deal architect

This blog sponsor seat is (expletive) golden...

Jason Busch is hilarious about shakedowns in our industry.

He lives in Chicago - he should know about Gov. Blog-ovich :)

Riddle me this, Batman...

Darrel Thomas on the EDS Blog asks about Cloud Computing.

"What effect(s) will this tipping point have on current and emerging Client business and IT buying patterns? How will IT Service Providers change to meet the shift? And what will the IT Client-to-Provider Marketplace look like at that shift point?"

Fair questions.

But here are my puzzled questions back:

Why is the second largest outsourcer in the world, now as part of HP, asking its readers these questions? Should it not be telling us its strategy to lead its customers into the new world of cloud computing?

Vendor Viability Redux

Raising viability doubts about smaller vendors is a favorite sales technique in technology markets. But in recent weeks, in several deals where a vendor has made a viability comment I have cringed.

We are seeing big-name banks disappear or get acquired. We are seeing big-brand auto companies teeter. Bigger airlines are weaker than start-ups in many ways. "Bigness" is no longer a sure sign of viability.

My advice to bigger vendors is to bite your lip. You may think your statements help your competitive position by hurting your smaller competitors. But it is just raising buyer anxiety. Even about you.

The New Queen's English

From BBC new tech-slang from across the pond

"The card readers show the number 35 if the card has run out of credit. As a result, "Code 35" has come to mean penniless.

Similarly, if you're behind the times, you might be "Code 11" - Oyster's way of signifying an out-of-date card."

"the economic downturn has given rise to "GOOD job" - an acronym for Get Out Of Debt"

""I love you" can take the shortened form of 143 - for the number of letters in each word."

While they may be shortening some words, they still refuse to shorten colour, aluminium and a bunch of other words :)

Who dreams up these prices?

Remember the airphones at the back of plane seats? Halfway though every cross-country flight I would use one for a few minutes to check my voice mail. At $ 4 a minute could not afford much more. On Atlantic flights I would check with a flight attendant if we were still in US airspace so as not to risk being charged even higher international rates.

In my day job, I have a keen interest in technology prices. I am paid to understand underlying costs of technology and to understand the psyche of the pricing analysts at vendors.  Every time I would get on a flight I would expect to see a more reasonable price to expand the business volume of such calls. But in spite of the massive capital investment in the equipment in the planes and the ground stations, and the extremely low usage by consumers, the pricing never budged much over a decade. (There were occasional promotions - I remember where you could make an unlimited call for $ 10, and this guy from Nigeria screamed non-stop for 3 hours much to the entertainment and consternation of his fellow passengers). It was if some anal pricing analyst overrode any marketing attempts to make the product much more mainstream. In the end, though, the pricing analyst won and those phones disappeared from the airlines.

I am convinced the same analysts now are responsible for mobile roaming prices at AT&T, T-Mobile et al. Because of their insane voice prices - $ 3.49 a minute to call back from Romania to US on AT&T and data charges - Rogers charging its customers Canadian $ 76 for a 3 minute YouTube video when roaming in Europe, their poor marketers have to adopt defensive measures as T-Mobile has had to with its G1 phone.

My advice to phone companies: Retire these analysts and pay their retirement moneys in the form of airphones gathering dust somewhere.

IT Certifications and Talent Pricing

ZDNet has a guest post from Erik Eckel about IT certifications. And it is striking how most deal with development and IT infrastructure areas - with Microsoft and Cisco deserving plenty of credit for a number of certifications.

Glaringly absent are certifications from the big ERP players. A SAP MM consultant should be as fungible as a Microsoft SQLServer resource. I would argue in that vacuum, the Big 5 accounting firms and other outsoucers have continued to use the "skills shortage" excuse for higher rates even after more than a decade and hundreds of thousands of ERP projects around the world.  And even the offshore firms expect a premium for those skills because the "ceiling" above them from the Western firms has stayed high.

Next Sourcing Hotspots?

Courtesy of Jason Busch I saw this Supply Management article which identifies Indonesia, Mexico, Vietnam, UAE and Ukraine as the next global hotspots.

When it comes to IT Outsourcing and BPO, I have learned that raw country potential often does not translate to momentum. Each of these countries has some question mark. For Ukraine there are IP concerns not being part of the EU. With Mexico it is English skills. With UAE it is the fact that much of the talent is imported from India, Pakistan, Philippines - so why not just go to the source for that talent? With Indonesia the fear of Islamic fundamentalism has been an issue.

But the biggest gating factor is the absence of a mature supplier pool. Unless buyers are trying to set up their own captive unit in those countries, they look for viable vendors to provide them access to the talent pool. One reason why China, in spite of huge potential, has only been a bit player in ITO and BPO. 

I have seen proposals from vendors such as EPAM using Ukraine resources and Softtek using Mexico resources, but there needs to be vibrant vendor community, not just a couple of vendors in a country. I would suggest if India 10 years ago only had a single vendor like Infosys or TCS it would have not become the juggernaut it has with so many other choices such as Satyam, Wipro, HCL and countless others.

What is likely to happen is buyers will encourage their US, European and Indian outsourcers to look at these emerging markets as a diversification strategy. As an example, in the last year Cognizant has opened a Buenos Aires and a Budapest office - encouraged by two of its major clients. Dubai in the UAE is already a regional office for many outsourcers - but used primarily to service the Middle East customer market.  I suspect something similar will happen with the other hotspots Supply Chain magazine has identified. 

More New Renaissance

On the innovation blog

Privacy 2.0

Now this is amore!

Goodness Gracious: Great Balls of Kevlar!

Bluetooth at 10

e-Verify

Twisted Minds: part 82

Heard in the great state east of Illinois

"Imagine if Eliot Spitzer was still governor of New York and Caroline Kennedy had called asking about Hilary's empty Senate seat. What favors would he have asked for?"

Aren't you glad we live in the corruption-free technology industry away from slimy politicians :)

"Laptop4Life"

"Buy any LifeBook laptop from Fujitsu Siemens, and the company will provide you with a new laptop every three years until you die. The only requirements are that you need to buy a three-year extended warranty, you can only upgrade using Fujitsu parts, and you must turn in your laptop in good condition with the original receipt after three years."

Physorg

Hmm...let me share the laptop policy at my small business and my family. For the last 5 years, we have bought Toshiba Satellite laptops expecting a refresh every 18 months, not 3 years. They have all cost sub-$ 1,000 (the recent one for my daughter cost $ 479.99 in a special at Office Depot - not a slouch machine either with a dual-core 2GHz processor and 3GB of memory). We decline extended warranty.

We buy them using American Express, which for no additional charge extends the manufacturer warranty by 12 months beyond the manufacturer's traditional year. Amex has replaced motherboards and even "totalled" 2 laptops over the 5 years.

I am pretty confident the TCO of our "Laptop4Life" package is a small fraction of what Fujistsu or others offer. And when compared to beat-up machines I see my poor clients stuck with (some even have a 4 or 5 year refresh cycle), I wonder why their accountants and their discounted cash flow and residual value analysis do not get challenged more.