Subba’s Serendipitous moments

March 23, 2007

Oracle accuses SAP of theft.

Filed under: Business,Competition — Subbaraman Iyer @ 1:11 pm

Oracle after taking swipes at its main competitor SAP at all its forums, has taken the battle to a new level. It has accused SAP of corporate theft on a grand scale. The news item from Reuters is here.

It has filed for damages and injunctive relief at the court and the charges that it has brought against SAP include:

SAP has engaged in systematic and ilegal access to Oracle’s customer support systems. Through this scheme, SAP has stolen thousands of proprieted, copyrighted software products and other confidential materials that Oracle developed to service its own support customers.

SAP has gained access to Oracle’s proprietary, password-protected customer support website for its PeopleSoft and JDE product lines..

SAP employees using the log-in credentials of Oracle customers accessed and copied thousands of individual software and support materials.

The detailed documents can be accessed here.

It would be interesting to see how the court room battle evolves– will it be protracted or settled out of court quickly.

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Oracle’s results are good; competitor bashing is also up!

Filed under: Business,Competition,Leadership — Subbaraman Iyer @ 12:16 pm

Oracle announced impressive results this quarter, beating the expectations in terms of both revenues and earnings.

  1. Revenue was $4.4 billion (up 27% a year ago) and net income at 20 cents a share.

  2. Total software revenue was up 25%, with database and new license revenues up 17%

  3. New applications licenses were up 55%, with middleware being a significant contributor.

However, it has become increasingly difficult to assess Oracle’s true performance because of the way it reports results. The main challenges that I face in understanding Oracle’s performance is:

  1. No clear breakdown on organic growth and the growth gained through acquisitions.

  2. It uses a broad category– technology and applications for financial reporting purposes, though I believe it would help everyone if it could segment it by database, middleware, application suite and standalone applications.

That way, it would help everyone make inter-company comparison and also inter-period comparison.

In the absence of this, I am inclined to be ever watchful of Oracle’s claims of beating the competition.

Speaking of competitor bashing, Oracle loses no opportunity to bash them up, and this briefing was no exception. Some of the brash statements made:

  • "Our middleware new license sales grew 82% in the third quarter and 62% over the last twelve months," said Ellison. "This compares to BEA’s growth rate of 8% in their most recently reported quarter and 12% over their last year. Not only are we growing faster than BEA, we’re now larger than they are in the middleware business."

  • "Our applications new license sales grew 57% in the third quarter and 61% over the last twelve months," said President, Charles Phillips. "This compares to SAP’s growth rate of 7% in their most recently reported quarter and 10% over their last year. Although SAP is still larger than Oracle in the applications business, we are closing the gap consistently and rapidly."

And it is difficult to verify these claims, because of the way Oracle reports the numbers. I only wish that there was more clarity and transparency and as one of the industry leaders, they set an example.

Over the past few months, I have had a chance to speak to several Oracle employees — from managers to senior executives. Almost all of them  divided their time talking about Oracle and indulging in competition bashing in equal measure.

I wonder is this success strategy of bashing up the competition a sustainable one?

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March 20, 2007

Cisco’s interesting acquisitions

Filed under: Business,Model — Subbaraman Iyer @ 11:11 am

The past few weeks saw Cisco make some very interesting acquisitions. It acquired Five Across — a small social networking company, for an undisclosed sum. To me, it just meant that perhaps Cisco is just planning to use them for some internal innovation work, much like the Dell’s Ideastorm.

Cisco’s acquisition of WebEx for for $3.2 billion is more strategic and it would have  implications for the industry in general and to some players in particular.

Cisco and some of their competitors like Avaya have been aggressive in promoting the Unified Communications concept, something which has been talked about for the last five years. While they have made strides, the vendors ignored Web collaboration, which helped WebEX make very impressive strides. This space heated up with Microsoft announcing their Live platform, and hence it was only a matter of time, before Cisco had to square off with Microsoft.This acquisition sends a clear signal that Cisco is aiming to take the leadership position.

WebEx  with more than 2 million users offers their technology as an on-demand platform, which is attractive to the SMB business. So, it would be interesting to see whether Cisco saw in WebEx an opportunity to strengthen their SMB offerings along with Linksys or to integrate WebEx technology as part of the communication and conferencing solution offerings like Telepresence. It could perhaps do both, given that WebEx has a distinct offering for SMBs.

Where Cisco is likely to score is in its ability to blend the social networking aspect with collaboration which could include calendaring, file sharing, and project management.

This collaboration space hence would see some intense competition with Microsoft (Sharepoint), IBM (Notes), and some weaker players like Citrix (Go to meeting). Microsoft has also upped its offerings with its acquisition of TellMe.

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March 12, 2007

The amazing Nokia success story in India

Filed under: Business,India,Innovation,Leadership — Subbaraman Iyer @ 11:58 am

Nokia is undoubtedly an amazing company. But what took my breath away, was how it managed to surpass Unilever’s revenues in India. For people who are not aware, Unilever is the most successful MNC operating in India and is considered an icon. Its business practices, strategies are emulated by many companies in India and abroad.

Some key reasons why it could become so successful when other MNCs could not succeed to the same level:

  1. A complete "local" management style– with most of its senior management being local and empowered to make decisions that will drive growth.

  2. A dedicated R&D unit, and a manufacturing unit. New products designed and manufactured for the local markets.

Net impact:

  1. More than 70% market share in India, which means close to about 3.5 million handsets sales each month (India adds about 5 million subscribers each month)

  2. Voted as the top brand in India

  3. Deal with the largest operator (Bharti- Airtel)

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Poor brand communication

Filed under: Uncategorized — Subbaraman Iyer @ 11:34 am

Last week, had the opportunity to attend an event hosted by a major technology company (software) which was attended by the journalists, bloggers, media houses and their own PR agencies. After listening to about 4 hours of presentation (death by Powerpoint of course), the company could still not articulate clearly what the rational benefits of the brand or the emotive connection of the brand. All that they talked about was their technology, engineering, new products and new service offerings. All inward looking, and not a single customer story, or how the company wants to position itself in terms of trust, reliability and peace of mind offerings, though they kept harping on these issues.

Makes me wonder, whether the company really thought through its initial brand equity signals and what the final brand message is for their partners and customers.They also failed to articulate how it expects the brand to be perceived by customers in some of the  new market segments that they were planning to enter.

On the contrary, I saw some very compelling messaging by another software vendor which has become a category leader in recent times giving the incumbents some scare. The key thing that this software vendor articulated was how its eco system would project a sense of fun and ease of use / deployment and how it created customer success stories. In fact, the messaging was so compelling and consistent that a lot of us in the room felt a sense of exhilaration despite the fact that their offerings were short of great functionality.

One notable difference between the two companies was in their choice of language — the weaving of an incredible story, that brought the brand completely live in the room. One also saw the marketing managers, even product specialists using the story metaphor with an amazing clarity and sense of purpose.

Why do communication managers fail to articulate the emotional connection? Is it because they beleive it is anathema in the technology world? Or do they just exhaust all their creativity in inward looking activities? Or is it just inertia to make the change?

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Lessons from SGI

Filed under: Business,Competition,Leadership,Learning — Subbaraman Iyer @ 10:58 am

Remember Silicon Graphics? One of the icons of the computer industry, well known for its graphics workstations,  for high end applications like video editing, movie making and 3D graphics. It was an industry leader in the 1980s and I used to feel over awed by its graphics abilities.

Last year, it filed for Chapter 11 and now it is being restructured as a provider of high performance server and storage solutions. Its decline provides many a lesson to  many of the hardware vendors. Some of the lessons are:

  1. It is good to be able to dominate a niche, but when the industry forces coalesce to eliminate the niche, it is time to change. SGI’s focus on high end systems, blinded it to the fact that PC based systems were catching up on performance, and reduced the size of its niche.

  2. It could have retained its leadership in graphics based cards and successfully eliminted competition like NVIDIA and ATI, but remained smug. It was only a matter of time, that NVIDIA and ATI assumed leadership positions and relegated SGI to just a small niche vendor.

  3. More importantly, it contined to sell direct without building a partner / channel eco system. In the computer industry, more so in the hardware sector, the network effect can only be ignored at the cost of disastrous effects.

Even today, there are several companies that seem not to understand the "SGI effect" and continue to focus on their technology / engineering prowess, often ignoring the changes that are occuring in the industry sector.

I always feel intrigued what causes this blinding effect amongst talented management people. Is it the hope that the industry changes that they see as just transient phenomenon that will just disappear, or the inability to institute gut wrenching changes? Is it that they fall in love with their niche that they cannot see the impact of the broader changes impacting their niche?

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March 11, 2007

I often encounter SCATE

Filed under: Business,Leadership,Learning,Model — Subbaraman Iyer @ 11:13 pm

Just came across the nice little piece on SCATE. It makes not only interesting reading, but paints the reality as it exists in the management world.

Most management issues are not necessarily complex, but not simplistic either. The issues are rarely uni-dimensional, and often cover multiple facets. But, somehow there’s always a section of leadership, which often believes in an overly simplistic diagnosis and hence prefer a SCATE approach.

And people who prefer the SCATE approach often end up taking the shot gun approach and live with a feeling that they are dealing with the problem, though they only go through the motions.

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Microsoft’s radical innovation in India

Filed under: Business,India,Innovation — Subbaraman Iyer @ 10:45 pm

Would you ever believe that Microsoft so closely identified with the personal computer and everything around it, replaces that with SMS enabled phones to convert database calls into sms messages?

I was not only pleasantly surprised, but also felt elated because this is what I would refer to as appropriate innovation. And this innovation is likely to have a global appeal, as people across the world strive to resolve the digital divide problem.

Well, certainly Microsoft Research India has broken new ground replacing PCs with mobile phones in a project called Warana Unwired.

Here are the details courtesy: Sean Blagsvedt and Rajesh Veeraraghavan of Microsoft Research India.

Warana Unwired

Basic Thesis:

We have run an experiment replacing a PC based system for helping a rural sugarcane cooperative with a mobile phone based system. The new mobile system replicates almost all of the PC based functionality. It is cheaper, adds additional functionality and is more popular.

We believe that this is the first project of its kind in developing regions where an entire PC setup has been replaced with mobile phones.

Warana Wired Village project is now called the “Warana Unwired.”

Context:

Warana is a village located in Rural India, in the state of Maharashtra. The sugarcane cooperative is serving about 70,000 farmers across 75 villages.

The government of India in 1998, started a pilot experiment to bridge the digital divide by setting up this project referred to as the Warana Wired Village project. It is touted as Asia’s first computing intervention in rural areas of this scale. The project was introduced in 1998 jointly with government of India funding 50%, government of Maharashtra funding 40% and 10% from the Warana Cooperative. The total amount that was spent on this pilot project was $500,000. Under this project 54 kiosks are established to connect 40,000 farmers across the different villages.

Since it was a pilot, the original goals of the project were understandably very exploratory. The original goals of the project were to give internet access to farmers, to allow farmers to check market prices so that they can sell the produce to the market that was offering them the best price, it was to setup a remote agricultural advisory system. For various reasons, these didn’t work out.

The cooperative then turned around and started using these kiosks for remote bookkeeping.

The farmers used the kiosks to check their sugarcane output each farmers produce, track their fertilizer outputs, issuing harvesting permits and to get their pay stubs. There is a kiosk operator serves as the intermediary to give access to these farmers.

Problems with the existing System:

It is indeed amazing that these kiosks are still running after 8 years after their original installation, it is rare you see rural computing projects running for this long. That said, the PC’s were running into many issues due to the rugged rural conditions and the maintenance cost were shooting up steadily. Power is a huge issue in these rural places, and they had UPS backups that would help with it. It costs money to replace them and that also added to the maintenance costs.

Research question:

Can we preserve the functionality of the existing PC based system while making the entire system cheaper and more effective?

We replaced the client PCs with SMS enabled phones. On the server, we attached a smart phone through USB to their PC server. So, we effectively have an SMS gateway that receives incoming SMS messages and converts into database calls and the response was also converted to an SMS message and the result sent back to the phone that sent it. The authentication was through the SIM card (essentially the phone number).

Results:

We found that all the application scenarios they had could be converted using the SMS enabled phones. The system is now available 24 hours, and we have farmers using the data on a few occasions at odd times like 3.30 in the morning. The solution is truly mobile and the farmers are using it in places like the tea shops, front of the farmer fields and in the kiosks. In most cases they use the kiosk operator (who is now the phone operator) as the intermediary to send the SMS messages. There is a potential saving of over a million rupees($22,000, which is a big deal in these contexts) if the cooperative completely switched from the PCs to the mobile phones, this is primarily due to the savings from the maintenance costs of the PCs.

We are working with the Warana cooperative to see whether they want to scale this to all of the 54 villages they are operating. We hope this will lead to many more SMS applications throughout the world.

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March 6, 2007

Converting weakness into strength

Filed under: Business,Innovation,Stories,Winning,Winning strategies — Subbaraman Iyer @ 11:57 am

It requires a bit of audacity, imagination and a great sense of conviction to convert one’s weakness into strength. As a business coach, I often face the dilemma of advising clients about their weaknesses (and do little about it, unless it is debilitating), and leveraging on their strengths, or trying to convert their weakness into a strength.

The following story about Arnold Schwarznegger highlights how they encashed their weakness into strength. 

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March 5, 2007

Dell engages — in a Digg fashion!

Filed under: Uncategorized — Subbaraman Iyer @ 6:00 pm

I was simply amazed at how Dell has managed to harness the collective energy of its employees, customers as it begins a massive turnaround.

It simply created an Ideastorm where people could post ideas, vote on them and also comment on them. Clearly Dell has embraced the Digg philosophy, — a clear cornerstone of the Web 2.0 movement. 5 days later, the site has generated close to 1500 ideas, with 122,000 votes and 2100 comments and going strong. It only shows how social software environment and a passionate user base can aid in idea generation.

Amazing!

If this is not radical, Dell is attempting a StudioDell where users can post videos about their experience with Dell products. Perhaps a Youtube clone.

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