Brij Singh's Random Musings

Tiecon 2005

Attended the Saturday session of Tiecon. It was a packed gathering full of proven and yet-to-prove entrepreneurs.  I did not attend the Friday session but I could hear people talk about "Flatteners"  every now and then.  Thomas Friedman definitely left behind few good punchlines for people to remember and quote.

Some of the quotes from the conference: -

Cost of running offshore site in Spain is only 8% higher as compared to India - Virmani (Global Partner - Accenture)

Best introduction (received big applause for this) - "I am Craig Newmark, customer service rep and founder , Craigslist"

"I don't believe in low-end, high-end distinction. TCS was doing pure body shopping and now they are a multi-billion consulting giant" - PV Kannan, CEO 24/7 Customer

Some other tidbits , don't remember who said what !

Online bill payment growth number is about to hit hockey stick growth - Billeo CEO

Most of the Internet emerging startups are using Google adsense to pay their bills.  Atleast Fatlens, Billeo and Technorati acknowledged that.

What metrics to show to board members ? CTR, Conversion, Impressions, LTV , Irrational Exuberance (Ok I added the last one !)

New catch phrase for all outsourcers - Business Transformation.  Expect IBM to trademark eTransformers or maybe bTransformers. 

80% of the world cannot  afford HP products. This realization started HP's initiative to capture bottom of the pyramid. Hence e-inclusion type projects.

In order to ensure business continuity, Accenture makes sure  "same work profile" is available in Manila as in Bangalore ! ( If he is not speaking like a consultant then this is a huge process advantage - capturing work attributes, keeping them updated and putting global touch to it requires good amount of organizational and technical mastery)

All in all Tiecon was a good investment of time and money. For the first time I saw more non-Indians in the conference. This shows that the deal making is expanding.

More important than Iraq war ?

Kuwait grants political rights to its women.  According to one activist:

It has been 20 years of work, but at last we got our rights

Bush & Co. needs to focus on these kinds of efforts instead of sending robocops to spread the democracy.

Pitfalls Of Linear Thinking

I took Om's advice and went straight to Cringely's site to read his  commentary on the inflection point.

Cringely's Jeffrey Archer style storytelling makes for a fascinating read. If you were the one who  just landed in this world and read Cringely's post then you would go straight to stock market and buy as much GOOG, YHOO and MSFT as you can. Fascinating post no doubt.

There is one problem with his analysis, he is assuming that rest of the world is stupid and sitting in the spectator's gallery.  That's not the reality anymore. We are together  in this theater and for once there are no spectators - yes  including customer - Think about all the user-generated content movement.  This time it will be hard for any company to own the segment for a longer duration. Reason being that if unchecked it's extremely easy to own the segment. Internet efficiency comes into play here.

Inflection point usually generates a monopoly, I still don't see where is this monopoly coming from?

If Google takes over the content distribution world then Cisco's revenue gets hurt. If Microsoft stabs it's OEM partner on their back then Intel comes out as a looser. There are many big companies who have the resources and intellectual chops to derail these inflection point champions ! What about HP, Oracle, Big telecom equipment suppliers. They have to be dumb not to react to these moves.

Post is insightful in a way that we should be aware of these possibilities (specially creepy Web Accelerator designs by Google).

When proprietary software goes open source

David Berlind interviews Marc Fleury and discusses IBM's Gluecode acquisition.

This "paranoia" proves one thing that the open source business model rides as much on the novelty as much on having strong proprietary license based competitors.  You remove that competition and suddenly high-priced service model falls flat on its face. Selection moves to other ecosystem variables such as tools, adoptions, developer count, third party tools etc.

Also it's very hard to sustain brand-based  revenue margin when the market is full of open source components of the same category. JBoss will have a real challenge now. When the market for J2EE itself is maturing and other stacks are rapidly maturing, selection becomes more tricky.

Different markets buy for different reasons - low end goes for least hassle/low cost  and high end prefers certification/indemnification/mission-critical support. Hard to ignore IBM's pitch on the high-end of the market.

This is getting very interesting now.

But to be young was very Heaven

Are we witnessing open source version of the  French revolution ?

Jeff Clavier posts some more tidbits from Microsoft's VC meet:

Q: Statistics report that there are 2M Open Source developers, 70% Europe, 70% under 25. Entire generation "lost to capitalism" ?

Microsoft is going to release a free version of Visual Studio Express targeting students, who traditionally have been using Linux and free stuff.
Ballmer also goes on to stating that the GPL makes it hard to commercialize innovation (b/c of the requirement to contribute changes back to the source tree).

These numbers and segment represents a major new trend.  They are under-25 and very soon they will go into decision making roles in their companies.

Who is betting that they will be advocating purchase of  business packages priced around million dollars ? 

Enterprise software business model

Jeff Bussgang posting about Microsoft's VC conference held at Mountain View:

The enterprise software business model is dead.  This is refrain many VCs are mumbling to each other lately.  Price pressure is incredibly intense between open source, Microsoft moving up the stack, vendor consolidation, IT buying wariness, the ASP model, overfunding in interesting sectors and many other factors.  It used to be that you could build a profitable enterprise software company at the $15-20M threshold.  But with today's pricing pressures and high cost of sale, it seems to have jumped to $40M, and it's harder to reach that threshold quickly.  VC appetite for standard enterprise software appears to be dwindling to nothing.

Enterprise software business is tough there is no doubt about this.  High cost of selling,  distractions with Sarbanes compliance, where-is-the-ROI concerns have made this sector very tough. Though the title is rhetorical, real deal is that the conventional budgeting process for enterprise software is dead. Now its much more diffused across offshoring, open source solutions,  outsourcing,  DIY-IT,  and best-of-breed packages.

Ecomagination

This is very informative (and flash trick is way too cool).  Learned few chilling facts about the energy and water problems.

Something tells me I am not doing my daughter a favor by driving SUV. Future needs fewer SUVs and more hybrids.  I should switch fast.

IBM buys Project Geronimo

IBM buys Project Geronimo.  More trouble for JBoss,  Sun and potentially BEA.

If I am not wrong then this is a first acquisition of an open source services start-up. It will atleast force many pundits to sit back and ask the question - what's the big deal here ?  Answer lies in the market knowledge - We are not dealing with one market here. There are multiple niches which can absorb  multiple architectures. SugarCRM will not displace Seibel but it will find enough takers to be profitable.  Similarly for Websphere and Geronimo.

Its a coup for IBM since this Geronimo camp has a history with JBoss. 

It's hard to compete with IBM resources - its not impossible but its very hard. With this acquisition IBM is buying a well respected community via which they can do Linux type  patronage-based development model or they can just outsell every open source services startup on the scale and diversity alone.

This space will see more action now.

American dream

This is what American dream is all about:

Khanna will join the White House staff effective May 8, Peace Corps Director Gaddi Vasquez announced. The position is currently listed as vacant following the departure of the last CFO Jim Daniels.

Khanna will oversee a White House budget that is said to be in the region of $ 750 million. He will work in the White House office of management.

Khanna, who was born in Kanpur and graduated from the local Christ College, migrated to the U.S in the early 1970s. He earned an MBA from University of Maine and has held senior executive positions in finance, IT and management consulting in several U.S companies

This is all the more inspiring because of the common hometown. Well the "other" hometown.

Sitting Idle? Write Open Source Code

Australian government program using spare labor capacity in building OSS projects. This is a unique initiative where all parties involved come out as winners.  Government gets programming done cheaply and people on the bench get good training.

This  is something which will be replicated in other countries.  And why not, it makes sense. Its a great way to initiate recruitment, utilize idle capacity, and write the kind of software which proprietary world is not interested in writing.

[Link via Slashdot]