Dudu Mimran Blog

See interesting piece on Microsoft’s innovation strategy - HBS Working Knowledge: Innovation: The Secret of How Microsoft Stays on Top.

Excellent coverage on CIO state of mind - SandHill.com | Sales & Marketing | Software that Makes CIOs Happy.

Excerpt:

Improve Quality
The panel was unanimously unimpressed with product quality. “The quality of software I receive from you is abysmal,” says Kaiser’s Watson. “I’m in a business where if I put in a bad piece of software, I can actually kill people. We take patient safety and software quality extremely seriously. I need partners that take it just as seriously as we do.”

Hospitals are not the only clients with life or death accountability. “At Lockheed Martin, we have more lines of code than Microsoft in the products we deliver,” says Meehan, complaining that the enterprise software vendors he purchases from do not have the same standards of quality. “The difference is that our products have to work because we have lives at stake, missions at stake.”

Add Value, Not Complexity
“Most software adds complexity,” says BP’s Leggate, speaking for many critics of the enterprise software business. “We’re looking for software that adds unique value to our corporation.”

“The complexity forces companies to invest in maintenance and integration work which seems to have no return for the business. This places the CIO in a bad position,” says Unilever’s Cameron. “All other parts of the business can negotiate away expenses with no ROI… It makes me not want to buy software.”

Build Dialogue
Software vendors have long been criticized for a lack of strategic, consultative selling. The CIO comments seem to indicate that vendors are trying to be true business partners - but not quite there yet. “Please don’t tell me you’re going to solve all my problems. Vendors are continually using that pitch,” says Cameron. “Ask me what my problems are.”

Adds Leggate, “If you’re going to set out to build good stuff, come and talk to me first,” We want to work with companies at a level of strategy, not at a level of selling boxes and disks.”

Be Flexible
All panelists expressed an interest in new vendor business and pricing models. “The ASP model was static,” says Watson. Buying software as a service allows enterprises to purchase more than just an application; it can also come with an additional piece of intellectual property. “Software as a service is more flexible.”

As vendors increasingly focus on service or subscription models, it is important to remember that all customers may not want the same model - or the same model every time. Adaptability is key. “We like to go to our vendors and say, ‘Can you do it this way?’” says Meehan. “Most of the time, it works out.”

Embrace Reality
Even at companies with large IT budgets, funds available for new initiatives are still scarce. Meehan explains Lockheed Martin has grown 13 percent over the past 10 years but the IT budget has only grown 1 to 1.5 percent.

BP has a similar situation. “The headroom for new software is only $10, $20, $30 million a year,” says Leggate of BP’s budget. “We care deeply about innovation. But we need things that fit our business and take our company forward but not cause integration problems.”

Smooth Merger Impact
Too often, customers are bearing the brunt of industry consolidation. “I don’t know how many times I’ve been negotiating for a product, purchase one and then end up with the other because of an acquisition. You think you know what you’re buying but then you have to factor in what’s going to change as a result of the acquisition,” says Meehan. “We look for value, ease of use, ease of dealing with company and flexibility in our deals. The consolidation going on in the industry adds another layer of complexity.”

Enhance Security
IT security remains a tremendous challenge for enterprises. Software vendors need to do more to help fight the battle. “Today I am spending tremendous amounts of money to protect the business environment,” says Meehan. Lockheed Martin tracked 56,000 viruses two years ago. Last year that figure hit 10 million. The ramifications of the situation are huge. “How can we get 130,000 people patched against a vulnerability before the hacker community figures out how to exploit it?”

Share Responsibility
“I’m looking for [vendors] to have some skin in the game,” says Watson. “When it works, I’m happy to pay you because I like ‘win-wins.’” But too often when it doesn’t work, vendors wrap themselves in warranty provisions and eliminate their downside. “I don’t believe that is a fair exchange in value.”

Speed Industry Evolution
Buyers appreciate that the software industry is maturing and evolving. But the dynamics and timing of the evolution are frustrating. “We’re all looking to see the future and bring the future forward,” says Cameron. “When we see the future, our biggest frustration is ‘How do we get there faster?’ What we’ve got is SOA and I won’t live to see it - and I’m young… So we have to get after these things faster so that we can bring them to the business and see the benefit.”

RFID Strategy — The Three R’s - industryweek

Amdocs acquires DST Innovis for $238m in cash - globes.co.il

Microsoft previews next-generation CRM - news.com

Art of Stock Picking By Charlie Munger - vinvesting

SAP to double staff in India - infoworld

Exclusive: IBM enters enterprise search fray - infoworld

Contributor: Venator Partners - Venator Partners is a Boston-based executive search firm that specializes in recruiting senior-level executives in the software and communications industries.
Copyright: Copyright © 2004. Venator Partners, LLC.
Covered Categories: M&A, Start-ups, Personnel Changes

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What’s key to early days of Symantec-Veritas - zdnetindia

The Worst Thing About Best Practices - marketingprofs

Microsoft and Open-Source - emergic

Sun opens door to Windows - wininsider

Happy 4th of July to our readers!

The post Infectious Greed: Venture Capital Business is a Dud quotes an article where Greylock Partners‘ Bill Helman expresses candid feelings that the venture capital industry is going down. I as an entrepreneur agree that the state of mind of VC today and the way funding decisions are taken may imply a dead end for the VC industry. A quote from the original article enforces this gloomy perspective - “as only a handful of outfits have generated a majority of the industry’s reported profits over the last 15 years”.

The real question here is whether IT markets have reached their optimum and whether we are in an industry maturation phase as “classic” literature defines as one step before a slow decline to death or is it just a plateau before the next steep demand curve. IT markets have always been born and fuelled thanks to innovative minds that invented things that were not thought possible or not being thought of at all. These minds have been always supported by external financial resources although today the level of resources required for starting up a company with good chances to survive have increased dramatically. “Identifying” an industry maturation could have been done 20 years ago before those same minds envisioned the potential of the internet and its commercial uses and at any other point were a three years of low demand level existed.

The VC community is by nature watching fragments of history where the returns on investments that they see (and try to gross evaluate as an indicator for the state of the industry) are always a reflection of what have been invested during the prior five years. The last five years (2000-2005) have been very slow in terms of fuelling innovation and today VC see the results of that conservative attitude. Creating the next wave of productivity tools both for corporations and individuals always requires a leap of faith and creating a 10-15 giant companies every five years is not so bad since many other smaller companies depend on them and make complete viable industries.

Technology Sector Merger and Acquisition Activity Spikes in 2Q 2005, Says The 451 Group - tekrati

Microsoft pays out $775m to IBM - bbc.co.uk

The Art of VC: I was not wrong, just early - robinbordoli.blogs

The Wisdom of Steve Jobs - worthwhilemag

PeopleSoft merger: premature celebration? - dealarchitect

Google’s Next Act - emergic.org

In Brief: Micromuse to acquire GuardedNet - infoworld

Sprint, Motorola Partner on WiMax - wirelessnewsfactor

Linux servers grew 36% in Canada in 2004 - blogs.zdnet

I.B.M. Agrees to Modify Its Software for Sun Line - nytimes.

Q&A with CA COO Jeff Clarke - redherring

$100M RSS Fund Launched - redherring

SeaBeyond acquisition to boost Sun Microsystems’ presence in business integration - newratings

The root of Sun’s strategy - blogs.zdnet

Q&A: Vivek Paul of Wipro - redherring

Sequoia’s $200M Israeli Fund - redherring

Timing-based Competition - emergic.org