deal architect

DAD: at his most huggable and corniest

Dave Duffield is not slick - he kept forgetting his notes and guest mike at the podium. But during his talk at Workday Rising he was also generous and brought up several executive guests to the stage, thanked his growing partner list and he was entertaining:

• He had a Top 10 list why Workday went IPO which included a reference to “if Anderson Cooper can come out, so can we”
• He teased his co-founder Aneel Bhusri about bragging about product features, and that he could do better with contract closings and invited the CIO of City of Orlando to sign her contract on stage.
• He gave his CFO palpitations with frequent teasing on forward looking stuff and a guessing game on the + in a slide which showed 350+ customers. After the Orlando signing his slide changed to 351+ customers
• He presented a photo gallery which showcased his family members and pets as fans of various Workday customer products.
• In a dig at Oracle, he quipped “I love walking all over on Fusion” and pointed to the brand of shoes he was wearing
• He periodically had slides with SAP and Oracle characters peeping in the conference room
• He tossed Cloud Cakes (a Twinkie like product of one of his customers, McKee) with gusto into the crowd, then wondered if he had adequate legal protection if those projectiles hurt anyone.

For all that he got by my count  three hugs and one high-five on stage.

Corny he may be, but as his initials suggest, he is also beloved.

A word about Dennis Howlett

Larry Dignan of ZDNet lays out an ugly situation Dennis Howlett finds himself in. Larry is privy to much more of the gory details than I care to want to ever find out.

All I want to do is thank Dennis for his wonderful support during my health hiccup couple of years ago, and his early support for both my books even though they took him out of his comfort or interest zones. He did so without expectation of any compensation. I have seen his generous side.

We don’t see eye to eye on many topics and I have to periodically remind him we don't have to agree on everything. So, I would say I have also seen his reasonable side.

Those sides may not be visible to others. Not my intention to argue with them, just to belatedly thank Dennis for some of the things he has done for me.

“One of the good guys”

Workday is recruiting Jim Holincheck from Gartner. He is a top notch HR analyst, and I agree with Dennis Howlett, “one of the good guys”. Very nice functional and personality fit for Workday.

Jim and I go back a ways. I tried – unsuccessfully – to recruit him when he was at Accenture in 1993. I finally succeeded in 2000. I lost him to my former employer, Gartner in 2003. But we have always been a phone call away when we want to validate anything as peers.

Through it all, I can certify Jim is high-ethics. In his soft-spoken way, he knows how to make his points. I have long admired the fact that he is a tinkerer – always curious about new apps. I always felt if there was a PC Labs for enterprise software he would be a great fit.

I also learned you do not want to challenge the guy at foosball. Or play trivial pursuit on anything Disney World with him.   

I am looking forward to another chapter with Jim as he joins the other good guys at Workday. 

FBI on Steve Jobs: Snore

The FBI has made public notes from the background check on Steve Jobs when President Bush wanted to consider him for an appointment. Sure there is some unflattering personal detail, but this was during Bush Sr’s (yes!) tenure – over 20 years ago.

What would be far more interesting is recent notes. The Secret Service’s notes on Jobs as he met President Obama on several occasions. President Obama’s memoirs and his recounting those meetings and likely Jobs’ frank talk. The CIA’s notes on Apple’s China operations and its Japanese, German and other component suppliers. The Justice investigation on whether Apple colluded with book publishers to raise eBook pricing compared to a market standard Amazon was establishing. FCC notes on the AT&T, Apple and Google dust-up. The EU’s files on potential anti-competitive behavior. FBI and other investigations into countless IP theft and infiltration attempts Apple is constantly subjected to. The surveillance agreements Apple was likely coerced into with carriers around the world as it rolled out the iPhone globally.

Dream on if you think any of this will see public light any time soon. Like Area 51, it does not even exist:) 

Zach Nelson: A Decade in the Clouds

Zach Nelson is a really interesting tech executive. He has a wide rolodex (over 20 pages in my last book, The New Polymath came from interviews with Zach and several others he introduced me to), diverse interests (numerous relationships with the Oakland Athletics baseball team, part owner of the Omaha Nighthawks football team, golfer), and he is entering his tenth year as CEO of the cloud computing pioneer, NetSuite. 

Every conversation with him veers in many fascinating directions. I recently had a chance to listen to him reminisce about his decade at NetSuite.

Given your big company experience at Oracle and Sun, and the dot.com bust, was it not a very risky decision for you in 2002 to join a startup like NetSuite?

Actually my career has always been about doing startups, though within large companies. At Network Associates, I helped roll out both MyCIO.com and McAfee.com (which interestingly enough was actually the first Cloud IPO way back in 2000). At Oracle, I was there when we launched video on demand and Interactive TV. At Sun, I headed up marketing in the SunSoft/Solaris spin-off.

So, joining a young company was not much of a challenge, but I did have 5 criteria guiding my job search, and amazingly NetSuite (then called NetLedger) met them all. I wanted to be with a Web-based enterprise software company. The term SaaS had not been coined then, but my experience with McAfee.com and MyCIO.com taught me customers preferred software from vendors who not only wrote the code but also managed it, and that the web had to be an integral part of the deployment/delivery platform. NetSuite fit that bill.

I wanted a great development team. (Founder) Evan Goldberg had that in place.

Given the dot.com bust, I wanted to join a startup which had real customers, not just ideas. I also wanted to see a good funding plan. NetSuite already had thousands of small customers, and having Larry Ellison (Chairman and CEO of Oracle) as a major investor met my 3rd and 4th criteria.

My last criterion, looking back, was possibly the most unreasonable. I wanted a short commute. If you remember traffic during the dot.com boom in the Bay Area, we were all commuting for hours. NetSuite, amazingly, was just 3 miles from where we live.

So, in many ways, it was actually an easy decision for me to join NetSuite.

Over the last decade, the highs must have been really high, the lows really low. Can you share a few of each?

In many ways, it has been one long high, but the last couple of years have been particularly satisfying. Even though NetSuite continued to grow during the downturn, nobody can say he or she enjoyed the slowdown of 08 and 09. However, those years focused our investments in two areas that have really paid off for NetSuite and our customers: the verticalization of our product and our company, and the traction the OneWorld product has provided us in global customers.

Looking ahead, two things really excite me. One is our exposure to large enterprise customers shows us how poorly their current legacy systems work and what a huge opportunity we have there. The second is the emergence of new opportunities in the emerging eCommerce market. There really is no platform for easily extending your transactional processes to customers, partners and vendors via ecommerce, and I think we have a very differentiated approach there.

But bigger companies tend to prefer working with larger vendors like SAP, don’t they?

When you see how companies deploy applications like SAP, you quickly see that approach is dated. Any company that has a multi-year road map to deploy enterprise systems will be crushed by faster, more nimble competitors who are moving their operations to the Cloud using NetSuite.

I used to worry about SAP and Microsoft making a move to the Cloud. But after waiting year after year for them, I now believe whatever they do in Cloud Computing is superficial. SAP may throw marketing around for BusinessbyDesign or Microsoft Dynamics Great Plains, but fundamentally their DNA remains that of on-premise software companies. And smart customers know that those applications will not give them competitive advantage in the Internet Age.

NetSuite has been a risk-taker on many fronts. You used the auction method for your IPO. You expanded internationally in relatively risky markets like the Philippines. How do you sustain a risk taking culture?

These are calculated risks. In each of those decisions I have bet on an executive I felt comfortable with.

For the IPO, we bet on Bill Hambrecht and his firm’s auction model and philosophy. For our Philippines expansion or the Czech development effort, again I bet on strong executives to make us successful.  It is as much about the people you have to execute a strategy as it is about the strategy itself.

You seem remarkably compatible with (founder) Evan Goldberg, your CTO. Very few founders and professional executives who come in later co-exist as long as the two of you have.

Evan is one of the smartest people I know and could run sales or services or anything he chooses to tackle, but he loves and is focused on development. I came in wanting a solid development team in place. So our skillsets and interests are very complimentary. Quite often the founder and the professional executive don’t delineate their roles well enough, but with Evan and me, our roles were clearly articulated. And we both believe in what NetSuite does to help our customers fulfill their business visions.

Tell us about folks who inspire you

Larry Ellison is one for showing me how your vocation can also become your avocation. I was at Oracle when he turned billionaire, and I asked myself if I was that rich, would I not retire? After working at NetSuite, I figured out why he is still at it. I couldn’t imagine anything more enjoyable to do with my time. I have the best job in the world.

Well, I believed the last statement till I saw Brad Pitt play Billy Beane in Moneyball, and I figured out HE probably has the best job in the world! I am honored to have Billy’s guidance as a director and customer. As the movie shows, he saw the game of baseball from completely different eyes. On our board he brings the consumer mindset to the enterprise world. He forces us to think differently, as he did the baseball world.

Defending Ray Lane

Ray Lane is taking hell for a photo which shows him with a MacBook at home. The sky is falling – how can the Chairman of HP be so un-PC?  Shades of the poor Fedex man who supposedly got fired for carrying a Coke can into Pepsi HQ. Or that of Citibank supposedly rejecting employee expenses charged on personal Amex cards.

I have known Ray for over 15 years now. Trust me he can be extremely proud and defensive of his companies.  I have had heated debates with him when he was President of Oracle and I was a Gartner analyst. And he is an early adopter of many of their products.  He rode an early Segway ( a Kleiner company) into a commencement speech, he drives an early Fisker Karma EV (he is on the board), and he was sending emails from his HP Veer shortly after it was released this May.

He has been one of my first calls as I started research for each of my books. He is always full of suggestions – and has introduced me to a number of Kleiner portfolio companies and to execs at HP. But he has also talked nicely about Google, Apple, Amazon, eBay and plenty of others. And he has also clammed up when I reach into topics he would rather not comment on given his fiduciary or moral responsibilities.

Go on be snarky if you want. Personally, I wish more industry leaders were as open-minded as he is.

Saving Private Steve Jobs

In a touching scene in the movie, a much older James Ryan asks his wife “Tell me I have led a good life”. “Tell me I am a good man”. Earlier in the movie, when Captain Miller (Tom Hanks) is given orders to risk his men and go find Private Ryan he says “He better be worth it. He better go home and cure a disease, or invent a longer-lasting light bulb.”

I say this because Steve Jobs invented much more than a better light bulb, but we seem afraid to say he was a “good man”. I spoke to someone yesterday who called him an “assxxxx”. Time magazine reviewing Walter Isaacson’s recent biography paid him a left handed compliment “The strange, sad, triumphant life of Steve Jobs”. This Business Insider blog gives 16 examples from the book of Jobs being a “huge jerk”. I asked my 18 year old son as he was flipping through Isaacson’s book if he had a preconceived view of Steve and he said “he was an assxxxx. Not very nice to people around him”.

So, I told my son to also write down positive stuff about Jobs as he read the book. And I have written below some of the things I found admirable in the man.

To start with even though there is plenty of Apple in my next book, I am far from an Apple “fan-boy.” I was scarred in the mid 90s. My employer, Gartner was an Apple shop but because it was then considered a dying platform, our hardware and applications were old and un-flattering to the Apple of today. I was also unimpressed that Apple, so fussy when it comes to design and other operations, had tolerated its partner, AT&T’s poor network around its iPhone and its onerous roaming, early cancellation and other economics.

But credit where it is due:

Jobs as a management philosopher: No he did not pretend to be Peter Drucker or Jack Welch, but the more we learn about his philosophies, the more he will see his influence on corporate executive behavior. His emphasis of good design driving engineering regardless of the economics, his unwillingness to let deadlines compromise excellence, his ability to cut through silos. The last point is particularly poignant. Think of Sony – even with its Walkman, its studios and labels, and so many other Hollywood connections could not get organized even after years to cut through its silos to challenge the iPod and iTunes. Think of Microsoft and how its infighting prevented it from leveraging a multi-year lead in tablets compared to the iPad.

Jobs and his insatiable curiosity: Against the lily-white, hypocritical politicians of today, it is refreshing to read about Job’s weird diets, his interest in Buddhism, his experimentation with drugs. He may have been opinionated but he knew more about music, movies, publishing, even marble and glass from designing his stores and office complexes than even many experts in those fields  (I thought it was hilarious in an episode in the book the CEO of Corning had to tell him to shut up and listen to someone who knew a bit more about glass)

Jobs and long-term relationships: If he was so difficult with people, how come he managed to work with some of the most talented people in the world for 5-10-15-20-25 years? Jonathan Ives, John Lasseter (now with Disney), Ron Johnson (now CEO  of J.C. Penney), Tim Cook, Bill Gates, Larry Ellison, John Doerr and more. Most of us would give a limb to have a fraction of his rolodex. And then there was a marriage for over 2 decades, While his wife Laurene Powell deserves more than half the credit there in a society where the average marriage barely lasts a decade. let’s give the man credit.

Jobs as amazing fighter: The remarkable thing about his last 8 years was how productive he was in his innovation while undergoing so many invasive surgeries and debilitating treatments. As I have gone through my own recovery I sent him an email earlier in the year saying I was inspired by his zest for life. Whatever his faults, at least from a distance, I think he inspired many like me with health hiccups.

I don’t expect my son even after he reads the book to say “Steve was a good man”. But when he reads that his iPod like Steve’s was filled with Dylan and The Beatles, I hope he at least says he was a “cool dude”.

Laurene Powell Jobs must be one heck of a lady

I have admired the pillar of strength my wife Margaret has been through my last year of recovery. I had seen the ups and downs she went through as she lost to cancer the sister she was closest to. And doing so while raising two wonderful children.

I cannot imagine what Laurene has gone through for 8 years – the highs as Steve recovered from various treatments and the lows as they moved from one drug regime to the next. And doing this while raising and sheltering three young ones from the relentless scrutiny that Steve attracted.

As we celebrate Steve and his amazing achievements,  I hope we also give Laurene her due.

Steve Jobs: A thousand “nos” and ten gutsy “yeses”

I recently submitted the first draft of my manuscript for my next book. It’s about what I call “technology elite” companies and it has 21 chapters most of which talk about attributes of what makes them elite. They include elegance in product design, malleable when it comes to business models, very aware of the power of the physical presence and touch even in our digital world, global when it comes to supply chain etc etc.

Honestly, when I started writing it I had Apple prominent in every chapter. I mean how can you ignore Jonathan Ive when you are talking product elegance? How can you ignore Apple’s masterful retail strategy when it comes to physical presence?

In the manuscript I ended up submitting Apple still looms large, but the book  is much more balanced. It has 17 case studies including UPS, 3M, Corning, Boeing, Virgin America, Google, Facebook, HP and of course, Apple, and 4 guest columns from CIOs and IP attorneys and professors as a companion to each of its 21 chapters.  

Here are some excerpts from my Apple case study

• “In a 2004 BusinessWeek interview Jobs said “And it comes from saying no to 1,000 things to make sure we don't get on the wrong track or try to do too much. We're always thinking about new markets we could enter, but it's only by saying no that you can concentrate on the things that are really important.” That ‘saying no to 1,000 things” has become part of the lore around Jobs and Apple. But Apple’s saying yes to plenty of gutsy, even maverick decisions is what really defines Apple’s success.”
• “While Apple did not invent MP3s, it dragged the music industry with iTunes to make it a big business. Over 15 billion songs – most of them singles - have been downloaded via iTunes and many more through other channels like Walmart.com. Even today, though, many music executives long for the return of albums, ignoring the “long tail” phenomenon – users buy many more “one-hit wonders” than they would if they were not unbundled.”
• “Apple has stayed loyal to Foxconn through multiple releases of iPods, iPhones and iPads in spite of sweatshop accusations, employee suicides and factory explosions in its Chinese facilities. Most companies like to diversify between company owned and outsourced plants and certainly across geographies. Apple has been willing to take the risk of putting its eggs in the Foxconn basket and taking plenty of jabs from China bashers (though Foxconn has recently been looking at a significant diversification to Brazil)”
• “When Apple opened its first retail store in 2001, an observer commented “"I give them two years before they're turning out the lights on a very painful and expensive mistake,"Apple dealers were not happy. One of them said “Apple might do just well enough to really hurt our business. They've also done a...poor job telling us how sales and service will work when an Apple Store opens nearby," Others questioned the timing in 2001 with the tech industry in a severe downturn and drawing parallels to PC maker Gateway's struggling retail effort.”
• “When Apple introduced the iPad in 2010, it tried to reverse “more than two decades of (industry) attempts to get tablets right–none of which really succeeded, and some of which failed on a monumental scale.“
• “Amazon has over the last decade become a dominant player in the book market. As eBooks started to grow in popularity over the last couple of years, Amazon had driven the market towards a $ 9.99 price point. At the iPad launch, Walt Mossberg of the Wall Street Journal asked Steve Jobs why people would pay more for the same book on an iPad. Jobs’ response was “The prices will be the same” Apple had no intention of keeping prices that low even though it was a trivial player in the book market compared to Amazon. Instead it signaled to publishers it would accept an agency model which would give them more control over pricing. That precipitated a show down between publishers and Amazon, and Amazon having to cede pricing control to the publishers. Venturebeat wrote “The ten-dollar e-book may soon be gone, replaced by the fifteen-dollar e-book””
• “While many technology companies use cash reserves to make acquisitions, Apple has on many occasions used large sums of money to secure strategic components. In 2005, “Apple reached long term supply agreements with a number of memory supply companies including Hynix, Intel, Micro, Samsung Electronics and Toshiba. Apple will prepay up to $1.25 billion for flash memory over the next three months. The agreements secure a supply of NAND flash memory through 2010.” In 2011 they announced “During the September and December quarters, we executed long-term supply agreements with three vendors through which we expect to spend a total of approximately $3.9 billion in inventory component prepayment and capital expenditures over a two-year period.”  Apple would not reveal the components or the suppliers but such large commitments not only get them priority in tight markets but also freeze out competitors.”
• “It could be saying no to 1000 things or it could be saying yes to 10 gutsy decisions, or it could be what Marc Benioff, who did a stint at Apple before founding his own very successful salesforce.com, says “Steve Jobs is the best technology leader the world has ever seen.” Certainly, few would argue he is the Tom Cruise “Maverick” - the “Top Gun” of the industry!

Cuppa Joe

It is with sadness that I heard this week of the untimely passing of Joe Vales. As Phil Fersht describes he was a powerhouse in outsourcing circles. 

But I will especially miss him for our personal relationship. Our paths did not cross when we were both at Price Waterhouse in the 90s, but we made up for it in the past decade. Before I set up my consulting firm, I talked to him and he coached me patiently. Over the years, I quoted him several times on this blog and he interviewed me for his series for HRO magazine titled “Cuppa Joe” which always had wise words on happenings in outsourcing.

He would send kind me emails at every holiday – and an occasional sharp one when he disagreed with something on the blog. But it was always polite and always brightened my day.

What I particularly liked about him was how much of a family man he was. When I invited him to write a guest column for the blog he could have written about any number of outsourcing topics, but he wrote about involving his daughter, Kerry Ann in his advisory business.

As I sit down to coffee this morning I raise my cuppa to Joe, the gentle giant.