deal architect

Well, may be not Dell

One of my predictions for 2006 was

"An infrastructure vendor - likely Dell or Sun (as it tries to redefine itself) - will introduce infrastructure outsourcing at aggressive, "utility" price points to cover a wide range of network, database, desktop and other services. In its hype cycle for outsourcing Gartner defines infrastructure outsourcing as one of the most mature. As systems management automation and offsite, shared labor models mature, an efficient services "supply chain" becomes much more viable."

Well, Kevin Rollins, CEO of Dell says in this Fortune Small Business article

"But I'm not convinced that we're going to move to a utility model for software or for hardware. A lot of customers don't find the economics of that particularly compelling."

But he is debating with Nick Carr, and may have just wanted to be contrarian...if he is serious Dell is missing a major opportunity to offer an alternative to the IBMs and the HPs and the EDSs who want to sell heavy labor content outsourcing models, versus the high automation and shared service models that "utility" models are calling for.

Are we better off four years later?

It is not a Presidential year but it is still a good question to ask as the Enron legal circus started in Houston this week. It has been over 4 years since the scandal broke.

Read this WSJ 9 chart analysis and commentary on one of Enron's complex transactions - Chewco.

Have our watchdogs – external auditors and the SEC – retooled themselves to better deal with Chewcos? If SOX had been in place 4 years ago would Enron management have not attempted such transactions? Are we as individual and institutional investors any savvier about Chewcos - or similar risks in our portfolios?

My answers to those questions: No. No. No.  We are making corporate America spend a lot of money on SOX compliance and feeling lulled by it.

My campaign bumper sticker:

Four No more years for SOX.

"CEO Machines"

Fortune magazine lists  companies which are training grounds for CEOs  - GE, P&G and others.

They should have given Larry Ellison and Oracle credit. While most Oracle alum have gone to private tech companies, it is an impressive list

Tom Siebel, Siebel (acquired by Oracle)
Gary Bloom, Veritas (merged with Symantec)
Craig Conway, PeopleSoft (acquired by Oracle)
Marc Benioff, salesforce.com
Harry You, Bearingpoint
Terry Garnett, several companies and now at Ingres
George Kadifa, Corio (acquired by IBM)
Robert Shaw, ArcSight
Polly Sumner, Alphablox (acquired by IBM)
Nimish Mehta, Stratify (now works for SAP)
Doug Merritt, Icarian (now works for SAP)

and many, many more...

I may not agree with Oracle on many things but they have been an impressive incubator for many in tech...

Author's Note: Fortune may have missed Oracle, but Forbes did not in this March 2005 article. They identified another prominent Oracle alum, Umang Gupta

Call me about a big opportunity...

Seriously, I would like to talk to folks about entrepreneurial and sponsorship opportunities in the sport of chess.

About 4-5 weekends a year I take my kids to chess tournaments around the country. So do other parents with upper middle class demographics. We are a captive audience for 2-3 days at some hotel where the tournament is being held. What a great opportunity to pitch investment products, time shares – but no one has really gone after this market. Some national tournaments attract thousands of parents.

Few large companies sponsor these events. We have the best and brightest young kids in these tournaments – what a great way to build brand loyalty while they are young. More importantly to bask in the support of a brainy sport when the US President is about to highlight the need for more science and technology talent. The interest is becoming mainstream - as my daughter carried her trophies from the tournament this weekend it is amazing how many smiles, questions and kudos we heard from average folks at the airports and on the plane.

Finally, technology VCs and entrepreneurs – the sport is known for IBM’s supercomputer Deep Blue but is still remarkably paper based and manual. There are plenty of automation opportunities and a large and growing global market for creative products.

If you want to discuss any of the opportunities above, please email me. If you are not personally interested, please forward on to your marketing or event planning groups or to other potential entrepreneurs. Business opportunities to also feel good about. Thanks.

The State of the Union Speech

President Bush makes his big speech tomorrow evening. While he will recognize a number of people, big and small and cover a lot of ground in topics, I hear he will prominently talk about the challenge the US has around our science and technology talent. He will highlight the National Academy findings I wrote about here. Whatever your political leanings, that is something every American should agree on.

Breaking the shackles of the software "Iron Triangle"

Charles Zedlewski's post on agile development made me think about long accepted adages in the software industry. We are shackled by"iron triangle" thinking - something's gotta give mentality- if you do not adjust software scope or the software budget or the software schedule, the software quality will suffer.

Which is why we seem to just accept Oracle 11i significant quality problems. Just shrug our shoulders when SAP says only half its customer base will by 2010 have implemented what it is marketing as its single biggest innovation - its web services architecture. Cynically listen to Microsoft talk about "scrum" development knowing it has spent $ 20 b in R&D in the last 3 years and does not have too much to show for it.  Or when IBM extols its embrace of the Linux - "bazaar" type - development model while its large global services group still uses more traditional (and significantly pricier to clients) "cathedral" development models. Just because the scope of what each does is large, we accept their traditional quality, time and budget standards.

Several benchmarks in the last few years allow us to challenge their performance - and broadly prepare us for a revolution in software development and implementation.

Let's start with the Indian services industry. The major reason companies went there for software development was economic. But they are delighted with the quality improvement . The CMM and Six Sigma initiatives at a number of Indian firms have quantifiably improved software quality. 60% of all CMM`Level 5 certified shops are in India. Users are even more delighted with the time to market advantage that comes from "follow the sun" development teams handing code back and forth.

But India is just the beginning. As I wrote in Frederick Taylor and Technology Services, the software development and implementation ecosystem has so many inefficiencies, that Indian vendors have only scratched the surface. There are so many geographic, functional, capacity optimization and continuous improvement and automation opportunities in the software and services  supply chain.

I was talking to someone recently that in the near future we could be seeing very good software talent at $ 5 an hour. How? A number of countries are aggressively emulating India's success. A number of US states are providing incentives for software factories. Communities like those around open source products can test software for near free, and often more robustly than internal testing teams. Communities being built by elance and amazon.com allow for chunks of development to be easily parceled out at affordable costs and rapid turn around.

Time for the software and technology services industry to break out of the old mentality and old cost, quality and time benchmarks. Melt the iron triangle.  Oh and by the way, then we can turn to the golden calculator that makes sales and marketing costs in the industry even larger than software development costs.

A thing of efficiency is a joy every time

Excuse me for mangling Shakespeare, but while I like to admire well designed products like  BMWs and great customer service at Four Seasons, I really love operationally excellent companies. So, allow me to gush about Southwest Airlines - again.

I flew non-stop this week from Tampa to Houston on Southwest for $ 147 round-trip - 682 nautical miles each way.  Uncle Sam added $ 27 in taxes. If you book a non-refundable fare and not fly it, you can apply it towards another fare within 12 months. Other airlines hit you for $ 50 to 200 each time you change tickets.

The average ticket earns $ 93 for Southwest over 793 miles. The IRS recognizes 44.5 c  per mile driven in 2006. - 4 times as much.

Each ticket booked on-line - 2/3rds of Southwest tickets  are - earns 4 award credits. 16 credits get you a free ticket anywhere on the system. Do the math - the average Southwest customer gets more in free ticket value than he pays the airline. The awards have no capacity controls (other than 15 blackout days in a year during major holidays) so technically 125 passengers could show up for a Tampa to Seattle flight and Southwest would honor all their awards.

Going out of business model? Southwest has never had a loss in its 30+ year history. They are becoming less generous about awards (introducing capacity controls next month). But then they turn around and give me a free companion pass for being one of their more frequent fliers. My daughter can fly free with me anywhere, anytime. 5 flights a day if I choose to. Even if I am using an award ticket! Handy for those chess tournaments.

They are on-time 75 to 80% of the time - depending on the time of the year, and usually 3 to 5% better than the industry average. Their employees laugh and sing during flights - a rarity nowadays in other airlines. They have never had a fatal passenger accident (though recently a Southwest plane had an accident where someone in a car died).

The other airlines will tell you Southwest does not have a first class cabin. It does not. But I can check in on line and get the first boarding group 98% of the time. Which guarantees plenty of on-board baggage space. It also ensures an aisle on the left side of the plane so my right hand can freely work on the laptop. And my 6 foot 2 body frame appreciates the extra leg space their 737s have compared to other airlines. Let's not forget only a handful of their passengers do get upgraded on each flight.

The other airlines will tell you they can fly you around the world on their awards. Try redeeming them. I have called Delta 6 times since past summer to book tickets to Ireland next summer( in fairness, over the years we have taken a number of award trips on Delta but as they get more financially fragile they appear to have become stingier with awards)

The other airlines argue Southwest makes you stop multiple times. From my home airport Southwest now offers non-stops to 26 cities and 1 stops just about everywhere.

The other airlines argue Southwest is lucky to not have union issues. Southwest says it is 81% unionized.

The other airlines can keep saying things ...ideally they should just match Southwest's operational model. Not difficult to match ...just fairly priced, on-time, safe, cheerful.

A thing of efficiency like that is a joy every time. And allows you to save for the other things of joy - the  BMWs and the Four Seasons.

SaaS Showplace

Jeff Kaplan, ex IDC and Meta, and who runs THINKStrategies has always been hot on managed services, utility computing and SaaS.  He has set up a nice resource on the growing list of SaaS providers in the SaaS Showplace.

It supplements names in ecosystems being set up by salesforce.com and NetSuite. I was pleased to see Jeff has more vertical solutions in his showplace, though we still have a long way to way both in breadth and depth.

No Blog is an Island

Charles Zedlewski invokes Spinal Tap as he responds to my blog about memeorandum. He says he does not care if he is way at the distant end of the long tail of blog exposure.  He has strong opinions on a number of enterprise technology topics - I believe he deserves to be heard by a broader group of folks. Today, we seem to find blogs almost by accident. Various sites have blogrolls - some have 50+ and we refer to each other in our posts. But the neat thing about memeorandum is the topical linkage, by relevance etc. If they do not care enough about enterprise topics we all need to encourage other comparable sites to emerge.

I would instead like to suggest a different genre from Charles'- Joan Baez -  No man is an island, even if he is at the outer extremes of the blog galaxy.

BPM: Management Philosophy and Software Tool

Nice article here by Bruce Silver on Business Process Management. Most vendors in that category have historically focused on the technology - hopefully more will also focus on the management philosophy and "process angioplasty" opportunities. Also, avoid the cardinal sin - where the technology itself becomes a cost "plaque" which burdens the process it is being asked to support.