Sunday, September 22, 2013

Vendors Survival: Will Facebook Survive Until 2023?

I  wrote many posts about Vendors Survival. In most cases it is more interesting to write about leading vendors and not about Vendors that for surely will not Survive. 
So I wrote about: Apple, Google, Microsoft, HP, EMC, Software AG, Nokia etc. 

All these companies are vulnerable, so their is probability that they will not survive in 2023 (Nokia will not Survive). 

I think that the probability is low (except Nokia). However, it is higher then zero and the probability that one company will survive, could differ from the probability that another company will survive.

I thought of writing about Facebook as well. I did not do it till now due to lack of knowledge about the company and lack of information about the Company's Culture.

Today I read an article by Vivek Badhwa. Its title is: Facebook is Doomed.
Badhwa was asked to write an article comparing Google and Facebook.  
His conclusion is that Facebook is doomed unless it will acquire another company that will transform its Business.

Badhwa admires Google, so take care before accepting his conclusions about it.
As far as Facebook is concerned, I agree with two points he made about Facebook (I rephrased them):

1.Facebook entire Business depends on one Business Line: Electronic Social Network.

2. Lack of Inventions. 

I doubt if his comparison of Microsoft's users feelings and Facebook's user feelings  "Facebook users dislike Facebook for  the same reasons", could be a reason for the disappearance of Facebook.

I do think that a lack of appropriate Revenues Model could be a threat.  

On the one hand Facebook is very popular and its usage is by a new language shortened and simple: Like Share etc. 

On the other hand there are many Use Cases such as: sharing personal experience, sharing photos, sharing interesting articles, Business usage for advertisement, Birthday greetings, Events, Games.

The problem is that there is too much of all of them.
You can not seperate different types of information by structured easy to use tool.

When thinking of the future of Facebook you should remeber two names:

Second Life and Virtual Worlds
The popularity and the buzzword ended suddenly due to lack of Business need. 

Myspace
Myspace, the leading Social Networking Service from 2003 to 2005, refused to buy facebook for 75 million USSds and gradually declined. 

Their fate could be Facebook's fate in 10 years, if nothing new will be invented by Facebook.




Monday, September 16, 2013

Will Shadow IT fill the Business-IT Gap or widen it?

Shadow IT is growing and growing. In this post I explain what Shadow IT is and how it is related to the Business-IT Gap. 

What is Shadow IT?
Shadow IT is Information Technology Applications, Systems and Infrastructure, which are developed and/or used without decisions and without approval of the Enterprise Management Team and the CIO
Sometimes the Enterprise Management don't even know that these "Shadows" are executed as part of the Enterprise Information Technology.

Shadow IT Trends and Directions
Shadow IT is almost as old as Information Technology. When I worked on Y2K Bug, IT assets mapping was a necessary step. 

We discovered Shadow IT applications such as Microsoft Excel applications, Reports using orphan tools (The company which built the tool was out of Business), Microsoft Access Applications and Data (The End User who developed them was no longer an employee of that Enterprise) etc. 

If you read Alex Salazar's article: A little Little Rebellion is a good thing: The Rise of Shadow IT, you will probably discover a different Shadow IT in 2013.
In addition to Shadow IT applications similar to those we discovered 15 years ago, you may discover another type of Shadow IT: Open Source tools and Applications build by these tools, e.g. MYSQL Database.  

Read other articles, e.g.  Julia King's article: The upside of Shadow IT and you will discover a third type of Shadow IT: SaaS and other Cloud Computing  services. 

It should be noted that Open Source is Shadow IT, if and only if, Developers or other IT Savvy non-IT employees downloaded the software and used it without any Governance or Control by the CIO and/or the Upper Management.

The same conclusion is applicable to SaaS and other Cloud Computing Software and Hardware.

The Bottom Line: Shadow IT will continue to grow due to new types of Shadow IT Applications, Infrastructure and Hardware

Are all Shadow IT components created equal?
There is a huge difference between Open Source Shadow IT and SaaS Shadow IT.

Both are stimulated by low costs. You may bypass organizational procedures in case of low or no costs. Such procedures includes formal approval, allocating and planning budget and payments. 

In the end of the day, the enterprise will find that there are no free lunches: you may need to pay for supporting your Open Source and surely when your SaaS implementation will be in Production stage, you will have to pay to the vendor a lot more than in the Pilot (In many cases you will pay less than others will be pay for On Premise products). However, that will be long time after the Shadow IT application was built and used.  

The main difference between Open Source Shadow and SaaS Shadow is the decision maker

The decision maker in Open Source Shadow is usually a junior IT employee who downloaded and used the software. In other cases it may be a junior IT Savvy Business User.

As far as SaaS Shadow is concerned, the decision maker is usually a Manager In a Business department.
The SaaS Shadow is more related to the Business-It Gap than the Open Source Shadow IT

The Business-IT Gap
This blog title: Filling the Gaps, implies that Business-IT Gap is a main topic. The notion is that decent SOA implementation should narrow that gap. 

I discussed in previous posts other aspects of Business and IT Gap and Business and IT Alignment.
For example, Will Business and IT Aligned? , STKI Summit 2011 - SOA Perspective: Business Services or only Integration?  Mind the Gap not the Name  and BPM Market Growing Rapidly but still Maturing and Changing.

The roots of the gap is a difference between Business viewpoint of IT and how IT perceives its interactions with the Business.

Business point of view is that IT Architectures, procedures and Systems are a barrier to an efficient and Agile Business. However, it is essential for operating the Business. In summary; You can't with IT and you can't without it.

IT managers and workers tend to exaggerate their Business contribution: If anything is wrong it is the Business Departments procedures and lack of understanding of Technologies.   

Shadow IT and The Business-IT Gap
The down side of Shadow IT is obvious. However, according to Julia King's article, published by ComputerWorld, possible benefits should not ignored. 

Another question discussed in King's article is: What should the CIO do about Shadow IT?
The opinions of some of the CIO's which were interviewed, could be described as "If you can't beat them - Join them" attitude. 

In this post I am asking a key question: Why enterprise's employees implement Shadow IT instead of using the IT Department Methods, Procedures and Services?

The context of this question is more SaaS Shadow oriented than Open Source Shadow oriented.

If CIO's would like to narrow the Gap, they should ask the key question cited above.

In most cases they will find that Business users used Shadow IT because they were not satisfied with the IT Department's services.

Sometimes the Gap resulted in IT professionals, who does not address fully the Business Department requirements.

Sometimes the Gap resulted in IT Systems which are far from addressing basic current requirements.

Sometimes it is a difference in Priorities: The Business Department people felt that the IT schedule does not reflect correctly the high-priority they assigned to tasks.

In many cases it is due to non-flexible and not Agile IT Procedures.

Sometimes the IT implementation of Business Processes is a Bottleneck: The Business department would like to improve Business Processes, but due to lack of Visibility and lack of proper implementation of BPM it takes a long time to change the Business processes.

You can't always blame the IT Department
Sometimes it has nothing to do with IT Department issues; A Business user or a Business Department Manager, assigned a lot higher priority to a task than the priority Top Business Management assigned to the same task. The IT Department may adjust its priorities according to guidelines provided by the Top Business Management team.

Never the less, even in this case the CIO (with or without Top Business managers) should discuss the issue with the Business Department in order to narrow the Gap.


Wednesday, September 11, 2013

Customers Typology: The Good The Bad, and The Ugly Part 3: The Ugly


This post is the last of trilogy of posts named after Sergo Leone's movie The Good The Bad and The Ugly. In previous posts I described The Good Customer and The Bad Customer

I start by describing the challenges of a Freelance Consultant, before dwelling on The Ugly Customer.
You will soon discover that the two topics are related. 

The World of a Freelance Consultant
I refer to a Consultant with no Long Term full time employing customer.
Unlike a Salaried Employee, he has to take care of many administrative tasks such as paying VAT, paying Income Tax and Paying National Insurance fees.

One of his challenges is income instability and the number of work hours instability. 

Sometimes his working hours are similar to working hours of typical salaried employee. During these periods his income is reasonable or good.

Periods of too much work to do
Periods of too much potential assignments are relatively easy to take care of: The Freelance Consultant could pick more interesting and challenging assignments and/or higher payments. 

The Challenge is to reject assignments without relinquishing future opportunities to work for the customers he rejects. 

For example, I worked concurrently for three organizations:
First Customer I managed a project with a 10 people team.
Second Customer  I lead a process of Strategic Software Product selection
Third Customer I wrote A Strategic Information Technology opinion.

What should I do when a Fourth Customer asked me to bid for consultancy assignment?
It should be noted that the Fourth Customer's CIO spend time and efforts to find me, because the previous occasion we done business was more than ten years before this assignment (He was not CIO ten years before).

I had no time left for full time assignment for few months concurrently with the three assignments I was doing.

If I would not bid, then the Customer may not ask for my services in future opportunities.

If my bid would be a low quality bid, then he may not ask for my services as well.

If the Customer would have chose me to perform the assignment, I could not obligate and could not perform the task as well. I could forget about any future assignment for this Customer.

The solution: Bid a good quality professional bid but lose the RFP
There were only two reasons not to chose my proposal: high price and relatively longer time to complete the job.

The most difficult periods: No assignments or not enough work to do
The low income during these periods is a problem, but the main problem is uncertainty: The Consultant do not know if and when he will had more assignments and higher income.

During these difficult periods the Consultant is ready to compromise: He would do less interesting and less suitable assignments for less money. He may even work on assignments outside his domain of expertise.

The meaning of working on such assignment is studying the new domain with no payments for the long hours spend. The result is a lower hourly tariff even than the low hourly tariff he asked for.  

The Public Sector in my country prefers contracts with companies, therefore in many cases the Consultant could have no choice other than being a subcontractor of a company, i.e. paying 10% or 20% of payments he receives to the company.
In that case the Consultant have two Customers: The Customer and the mediating company, which sometimes is doing nothing except getting paid.

Back to the Ugly Customer. In that case of two customers, each of them could be the Ugly Customer.

The Ugly Customer
Like The Bad Customer, The Ugly Customer could also be the other types of customers, except The Good. He could also be The Customer who Knows Everything, The Captive, The Self-deprecating or The Paralyzed Analyzer.

The unique quality of the Ugly Customer is unfairness. Usually the unfairness is not limited to unfairness towards the Consultant.  

The unfairness could be manifested by deferring payments, paying less than he should pay according to the contract and even refraining from paying any payment. 

Tie this unfairness of payments with the previous section about the most difficult periods, and you will understand the problematic situation for the Consultant (In better periods he would probably chose other types of customers).

Two examples of Ugly Customers I worked for.

Example 1: Payments 6 months latter than he should.
I worked for a customer about 40 hours a week for many months. However, he did not pay me for 6 months, although he should pay each month according to the contract he signed. After 6 months he paid.

It was not personal: He did not pay for 6 months to all the other Consultants worked for him.

Example 2: Paying extremely low tariff and complaining about the document format
I performed an assignment during a very difficult period. I would never perform such assignment in brighter periods. I had no idea about the topic prior to performing the assignment. The number of hours dedicated to studying, with no payment, resulted in a ridiculous hourly payment. 

The Customer told me that he knew that the tariff is very low. he told me that a competitor would pay me ten times more for the same assignment. 

The product was a Design Document. The customer was satisfied with the Design but complained about the packing or the format. 

he thought that I could add 10% to 20% to the number of hours (It was a Fixed Price project) to add nicer illustrations.
Another type of customer, who is paying 10% of what is competitor would pay, would be glad that the design he received was perfect and would ignore or repair the format. 

The unfairness could be also manifested in case of failure. The Ugly Customer will always blame others: vendors, Consultants, employees etc.
If it would have been a success story, it will always be the Ugly Customer who should get the credit.

Even if the reason for failure is the way the Ugly Customer chose to implement the Consultant's excellent advices, the Consultant would be blamed. 

I was impressed by the behaviour of a CIO who was ultimate example of the opposite of the Ugly Customer.
He had to present my Strategic consultancy conclusions and directions to the upper management.
I and IT managers participated in the meeting. 
Business managers complained about IT employees and IT managers products. He has only single answer to any complain: Blame me. I am responsible as their manager (I am sure that at least  some of the complains were nothing to do with the CIO, however he protected the people he managed). 

What should a Consultant do when he finds that the Customer is an Ugly Customer?

If the Consultant could afford not to work for the Ugly Customer, this is exactly what he should do. He should complete the current assignment and work for other Customers.

If he has no choice (The income is necessary and he does not have alternative customers) he should minimize damages.

He should anticipate the Ugly Customer behaviour and plan how to react.

As already mentioned, in many cases the Customer is not a single entity: Organizational Customer could be composed of multiple managers and employees.
The Consultant should carefully find a way to work with more "Beautiful" people composing the Customer entity instead of the Ugly.  

Thursday, September 5, 2013

Vendors Survival: Nokia the new DEC



When I begun posting about Vendors Survival, I had to explain why I doubt that even the strongest vendors, e.g. Microsoft, Apple, Google, will surely survive for at least 10 years.

The easiest way to explain it was by Digital Equipment Corporation (DEC) ill fated history.

The IT leaders of the 80ths were IBM, HP and DEC. However, they had to adapt to a new model inspired by Microsoft and other Software vendors.

The Hardware Centric Model was changed to Software Centric Model.

IBM, HP and DEC could no longer rely on Hardware sells high profit margins and Software as Hardware complementary low priced product line. 

IBM and HP adapted successfully. DEC failed.
DEC Strategy relied on Alpha chips based Servers.
After unsuccessful quarters DEC sold product lines (e.g. System Management software to CA, Communication Hardware to Cabletron).  

Finally, DEC sold their Alpha chips patents to Intel.
I immediately notified my DEC based clients that they can count DEC days until it will be acquired by another company.

Nokia strategic business is Cellular phones.  
Nokia was the Leader of this market. 
Like DEC, it failed to adapt to a new paradigm led by Apple: Smart Phones or actually Mobile multi-function small computers instead of Cellular phones.

The acquisition of Nokia's phone business by Microsoft for 7.2 billion USDs is not similar to the acquisition of DEC Alpha patents by Intel: Nokia sold the business and the patents. 

It is comparable to DEC selling the patents to Intel and being acquired by Compaq.   

According to Wikipedia, Nokia employed in 2012 97,798 people. Even after layoffs, the estimated number of employees who will be Microsoft's employees is 30,000. 

As we already know from the unsuccessful acquisition of DEC by Compaq and the unsuccessful acquisition of Compaq by HP, acquisition of a large company by another large company is not simple.

Expect Corporate Cultural differences, difference in Processes and layoffs. 

Microsoft: another non-adapter?
Smart Phones are not only immediate threat to Cellular Phones maker. They are also a Long Term threat to Microsoft's core Desktop business.

Microsoft's vision of Windows as the Mobile Operating System (Smart Phones and Tablets) failed.
The two dominant Operating Systems are Google's Android and Apple's IOS.

Android role could be compared to Windows Desktop role many years ago. many years ago you could buy Desktop Computer from any vendor, excluding Apple, but you Operating System will be probably Windows.

Today, you can buy any Smart Phone, except Apple's  iPhone and Microsoft and Nokia's phones, and use Android Operating System. 

After announcing that he will step down as the CEO of Microsoft, Steve Ballmer was interviewed by many papers. According to one article in Hebrew, he was asked what was his biggest failure in Operating Systems? he answered Windows Vista
Wrong answer: The biggest failure was Windows8

Windows8 promises were Smart Phone like user interface for Desktop and Mobile version aiming to be "a little Android", e.i. usage of Windows8 by different Mobile Hardware vendors, similar to Android's usage.

Will Microsoft-Nokia be a key player in the Mobile market?
I suspect that the answer to this question is a negative answer. 
In my opinion, the probability that the acquisition consequences, will remind you of Compaq acquisition by HP or even EDS acquisition by HP is high. 

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