deal architect

Pike Place and innovation

I went to visit Seattle for a Microsoft event last week. While there was plenty of innovation there (see my post here), it is dwarfed by the diversity of Pike Place, the city’s landmark, century-old marketplace. It is a riot of colors, smells and sounds. All kinds of fruits, flowers, fishes, cheeses, coffees and more. 

It is a good reminder of the dramatic range of technology enabled innovation we are seeing. Through October 31, the New Florence blog is at 530 entries for the year, or a 650 annual run rate. Not bad for a year where I also worked on a book project.

Enjoy the bounty. And I came home and told my wife I need to take her to Seattle so she can enjoy Pike for several days.

Photo Credit - Wikipedia

Thank you, thank you

A recent communication I sent to my blog sponsors

“As part of a recent back up of the Deal Architect and New Florence blogs, I also saved them as Word files. I was shocked they totaled 9,300 single spaced pages! Without images !!

That’s easily the equivalent of over 20 books in there.

And my thought immediately went to thank you and the other blog sponsors for making this possible. You are facilitating tens of thousands of readers around the world to learn about the amazing innovations and disruptions our industry continues to deliver. And in doing so also getting yourself coverage as media coverage of enterprise technology dwindles.

I particularly appreciate how little editorial control you ask for and how you respect the NDAs I have with my consulting clients.

On behalf of all our readers, thanks so much for your continued support."

Innovations from the Lonely Planet

Innovations from various parts of the world we don’t usually expect innovation from

The bookless library – San Antonio, TX

Changing global wine map  - Georgia, China, Chile

Battling remote Oil spills – Arctic Circle

Common Core Standards – State of Kentucky

A photo catalog of last century – International Herald Tribune

Lego bricks and more – Denmark, the world

earlier posts in this series are here and here and here and here and here and here and here and here

The Machiavellian CIO

My EI colleague Michael Krigsman pointed me to a new Gartner eBook The Wolf in CIO’s Clothing

Author Tina Nunno says “Over the course of my career working with CIOs and other executives, whenever I encountered particularly strong CIOs, I consistently asked what had inspired them and enabled them to grow their strength and effectiveness as a leader. A startling number of them had studied Machiavelli and practiced his teachings.”

I like the premise of the book – “how CIOs and IT leaders can adjust their leadership styles in extreme situations for their own success and that of their teams.” And in many situations her advice would be spot on – when a CIO has to ruthlessly consolidate a fragmented portfolio of data centers or applications.

But in many ways the CIO, in many organizations, is not in much of a position of strength to play many games

a) SaaS, IaaS on corporate charge cards, BYOD – three very visible symptoms where the CIO has not been able to dictate IT standards

b) 80 to 90% of IT and telecom spend in many organizations is with outside vendors. The CIO may have the budget, but not the headcount, and frankly many of his executive peers think the CIO has a dangerous dependence on so much in external resources.

c) Few CIOs have shown the ability to manage project overruns or deliver impressive service levels (when the benchmarks fairly or unfairly are Google and Apple and Amazon)

d) As enterprises embed technology in their products and services, they often leverage their product engineering or R&D groups not IT. As they move to digital marketing, the social, mobile spend is often with the CMO, not IT. So front office, revenue centric tech is often being done without IT.

e)  Many executives are worried – actually petrified - about security, data protection, compliance issues. They want their CIO to be a rock of stability, not rocking the boat.

The good news is there is a growing band of strategic CIOs who are moving their IT from what I call “systems of record to systems of advantage”. Chris Murphy regularly profiles many of them in his Global CIO section of InformationWeek. The ones I profile in my innovation books and New Florence blogs.

I am sure these CIOs deal with bare knuckles politics in their enterprises. But I think where they get their power from is the “wow” they are delivering, not from their back smoke room politicking skills.

I found the book a fascinating discourse on organizational politics – frankly, you could substitute VP of Marketing or CFO for CIO and apply some of the guerilla and other tactics she elaborates. In many ways, those executives are better positioned than the CIO to be the “wolf” Tina advises them to become.

 

The “Switching Economy”

Accenture has a study which should startle every major brand

Despite having more data and insights into consumer desires and preferences, companies in the U.S. have failed to meaningfully improve customer satisfaction or reverse rising switching rates among their customers.  As a result, there is a potential $1.3 trillion of revenue at play in the U.S. market represented by the ‘switching economy’, according to Accenture’s analysis of consumer spend forecasts and switching rates.

They highlight retailers, telecom/cable, banks as the most vulnerable, but frankly every sector is at risk (and that includes Accenture).

After a decade of generally satisfactory experiences with Southwest Airlines, I have recently sent their CEO a letter saying I will be  spending dramatically less with them next year. Sneaky seating  changes, abysmal wi-fi, unfair charges, fewer nonstops all are factors.

Sure they will ignore me as the aviation consolidation has put airlines back in a seller’s market, but they ought to see what I did with Delta. I flew my second million miles with them between 94 and 97. The third million miles have taken me 17 years. It’s not that I was not flying. But I deliberately moved my business away from them.

Now, it’s Southwest’s turn to feel the switch. Delta’s Economy Comfort seating, JetBlue’s 12mbps ViaSat wifi, Virgin America’s digital cabin all beckon.

Way too many entities take their positions - and customers - for granted. The pole positions are fleeting.

Social Networks and innovation content

What’s your favorite social network -Twitter, LinkedIn, Facebook, Quora, Pinterest, other?

Sorry I asked and started a debate :) That’s the new reality, is it not? People have vigorous views about how much they like one versus another. 

With the hungry New Florence blog and its appetite for 600-700 posts a year, you would think I would be agnostic and mine any and all of these sites. I do, but surprisingly, less than 10% of all the posts comes from these sources.

For me, more reliable sources are:

Case study interviews

The 15-20 case studies in my books every couple of years provide plenty of side bars which with a bit of research become blog posts

My iPad

Several of my magazine subscriptions show up on the iPad and provide a steady stream of stories.

Barnes and Noble

Once a month I go into our local store and scour 15-20 magazines for blog post ideas. While the social world believes the print world is dead, I am pleased high quality work continues at so many publications.

Industry Events

Most industry events will provide the opportunity for several product, customer and often event location posts. This is where Twitter does come in handy for events I cannot attend – I will scan tweets that came out of an event. But, usually after the fact. To me, quality is far more important than speed, so I like to mesh input from Twitter from other sources.

Client consulting

This is usually under NDA but as with the books above the research often allows for the side bars which can become posts

Travel

Whether on business or pleasure, innovation in planes, airports, hotel rooms, local museums and architecture provide plenty of fodder

The Calendar

Holidays, events – be it Halloween, or the Super Bowl - allow for several entries. I also like to go back and look at entries for the event over the last few years to see how the holiday is evolving with technology.

Of course, people love social sites for camaraderie, entertainment – not just for innovation ideas.  Just saying the yield of innovation stories for my blog is pretty low.

The Internet of Small Supplies

Lee, our leather repair guy, has mended and polished countless shoes and bags and heels and soles for our family over the last couple of decades. From Korea, his English has got better and  better and during a recent visit, he told me business was good as the recession had reduced competition but that local distributors had also gone away. So, he was ordering more from IL and VA – higher shipping costs and longer lead times. It made me think about the supply chain of specialty leather, nails and adhesives.

And while I was thinking about that I was stunned to read the NASSTRAC 2013 Shipper of the Year award has gone to …hold on, a maker of pencils. Seriously, how retro is that in our paperless world?

But this is a giant in that industry – Dixon Ticonderoga, one of the oldest US companies still alive, sells a half billion pencils a year and has 150,000 SKUs.

It is a fascinating story of how that contraption of cedar, lead, rubber and layers of iconic yellow paint made in Mexico, China, Korea and India shows up at our local Staples for about 25c, and in time for the back to school spike in orders.

I know not as exciting as the new iPad or the Google autonomous car, but in many ways more heart warming. 

I felt a great disturbance in the Force..

We have watched for years as cloud companies target on-premise systems – so Salesforce going after Siebel, Workday after PeopleSoft, Amazon after IBM etc.

At the Microsoft Analyst Event yesterday I heard in reverse of back to on-premise examples especially in the banking sector as global regulatory concerns grow around public clouds. Then there are cloud to cloud moves - NetSuite announced a SAP BYD sunset program. Infor has been targeting on- premise to on-premise moves with better vertical functionality and TCO. There is churn everywhere.

Same with the services arena. Two SIs described their plans during the Microsoft event. One a global SI with a major SAP practice would not have been caught anywhere near a Microsoft project a couple of years ago. A national firm described how they are adjusting to life with Microsoft itself going direct to customers. Microsoft described a new set of cloud services firms which have grown with the Office  365 rollout. They described the growing focus on digital agencies as Microsoft finds itself in a unique position of bundling access to its marketing applications and its numerous media properties. At the same time, resellers from the Great Plains era with core accounting/ERP skillsets continue to be an important channel.

And yet, as I told some of the Microsoft execs yesterday, customers are building their own or buying from boutiques strategic technologies  to make their products and services smarter. So, auto insurance companies are using telematics to gather driving patterns and better quantify risk. Banks are rolling out deposit and more elaborate mobile functionality. Retailers are trying out soft POS, scanners in fitting rooms, facial recognition to prioritize VIP customers, depth sensors to monitor customer reaction to products on aisles and more.  Governments are looking at surveillance video analytics and wearable technology for first responders. Auto companies are testing out all kinds of natural UI – eye tracking, voice response, haptic feedback.

Every industry has unique nuances which established ERP, CRM and other established category vendors are missing out on. While many are in froth this week about SAP’s direction for ByD, personally I would love to see them deemphasize that ERP retread and focus on the newer opportunities above.

More churn. Opportunities for many, challenges for others.

Like Obi-wan I felt a million voices suddenly crying out –but many were in excitement at the coming changes.

Microsoft’s “High Value” Strategy

I arrived at Microsoft’s Fall Analyst Event with modest expectations. I expected to hear about the growing MBS Dynamics business with 400,000 customers. I expected a bit of disarray given the CEO transition and long search. It turned out be an intense day with perspectives from Microsoft executives, partners and customers with a showcase of wide range of products. But the biggest takeaway was a much more coherent set of messages around Microsoft’s wide portfolio.

Microsoft wants to focus on “high value” activities that consumers and business users prioritize. That translates to key words such as “serious fun” and “expression” for consumers and to “customer interactions” and “information insurance” for business users.

And it showcased 7 of its competences to go after satisfying those activities

• Operating System
• High Value Apps
• Hardware/Nokia
• Cloud Services
• Machine Learning
• Natural UI
• Consumer/Enterprise (comfort with both)

and over the course of the day there were plenty of reminders of how these competences come together.

Many of the presentations were on a Titanium Projector – the CNN “Magic Wall” brought to a conference room and run wirelessly from the presenter’s laptop or tablet courtesy of their acquisition of Perceptive Pixel.  There were conversations in English and Mandarin sign language facilitated by Kinect sensors and Microsoft’s growing Unified Communications (including Skype) capabilities.  There was a glimpse into Microsoft’s massive Azure data center infrastructure and the exploding user base of Office 365 that can make the claim of the biggest enterprise app in the cloud.  There were several working prototypes of just released Surface 2 and OEM tablets with their evolving accessories such as docking stations and detachable backlit keyboards.  There was discussion on how acquisitions like Netbreeze and Marketingpilot and internal projects around campaigns and other marketing areas are greatly expanding Microsoft’s  CRM footprint. There was a discussion around how Microsoft with its Retail software, with Nokia Lumias and with other functionality developed by partner Avanade resulted in a POS solution in the sky for Delta (see my post here). There were customers discussing vertical extensions developed by Microsoft VARs and mentions of industry solutions developed by Microsoft ISV partners such as MECOMS billing for Utilities by Ferranti Computer Systems and Ellucian CRM solutions for Higher Education.

And there were several sessions under non-disclosure. Microsoft showcased two implementation partners – one a global SI who candidly described the opportunity and challenges in a marketplace as it churns away from previous generation enterprise apps (as he was speaking NetSuite was announcing a SAP BYD “sunset” program and over course of day Microsoft described several replacement CRM customers) . The other, a national partner described the private/public cloud debate he is seeing at customers and adjusting to life as Microsoft increasingly goes direct to customers . There was a panel of customers from multiple industries who described a wide range of capabilities they were using from the Microsoft family.

It was impressive to see the wide range of experiences Microsoft gives its executives. Several of the attendees marveled that Tami Reller, EVP of Marketing had done jobs of both CMO and CFO at the Windows division. Satya Nadella, who provided the Azure update, has previously run R&D for Bing and other online services, and the Dynamics business unit.   Kirill Tatarinov who now runs the MBS unit ran the Management and Solutions Division. There was plenty of other executive talent in and out of the room during the day.

Oh and by the way, there were demos of new MBS features and growing systems management tools Microsoft is delivering to those customers.

During the recap session I asked how Microsoft expected to sell “One Microsoft” when there was already market fatigue around single source Red and Blue stacks. Kirill had two answers. Larger multinationals and moving to diversification, but that the sub “Fortune 2000 type company” was struggling with too much vendor fragmentation and actually looking to consolidate.

But the even better answer he had was “We may not always be able to deliver, but I want customers to think of calling Microsoft first anytime they have an opportunity where technology can help”.

Given the wide range of technologies, talent, and partners we saw during the day, that would be  a smart call for any customer executive. Microsoft will strive to deliver to all your “high value” activities.

IaaS Architectures

Timely article in InformationWeek as cloud provider Nirvanix goes out of business about the scrutiny IaaS architectures will increasingly get

“The size of the pipes providers use to move data into and out of their cloud is an architectural decision, and Nirvanix had maximized the inflow of data with lesser provisioning for outflow. Nirvanix's architecture reflected the prejudices of its business. In the end, the third-party vendors hosting Nirvanix bailed customers out by making 10-Gbps cross-switch lines available or otherwise using their expertise to relocate customers to another provider.”

“IaaS vendors don't talk about their architecture in great detail, viewing it as a competitive advantage. But at the most fundamental level, infrastructure clouds have scale-out architectures, rather than the scale-up architectures favored by most enterprises. Cloud vendors add servers, network capacity and disks in regular increments, and their cloud management software automatically discovers and integrates the fresh physical resources. Those cloud resources are connected by straightforward Layer 3 networking, usually commodity 10-Gbps Ethernet switches.”

The article only focuses on Amazon Web Services, Google Compute Engine and Microsoft Azure. As Oracle, HP and other IaaS services keep growing expect similar scrutiny around their clouds also.