements that could be far more relevant and targeted.

App-driven and content-driven clouds: Now that we are hopefully getting over the fight between private and public cloud let’s talk about a vertical cloud. Computing is not computing is not computing. The needs to compute depend on what is being computed - it depends on the applications' specific needs to compute, the nature and volume of data that is being computed, and the kind of the content that is being delivered. Today in the SaaS world the vendors are optimizing the cloud to match their application and content needs. I would expect a few companies to step up and help ISVs by delivering app-centric and content-centric clouds. Being an avid advocate of net neutrality I believe that the current cloud-neutrality that is application-agnostic is a good thing. However we can certainly use some innovation on top of raw clouds. The developers do need fine knobs for CPU computes, I/O computes, main-memory computing, and many other varying needs of their applications. By far the extensions are specific to a programming stack such as Heroku for Ruby. I see opportunities to provide custom vertical extensions for an existing cloud or build a cloud that is purpose-built for a specific class of applications and has a range of stack options underneath that makes it easy for the developers to natively leverage the cloud.

NoSQL Is Not SQL And That’s A Problem

2010-03-05T09:22:00.000-08:00

I do recognize the thrust behind the NoSQL movement. While some are announcing an end of era for MySQL and memcached others are questioning the arguments behind Cassandra’s OLTP claims and scalability and universal applicability of NoSQL. It is great to see innovative data persistence and access solutions that challenges the long lasting legacy of RDBMS. Competition between HBase and Cassandra is heating up. Amazon now supports a variety of consistency models on EC2.

However none of the NoSQL solutions solve a fundamental underlying problem – a developer upfront has to pick persistence, consistency, and access options for an application.

I would argue that RDBMS has been popular for the last 30 years because of ubiquitous SQL. Whenever the developers wanted to design an application they put an RDBMS underneath and used SQL from all possible layers. Over a period of time the RDBMS grew in functions and features such as binary storage, faster access, clusters etc. and the applications reaped these benefits.

I still remember the days where you had to use a rule-based optimizer to teach the database how best to execute the query. These days the cost-based optimizers can find the best plan for a SQL statement to take guess work out of the equation. This evolution teaches us an important lesson. The application developers and to some extent even the database developers should not have to learn the underlying data access and optimization techniques. They should expect an abstraction that allows them to consume data where consistency and persistence are optimized based on the application needs and the content being persisted.

SQL did a great job as a non-procedural language (what to do) against many past and current procedural languages (how to do). SQL did not solve the problem of staying independent of the schema. The developers did have to learn how to model the data. When I first saw schema-less data stores I thought we would finally solve the age-old problem of making an upfront decision of how data is organized. We did solve this problem but we introduced a new problem - lack of ubiquitous access and consistency options for schema-less data stores. Each of these data stores came with its own set of access API that are not necessarily complicated but uniquely tailored to address parts of the mighty CAP theorem. Some solutions even went further and optimized on specific consistencies such as eventually consistency, weak consistency etc.

I am always in favor of giving more options to the developers. It’s usually a good thing. However what worries me about NoSQL is that it is not SQL. There isn’t simply enough push for ubiquitous and universal design time abstractions. The runtime is certainly getting better, cheaper, faster but it is directly being pushed to the developers skipping a whole lot of layers in between. Google designed BigTable and MapReduce. Facebook took the best of BigTable and Dynamo to design Cassandra, and Twitter wanted scripting against programming on Hadoop and hence designed Pig. These vendors spent significant time and resources for one reason – to make their applications run faster and better. What about the rest of the world? Not all applications share the same characteristics as Facebook and Twitter and certainly enterprise software is quite different.

I would like to throw out a challenge. Design a data store that has ubiquitous interface for the application developers and is independent of consistency models, upfront data modeling (schema), and access algorithms. As a developer you start storing, accessing, and manipulating the information treating everything underneath as a service. As a data store provider you would gather upstream application and content metadata to configure, optimize, and localize your data store to provide ubiquitous experience to the developers. As an ecosystem partner you would plug-in your hot-swappable modules into the data stores that are designed to meet the specific data access and optimization needs of the applications.

Are you up for the challenge?

Google Buzz Is New Black - Solving A Problem That Google Wave Could Not

2010-02-09T12:03:00.000-08:00

Today Google announced Google Buzz. Watch the video:

The chart below shows the spectacular adoption failure of Google Wave as a standalone product. This was predicted by a lot of people including myself. As Anil Dash puts it Google Wave does not help solve a "weekend-sized problem".

Besides the obvious complex technical challenges there are three distinct adoption barriers with Google Wave and Google Buzz has capability to overcome those:

Inseparable container, content, and collaboration: Changing people's behavior is much more difficult than inventing or innovating a killer technology. Most of the people still prefer to keep the collaboration persisted separately from the content or not persisted at all. Single task systems such as email, Wiki, and instant messaging are very effective because they do one and only thing really well without any confusion. Google Wave is a strong container on which Google or others can build collaboration capability but not giving an option to users to keep the content separate from the collaboration leads to confusion and becomes an adoption barrier.

Google Buzz certainly seems to solve this problem by piggybacking on existing system that people are already familiar with - email. Google Buzz is an opt-in system where the users can extend and enrich their experience against using a completely different tool.

Missing clear value proposition: Google Wave is clearly a swiss knife with the open APIs for the developers to create killer applications. So far the applications that leverages Google Wave components are niche and solve very specific expert system problems. This dilutes the overall value proposition of a standalone tool.

Google Buzz is designed to solve a problem in a well-defined "social" category. People are already using other social tools and Google Buzz needs to highlight the value proposition by integrating the social experience in a tool that has very clear value proposition unlike Google Wave which tried to re-create the value proposition. Google Buzz assists users automatically by finding and showing pictures, videos, status updates etc. and does not expect users to go through a lengthy set up process.

Lack of a killer native mobile application: This is an obvious one. Google Wave does work on iPhone and on some other phones but it is not native and the experience is clunky at best. When you develop a new tool how about actually leveraging a mobile platform rather than simple porting it. A phone gives you a lot more beyond a simple operating system to run your application on.

Google recognized this and Google Buzz is going to be mobile-enabled from day one that leverages location-awareness amongst other things. I hope that the mobile experience is not same as the web experience and actually makes people want to use it on the phone.

You could argue that why Google Buzz is going to be different since Google did have a chocolate box variety tools before Google Buzz - Latitude, Profile, Gmail, Wave and so on. I believe that it is all about the right experience that matches the consumers' needs in their preferred environment and not a piece of technology that solves a standalone problem. If done right Google Buzz does have potential to give Facebook, Twitter, Foursquare, and Gowalla run for money.

Mass Customization: From "There is a plug-in for that" To "There is an app for that"

2010-01-27T22:16:00.000-08:00

In a much anticipated mystic event Apple announced a tablet today called an iPad. Steve Job's hypnotizing presentation convinced people that iPad is a magic. I was not there in person to see Jobs unveiling an iPad and somehow escaped the magic. That gave me time to think about the implications of a trend that an iPad endorses - mass customization. Firefox's success in part can be attributed to its approach to allow the developers to write and publish extensions. There is a Firefox plug-in for pretty much anything. Then came the iPhone and we had an app for pretty much anything. Now we have an iPad and the trend continues.

Mass customization trend is about micro-chunking the software that we run on our devices ranging from cell phones to laptops. The emergent architecture and delivery model have empowered the consumers to buy only the chunks of software that they actually need. The cloud computing and SaaS have further enabled the consumers not to run any software other than a web browser for many daily tasks that they need to accomplish. Micro-chunking and webOS have grave implications on the large shrink-wrapped software packages that occupies the most space on consumers' hard-drive, hogs memory, and provides a little value. I won't go to the extent of calling this gold rush for the app developers but I do agree that the independent developers now have a level playing field to compete with the ISVs.

I certainly welcome this trend. I not only want to be in charge of the devices that I own but I also want to experiment and micro manage the applications that I run on my devices. If I can get a tall non-fat extra hot double shot latte at Starbucks why shouldn't I expect a device that runs the exact software that I need - no less, no more.

Silicon Valley Is An Innovation Dagger

2010-01-26T09:24:00.000-08:00

It was a routine trip back home from work one of these days. As soon as I boarded the bus the driver asked me: "So, what do you think about Google's announcement regarding China? Will Yahoo follow the suit?". The same bus driver had asked me about my views on NexusOne on the day it was announced. He even has a strong point of view on net neutrality. The other day the librarian showed me a Firefox plug-in that hides your identity from Google. Everyday it's a constant reminder of the demographics that we live in the Silicon Valley. It's an innovation dagger. One edge keeps people to stay on top of cutting edge technology and the other keeps them away from the vast majority of the users that don't live in the valley.

I cannot overemphasize the importance of being surrounded by the smartest of the smart people in the valley. However for entrepreneurs it is equally important to stay grounded in the reality. As cool as iPod was and iPhone is and iPad/iSlate will be it takes years for the products to cross the chasm and many products simply vanish. If you are designing a product in the valley please do me a favor - find your users outside the valley. They are the real people, the mass, that you should be designing for. It took Facebook 5 years to go from 5M users to 350M users and Foursquare is just the beginning of what's more to come. If you are in the valley building the next big thing, be real. Hangout with all the cool kids on the block but don't forget that you will have to cross the chasm and it won't be easy.

Tomorrow Apple is going to announce the tablet. When I take the bus tomorrow I will face the question from the driver: "So, what do you think of the tablet?". While I prepare my answer, check out this hilarious "In The Valley" performance that resonates well with what we see and how we think.

What Can Enterprise Software Learn From CES? - Embrace Ubiquitous Convergence

2010-01-19T08:56:00.000-08:00

One of the biggest revelations to me from my trip to CES is that the ubiquitous computing, once an academic concept, has finally arrived. The data, voice, device, and display convergence is evident from the products that I saw. There has been wide coverage of CES by many bloggers who track consumer technology. However, as a strategist and an enterprise software blogger, I have keen interest in assessing the impact of this ubiquitous convergence in consumer technology on enterprise software.

I believe that the consumers will soon start expecting the ubiquitous experience in everything that they touch and interact with ranging from their coffee cups to the cars and everything in between. This effect is going to be even more pronounced amongst millennial who grew up digitally and are entering into the workforce with an expectation of instant gratification. The mobile phone revolution was consumer-driven at large and Apple made the Smartphone category popular and appealing to non-enterprise consumers. These consumers slowly started expecting similar experience in enterprise software, because of which, many enterprise software vendors are now scrambling for making mobile a priority. I suggest that they learn a lesson from this and stay ahead of the curve when this ubiquitous convergence picks up momentum.

So what exactly does this mean to the enterprise ISVs?

Any surface can be an interface and a display:

I saw a range of new interface and display technology including pico projector, multi-touch screen by 3M, a screen with haptic feedback, and 3D gestural interfaces. A combination of a cheap projector and a camera could turn any surface into a display or an interface. The consumers will interact with software in unanticipated and unimaginable ways. This will put ISVs under pressure to support these alternate displays and interfaces. I see this as an opportunity for ISVs to differentiate their offering by leveraging instead of succumbing to this technology trend. Imagine a production floor that has the cameras and projectors mounted on all the walls. A maintenance technician could walk in and the maintenance information is projected on the machine itself which also doubles as a touch interface. The best interface is no interface. We all use software because we have to.

Location-based applications and geotagging will be a killer combination:

Google's Favorite Places and Nokia's Point and Find (that I saw at CES) are attempts to organize, and importantly, to own the information about places and objects using QR codes. The QR codes are fairly easy to generate and has flexible and extensible structure to hold useful information. The QR code readers are the devices that most of us already own - a camera phone with a working data connection. Combine geotagging with Augmented Reality that is already fueling the innovation in location-based applications, you have got a killer combination that could lead to some breakthrough innovation. This trend can easily be extended to the enterprise software to geotag objects and the associated processes from cradle-to-grave that provide contextual information to people when they interact with the software and the objects. This could lead to efficient manufacturing, smarter supply chain, and sustainable product life cycle management.

3D will go from "cool" to "useful" sooner than you think:

Yes, you and I will be wearing those 3D glasses in our living rooms and may be in our offices as well. Prada and Gucci might make them. What seems like beginning of 3D with movies, video games, and game consoles this area is going to explode with the opportunities. What is being designed as "cool" will suddenly be "useful". With the exception of a few niche solutions ISVs will likely brush off 3D as not relevant in the beginning until someone unlocks the pot of gold and everyone else will follow. Simply replicating 3D analog in a digital world will not make software better. Adding third dimension as an eye candy could actually introduce noise for the users that can look at the data in 2D more effectively. The ISV will have to hunt for the scenarios that amplify cognition and help users understand the data around certain business processes that are beyond their capacity to process in 2D. The 3D technology will be more effective when it is used in conjunction with complementing technology such as multi-touch interface to provide 3D affordances and with location-based and mapping technology to manage objects in 3D analog world.

The rendering technology will outpace non-graphics computation technology:

The investment into rendering hardware such as Toshiba's TV with the cell processors and graphic cards from ATI and nVidia complement the innovation in display elements technology e.g. LED, OLED, energy-efficient plasma etc. The combination of faster processor and sophisticated software is delivering hi-quality graphics at all form factors. The enterprise software ISV have so far focused on algorithmic computation of large volume of data to design various solutions. The rendering computation technology always lagged non-graphics data computation technology. Finally the rendering computation has not only caught up but it will outpace non-graphics data computation in some areas very soon. This opens up opportunities to design software that not only can crunch large volume of data but can leverage high-quality graphics without any perceived lag that delivers stunning user experience and realtime analysis and analytics.

Consumers will have "Personal Cloud" to complement the public cloud:

Okay, this is a stretch, but let me make an attempt to put all the pieces together. The consumers now have access to ridiculously powerful processors and plenty of storage in their set-top boxes, computers, appliances etc. These devices can be networked using wired and wireless devices that support wireless HDMI and USB 3.0. This configuration starts to smell like a mini "Personal Cloud" even though it does not have all the cloud properties. The public cloud, as we all know today, will mature and grow beyond utility computing and SaaS. The public cloud, the hardware that leverages IP6 and multicasting, and sophisticated CDN will see plenty of innovation ranging from streaming movies to calibrating carbon footprint of consumers against their neighbors. The public cloud and the personal cloud will complement each other in providing seamless ubiquitous user experience across all the devices. The ISV who will leverage the cloud and the channels to these consumers' devices have great potential to grow their portfolio of solutions that extends well beyond enterprise software and has a lot more productive and delighted users.

I don't want to predict what is a fad and what is the future but the convergence is clear and present. It is upto the ISVs to be innovative and find the golden nuggets and tune out the noise to deliver better business value to their customers.

On a side note, I really badly want this iPhone controlled AR.Drone - the coolest toy that I saw at CES!

India Needs Public Policy And Service Innovation And Not Web 2.0 Companies

2009-12-15T09:55:00.000-08:00

The second most populous country with the fourth largest spending power, India, saw a surprising 7.9% YOY GDP growth well above the expectations of 6.3%. The Indian stock market recovered much quicker since the US financial meltdown. In fact one of my friends who oversees sales of a European earthmoving equipments company in India complained that the European manufacturers have not increased their production to meet the increased demand in India due to the faster economic recovery, especially in the infrastructure sector. When I switch on a news channel in India I hear all about incentivizing manufacturing companies to increase indigenous production that will fuel the growth of the industrial sector. I also see commercials ranging from baked potato chips to a service to transfer money using virtual currency on a mobile phone targeted to the fast growing middleclass. The marketers have no problem understanding the rich and the middle-class of India and designing the products for them.

What I don’t see is entrepreneurs catering to the people at the bottom of the pyramid. Vivek Wadhwa’s guest posts on TechCrunch stirred quite a controversy especially the one on the “reverse brain-drain” - the Indians returning to India from US. NYTimes recently carried a story on the innovation pace in India. There are more angel investors in India than even before. A few people from Infosys have started their own VC fund. This is all good but I don’t think that the entrepreneurs are pursuing the right opportunities. I have written before about the opportunities to cater to the people at the bottom of the pyramid and I will repeat again that it will be a huge mistake to equate India’s needs with those of the developed countries. India has a little over 300 million people that are below poverty line (450 million by international definition – who earns less than $1.25). What it simply means that at least the one-third population of India has no guarantee that there will be food at the table and access to affordable healthcare. India has significant challenges in getting the basic services right and educating its people and providing healthcare to them. These people will do just fine without Web 2.0 companies.

Here is an example and an opportunity for the kind of innovation that I am referring to:

Electronic voting machine

India has been trying for many years to improve its voting process where the votes are regularly rigged in many parts of the country – it’s called “booth capturing”. The ex. Chief Election Commissioner N. Gopalaswamy (also father of a close friend) helped revolutionize the voting process with the introduction of electronic voting machines with a tiny little feature called “12 second delay” that made all the difference. This delay prevented the votes to be “stuffed” even if the machine was physically compromised. The machine also has an algorithm to recognize a pattern to detect the votes being cast every 12 seconds and simply discard them if needed. This is a great example where technology is being used to fight the corrupt behavior during the elections.

Universal Healthcare Card

This is a huge opportunity. The Universal Healthcare Card is an attempt to insure 300 million people (below the poverty line) with the cost of $1B, which is a small fraction of overall healthcare spending of $45B, which in turn is only 4% of the GDP. This policy has administrative and operational challenges to fight corruption and to ensure that people below poverty line actually benefit out of this plan. I see this as a socioeconomic problem that technology can help solve to provide accessible healthcare to the people who really need them without any pilferage.

What India really needs the most is the entrepreneurs who can get involved in the public policy and create service innovation to remove the fundamental roadblocks that India has on its way to become a developed nation. We need more people like Nandan Nilekani who left Infosys to spearhead the efforts of the national Unique Identification Project. He is an ultra smart entrepreneur who understands the challenges associated with such a project, has deep passion for public policy, and is fully committed to make things happen.

Are you an entrepreneur up for such a challenge?

Google Does Not Have Innovator's Dilemma

2009-10-31T22:13:00.000-07:00

I asked a question to myself: "Why has Google been incredibly successful in defending and growing its core as well as introducing non-core disruptive innovations?". To answer my own question I ran down Google's innovation strategy through Clayton Christensen's concepts and framework as described in his book "Seeing What's Next". Here is the analysis:

Google's latest disruptive innovation is the introduction of free GPS on the Android phone. This has grave implications for Garmin. To put this innovation in the context it is a "sword and shield" style entrant strategy to beat an incumbent by serving the "overshot customers". The overshot customers are the ones who would stop paying for further improvements in performance that historically had merited attractive price premium. Google used its asymmetric skills and motivation - Android OS, mapping data, and no direct revenue expectations - as a shield to enter into the "GPS Market" to serve these overshot customers. Google later turned its shield into a "sword" strategy by disinteremediating the map providers and incentivizing the carriers with a revenue-share agreement.

On the other hand Google's core search technology and GMail are a couple of examples of "incremental to radical" sustaining innovations where Google went after the "undershot customers". The undershot customers are the ones who consume a product but are frustrated with its limitations and are willingly to switch if a better solution exists. The search engines and the web-based email solutions existed before Google introduced its own solutions. GMail delighted the users who were frustrated with their limited email quota and the search engine used better indexing and relevancy algorithms to improve the search experience. I find it remarkable that Google does not appear to be distracted by the competitors such as Microsoft who is targeting Google's core with Bing. Google continued a slow and steady investment into its sustainable innovation to maintain the revenue stream out of its core business. These investments include the next generation search platform Caffeine, social search, profiles, GMail labs etc.

Where most of the companies inevitably fail Google succeeded by spending (a lot of) money on lower-end disruptive innovations against "cramming" their sustaining innovation. Google even adopted this strategy internally to deal with the dilemma between its sustaining and disruptive innovations. One would think that the natural starting point for Google Wave would be the GMail team but it's not true. In fact my friends who work for Google tell me that the GMail team was shocked and surprised when they found out that some other team built Google Wave. Adding wave-like functionality in the email would have been cramming the sustaining innovation but innovating outside of email has potential to serve a variety of undershot and overshot customers in unexpected ways. This was indeed a clever strategy.

So, what's next?

If I were AT&T I would pay very close attention to Google's every single move. Let's just cover the obvious numbers. The number of smartphone units sold this year surpassed the number of laptops sold and the smartphone revenue is expected to surpass the laptop revenue in 2012. Comcast grew their phone subscribers eight-fold with the current number exceeding 7 million. Google Voice has over 1.4 million users of which 570,000 use it seven days a week. Even though Google does not like its phone bill Google seems to be committed to make Google Voice work. This could allow Google to serve a new class of overshot customers that has a little or no need of land line, desire to stay always-connected, and hungry for realtime content and conversations. Time after time Google has shown that it can disintermediate players along its value chain. It happened to NavTeq and Tele Atlas and it is happening to other players with Google Power Meter and Chrome.

Many people argue that Chrome OS is more disruptive. I beg to differ. I believe that Chrome OS does not have near term disruption trajectory. Being wary of hindsight bias, I would go back to the disruptive innovation theory and argue that Chrome OS is designed for the undershot customers that are frustrated with other market solutions at the same level. For the vast majority of the customers it does not matter. If Google does have a grand business plan around Chrome OS it certainly will take a lot of time, resources, and money before they see any traction. I see the telco disruption happening much sooner since it serves the overshot customers. I won't be surprised if Google puts a final nail in telco's coffin and redefines the telephony.

Branding On The Cloud Is Part Business Part Mindset

2009-10-28T10:26:00.000-07:00

As it goes "on the Internet, nobody knows you're a dog". Actually people do. Recently AT&T asked their employees to fake the net neutrality. Employees were asked to use their personal email addresses to petition against net neutrality. The internal memo ended up on the blogs and Twitter in minutes. Forcing your brand down your employees' throats is not particularly a smart idea.

Is your brand ready for the cloud? This is not a question that many companies ask until their brand gets caught in a cloud storm. The storm is about the customers, partners, and suppliers discussing your products and brand in the public using social media, report problems using the SaaS tools, and engage into the conversations in ways that you never anticipated. Recently Seth Godin announced an initiative to help companies launch brand in public. It stirred quite a controversy and created confusion. He had to pull back. The organizations are simply not ready. The organizations are unclear on how to monitor, synthesize, and leverage the conversations that are happening on the cloud. The cloud enables the people to come together to share and amplify their conversations. .

Whether you are a SaaS ISV, non-SaaS ISV, or not even a software company, what can you do as an organization to build your brand on the cloud? It is part business past mindset:

Don't dread failures instead use them to amplify brand impact:

Recently an enterprise SaaS ISV, Workday, experienced an unplanned 15-hour outage. Not so surprisingly customers responded well with the outage. SaaS essentially made the outage a vendor's problem. Unclear? Take an example of the analog world. Occasionally I have experienced power outage in my neighborhood (yes, even in supposedly modern silicon valley). The wider the outage faster it got resolved. The utility folks feverishly worked to resolve the problem that impacted hundreds of subscribers. Coming back to Workday's outage, while Workday had all hands on the deck to resolve the outage the management team personally picked up the phone and started calling the customers to reassure them that the outage will be resolved soon. They extensively used the social media during and after the outage to be transparent about the overall situation. Now it gets even more interesting. They reached out to a key blogger, Michael Krigsman, who analyzes IT failures to brief him on what happened and extended an invitation to have a chat with the CEO. Michael Krigsman has a great post 'A matter of Trust' covering this outage and his subsequent conversations.

Workday used its outage not only to underscore the fact that why people think they are better of with a SaaS vendor but also used the opportunity to strengthen their brand proposition amongst the customers, analysts, and bloggers.

Building brand leveraging SaaS delivery model to act in realtime:

If you are a SaaS vendor ask yourself whether you are leveraging the SaaS delivery model to strengthen your brand in realtime. Jason Fried from 37 Signals was quite upset upset with Get Satisfaction when 37 Signals got labeled as “not yet committed to an open conversation”. A couple of people from Get Satisfiction immediately responded, apologized, and changed the parts of the tool in minutes that caused the problems. Similarly Twitter postponed its scheduled downtime to accommodate the protest against the outcome of the election in Iran. A former deputy national security advisor to George W. Bush, Mark Pfeifle, went to the extent to comment that Twitter founders should have won the nobel peace prize for postponing the downtime.

Being able to demonstrate the support for what you believe in has significant positive impact on your brand. Don't underestimate the power of social media on the cloud. Twitter has changed culture of Comcast.

Empower your employees to be your mavens:

As Malcolm Gladwell puts it customers don't retain their soap wrappers to call the toll free number to let the manufacturer know if they are unsatisfied. But if someone does call, you know that, you discovered a maven whom you should serve at any cost. That person will start the word-of-mouth epidemics. Chances are that some of your employees are already having conversations on the cloud. Make them mavens of your brand. Get Satisfiction is an example of a great tool that a company can use to encourage their employees to get closer to the customers using the alternate customer support channels. Glassdoor is another example of such a tool that not only works as a great salary benchmarking tool but also provides insights into culture of an organization. Primarily designed as a tool for the external candidates the tool has potential to be used by the internal executives to objectively assess the employee sentiment and help improve the external brand perception as projected by the employees. Focus on your employees and how they can better connect with the customers and partners using the tools and open communication channels on the cloud.

I am not ignoring the negative aspects of the cloud being an open medium that isn't perfect. It never will be. As Bruce Schneier describes the commercial speech arms race - "Commercial speech is on the internet to stay; we can only hope that they don't pollute the social systems we use so badly that they're no longer useful."

I am optimistic. The cloud is a great platform for social participation that, if used wisely, could strengthen your brand.

Augmented Reality Will Change Enterprise Software For Real

2009-09-28T10:14:00.000-07:00

Augmented Reality (AR) has seen a sudden buzz in the last few weeks. The announcements just keep coming; Layar announced a 3D API and Wikitude announced AR API. VentureBeat recently ranked the emerging start-ups in augmented reality. AR is still a nascent domain with many quirks and twists but it is for real and it is going to cause disruptions in many dimensions. This is how I see it would affect the enterprise software:

No interface will be the interface

The augmented reality uses the most natural interface, the reality, and layers information on top of it essentially eliminating the need to have an artificial interface. Users will prefer in-context user experience at the locations where they perform their primary task compared to unnatural static experience on their current devices. I also see the impact and potential for innovation in the MVC frameworks. The AR opens up a lot more opportunities for the developers and designers, who were constrained by the traditional technological barriers, to innovate new UI frameworks that have higher affordance and closer mapping to users’ mental model against an unproductive artificial user interface. Getting closer to user’s mental model is going to make the user experience a pleasure and the users more productive. Check out this Layar video:

Data will be the new design

With the growing popularity of AR once considered a nice to have feature, the alternate data consumption, will become the core requirement of the enterprise software. The users are likely to access data with a variety of new clients in unanticipated ways. The widespread adoption of RSS feeds made the interaction and visual design of a blog less relevant against burning the feeds to deliver the content in realtime. Similarly accessibility to a range of rich enterprise data in real-time is going to outweigh everything else. The users will create new environments and experiences. This emergent behavior is a golden opportunity for the companies that have captured rich enterprise data but have faced challenges to make it accessible and useful to the end users.

The SaaS, the cloud, and mobility will be base expectations

The AR applications require the data to be accessed from a range of physical locations on mobile devices without any latency. This distributed data need combined with the nature of the AR deployments where one company does not own an end-to-end solution will necessitate the data and the apps to be delivered from the cloud to optimize the solution. The users will not only demand that the application be accessible from the mobile devices but the mobile devices might be the primary and in some cases the only interface to the business information. Emerging technology trend such as cloud-based rendering, when combined with such AR deployments, has potential for some killer innovative applications.

These are exciting times and I hope that the entrepreneurs tap into the world of augmented reality and make it real by creating innovative experiences that demonstrate technology excellence, create new business models, and make it a real pleasure to interact with the enterprise software.

True Entrepreneurial Spirit Is Believing In A BHAG

2009-09-17T10:56:00.000-07:00

GigaOM has a post "How Start-ups can win big with VCs" that muddies their point of view of having a clear value proposition with not doing something because no one may want this or someone else has already done it. I added the following comments to that post:

I agree with the viewpoint about honing the pitch. However I have a different take on some of the start-ups. It’s one thing not to know what the value proposition is but it is other thing to believe in a BHAG. Many start-ups had huge success when people initially thought that they could live without that. Twitter is one of those examples. Also, there is nothing wrong in duplicating what someone else is doing. Presence of similar companies signal that there is a market. It is now up to the new entrant to beat the competition by solving the problem well. When Google announced Gmail it was one of the last (as of now) web-based email that was introduced. Google would not have released Gmail or even the search engine if they would have thought that other people are already solving this problem.

I welcome the entrepreneurial spirit of the Silicon Valley. This innovation engine is amazing. I was watching the panelists beat up http://anyclip.com at Techcrunch 50 suggesting that the content deals are hard to come by. I liked the answer: “No one thought that we would have a black president one day”. The company acknowledges that it is an astronomic task but the reward is very high if they can pull that one off. We all know the story about Steve Jobs, iTunes, and the music industry. Let’s not forget that we can repeat the history only if we believe into these start-ups and give them an opportunity to succeed.

Amazon Customers Can Now Get A Placebo Cloud

2009-08-31T23:21:00.000-07:00

That would be the new Virtual Private Cloud (VPC) by Amazon.

I am a big proponent of the public cloud but I am a bigger proponent of giving what the customers really want. Amazon had resisted offering a private cloud but they finally gave in and offered a private cloud or at least this is what they want the customers to believe. The bloggers are already questioning whether VPC is a true private cloud. Regardless of the arguments whether the VPC is really a “virtual” private cloud or a “virtually" private cloud, I believe, this placebo cloud is likely to help the customers overcome the cloud computing adoption barriers:

Security: The placebo cloud would alleviate the perceived risk of adopting the cloud computing. The perceived risk is based on the customers’ past experiences. The customers believe that anything that they can connect using VPN must be safe even if they are tunneling into a set of shared resources. The customers will get an environment what they believe is safe and secure to deploy and consume the applications.

Ownership: The VPC does not let the customers own the computing but still provides a sense of ownership. If Amazon’s marketing engine does a good job the customers would be less wary about the lack of ownership.

Virtualization: The customers are not necessarily clear about the real differences between virtualization and the cloud and they necessarily don’t care as long as their business goals are realized. The VPC would allow the customers to work with the existing technology stack that they already understand such as VPN and network-virtualization. The VPC would also empower the partners to help the customers build the bridge from their on-premise systems to the cloud to create a hybrid virtualization environment that spans across various resources.

Even if I personally favor the public cloud I do want to see the customers buy into the cloud computing and later make a decision whether they should move to the public cloud to leverage the cloud in its true sense.

SOAP may finally REST

2009-08-27T11:16:00.000-07:00

Lately I have observed significant movement in two transformational trends - adoption of REST over SOAP and proliferation of non-relational persistence options. These two trends complement each other and they are likely to cause disruption sooner than later.

The enterprise software that required complex transactions, monitoring, and orchestration capabilities relied on the SOAP-based architecture and standards to realize their SOA efforts. The consumer web on the other side raced towards embracing RESTful interfaces since they were simple to set up and consume. There are arguments on both the sides. However, lately the market forces have taken the side of REST even if REST has significant drawbacks in the areas such as security and transactions. This once again proves that a simple and good enough approach that conforms to loose contracts outweighs a complex solution that complies to stricter standards even if it means compromising certain critical features. The web is essentially an unreliable stateless medium and any attempts to regulate it is less likely to work in our favor.

Many argue that the self-describing standards for SOAP are its strength over the RESTful services that lacks such features. However designing a RESTful service is fairly trivial since it allows to learn and experiment by being iterative unlike a relatively complex upfront learning process associated with the SOAP-based architecture. There has been a flurry of activities in the messaging middleware by Google that makes these RESTful interface even more compelling. This includes Google Wave Federation and PubSubHubbub. The developers are more likely to prefer these messaging protocols against SOAP and that would mean more RESTful APIs in the Pushbutton Web. Easy consumability reduces the initial adoption barrier and that's the key to success in many cases.

Since I last blogged about the continuum of the database on the cloud from schemaless to full-schema new persistence options have emerged such as RethinkDB and HadoopDB and many debates have spurred questioning the legacy of the RDBMS. For a cloud-like environment the statelessness, ad hoc persistence design, and instantaneous horizontal scale go well with the RESTful architecture. The growing popularity of SimpleDB and CouchDB along with many discussions on how to achieve CRUD with REST signal that the persistence is becoming more RESTful and schemaless.

I was convinced quite some back that REST was certainly the future for the consumer web but the latest trends have made me believe that the REST will see its adoption in the enterprise software accelerated much sooner than I had originally expected. This is like Java and Internet; the organizations embraced Java and the Internet at the same. The same will be true for the cloud and REST. When the companies consider moving to the cloud they will reconsider their SOA and persistence strategy and will likely adopt REST and alternate persistence models.

The cloud might be the last nail in the SOAP coffin.

SaaS 2.0 Will Be All About Reducing The Cost Of Sales

2009-08-18T16:14:00.000-07:00

A clever choice of the right architecture on right infrastructure has helped the SaaS vendors better manage their operational infrastructure cost but the SaaS vendors are still struggling to curtail the cost of sales. As majority of the SaaS vendors achieve feature and infrastructure cost parity, reducing the cost of sales is going to be the next biggest differentiation for the SaaS vendors to stay competitive in the marketplace.

Direct sales model is highly ineffective and cost-prohibitive for the SaaS vendors as it does not scale with the volume business model that has relatively smaller average deal size. The role of the direct sales organization will essentially get redefined to focus on the relationship with the customers to ensure service excellence and high contract renewal rates in addition to working on long sales cycles for large accounts.

How can a SaaS vendor reduce the overall cost of sales to maintain healthy margins and growth?

This is a difficult nut to crack. There are no quick fixes. There is no easy way to optimize the tale end of the process without holistically redesigning the entire SaaS life cycle.

Self-service demos to "self-selling" trials:

Fundamentally the direct sales model for an on-premise software sales has been all about initial investment into the right demos to model customer scenarios and align the sales pitch to match the solution needs. The SaaS vendors moved away from this model as much as they could and replaced it with the self-service demos or trials. However these demos are not "self-selling" and still requires intervention from the direct sales people at various levels.

The SaaS vendors need to move from self-service demos to the self-selling ones that are not only fully functional out-of-the-box but also articulate the solution capabilities implicitly or explicitly. The demo is not just about showing what problems you are solving but it is also about how well it maps to the customers' pain points. It is like buying a hole and not a drill. The demo and the product should scream out loud the value proposition without making customers go through a webinar or a series of PowerPoint slides.

Customer acquisition to customer retention:

SaaS companies have traditionally focused their sales and marketing budget on customer acquisition against retention. While customer acquisition is a necessity the increasing SaaS competition could result into the current customers ditching the vendors. Customer support is the new sales model. Design your customer support organization and operations to retain customers. Don't let the contract renewals slip through the cracks.

Your customers are the biggest asset that you have. Market new solutions to them as an up-sell. One of the powerful features of a SaaS platform is to be able to integrate and push the new products effortlessly to the existing customers and have them try it out before they start paying you. Modernize your internal tools to track the usage analytics to better understand your customers, sales activities and effectiveness of the marketing campaigns. You have a problem if you cannot tell which customer is using what, who are the right partners, who needs training and support etc. If you haven't lately looked at the tools that your sales people use this is the right time. I would not expect a SaaS vendor to reduce the cost of sales without empowering the sales force with the true customer, competitior, and partner intelligence.

Low-touch persuasions to hi-touch interactions:

Low-touch one-to-one selling does not scale. Replicate the Avon model. Design a great ecosystem of your channel partners to whom you can pass on the cost of sales. Align the incentives and encourage the partners to sell but ensure the customer support and overall brand integrity. This strategy would require an extensive partner program with sizable investment in training and tracking what and how the partners are selling but this investment will go long way.

Reserve the direct sales force engagement for large hi-touch CIO type deals where you are required to go whole nine yards before you get a contract. The key is to have a highly variable sales force and extremely efficient compensation model to deal with a variety of prospects and customers. One size does not fit all.

Low-barrier adoption to zero-barrier productivity:

The SaaS model pioneered the low-barrier adoption empowering the LOB to sign up and start using the software without an approval or help from the IT. Eliminate any and all barriers to further penetrate the adoption. Do not enforce upfront credit-card requirements and even skip the registration if you can. Let the customers use the software with the minimum or no information up front. Demonstrate value when asking for more information e.g. Picnik lets you manipulate image in any way you want but would ask you to register if you want to save images. There should be no paper work whatsoever, not even a physical contract. Allow customers to bring in the content from other sources such as Flickr, Facebook etc. Allow the customers to have access to a live sandbox as a step before the dedicated trial. Starting from a blank canvas could be a hindrance to evaluate a product.

Designing An Innovation Incubator To Prevail Over Innovator's Dilemma

2009-07-28T10:12:00.000-07:00

The large scale software companies often deal with the tension between incremental and revolutionary innovation. They know that if they only keep listening to their customers' requests the very same customers will put them out of the business. Clayton Christensen has captured this phenomenon in The Innovator's Dilemma. Over a period of time these companies have managed to execute the incremental innovation really well to deliver the same software release after release and occasionally introduce new products. However most of these companies struggle to incubate revolutionary innovation inside the company since it is fundamentally a different beast. The executives are often torn between funding the revolutionary initiatives to ride the next big wave and funding the incremental innovation that the current customers and the market expects. It is absolutely imperative for the executive management to differentiate between these two equally important but very different types of innovation opportunities. Many companies have set up in-house incubators to bring revolutionary innovation to the market but in most cases the incubators are set up as yet another department inside the company that shares the same legacy and bureaucracy. Following are some suggestions on setting up and running an incubator to avoid the innovation disappear down the rat hole:

6x6 cubicle in Iowa won't cut it: There is nothing wrong with Iowa but I won't build an incubator there. Pick a location that emanates entrepreneurial spirit, attracts talent, and is surrounded by good colleges. Scout for a location that has good work-life characteristics where people feel the energy and have social outlets - pubs, hiking trails, good restaurants etc. San Francisco and Palo Alto in the Silicon Valley are a couple of examples of such locations.

I cannot overemphasize the impact of an inspirational physical space that fosters innovation and drives people with insane urge to be creative and build something disruptive. Ditch Steelcase and shop at IKEA. Have a loft-like set-up with open seating, project rooms instead of conference rooms, and have all the furniture on the wheels. Can you write on all the walls? Have alternate comfortable seating all over the places - bean bags, red couches, chairs and coffee tables with tall bar stools. Innovation does not happen in a cubicle. Have an entire team paint the loft with bright colors as a team-building exercise. Pay a mandatory visit to IDEO and d.school in Palo Alto if you haven't already been there.

No process is the new process: The incubator should not inherit your organization's legacy processes. You cannot expect your employees to behave differently to solve a problem if they are restricted by the same process overhead. Throw your application policing process out of the window and let people experiment with whatever works well for them. One of the main reasons why incubators fail because they rely on the organization's product roadmap and capabilities. Don't pick up any dependencies instead simply consider your organization's capabilities as one more source that you can evaluate for your needs. Use open source as much as you can, build your own partner relationships, and OEM whatever you can.

Pizza-size multidisciplinary teams: Can your entire product team be fed on two large pizzas? Smaller and tighter teams reduce the communication overhead, churn, and produce amazing results. Don't follow your corporate headcount calculations. Go for smaller teams. Hire I-shaped and T-shaped people to form a multidisciplinary team. Have a good mix of internal people who understand the business that you are into and the external people that are entrepreneurs or have worked in incubators. Get help from the external recruiters to find the right people since the internal recruiters may or may not have expertise to find and hire the kind of people that you are looking for.

Be agile and design think everything: Design thinking and agile methodology empower the teams to apply an ambidextrous and iterative approach to take on the revolutionary ideas in highly ambiguous environment. Encourage wild ideas, defer judgment, and be iterative. Be visual in storytelling, stay close to your customers and end-users, and have persuasive, catalysts, and performance design. Focus on useful over usable. Have a good-enough mindset and ship often to get continuous feedback to keep improving. Iterate as fast as you can and keep your sprint cycles small.

Seed, Round A, and Round B: This is where many organizations get hung up on an upfront $200M business case to qualify the business opportunity as incubation-worthy. If all the start-ups required to have a detailed upfront business model we would not have had Twitter, Facebook, Google, Craigslist etc. The same incremental business case mindset simply won't work for revolutionary innovation. The disruptive innovation has characteristics that many people haven't seen their in their lifetimes. The organization need to adopt the VC model and embrace the high risk high reward business environment. There will be plenty of failures before you hit a jackpot but that's the fundamental premise of VC funding. Have a separate budget and an investment decision process that provides autonomy to an incubator to make their own decisions without going through a long chain of command. Have multiple rounds of funding to ensure that you are tracking the potential of the innovation right from the seed to the maturity.

Explore all exit strategies: Don't expect to go-to-market with everything that comes out of an incubator. The mainstream product teams in your organization may or may not embrace and support the innovation citing the reasons "not invented here" or "too radical". Focus on your customers and success stories. If you are successful people will come to you instead of you selling the outcome to the organization. Be courageous and kill the products that are not working out and experiment with other exit strategies such as spin-offs, outright sale etc. Try to keep the product portfolio moving. High volume and turnover is a good thing for an incubator. Financial success is not the only success that counts; happy customers, re-invigorated organization, and global visibility as an innovation player are equally important KPI.

Reward high risk behavior: People work for uncertain and highly ambiguous projects for two reasons - higher reward for higher risk and passion to build something new. Design your compensation structure that is fundamentally different than your corporate title-driven compensation and includes a generous equity option. The titles don't mean much when it comes to an incubator. What really matters is the skills, attitude, and the knowledge that people bring to the table. The career path in an incubator is very different than a conventional corporate ladder. Make sure that all the people that are part of an incubator truly understand what they are signing up for and are passionate for the work rather than simply waiting to be a "Chief Innovation Officer".

Debunking The Cloud Security Issues

2009-07-17T08:02:00.000-07:00

Forrester recently published a report on the security of cloud computing that grossly exaggerates the security threats. To point out few specific instances:

"Users who have compliance requirements need to understand whether, and how, utilizing the cloud services might impact your compliance goals. Data privacy and business continuity are two big items for compliance. A number of privacy laws and government regulations have specific stipulation on data handling and BC planning. For instance, EU and Japan privacy laws demand that private data—email is a form of private data recognized by the EU—must be stored and handled in a data center located in EU (or Japan) territories"

This is a data center design 101. One of the biggest misconceptions the organizations have about the cloud computing is that they don't have control over where their information is being stored. During my discussion with the Ron Markezich, corporate vice president of Microsoft Online, at the launch of Microsoft's Exchange on the cloud he told me that Microsoft already supports the regional regulatory requirements to store data in regional data centers. Cloud is fundamentally a logically centralized and physically decentralized medium that not only offers utility and elasticity but also allows the customers to specify policies around physical locations.

"Government regulations that explicitly demand BC planning include the Health Insurance Portability and Accountability Act (HIPAA) ...."

Amazon EC2 fully supports HIPAA [pdf] with few customers already using it. It is rather strange that people think of cloud as a closed and proprietary system against an on-premise system. A CIO that I met few weeks back told me that "on-premise systems are like an on-premise vault that you don't have a key to". The cloud vendors are under immense pressure to use open source and open standards for their infrastructure and publicize their data retrieval and privacy policies. In fact many people suggest that the United States should force the public companies to put their financial information on the cloud so that SEC can access it without any fears of the companies sabotaging their own internal systems. The cloud vendors have an opportunity to implement a common compliance practice across the customer. The customers shouldn't have to worry about their individual compliance needs.

"The security and legal landscape for cloud computing is rife with mishaps and uncertainties."

And the rest of the landscape is not? What about T.J. Maxx loosing 45.7 million credit and debit cards of shoppers, Ameritrade loosing backup tapes that had information of 200,000 of its customers, and UPS loosing Nelnet's backup tape that had personal information of approximately 188,000 customers?

"With the rising popularity of cloud computing and the emergence of cloud aggregators and integrators, the role of an internal IT security officer will inevitably change—we see that an IT security personnel will gradually move away from its operations-centric role and step instead into a more compliance and requirements-focused function."

Staying in current operational role still requires the IT to be compliant. Just because the information is stored on-premise it does not automatically make the system compliant. I would expect the the role of operational IT to change from a tactical cost center to a strategic service provider. If the IT does not embrace this trend they might just become a service consolidation organization. The role of a security officer will evolve beyond the on-premise systems to better understand the impact of the cloud and in many cases help influence the open cloud standards to manage and mitigate the security risks.

"In other cases, the division is not quite so clear. In software mashups, or software components-as-a-service, it can be difficult to delineate who owns what and what rights the customer has over the provider. It is therefore imperative that liability and IP issues are settled before the service commences."

I partially agree. The customers should absolutely pay attention to what they are signing up for and who will own what. The critical aspect of the IP is not the ownership but the IP indemnification. After the SCO case customers should know what are their rights as a customer if someone sues a cloud provider for IP infringement.

"Other contractual issues include end-of-service support—when the provider-customer relationship ends, customer data and applications should be packaged and delivered to the customer, and any remaining copies of customer data should be erased from the provider's infrastructure."

This is what happens when we apply the same old on-premise contracts to the new SaaS world. There are no copies of the software to be returned. Customer simply stop receiving the "service" when the relationship ends. Vendors such as Iron Mountain advocates the role of a SaaS escrow for business continuity reasons. It is up to the customers to decide what level of escrow support they need and what's their data strategy once the relationship with a SaaS vendor ends. It is certainly important to understand the implications of SaaS early on but there is absolutely no reason to shy away from the cloud.

Chief Sustainability Officer - the next gig for a CIO

2009-07-09T17:42:00.000-07:00

CIO no longer means Career Is Over. CIOs should not underestimate their skills and organizational clout to lead the company in its sustainability efforts by being a Chief Sustainability Officer (CSO).

Leverage relationship with the business: As a CIO you work closely with the business and have holistic understanding of the challenges that the business faces and the growth opportunities that they aspire to go after. You can leverage the relationship with the business to own and execute the sustainability strategy and effectively measure and monitor the progress using the expertise and investment into the IT systems. You can walk your business folks through your scenario-based architecture to help them quantify the business impact of the sustainability initiatives and estimate the required transformation efforts.

Start with Green IT and lead the industry: Start with the area that you are most familiar with. Reduce the carbon footprint of your IT systems by improving the PUE of the data centers and better manage energy consumption of the desktops. If you do decide to disinvest into the data centers and move tools and applications to the cloud it will not only reduce the energy cost but would also result in consuming cleaner energy. Share your best practices with your industry peers and lead your industry in the sustainability efforts.

Make Sustainability a business differentiation: For many organizations sustainability is not just a line item in the corporate responsibility report, it is actually the future growth strategy and a sustainable competitive advantage over their competition e.g. sustainable supply chain, higher operating margins, end-to-end environmental compliance etc. As a CIO you have the right weapons and skills in your arsenal to transform the organization in the sustainability initiatives. You could innovate your company out to grow leaps and bounds by focusing on the sustainability. This could be a blue ocean strategy for many organizations that are struggling in the red ocean to beat the competition. You do have an opportunity to empower your customers in their mission to be sustainable by providing them the data that they need e.g. a bill of material with the carbon footprint and recycle index, realtime energy measurement etc.

Redefine the program management office: The sustainability projects are very similar to IT projects in many ways - make a large set of stakeholders to commit without having much influence on them, work with internal employees, customers, and partners etc. Traditionally you have been running the program management office for technology and information management projects. Apply the same model and leverage skills of your program managers to run sustainability projects internally as well as externally. Sustainability is fundamentally about changing people's behavior. Promote alternate commute program tools such as RideSpring, carbon social networks such as Carbonrally, and employee-led green networks such as eBay Green Team. Run targeted campaigns to reduce energy and paper consumption, increase awareness, and solicit green ideas. Right kind of tools with an executive push and social support could create a great sustainable movement inside an organization.

Chief Sustainability Officer is an emerging title. Your ability to work across the organization, leverage relationship with the business to sell them on the sustainability goals, and manage the tools that are penetrated in all parts of your organization make you well suited for this role. A CSO does not necessarily have to be a domain expert in sustainability. In fact I would expect a CSO to be a people-person that can make things happen with the help of the sustainability experts and visionaries.

Now you know what your next gig looks like.

Structure 09 - Cloud Computing Is Here To Stay And Grow

2009-06-29T09:51:00.000-07:00

I was invited as a guest blogger to Structure 09 - a day long event by GigaOM focusing on cloud computing. It was a great event with an incredible speaker line-up of thought leaders in the domain of cloud computing. The panel and keynote topics included persistence on the cloud, hosting web apps on the cloud, infrastructure design etc. I won't attempt to summarize everything that I saw and heard, instead here are some impressions:

Solving interoperability with Open Source: A founding developer of Wordpress, Matt Mullenweg, strongly advocated open source for the cloud for two reasons. The first reason is to achieve interoperability and the second is to ensure the business continuity when certain vendors cease to exist. As I have argued before there is a strong business case for open source on the cloud. It was great to see the reaffirmation that other thought leaders feel the same way.

Operational excellence: Javier Soltero, CTO of Management Products at SpringSource, emphasized the operational excellence as a key differentiation for a company to achieve a competitive advantage. Vijay Gill, a senior manager Engineering and Architecture at Google, also feels the same way. He believes that having the lowest cost platforms capable of providing good enough service is going to be a competitive advantage for the companies. For good software, you need great engineers – and most companies aren’t set up to do that. The technological challenges can be solved but it is the smart people writing smart code that will provide the competitive advantage to the cloud infrastructure companies.

Vertical clouds: We are likely to see more and more cloud offerings that are optimized for the vertical functionality e.g. run your Ruby apps on the cloud, analytics on the cloud, storage on the cloud etc. The IT should focus on becoming a service provider against merely a cost center. Chuck Hollis, CTO of Global Marketing, EMC Corporation believes that if IT does not embrace the cloud technology stack, they will most likely become an organization that manages the consolidation of all the cloud services. James Lindenbaum, co-founder and CEO of Heroku, emphasized that the developers should focus on core - what they are really good at and not worry about how the code will scale on the cloud. The bad code is bad code regardless of where it runs.

Hybrid cloud: The debate between private and public cloud continued. The proponents of the public cloud such as Greg Papadopoulos, CTO of Sun Microsystems, argued that most public clouds are run more securely than most private enterprise clouds. I completely agree. One of the ideas that was pitched is to have SEC force the public companies to put their data on the cloud. If, for compliance reasons, the data needs to be retrieved the government has a better shot at retrieving this data from a public cloud against a private and proprietary system that could potentially be sabotaged. The proponents of the private cloud such as Michael Crandell, CEO and founder of RightScale, cited security as a barrier and suggested approaches such as silo clouds that are dedicated for a given customer that do not share data with other customers.

I believe that hybrid deployments are here to stay. Successful cloud and SaaS vendors will be ones who can create seamless experience for the customers and end users from top to the bottom of the stack such that the customers still retain their current on-premise investment, keep their data that they don't want on the cloud, and significantly leverage cloud for all their other needs.

It was a lot of information packed into one day event. However on the lighter side Om's conversation with Marc Benioff included Marc poking fun at Oracle and Microsoft. Marc is witty and he has great sense of humor. Check out his conversation:

Cloud Computing At The Bottom Of The Pyramid

2009-06-18T17:33:00.000-07:00

I see cloud computing play a big role in enabling IT revolution in the developing nations to help companies market products and services to 4 billion consumers at the bottom of the pyramid (BOP). C.K.Prahlad has extensively covered many aspects of the BOP strategy in his book Fortune At The Bottom Of The Pyramid that is a must-read for the strategists and marketers working on the BOP strategy.

This is how I think cloud computing is extremely relevant to the companies that are trying to reach to the consumers at the BOP:

Logical extension to the mobile revolution: The mobile phone revolution at the BOP has changed the way people communicate in their daily lives and conduct business. Many people never had a landline and in some case no electricity. Some of them charged their mobile phones using a charger that generates electricity from a bike. As the cellular data networks become more and more mature and reliable the same consumers will have access to the Internet on their mobile phones without having a computer or broadband at home.

The marketers tend to be dismissive about the spending power of the people at the BOP to buy and use a device that could consume applications from the cloud. BOP requires innovative distribution channels. The telcos who have invested into the current BPO distribution channels will have significant advantage over their competitors. The telcos, that empowered people leap frog the landline to move to the mobile phones, could further invest into the infrastructure and become the cloud providers to fuel the IT revolution. They already have relationship with the consumers at the BOP that they can effectively utilize to pedal more products and services.

Elastic capacity at utility pricing: The computing demand growth in the developing countries is not going to be linear and it is certainly not going to be uniform across the countries. The cloud computing is the right kind of architecture that allows the companies to add computing infrastructure as demand surges amongst the BPO consumers in different geographies. Leaving political issues aside the data centers, if set up well, could potentially work across the countries to serve concentrated BOP population. The cloud computing would also allow the application providers to eliminate the upfront infrastructure investment and truly leverage the utility model. The BOP consumers are extremely value conscious. It is a win-win situation if this value can be delivered to match the true ongoing usage at zero upfront cost.

Cheap computing devices: OLPC and other small handheld devices such as Netbooks are weak in the computing power and low in memory but they are a good enough solution to run a few tools locally and an application inside a browser. These devices would discourage people from using the applications that are thick-client and requires heavy computation on the client side. The Netbooks and the introduction of tablets and other smaller devices are likely to proliferate since they are affordable, reliable, and provide the value that the BOP consumers expect. Serving tools and applications over the cloud might just become an expectation, especially when these devices come with a prepaid data plans.

Highly-skilled top of the pyramid serving BOP: Countries such as India and China have highly skilled IT people at the top and middle of the pyramid. These people are skilled to write new kind of software that will fuel the cloud computing growth in these emerging economies. The United States has been going through a reverse immigration trend amongst highly skilled IT workers who have chosen to return back to their home countries to pursue exiting opportunities. These skilled people are likely to bring in their experience of the western world to build new generation of tools and applications and innovative ways to serve the people at the BOP.

Sustainable social economies: It might seem that the countries with a large BOP population are not simply ready for the modern and reliable IT infrastructure due to bureaucratic government policies and lack of modern infrastructure. However if you take a closer look you will find that these countries receive a large FDI [pdf] that empowers the companies to invest into modern infrastructure that creates a sustainable social economy.

Most of the petrochemical refineries and cement manufacturing plants that I have visited in India do not rely on the grid (utility) for electricity. They have set up their own Captive Power Plants (CPP) to run their businesses. Running a mission critical data center would require an in-house power generation. As I have argued before, local power generation for a data center will result into clean energy and reduced distribution loss. There are also discussions on generating DC power locally to feed the data centers to minimize the AC to DC conversion loss. Relatively inexpensive and readily available workforce that have been building and maintaining the power plants will make it easier to build and maintain these data centers as well. The local governments would encourage the investment that creates employment opportunities. Not only this allows the countries to serve BOP and build sustainable social economy but to contribute to the global sustainability movement as well.

Structure 09: Put Cloud Computing To Work

2009-06-10T21:24:00.000-07:00

GigaOM has organized an exciting event on cloud computing, Structure 09, on 06/25/2009. I will be at the event as a guest blogger and will be part of the energy and excitement. GigaOM has managed to put on an excellent schedule packed with great speakers including Marc Benioff, Michael Stonebraker, Jonathan Helliger, Greg Papadopoulos, Werner Vogels, and many others. I like the breadth of topics - cloud databases, data center design and optimization, commodity hardware, private cloud etc. I will see you there if you are planning on attending the event and if not come back here for blog posts covering the event. Leave a comment if you would like to see any specific topics or sessions covered.

Here is a lineup of the speakers:

Keynotes

Marc Benioff | Chairman and CEO, Salesforce.com
Paul Sagan | President and CEO, Akamai

Confirmed Speakers Include:

Werner Vogels | CTO, Amazon.com
Greg Papadopoulos | CTO, Sun Microsystems
Jonathan Heiliger | VP Technical Operations, Facebook
Dr. David Yen | EVP Emerging Technologies, Juniper Networks
Russ Daniels | VP and CTO, Cloud Services Strategy, Hewlett-Packard
Vijay Gill | VP, Engineering, Google
Richard Buckingham | VP Technical Operations, MySpace.com
Jack Waters | CTO, Level 3 Communications
Yousef Khalidi | Distinguished Engineer, Microsoft
Dr. Michael Stonebraker, Ph.D. | RDBMS pioneer and CTO, Vertica
Raj Patel | VP of Global Networks, Yahoo!
Michelle Munson | President and Co-founder, Aspera
Lloyd Taylor | VP Tech Operations, LinkedIn
Michael Crandell | CEO, Rightscale
Jeff Hammerbacher | Chief Scientist, Cloudera
Allan Leinwand | Venture Partner, Panorama Capital
Jason Hoffman | Co-founder and CTO, Joyent

Calculating ROI Of Enterprise 2.0 Is Calculating The Cost Of A Lost Opportunity

2009-05-31T15:07:00.000-07:00

I get this asked a lot – How do I calculate ROI of Enterprise 2.0? Bruce Schneier says, “Security is not an investment that provides a return, like a new factory or a financial instrument. It's an expense that, hopefully, pays for itself in cost savings. Security is about loss prevention, not about earnings. The term just doesn't make sense in this context.”. Similarly thinking of Enterprise 2.0 as an “investment” looking for a return does not make any sense. At best it is the cost of a lost opportunity.

If you are a CIO looking for a detailed ROI metrics or a simple checklist for Enterprise 2.0 you are probably out of luck. However you could adopt a two-pronged approach. Convince the business that the organization needs Enterprise 2.0 by showing whatever resonates with them e.g. sharing files help reduce email quota, Wiki makes people productive by X percentage, giving them a copy of The Future of Management by Gary Hamel etc. Once you do get a green signal for Enterprise 2.0 deployment, please, don’t be prescriptive to frame the problem or the solution. Instead simply provide the tools at grassroots and let people run with these tools.

For any collaboration, productivity, and social networking tools there is content and there is context that significantly depends upon the individuals that use these tools. For example some people prefer to be human-centric against artifact-centric. Some start interacting and collaborating with other people before exchanging the artifacts and there are others that prefer collaboration that is primarily an artifact-driven. Most of the tools mandate that users make an upfront choice. Even worse the IT makes the decision for them when they decide to purchase a specific tool assuming how people might want to work. This is the reason I like Google Wave since it does not make any assumptions on how people may want to use it. In fact it allows people to weave across people and artifacts seamlessly.

When Google Wave was announced Google spent most of the time demonstrating what it does and spent very little time showing what problems it is designed to solve. They received quite a criticism for that. Many designers questioned Google whether they really know if people want to work this way. Some bloggers called it an act of breathtaking arrogance of blowing off potential competition and touting tech buzzwords. I believe they all are missing the point. Google Wave has broken the grid that the designers are very protective about and has empowered people to stretch their imagination to make mental connections about how this tool might meet their needs that no other tool has met so far.

Would you still ask what’s the ROI?

Cloud Computing - Old Wine In A New Bottle?

2009-05-11T09:55:00.000-07:00

A recent cloud computing report from McKinsey stirred quite a controversy. TechCrunch called the report partly cloudy. Google responded to the report with the great details on why cloud is relevant. I appreciate the efforts that McKinsey put into this report. However I believe that they took a very narrow approach in their scope and analysis. An interaction designer, Chris Horn, from MAYA Design sent me a paper, The Wrong Cloud, which argues that the cloud computing is essentially an old wine in a new bottle and the big companies are fueling the hype.

"Today’s “cloud computing” claims to be the next big thing, but in fact it’s the end of the line. Those corporate dirigibles painted to look like clouds are tied to a mooring mast at the very top of the old centralized-computing mountain that we conquered long ago."

I appreciate that there are people out there who question the validity and relevance of cloud computing. This puts an extra onus on the shoulders of the cloud computing companies and others to make their message crisper and communicate the real values that they provide. I was recently invited at the Under The Radar conference where many early stage cloud computing start-ups presented. The place was packed with the venture capitalists closely watching the companies and taking notes. It did feel like 1999 all over again! I hope that we don't fuel the hype and deliver the clear message on how cloud computing is different and what value it brings in. Here are my arguments on why cloud is not just a fad:

Utility style cheap, abundant, and purpose-agnostic computing was never accessible before: There are plenty of case studies about near zero adoption barrier for Amazon EC2 that allowed people to access the purpose-agnostic computing capabilities of the cloud computing at the scale that had never been technologically and economically feasible before. I particularly like the case study of Washington Post where they used Amazon EC2 to convert 17,481 pages of non-searchable PDF to searchable text by launching 200 instances for less than $150 in under nine hours. We did have massive parallel processing capabilities available to us such as grid computing and clusters but they were purpose-specific, expensive, and not easy to set up and access.

Peer-to-peer and cloud computing are not alternatives at the same level: The MAYA paper argues that the cloud computing is similar to P2P. I believe these two are complementing technology. The P2P solves the last mile problem of client-side computing where as the cloud computing is a collection of server-side technology and frameworks that has centralized computing characteristics. BitTorrent is a great example of effectively using P2P for distribution purposes since the distribution problem is fundamentally a decentralized one that could leverage the bandwidth and computing of the personal computers. However I do see potential in effectively combining both the approaches to design an end-to-end solution for certain kinds of problems e.g. use CDN on the cloud with P2P streaming to broadcast live events.

Virtualization and cloud computing are not the same: McKinsey's report on cloud computing recommends that organizations can get the most out of virtualizing their data centers against adopting the true cloud computing. I am a big fan of virtualization but it does not replace the cloud computing and does not yield the same benefits. Eucalyptus, an emerging cloud computing start-up, has detailed analysis on how cloud computing is different than virtualization.

Disruptive Early Stage Cloud Computing Start-ups

2009-05-04T10:01:00.000-07:00

I was invited as a guest blogger to the Under The Radar conference organized by the Dealmaker media. This year's focus was to track early stage start-ups in cloud computing. The format was simple - each start-up gets six minutes to pitch their company and a panel listens to the pitch and provides feedback. It was a blast! The place was filled with the venture capitalists, entrepreneurs, and curious bloggers. I would highly recommend to check out the conference blog, Twitter updates, and watch some of the pitches. I wish I could blog about all the companies that participated in the conference. I have picked few companies - Twilio, Boomi, Zuora, and Cloudkick - based on their potential to cause some serious disruption in the cloud computing space. At the conference, while interacting with several people, the cloud computing felt to be nascent space bursting with energy and enthusiasm. The venture capitalists were drooling for the leads. It felt 1999 all over again.

Twilio commoditizes the telephony skills and uses the cloud to allow the companies to easily build and scale the voice applications without upfront capacity planning and expensive contracts with telco. Twilio has potential to revolutionize how developers build voice applications and allow companies to add a voice channel, by leveraging cloud-as-a-utility, to enhance the customer experience.

Watch Twilio's pitch:

Twilio's presentation:

Final Twilio Under the Radar 2009 Cloud

View more presentations from UTR.

Boomi's tag line "Connect Once Integrate Everywhere" is a riff on Java's tag line "Write Once Run Anywhere". Boomi is positioning their product Atomsphere as an integration middleware for the cloud that works across SaaS and on-premise systems. Boomi chose a hub-and-spoke architecture against an ad-hoc point-to-point integration. This not only allows Boomi and the partners to continue adding integration connectors without disrupting the core product and customers' deployments but it also allows the SaaS vendors to tap into Atomsphere to connect to other SaaS and on-premise vendors. The revenue model is based on integration-as-a-service - how many systems an organization wants to connect to. This allows Boomi to extract the maximum value out of the integration efforts that can be reused and resold.

Watch Boomi's pitch:

Boomi's presentation:

Boomi Under The Radar Cloud 2009 (Grad Circle

View more presentations from UTR.

Zuora wants to be the Amdocs for SaaS and they are getting there much faster than I originally thought. In addition to commoditizing the billing for SaaS they also demonstrated that the cloud is a great platform not only for the edge applications but also for core applications such as billing that the organizations never thought of putting it on the cloud. Organizations are increasingly looking for a payment system and not just a billing system. Zuora does a great job by combining their billing domain expertise with an integration with PayPal. Zuora seems to be an acquisition target for eBay. I can't help notice that the typeface for "Pay" in Zuora's marketing collateral is identical to the typeface that PayPal uses. Coincident? I don't think so.

Watch Zuora's pitch:

Zuora's presentation:

Zuora Under the Radar Cloud 2009

View more presentations from UTR.

I have used many management consoles but haven't seen a holistic design approach and simplicity in a management console that Cloudkick demonstrated. Three founders built the entire company in four months with $20k investment from Y Combinator and launched it to support other 40 Y Combinator companies to help manage their EC2 instances. Instead of waiting for the cloud vendors Cloudkick solved the interoperability problem by allowing the customers to get an AMI out of Amazon and put it on other cloud provider such as Slicehost. This is certainly encouraging for the organizations who see lack of interoperability as an adoption issue. The cloud management start-ups do run into risk of getting steamrolled by Amazon, but the fast and agile approach of Cloudkick could bring in some great innovation in the cloud management and interoperability domain that we may not see from the big cloud providers in the near future.

Watch Cloudkick's pitch:

Cloudkick's presentation:

Cloudkick Under the Radar Cloud 2009

View more presentations from UTR.