San Marco

[via Seth Godin]

[…] Better is not always the right strategy. Better is not always superior to different.

When you make something that works a little better, you’re playing the same game, just keeping up with the status quo. When you make something different, on the other hand, you’re trying to change the game.

The next time your engineers or customer service people want to initiate a project to make something better, challenge them to make something different instead.

As already discussed here, Nick and myself were in Venice, Italy last week for the HP Enterprise Executive Summit. Some pictures from our stay there.

HP Enterprise Executive Summit 2006

Gondola ride

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[via BetaNews]

Following through on a promise it made earlier this month, Sun confirmed at the JavaOne conference in San Francisco Tuesday that it would open the source code to Java, but said it needs the community’s help in getting it done to prevent fragmentation of the technology.

“The question is not whether we will open-source Java, the question is how,” Sun CEO Jonathan Schwartz said during his opening keynote. […]

In addition, Sun rolled out a new licensing program for operating systems, which will make it easier for companies — including FreeBSD, Linux and OpenSolaris vendors — to bundle the Java Runtime Environment (JRE) with their distributions. Restrictive licensing has held back Java’s adoption on these platforms.

[via McKinsey Quarterly]

Sometimes, also high-level business consultants are analysing *exactly* in the same way as we are doing that in the ecenter (is it good? ;-).

custom-built applications are still very much a part of the IT landscape. Companies in many sectors spend well over half their applications budgets on custom software, used largely to enhance, support, and operate customized systems. For large companies in competitive, fast-moving industries such as telecommunications, financial services, high tech, pharmaceuticals, and media, those outlays can run into hundreds of millions of dollars. […]

Some pioneering companies have found a way to capture the benefits of packaged software in a customized-applications environment. They have adopted the approach of software vendors, which package and sell applications aimed at the common needs of many customers rather than of individuals, by writing an application once and then selling it many times. In this way, pioneering banks and media and pharmaceutical companies have reduced the complexity and cost of managing applications and speeded up the deployment of new or updated ones. […]

A company can define the management of common elements among applications as standardized “products” designed to provide for the needs of many applications rather than one. Similarly, it can assemble new, custom-built applications from common, internally built modules of functionality and then reuse services developed by its teams to undertake common tasks such as authenticating users or accessing attributes of customers or products. […]

The IT and business teams involved in developing a custom application decide independently on the type and version of the applications tools and deployment environment it will use—the server, the database, the portal, and so on. Decisions about service levels (such as availability) and policies on data storage also are made ad hoc. Such applications end up as complex beasts to manage, typically requiring a host of maintenance and support processes as customized as the applications themselves. […]

In response to such problems, companies have tried to reduce labor costs by, for instance, offshoring the maintenance of applications and consolidating them in shared service centers. Consolidation improves utilization (fewer machines and people are needed) but rarely raises the productivity of IT maintenance, because the diversity of maintenance and support activities doesn’t go away. Similarly, offshoring can reduce per-hour labor costs, but companies (either in their captive offshore centers or their outsourcing vendors) typically do little to reduce the underlying diversity in the maintenance processes for applications. […]

A company may have thousands of applications, but we’ve found that, for most organizations, they can be clustered into fewer than a dozen archetypes—our term for applications grouped by their key commonalities. Archetypes naturally vary by company. […]

Today companies bring some order and standardization to the process by using Internet-based service-oriented-architecture (SOA) standards.2 These IT advances help companies to codify business functionality in ready-to-use software building blocks much more easily and quickly, to scale up the kinds of functionality suitable for reuse in applications, and to ensure that such building blocks are employed more effectively across project teams and organizations—and maintained in a more standard fashion after an application has been deployed. […]

For early adopters, the benefit that really counts is a reduction in the time needed to develop an application: they are finding that they can roll one out 20 to 40 percent faster when they use common applications products. Furthermore, the reduced expense could eventually allow companies to leverage the advantages by using easy-to-assemble applications to test new business strategies. If the strategies work, the companies can scale up the applications; if they don’t, little has been lost, because such applications are inexpensive to build and easy to discard. […]

The following lessons from early adopters:

• Build the products “prospectively,” mindful not just of the existing base of applications but also of future needs.
• Organize groups to deliver products effectively against business needs and not just technology outcomes.
• Pay attention to organizational factors that will ensure proper governance and realize the business benefits.

[via Knowledge@Wharton]

But tech companies often pose unique succession issues, in part because of their unusually fast growth and young founders, according to Wharton faculty and technology experts. “If you look at the dominant companies in the technology industry, most of them are still led, or until recently were led, by a charismatic founder. […]

Going forward, it remains to be seen what will happen at Oracle, which is still run by founder Lawrence J. Ellison after nearly 30 years, and at Apple, where founder Steve Jobs left the company once, but is now enjoying a second honeymoon with the success of the iPod and iTunes. […]

Only a handful of the largest firms have had founders with the ability to manage both the technology and business sides of their rapidly growing companies, Hosanagar says. “For the more successful companies, there was not a reason for the investors to make the intervention earlier. That’s why you have some of the biggest companies — Microsoft, Sun, Apple — run by the same people for 10, 20 or 30 years.” […]

The rate of innovation in the technology industry also allows entrepreneurial founders to remain in charge longer than their management skills might warrant because fast growth at the firms can mask management weaknesses, Hosanagar says. As the companies mature, those problems are not so easy to hide, making succession more urgent. […]

It has been difficult, Cappelli adds, for fast-growing technology firms to develop top managers internally. “The companies generally have not had a lot of systems in place, particularly for developing people, so that often makes it hard to find qualified people inside.” […]

While technology company founders are among the most well-known business executives, they are often less ego-driven than CEOs in other industries, where elaborate hierarchies link power to position. “The tech industry is unique in many ways and it has to do with the strong meritocracy,” says Hosanagar, who points out that technology executives work closely with employees at all levels to foster a sense of collaboration, which in turn leads to innovation.

And an interesting point of view about Ray Ozzie ;-)

Yet according to Kendall Whitehouse, Wharton’s senior IT director, one possible successor to Gates is Ray Ozzie, the principal creator of Lotus Notes, who joined Microsoft when the company acquired Groove Networks in 2005, a company which Ozzie founded in 1997. “Ozzie is clearly a tech visionary,” states Whitehouse. “He may be just what Microsoft needs to lead it into the next generation of Internet-enabled software applications.”

Great, now, we are going down along the stack :-) The idea of the Open Management Consortium is to enable the collaboration between different Open Source projects of systems management for servers runnning open source software stacks.

The projects which are participating are already quite exciting (we are using nagios in ecenter solutions):

• Nagios
• NetDirector
• openQRM
• openSIMS
• Webmin
• Zenoss

The Consortium is comprised of leading open source projects that are developing and shaping the technologies used to manage IT infrastructure, particularly open source infrastructure such as that hosted on Linux. The initial committee members represent community leaders and firms that are central to open management technologies. Specific objectives of the Open Management Consortium include:

• Create awareness of open source management tools in the market
• Provide education and resources to help end users make informed decisions regarding open source
• Establish conventions and standards that enable integration and interoperability
• Enable collaboration and coordination on common development projects
• Promote collaborative open source systems management solutions

The Consortium will work to drive open standards for systems management within the industry, assisting IT managers and system administrators to custom-create solutions to best serve their business needs.

That remembers something else, umh…. :-)

They have also a blog (feed).

Nick and myself are invited at the coming HP Enterprise Executive Summit in Venice, Italy (Mai 14-16, 2006).

Interesting agenda, we are participating to the vertical session Financial Services Industry – Insurance. Title of our presentation: Unleashing Technology Innovation for the Insurance Industry.

New tunes for a new season: with Mixed Tape 12 Mercedes-Benz presents 15 brand new tracks by international newcomers for you to explore, download and enjoy wherever you like – check out http://www.mercedes-benz.com/mixedtape to get your free compilation.

Mixed Tape 12 begins with a detour to Japan: Kyoto Jazz Massive, undisputed paragons of the Far Eastern Nu Jazz scene, celebrate their 10th anniversary and open our current compilation with a remix by British Nu Funk stars Quantic.
Europe, too, has plenty to offer when it comes to promising new
artists: whether rousing Indie Pop (The Royal We), Low Budget Soul’s London-based Hip-Hop (remixed by Nu Soul legend Blackbeard), beautifully fragile Soul hymns from Sweden (Natalie
Gardiner) or the seductive Electropop sounds of German duo Suitcase – all tracks are simply brimming with musical surprises!

Please note – to keep up with the ever-changing music scene, Mixed Tape changes its playlist every ten weeks: from the 18th of July 2006 the above-mentioned URL will feature Mixed Tape 13 with 15 fresh recommendations from around the world.

Nick has found two articles from news.com, both published in 2005 but still very relevant to our point of view, to define new possible trends concerning the way of licencing software (by the way: generally speaking, not just for open source components).

Open source reshaping services market

Seeking services revenue is not restricted to the open-source crowd. With corporate spending on software restrained, established providers of proprietary software increasingly rely on ongoing revenues, such as maintenance rather than new license sales. In an earnings call earlier this year, Oracle CEO Larry Ellison touted the company’s “subscription” maintenance business as “an extremely high-margin business.” […]

JBoss founder and CEO Marc Fleury said that his company’s support structure will ultimately give it an advantage over others crowding into the field. He said scaling up its support offerings so that the company can handle many clients with large-scale applications is one of the biggest challenges the company faces. “Customers want to know their provider is viable,” Fleury said. “Getting support directly from the vendor who wrote the software is a better model…What’s the credibility (of others)?”

Open-source companies chase steady money

Many industry veterans argue that open source is accelerating a shift that has been going on in the software industry for some time: Rather than hinge their business on big-ticket license contracts, software providers increasingly rely on recurring maintenance revenue. […]

And because most open-source tools don’t have license fees attached to them, commercial open-source companies are often forced to build their businesses around services revenue, in the form of support, up-front installation or training. With this model, purchasing software is more like committing to a yearlong cell phone contract–and less like buying a car with a large cash outlay and making regular payments later. […]

“Larry (Ellison) is buying everything he can get his hands on to consolidate the (business applications) industry. He believes that innovation in software is over. It’s all about maintenance revenue,” Goodnight said. […]

Analysts say that open-source software requires an industry of services companies for its adoption to spread. Some open-source products have been created by a relatively small group of programmers and do not have round-the-clock support organizations. Corporate customers require some sort of vendor to rely upon. […]

Also, a shift in buying habits is fueling interest in annuity-style contracts between providers and corporate customers. Increasingly savvy customers are shying away from committing to large-scale projects that consume millions of dollars and take years to complete.

“Enterprise customers, in particular, continue to be willing to pay fair and reasonable prices for software. The difference with the old days is that they don’t want to pay for it all up front,” Mitchell Kertzman, partner at venture capital firm Hummer Winblad and former CEO of Sybase, said at a conference in February. “They want to pay for it as they realize the value and get return on investment.” […]

“From a management point of view, if you do it correctly you can build a better forecast into expenses and revenue flow,” relies on subscriptions. Instead of spending the end of every said Matthew Szulik, CEO of Linux distributor Red Hat, which quarter trying to land big deals, the subscription approach “allows you to focus on strategic issues,” he said.