deal architect

East Coast Offense

In Walter Isaacsonʼs biography of Steve Jobs, Isaacson describes the time that Jobs cold called Wendell Weeks, the CEO of Corning, Inc., to learn about Gorilla Glass (which is now used in more than 500 devices). Weeksʼ assistant refused to put him through, but offered to take a message. Jobs described that as “typical East Coast B.S.” In response, when Weeks returned the call, he was told by Apple’s receptionist to put his request in writing and to fax it.

The story ended well for both Apple and Corning, but it did highlight cultural differences between East Coast (and other) Fortune 500 companies and Silicon Valley.

At yesterday’s GE event, I saw several hints of that. 

a) “Software is eating the world”

Chris Anderson of Wired asked Marc Andreessen on a panel to elaborate on the theme of his famous WSJ column, and Marc talked plenty of the Valley’s superb software capabilities . Jeff Immelt of GE said hardware, software, analytics and deep domain expertise are all important. And to emphasize hardware is far from dead, there was a giant,  GEnx engine on stage (see photo of Tom Foremski at event – he is at least 6 ft and is dwarfed by it). Immelt looked at it with  as much love as Steve Jobs used to when he showed off a new Apple device. With 20 sensors it can generate 1 TB of flight data a day. And Immelt talked about 250,000 intelligent pieces  of hardware in other industries – scanners, turbines etc. Finally, he commented in his 30 year GE career, he has seen the world come full circle on the importance of manufacturing. The GEnx engine with its precision machining and material science advances are just one example of that.

b) Horizontal versus vertical

The Valley knows extremely well how to scale horizontally – it has given the world IT infrastructure, back office applications and plenty of other technologies which work well across industries. Immelt and the customers showcased yesterday (see this post) were all about verticalization. Deep domain knowledge with massive operational payback.

c) Investment Money versus Customer Revenue

Andreessen commented what a great job VCs have. They learn from portfolio companies and prospects all day long because “ we can write checks”. Immelt in appealing for Valley firms to come partner with GE, only casually mentioned an investment fund. But  he repeatedly promised customer access – the opportunity to work on real life challenges in some of the most complex and demanding customers in the world. It reminded me of the expression I heard when I had my own startup: “Customer revenue is mother’s milk, VC money is sugared water”

d) My heroes have always been…

The Valley worships Jobs, Zuckerberg, Page, Ellison, Chambers – local company executives who have made it big. Immelt talked about peer Fortune 500 companies like Caterpillar which sell complex equipment. He could have also mentioned Siemens, Emerson, Deere, Komatsu and others who are also rolling out data intensive service offerings around their equipment.

e) It’s a small world after all

At various points during the day Immelt invoked Emirates Air, Etihad Airways, Qatar Airways and Korean companies in his comments.   Apple, HP, other Valley companies are no global slouches, but few have the global intensity of GE. During a break I was talking to one of Immelt’s staff about his global travels. He has met with Putin, Cameron, Merkel, most other global leaders.

Watching the GE team in action yesterday, I was reminded of the late 49ers coach Bill Walsh springing his West Coast offense on the NFL. Only in reverse. The Valley has not seen much like Immelt and GE.

The world’s largest outsourcer you never heard of

Quick, name the outsourcer which comes to market with

• A $ 140 billion services backlog.
• A relentless focus on guaranteed performance and improved outcomes for customers, not just standard SLAs or fixed price contracts
• Deep vertical knowledge in oil and gas, aviation, healthcare and several other complex industries
• Installed base of 250,000 intelligent machines – MS Scanners, Gas Turbines, Jet engines which  are generating all kinds of raw data waiting to be sliced and diced
• 40,000 engineers of every stripe
• A Center of Excellence on Advanced Analytics
• an open door to Valley startups to work with it on real customers and opportunities, not just an offer of VC equity money.

Welcome to GE.

Jeff Immelt, CEO in 15 minutes this morning unveiling its concept of  “Industrial Internet” summarized the phenomenonal assets he brings to market to deliver what he calls “1% opportunities”  : fuel savings for aviation and utilities, productivity improvement for railroads and healthcare,  reduction in capex for oil and gas. Just those 1% improvements, GE believes could deliver $ 276 billion in savings (over a 15 year horizon) across those 5 industries.

Later in the day, 4 customers from those industries – Alaska Air,  San Diego Gas and Electric, Norfolk Southern and Mt. Sinai Hospital – detailed many of their opportunities - see this post. Given their excitement for their opportunities you wonder if GE is underestimating the opportunity scope at 1%

Four things that really stood out during the presentation and in a few minutes I spent with him later

- GE is not interested in building a million person services army like a Foxconn or an Infosys

- GE is already used to very stringent performance standards from its customers. The way it will make money is by delivering to stretch goals and sharing results with customers,  not just by guaranteed multi-year contract with basic SLAs which defines most of today’s outsourcing.

- When asked if GE was doing it because its hardware – scanners, engines etc are at risk of being commoditized like IBM’s hardware was, he said (without meaning to be dismissive of IBM), GE’s stuff is really “hard to do”

- His value proposition to Valley partners is compelling. He said most Valley companies struggle to answer “how will you monetize your business?” GE comes with customers with the monetization opportunity built in.

Welcome to the new world of outsourcing. In my book, 3 years ago, I called him "Proton Jeff". Meeting  him today, the moniker sounds even more appropriate.

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Kind of like fixing the Hubble telescope

Apple in China

Tampa Bay’s Image Uptick

 

More New Florence

on the innovation blog

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“Chasing Ice”

Sandy in full fury and glory

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Bluebird by Amex

The Unwatering of NYC

The art of storytelling

Abe Lincoln inspires a whole range of emotions in people. One aspect of his life I was not very familiar with till I saw  the Spielberg movie was his endless stream of stories and his wicked sense of humor even in unusually tense times. The book Team of Rivals, on which the movie is based, gives credit to his father Thomas Lincoln ““a born storyteller, he possessed a quick wit, a talent for mimicry, and an uncanny memory for exceptional stories. These qualities would prove his greatest bequest to his son.”

Introducing myself during a speech recently I described myself as an “innovation historian – less about Tesla or Edison, but about plenty of contemporary innovators”. I am blessed to use my New Florence blog and my books to tell countless stories of wow.

My New Year’s resolution was to average 1.5 innovation posts a day on New Florence. It was my vicarious way to “sprint’ as I recovered from my health issues .  By mid year, I had posted 315 – at 1.7 average posts better than the goal. Amazingly, the pace has picked up even more – between July and November I will have added another 340. Three major contributors – the London Olympics, the Presidential Race, and the numerous industry events my improving health has allowed me to participate in.

Even better, in several presentations this year I have hand picked 5, 10,15 cameos from the blog relevant to the audience – like this presentation to supply chain/logistics executives at the Descartes Evolution event.  Others have been on Big Data, Consumerization of Technology and other industry trends. Most audiences love to hear of innovation stories, especially at peer companies.

Readers, keep on reading, and keep on sending me innovation stories to profile. I need a gentle push to get to 700 by the end of the  year!

The bigger push is coming from the President himself! Damn, he is fantastic storyteller in the movie.

Citizenship to the Cloud

I had a manager at Gartner who had weaned paper out of his life. He would review tons of our draft research papers on a good old screen. And this was 15 years ago. Dennis Howlett says he has similarly not printed a page in a long, long time. Inspired by these folks I have similarly minimized my use of paper – and dramatically lowered the cost of printing with Brother Lasers, squeezing 2 printed pages on 1 etc. My business partners continue, however, to conspire – airline boarding passes, credit card item print outs. My family still continues to patronize our HP Color printer, with its 4 cartridges costing 15x what  the Brother’s does.

Long transition to paperless.

As I unpacked my new Chromebook (my October “Black Friday” purchase) and set it up, it hit me we are going through another major transition. We have been gradually becoming what Workday calls Citizens of the Cloud.

Google is accelerating the transition. There are number of clues this is the ultimate thin client. Screen 1 of setup requires a Wi-fi network connection. You can stop right there if you do not have that. But think  about it – with wi-fi via airports, cafes and smartphone hotspots, that’s not much of  constraint.  The local storage  is a measly 16GB of flash MMC. In contrast, Google packs as part of the price, 2 years of 100 GB on its cloud storage. The applications we have learned to love and hate over the last 2 decades – most courtesy of Microsoft - do not work. Welcome to Calculator, Camera, Docs, Sheets, Slides among others – most designed to work better in cloud, collaborative mode that when you are actually in the clouds with crappy or no wi-fi. Google Hangouts takes aim at another Microsoft property, Skype.

And in what has to be an ultimate reminder you are going through a major transition is this warning “Don't try to plug your printer into your Chrome device -- it won't work!”

I have used several Google apps for years, and have had an Android phone for 2 years. And yet, I am not ready to leave on my trip this week with just the featherweight Chromebook. The transition will take a little time. But at just $ 250 for the device (actually half that when you factor the 2 years of cloud storage), Google is tempting millions to taste what it means to become a fuller Citizen of the Cloud.

Many of us illegals have just been offered amnesty!

More Innovation

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Customer experience as a service

Data encoded in DNA

In a galaxy not too far away..

I recently saw a news item which had a buff looking Jabba the Hut (buff for Jabba) with a young looking Hans Solo. I racked my brains – was that from Star Wars 1,2…oh wait, that would be 4,5 …and the brain froze with that sequence confusion.

I felt the same way watching this video starting at around 3.00 where Leonardo de Araujo explains SAP’s changing  messaging and positioning around its cloud/BYD products. Some day there will be a documentary which organizes all the twists and turns. And we have many more to come as you listen to (an unwell) Dennis Howlett later in the video. How in the world will the SAP field learn to sell loosely integrated modules after two decades of “tightly integrated” gospel? How will its partners who talked “wall to wall” even for industries where they knew SAP was functionally not complete?

My admiration goes to long- time SAP watchers like the four in the video. They keep waiting for a miracle. As Einstein would say it’s doing the same thing over and over again and expecting different results.

Back to Hans Solo. I think the news item that got me going was about Harrison Ford being rumored to play the part again for another in the Star Wars series. Now would be called a prequel, a sequel, a triquel? I think SAP Marketing has plenty of experience with that. Sure they could come up with a catchy TLA like A1S or BYD:)

Thanks – a long list and life

John and Julie, in their 80s, die in a fiery crash. St. Peter apologizes for their last few minutes on earth, and promises eternal bliss – endless golf for John, and no more domestic chores for Julie. A month into their new life, John comes home agitated. Julie asks him what could cause so much turmoil in such a joyful life. John: “Lady, I knew you should not have put me on supplements. We could have arrived here 20 years ago!”

My wife told me this joke. She has been switching me to supplements and exercise to wean me away from the medication I have been on since October 2010. In turn, I winked back “You know, I may come back two decades from now agitated like John ”

This Thanksgiving I want to thank so many who have been part of my life for so long. Starting with my wife, and my two lovely kids, who have blossomed into young adults at college. My buddy, Peanuts, who keeps trooping along.

And so many people from the past I have re-encountered in the past year. People like Dave Duffield and Charles Phillips and Art Mesher who I had not seen in years. Many more  who have pinged me on social networks I had lost touch with for decades.

Corny as it may sound, I also need to thank so many “things” that have faithfully been part of my life for several years now. I am glad to extend life of my HTC Android phone. Apple EarPods and Jawbone’s Jambox have allowed me to enjoy its MP3 skills the last few weeks. My trusty Veracruz which is entering its 5th year of reliable travel service. I feel guilty about my Toshiba Portege with its missing D key cap. iPads and Chromebooks lie nearby, but I continue my loyalty even as people find that difficult to reconcile with my quest for new and shiny in my innovation blogs and books.

So, thanks for a long and lovely life. And may it continue. Many more friends to meet and greet in the Internet of People and Things. 

Just allow me to periodically bitch and moan at the countless supplements and sprints Margaret keeps subjecting me to :)

Have a great Thanksgiving weekend!! To my friends overseas – keep on innovating and giving me more “new and shiny” to catalog.

Quantification in consumer world, disarray in enterprise world

I was reading this weekend the editorial by Corey Powell in the latest issue of Discover magazine

We live in an increasingly- quantified world. People know about movie grosses and YouTube views. They know exactly how many friends they have (thank you, Facebook), make purchases based on numerical customer ratings, and compare distances and traffic along different travel routes on Google Maps. DNA paternity tests are available for $30 at Walmart. This relentless quantification is changing the way we judge what is true and meaningful. It is no coincidence that fact-checkers became a central part of the political conversation in this last election.

And while I agree that is true with consumer tech, I think in many ways we have regressed in enterprise world. I devoted 3 chapters in my recent book about how financial analysts, industry analysts and regulators are steps behind all the innovations (and related issues) at the companies and industries they track – see excerpt below from the chapter on regulators.

Today’s shocking news about HP/Autonomy will bring out plenty of he said/she said. The reality is even our professionals are not completely in step with complex revenue recognition as hardware and software and outsourcing blend in multi-year deals, as reseller and other channels rapidly evolve, as cross-border business becomes the norm. 

As in consumer tech, most of us need to step up and help the “fact-checkers”. Whistle-blowers, tough bloggers and analysts, nosier auditors, regulators with teeth can all help. We have a long way to go in enterprise tech. 

Download Chapter 18 regulators