March 10, 2004

Myths of open source

Busting the myths of open source (from CIO magazine)

A variety of open-source licenses exist, and helping CIOs understand their implications is good business for lawyers—very good business. "[CIOs'] concerns chiefly revolve around the implications of using code to which they can't verify their right to use," says Jeff Norman, a partner in the intellectual property practice of law firm Kirkland & Ellis. "Just because you've got a piece of paper saying that you own the Brooklyn Bridge, it doesn't mean that you actually own it."

For some users, third-party indemnification is an option. On Nov. 17, 2003, for example, JBoss Group announced it will indemnify and defend JBoss customers from legal action alleging JBoss copyright or patent infringement. Other vendors of open-source software—including HP, Red Hat and Novell—also offer indemnifications of varying types.

And while conceding that the situation isn't perfect, Sabre's Murphy says that he's heard all the legal arguments he needs. "It's a concern, sure, but we've basically got to do this. There may be friction and challenges—but I don't see any showstoppers." (See "Open Source Under Attack," this page.) "

New software category - Software Indemnification Management System , any takers ?

March 10, 2004 in Economics of IT | Permalink | Comments (0) | TrackBack

March 09, 2004

Ray Lane on new economy

Ray Lane, during Software2004 conference, on the new dynamics affecting software-based startup businesses -

Competency driven cost-model
- Predictable metrics
- Ubiquitous access
- Continous updates
- SOA (has to be there !)
- Flawless service (very expensive feature)

His parting shot - "There's nothing so pure as a new software company ..and so scary as a mature one"

March 9, 2004 in Economics of IT | Permalink | Comments (0) | TrackBack

CIO reporting to Sales & Marketing

Jeff Cohen, the former CIO of JetBlue , on why he left JetBlue-

"I left because I knew I didn't want to report to sales and marketing," says Cohen, now chief executive of Vertical Software Group, an aviation-software startup based in North Caldwell, N.J. "If you are used to reporting to the CEO and COO, it's hard to report to someone who was your peer." Cohen's not alone. Other technology executives may need to consider the possibility they'll be reporting to sales and marketing in the future. Some smaller companies, such as Philadelphia-based collaboration-software firm Mindbridge, are already set up that way.
Though it's possible a company can get closer to its customers by melding sales and marketing know-how with, say, a customer-service implementation, critics of this arrangement say a single function of the company shouldn't have domain over the whole technology staff. The long-term fallout can be that sales and marketing will hog available project funds, leaving infrastructure upgrades, financial systems and logistics improvements behind. "

This is another sign of the subtle-trend I predicted (and received "hmm I am skeptical about that " response from the General Partner of a reputed Venture Capital firm).

Is anybody out there keeping score on the issue of Centralized IT Versus Decentralized IT ?

March 9, 2004 in Economics of IT | Permalink | Comments (0) | TrackBack

January 23, 2004

Muddle through

Peter Burris making good point while using political science term "muddling through" to explain the unforeseen consequences of Offshoring, Outsourcing, Open source, and productivity gains -

Citing general stats -
10% of IT work has been "offshored";
quality software development labor in emerging markets costs 90% less than in the U.S., but has been and continues to rise at a rate of 25% per annum compounded;
labor accounts for roughly 80% of the costs of solution development, but only 40% of the costs of solution operations;
software accounts for roughly 10% of the costs of solution development, and considerably less than that for solution operations;
solution development fails 60% of the time.

Economic analysis of this trend is worth exploring -

falling implementation failure rates;
professional service firms (and, by extension, BPO outfits) really passing the savings from offshoring to their customers, and not just expanding gross margins;
open source software organizations sustaining themselves economically;
a rapprochement in the relationship between the open source and Microsoft communities, neither of which are going away or are going to "win";
user efforts to keep enterprise software support fees flat;
the emergence and adoption of development methods that focus on collaboration throughout the life cycle and not just during the analysis/requirements phase.

January 23, 2004 in Economics of IT | Permalink | Comments (0) | TrackBack

October 10, 2003

U.S. Is Losing Edge

When Andy Grove says people listen (cause he is the most paranoid of all !!)

Some comments -

-India's booming software industry could surpass the United States in software and tech-service jobs by 2010
-torn between his responsibility to shareholders to cut costs and improve profits, and to U.S. workers who helped build the nation's technology industry but who are now being replaced by cheaper labor
-move offshore has been aided by the telecommunications bubble of the late 1990s
-He put the blame on slow patent process on slowing down the overall innovation train

Found more details on SV site.

He is recommending more emphasis on investing in pre-competitive technology.

I believe this is going to be a key battle ground in coming years. Once this cost rationalization dust settles battle lines will be drawn in terms of number of Phds, patents, research papers, incubation projects and cross discipline skillsets.

October 10, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack

September 30, 2003

IT job security 'gone forever'

Welcome to the free agent nation.

IT job security 'gone forever' -- Gartner

Gartner predicts job losses will be staggering in mature markets such as Australia and the United States. "Each year, one in 10 jobs at vendors will move to emerging markets, while one in 20 will go on the user side," Gartner says.

Gartner says 83 percent of 151 chief information officers it surveyed globally have reported that their companies are going to IT outsourcing, process-based working or application development embedded in the business. Most said the greatest hurdles to implementing change were staff resistance and lack of competence to deliver IT differently.

September 30, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack

September 29, 2003

New kind of business process driven innovations

Shahi Agassi (SAP) on innovations ahead -

What kind of innovation?
A lot of people talked about the improvements in supply chain--cutting four of five days out of a 16-day process. But you look at innovation in product definition and product design, and you may actually cut three to six months out of a 12-month cycle. The impact on a company is significantly bigger.

Where do you look to see that?
You look at innovation in mergers and acquisitions and post-merger integration, and if you have a better engine to integrate other companies, you may be the integrator versus being integrated into somebody else. These are new areas where we did things in the past on paper or spreadsheets and PowerPoints. We're moving now into a well-defined process that allows me to do it in a predictable and sustainable way across my businesses, across the world--from the design to the launch of a product, from recruiting people to a postmortem on projects, from premerger deal rooms to a postmerger reorganization. There are all these processes that we've never done before.

September 29, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack

costs of computer disposal

Costs of computer disposal

Disposing of outdated computing equipment is a costly proposition for companies--even if they manage to sell off some gear, a new study says.

Released Monday by research company Gartner, the study says although the sale of obsolete hardware can fetch owners from 3 percent to 5 percent of the equipment's original price, that doesn't factor in the $85 to $136 it can cost to get rid of an old PC

September 29, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack

September 26, 2003

Debate continues

Working to push the Google ranking for this article..

September 26, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack

September 22, 2003

Most Storage Startups Flop

Most Storage Startups Flop

And the bad news for VCs investing in storage doesn’t stop there. In order for a VC to achieve its target of at least tripling its investment in a company, the company has to be worth about 10 times the total funding it has received when it enters the public sphere. But of the three out of 10 companies that actually survive, the report shows that only 27 percent achieve a return of 10 times the investment, while 34 percent are worth less than three times the total investment in them.


So, how can VCs spot the winners in that sea of losers? John Borchers, a partner at Crescendo and co-author of the report, suggests that investors take a hard look at what storage segment a company is playing in.

“There’s an unintentional mis-gearing in the way different storage companies are capitalized,” he says, pointing out that, while the amounts invested in different segments are about the same, the number of companies that actually survive in the different segments varies greatly.

In addition, the report shows that investors should be wary of funding companies offering technologies based on evolving or not yet existent standards. “There’s a lot of naiveté surrounding how long it takes for standards to be adopted,” Borchers says. “Often, companies think the standard’s just two to three years away, but in almost every case over the past 30 years, it has taken six to seven years.”

September 22, 2003 in Economics of IT | Permalink | Comments (0) | TrackBack