Once an IBMer …


I left IBM a year ago – but have always held the company in high esteem . A lot of what I know today about the industry is stuff I learned in my time there . And I definitely had more good days than bad days there . I still own a tiny little bit of stock in IBM , and some of my best friends and mentors work there . Where I work now , IBM is both a partner and a competitor . And for all those reasons – I keep a close eye on IBM . As always – I am posting this as my personal opinions , not that of my employer .

It was pretty disturbing for me to read that IBM is planning another round of layoffs in 2014 and they have kept aside a billion dollars for that, like they did in 2013 . Having several friends who work there – it is pretty sad for me when I see IBM in such trouble .

When I joined IBM, I think the share price was a little less than $70 . And every year it kept increasing and at some point went well over $200 and now it is about $182 or so . So over the long term, they did pretty well and many employees and investors did well as a result . While there were always some unhappy employees – for the most part , IBM did ok .

IBM is unapologetically capitalist in nature . By the time I joined – there was no pension plan or life time employment type things . And the company was expanding rapidly outside USA. If you look at IBM as an American company , it is kind of hard to see it in a good light . But if you think of them as a global company – it made sense to make use of cheaper labor, better access to other markets and so on .

IBM , in Sam Palmisano’s time made the promise to investors that it will hit $20/share as EPS by 2020. And EPS has been on an upward trend through every quarter I think , irrespective of top line growth.

And then Sam handed over the reins of IBM to Ginnie Rommety . She had already managed services and sales for him, and was supremely qualified for the job . She also grew up the ranks at IBM and knew the company inside out . I thought it was a great decision to make her the CEO and Chairman . It was a pretty smooth transition too .

Sam not only grew the share price and EPS , he also did some savvy stuff like selling off the low margin PC division , investing significantly in IBM Watson etc . So all things considered – it seems Sam set up Ginnie for a decade of success . And Ginnie told the world that she is executing on current strategy .

IBM is laser focused on that EPS goal , and uses all possible levers . There are mainly just four things -
1increase revenue
2.decrease cost
3.buy back shares
4. show investment commitment to future revenues .

The latter three levers were the ones IBM seems to have played best in recent past . In Sam’s time – this was amply rewarded by the capital markets . But in Ginnie’s time – Market is punishing IBM for playing exactly those same levers . Not growing revenue is what is hurting IBM big time .

Selling the low margin part of hardware business to Lenovo seems like a good idea – but probably something the market has already factored in . I have mixed feelings of this sale – I have friends among the people in that business , and I can only wish them the best . But stemming that bleeding profit is good financially for the company .

All that being said – one question remains in my mind . Did Ginnie do the right thing by telling investors that she will follow Sam’s strategy and not chart her own course ?

Street likes predictability more than anything . So if a CEO resets expectations, market will usually give the company more time as long as the plan and time line is communicated well . In much worse situation, HP CEO asked for more time and the Market didn’t punish HP stock for that . If anything I felt HP CEO should have asked for even more time to steady her ship .

So if Ginnie had said “I am playing a long game – so I am going to extend the time frame of EPS roadmap” , would IBM stock have been punished more than the value it lost so far ?

Market is used to not seeing profits – companies like Salesforce and Amazon have gotten the market to believe that revenue/bookings growth should be rewarded even in absence of real profits . Yet, IBM will get punished for showing real profits and growing EPS but not revenue growth . I guess that is why capital markets have that mystic aura :)

Or maybe market is not that irrational – and IBM can’t cut costs forever and reach their promised glory . Like every large matrix organization, I am sure IBM has opportunities to cut costs and get leaner – but every time they do that, it does a lot of harm to its employee morale and that is not easy to repair . It is a hard choice to make .

Competitive landscape doesn’t make it easy either . IBM is an amazing technology company and has a habit of making long term bets – like Watson. But a mothership cannot always easily turn on a dime .

Amazon is the Walmart of infrastructure providers with its everyday low price model . That is not IBM’s game . IBM needs to play up its “value added services make us better than Amazon” card really well to see if it works . While I don’t under estimate Mr Bezos, I actually think IBM can out do Amazon since it has staying power in abundance . Soft layer acquisition is a good indication of IBM doubling down . Also , while intel based HW is out – IBM still has Z and P business which can provide manufacturing expertise for their cloud . IBM microelectronics has cutting edge expertise on semiconductors too. But data centers are a capital intensive business and IBM will need to get to the efficiency of the consumer company data centers at some point . Not at all easy , but eminently doable in my opinion .

I am pretty positive that IBM will do well again . I have three main reasons for that

1. Before my time at IBM, they had a near death experience . They know how bad it can get if things don’t go their way . But they survived that and thrived . That is invaluable experience that they can use again

2. IBM has invested a lot in leadership development . People like Ginnie and Steve Mills are some of the best in the industry and they have plenty of leadership bench . I always bet of good leaders and I would be shocked if these people can’t pull it off . It’s not just the top leaders – they have some very bright engineers and an amazingly well trained sales force with great customer relations . This is a people business first and foremost .

3. IBM has continued to invest in research through all kinds of economies . They have more patents most years than other companies . That kind of IP is invaluable in the long term – and not easy for someone else to overtake them

Good luck IBM – I wish you nothing but the best . But in the few times that I have to compete with them – I will try everything possible to kick their butt . That is how IBM trained me :)

May The Bridges I Burn Light The Way – I am Joining SAP !


First things first – I am not really burning any bridges :)

“Burning bridges” is usually construed as a negative thing – but I mean this in the most positive way. To move forward, I need to let go of parts of my past career. I will also be reusing most of what I learned so far.

That being said, after seven years of working in the global SAP consulting practice at IBM – today I have submitted my resignation to my manager. I have accepted the role of Global Vice President at SAP Labs, and will be working in The Technology and Innovation Platform team (known to friends and family as TIP) , which is Vishal Sikka’s Board area. Words cannot adequately express how happy and excited I am to join this amazing team.

I have been thinking about a change in my career direction for a while now. I decided about 6 months ago that I wanted a change from a traditional consulting career, and move to a software company. SAP of course was a natural choice given I have worked in that field all my life. To my delight, Vishal offered to hire me with IBM’s concurrence. I owe a lot to John Leffler, my boss at IBM, who was totally supportive of me moving to SAP. I am extremely lucky to have a mentor like John. I decided to stay in IBM till end of 2012 to finish all my commitments here, and start the new year at SAP. January 7th, 2013 will be my first day at SAP.

IBM has been an awesome employer for me. I had a lot of diverse assignments, and worked in 3 continents in my tenure there. My last job as the head of forward engineering was probably the most rewarding. In this role – my team and I were able to take cutting edge innovations from SAP and IBM to our customers. I will miss working with Gagan and the gang, but I am sure I will have an opportunity to partner with them in my new job too. The three biggest lessons I take with me from IBM, as I step into SAP are
1. Talent only wins games, Teamwork wins championships .
2. One needs multiple mentors to have a rewarding professional life
3. Investing in ecosystem relationships is the smart thing to do

Details of my new job are still being worked out – but the general idea is to SAP scale its innovations, and reach a large number of customers and users. My dream is for SAP to be able to run a victory lap someday in foreseeable future with a slogan “Earth Runs SAP”. I strongly believe SAP has the potential to touch the life of majority of the world’s population every day in some form in a few years. Between its smart employees, loyal customers and its extensive ecosystem – I think this is a goal worth attempting ( and for my cynical friends – I’ll add, OR DIE TRYING :) )

I do plan to continue to post on this blog as usual. As you probably know – I blog about pretty much anything that takes my fancy – software, music, food, sports, politics, economics – they are all fair game. Hey, I might even write something about IBM from time to time :)

Right out of college, till now, I have always worked for an SI. I have never worked for a software company before. So a part of me is worried whether I will add enough value to SAP. But then, this is an area I know well for many years, and I am still a hands on techie ( for the most part, that is . I am sure someone in my team might contest this notion ). And I know a lot of people at SAP, including several who work in TIP. So I know who to call for help, and I am never shy. So the other part of me thinks I can come up to speed reasonably quickly. I will keep you folks posted on how I manage.

I have been considered an SAP influencer and blogger for some time now. Obviously Mike Prosceno has to kick me out of his program now. It will be fun to see my blogger colleagues on the other side of the table going forward. Knowing them as well as I do, I don’t expect them to cut me a lot of slack with their questions :)

There are a large number of friends at SAP who gave me generous amounts of their time in the last couple of months, as I bombarded them with questions on how various things work at SAP. I can’t thank them enough. I am not going to take any names – but you know who you are, and please know that I am very grateful for all your help and guidance.

Last but not least – many thanks to my friends and mentors Vishal Sikka, Abdul Razack and Sanjay Poonen for the opportunity to work in their team. I truly appreciate that.

Wish me luck !

Mobility In India – Reminds Me of A BoneyM Song Bahama Mama


Last time I went to India was in May of this year. And I came back totally convinced that Mobility and Cloud have tremendous potential there. As I am flying back home to Phoenix now, after a whirlwind trip to India, I have a better perspective of opportunities and challenges.

I know BoneyM might not be popular with some of the readers – so check this video out. When I think of mobility in India , the lyrics of the song that goes “…6 beautiful roses, and no body to pluck them..” come to mind.

First, some observations from last week when I was in India.

Internet speed in India has increased by leaps and bounds, but hotels surely have ways to go in terms of bandwidth they provide their guests. I spoke to the staff at both Windsor and Leela Palace in Bangalore, both amazing hotels – and was told I will be pleasantly surprised if I visit a year from now. I will take them for their word since I know first hand over the years that they take customer service more seriously than almost any other hotel I have stayed in.

Mobile phone bandwidth on the other hand is a different story. I had poor up-time even with international roaming for data and voice. Voice surely was better than data by a long margin.

Device diversity is probably bigger in India than in US – and I found everything from iPhones, iPads, Androids of all form factors, Nokia phones and several blackberry PDAs. Email and Facebook are probably the most used apps from what I could see.
But almost every person I met is an expert in SMS messages. India runs on SMS (and missed calls – no voicemails, people just leave a “missed” call as an indication that they expect a call back).

Mobile banking continues to be a big hit with even the “tech averse” older generation taking an active interest now. I was pleasantly surprised to see many elderly folks take internet connections to just read news on internet, and do internet banking and save trips to the bank.

Mobile users in India seem to have lower expectations of functionality and performance than those in US and Western Europe. However, they do expect extreme simplicity. Given a choice, they would like to live in a world of SMS alone.

With these observations, I have to believe there is tremendous opportunity for someone to take that market by storm. Volume is not a problem in India – there are a billion people, and vast majority seem to have a mobile device of some sort. However – I think a mobile solution for India should have some common aspects to succeed.

1. It should be inexpensive

India needs a volume pricing – and buyers are price concious. And this would mean whatever solution is put in place needs a solid platform to go with it that gives economies of scale.

2. It should work in any device

There is no one favorite device.  It is a gadget friendly nation

3. Wherever possible, use SMS

The country practically runs on SMS. It will take time to change to something else. But if SMS can solve an issue today, there will be lot of people who will buy. This is also good from a multilanguage support point of view. It will be an expensive undertaking to build apps for each Indian language.

4. Offline capabilities is a must

Given high availablity of bandwidth is a pipe dream in several parts of India, some offline capability is a must for any mobile app

5. Government, banks, construction and transportation are easy pickings

Forget your political leanings – India is all about big government, and people look at government for all kinds of things. Vendors should embrace this and not fight it. On bright side, there is plenty of interest from government to IT enable everything. Banks are already on forefront of mobility initiatives, but the opportunity is huge. Construction is probably where the biggest bang for the buck is – there is a high rise coming up anywhere you look. And I am yet to see engineers use a mobile device to do their work in those. Public and private transportation companies are used by everyone, yet hardly make use of mobility. These are the no-brainer type opportunities. I can think of another two dozen or so avenues for mobility initiatives

6. India needs local talent to develop and sell mobile solutions

This is applicable not for just mobile – but ANY solution really. It is a unique place, that many from outside India will find hard to figure out at a level needed to succeed in business. It is not a big deal for vendors since India has amazing talent locally, and a large expat community that can bridge any gaps. It will be a very strategic investment to utilize this talent pool and invest in it now.

7. Extensibility, multi language support can wait a bit

On first impression – it looks like several users in India can live for some time with out of the box functionality. From a good design perspective, of course it is better to build things with extensibility and multi-language support in mind. But it can wait for a bit – I think a profitable business model can be built for short to mid-term without needing a lot of enhancements and multi-language support. Of course I will gladly stand corrected if people who live in India point me in another direction. I am basing this on my short visits, and I am fully aware that I might not have picked up on the nuances.

The question in my mind is – who will seize the first mover advantage in India? Will it be SAP? IBM? Startups? By first mover – I mean the first to try to solve the problem in large scale. I am well aware that this is happening already in a low scale fragmented mode. I must admit I am quite tempted to give it a go myself.

Shelf life of innovaton


To begin with – I wonder if someone will argue with me if I just say “there are only so many original ideas in this world”.  I am sure someone would – I can think of a few people I know on social media who hold a different view. In any case – I firmly believe original ideas are limited.

But is innovation a term to define an original idea? I am not sure – partly because I am not a scholar in English language.  I cannot draw a firm difference between invention and innovation when it comes to an original idea. The idea of invention and innovation is to improve something in general.

If someone comes up with a cure for cancer – we will probably call it an invention. And when the next person comes up with an even better way to cure cancer – it gets called an innovation, or less charitably – an improvement. And the judgement passed on this is not done by the cancer patient who got cured or the doctor who treated the patient. It will be done by authors, analysts, scientific community etc – all of whom are a degree or two or more separated from what actually happened. Whether we call it invention, miracle, innovation, minor improvement or a waste of time and money all depends on the eye/tongue/keyboard of the beholder.

What is innovation then?  It is a comparison to status-quo, isn’t it? If I do something better today than yesterday, I have done some innovation. But will anyone other than me agree that it is innovation? Should I wait to call it innovation till I find a few more people to agree with me? If making money is key – then yeah, I suppose a few people should agree with me. These should be buyers, people who influence buyers etc.  This also explains why vendors shout out about innovation before any customers benefit from their wares. Good for them.

What is forgotten in this dialogue (err..monologue since I am the only one “talking” here now) is the time dimension of innovation – or more accurately, the shelf life of innovation.  So I and a few others get to agree that what I just produced can be called innovation.  And someone is willing to pay money to get it. As time progresses, I keep tweaking my product (to keep getting some money to earn a profit, to fund new projects, to go to Australia to watch a boxing day test match and so on) . Will each tweak be called innovative? Or because I did innovation once, will I continue to be known as an innovator?

From the money point – there are two ways I can make money. I can charge money for tweaks by charging a maintenance fee (the type SW companies do) or I can bring a new version every now and then and convince customers to (optionally) pass down old ones and buy new ones (like car companies, Apple etc do).  As a customer, I prefer the former model where I get everything I need for a smaller price tag every year, as opposed to spending money (equal to or more than original investment)  again to buy the next version.  Companies who charge a maintenance revenue are tagged with “improvements” and companies that make you buy the new version all over again are tagged “innovators” or even “inventors”.  Am I the only one who thinks this is strange?

For me as a vendor – if making money is my prime objective, the latter model is probably better.  Of course I cannot do this one product – I will need a portfolio of products so that no one product can sink the ship if it fails to sell. I also need a brand that holds significant value and loyalty. Car companies and Apple have proven that this is a workable model. I have several friends who have bought iPads every time Apple had a new model. I also know many friends who for generations have bought Chevy, Ford or BMW.   I don’t have any friend who buys cars from Chevy, Ford or BMW every time there is a new model though :)

This model is rarely seen in software side. The successful companies like IBM, SAP, MS all have made excellent software – used by millions of users for their daily jobs. Their solutions have long shelf life. And they charge a maintenance fee to provide improvements and support over time.  They also come up with new solutions that fetch more upfront money than the annual maintenance.  But since they don’t make people buy new models every few months – they almost never get any credit for innovation like Apple from the analyst/blogger community.

The criticism on”incremental-ism” is not without merit – customers are not always given sufficient “big enough” changes all the time. Vendors need to address that. However – it is not as if customers use what is available already all the time either. If I take SAP as an example – very few customers take time to find out what is available to them in Enhancement packages that they can use to improve their business process.  And only a few go on all the way to implement it unless forced by laws and regulations etc.  Vendors know this – so they strike a balance on how much they will improve existing products vs invest in new ones. Of course when they come up with new ones – there are people (like me) who will question its maturity.  There is no easy answer here.

One last thing – adding “disruptive” to innovation. I believe this idea of “disruptive innovation” came from Clay Christensen.  I do agree it is a neat idea. Where I differ from some other people is the frequency at which disruption can be done without losing efficiency of doing business.  I cannot get my head around the notion of a business surviving technology disruptions every year in the name of innovation. But listening to some experts on the topic – and resisting the temptation to name names – I constantly get this feeling that they expect customers to be friendly to this idea of constant change.  I know a CIO who had to fight more than a year to convince his company to let go of on-premises MS office and go to a cloud based office 360 solution. I doubt he can fight 5 such battles a year.

Just when I was all tired about the innovation – I spoke to an ex-colleague on phone. He says that the need to be innovative is so yesterday. His company is now moving on to be inventive.  That is the new cool kid now it seems. At least can we go back and talk about “Synergy” or something again , or is retro not cool anymore either?

 

 

SAPPHIRENOW 2012 – View from the top, with Joseph A Bellissimo of IBM


In my last post, I had included 2 videos I did with John Leffler of IBM. This time, I am including a short video with Joseph (Jay) A Bellissimo .

Jay Bellissimo is the Managing Partner of the Global SAP practice at IBM Global Business Services.  He grew his career up the ranks via the technical path. He started in COBOL programming etc back in the day, and was a strong expert in SAP Basis from early 90s. He ran the COE for SAP when it was first founded. As he progressed in his career and became a Partner, he started taking up several business leadership roles including Geographic, Sector and Service Area ones. Jay has a truly international career – and has spent many years living in different countries and working with our global customers in various industries.

A lot of SAP technical consultants , including me at some point too, have wondered if there is a future for them in this field. People like Jay and Chuck Kichler (our CTO – and with whom I am planning to shoot a video soon) are prime examples of folks who had successful careers by taking the technical route.

I caught up with Jay right after the keynotes, and my friend Kris Ferrari shot this with her flipcam inside a conference room in the show floor. Huge thanks to my buddy Dennis Howlett for his editing expertise. I enjoyed the conversation a lot, and I hope you will find his perspective valuable too.

 

SAPPHIRENOW 2012 – Interview with John J Leffler of IBM


Most of you know that I work at IBM. IBM is probably the biggest partner of SAP globally – on Hardware, Software and Services. I have spent a good part of my SAP consulting career in IBM Global Business Services, and I have several mentors who are IBM executives. I have looked up to them for many years, and have derived a lot of value from their insights. I was curious to see if these folks would be open to share their perspective with the larger ecosystem so that a few others can get the benefits that I got by listening to them analyze the SAP market, and explain their views on career growth. Of course there is an aspect of IBM getting some potential good press as a result, which I don’t deny for a second.

I reached out to one of my favorite leaders – John Leffler, to see if he has an interest in such an initiative. He agreed in a heartbeat, and we decided to shoot this while we were at SAPPHIRENOW 2012 in Orlando, FL. Kristina Ferrari , another IBMer and dear friend volunteered to shoot it with her flip cam.  It is an unedited version – and an amateur production :)

John Leffler is the Managing Partner for IBM’s North American SAP consulting  practice and takes care of our relationship with some of the top customers globally, and used to run the global practice till very recently. He has been in the SAP field longer than any one else I know, and has seen the SAP consulting market evolve from its first days. John grew his career from being a functional consultant, and then as Project manager and then a regional leader and about 12 years ago, he started leading the whole practice across the world.

John is big about differentiation in the market – and hence he readily throws all his weight behind the innovation agenda of our SAP practice. I can vouch first hand how much support he has given to the practitioners who explore innovative ideas in the realm of SAP solutions. John is a great supporter of co-innovation between SAP and IBM, and have actively sponsored several such initiatives in the past.

So without boring you any more with my commentary, here is the interview . Let me know what you think. If you have questions for John, let me know and I will try to find answer.

Here is a bonus video where John and I discuss how to develop an SAP consulting career in IBM. I originally shot this right after the video above for my colleagues in IBM’s SAP practice. But I thought there is enough material in this to pick the interest of folks outside IBM too.

I am planning to do a few more of these with IBM and SAP executives going forward, if I see an interest from you folks.

SAPPHIRENOW 2012 Orlando, Day 1 Wrap – speed, simplicity, personalization


SAPPHIRE is a week of sleeplessness and schedule conflicts, and this time is no different.  Right up front – Big thanks to Mike Prosceno, Stacy Fish and Andrea Kaufman for the excellent meetings they arranged for bloggers. Today’s agenda included meetings with Rob Enslin ( who heads global sales), Sanjay Poonen (heads Global solutions) and Steve Lucas ( heads D&T), and of course the big key note from Bill McDermott, the Co-CEO.

Enslin used to be CEO of North America, but it was my first time ever meeting with him face to face, although I have seen him doing keynotes etc many times. He knows the pulse of the market – and is aware of the challenges SAP has to over come to make it a successful year.  Between him and the current North American CEO – I think SAP sales is in North America has the best leadership they can have. I enjoyed the meeting a lot – since he gave answers to the point. My big question for him was what he sees as the future of SIs since SAP seems to be doing mostly a “productize the consulting” approach. Rob did not deny that, but pointed out that it will take some time to truly productize – and even at that stage, the need for business consulting and integration does not go away.

Next up was Steve Lucas, and he is some one I know well. Here is a photo of Steve with his IBM branded HANA box.

Steve recognizes that HANA is young, but his main message is that HANA is still one part of a portfolio of database products. So SAP can offer RDBMS solutions too for the clients who need them.  And to his credit, he did not reiterate the “we will be number 2 DB vendor by 2015″ mantra this time. I believe they will stick to the “fastest growing DB” message.

Both Enslin and Lucas emphasized that time taken for hardware delivery is a big problem for HANA sales as it lengthens the sales cycle. I think this can be somewhat solved by deploying HANA to cloud, which is fairly easy to do. You can always migrate to physical hardware once you have it. But a lot of work on HANA can be accomplished just by having it on cloud. As far as I know, the only way to do this today is to hack the installer – but that is an easy problem to fix.

I would also hope that in Hasso/Vishal keynote, SAP will do something about the HA and DR scenarios for HANA. It is a question every CIO will ask before HANA can be deployed in production. My proposal is simple – while the keynote is in progress, they should just pull the power plug of HANA box and show HA will kick in.

Next up was the meeting with Sanjay Poonen. Sanjay is also someone that I have known for some time, and is an absolute straight shooter. He is a perfect example of the “new SAP executive” who not only asks for external feedback, but also acts on it in a time bound fashion. He is already making progress on developer enablement and licensing , and we should hear some details soon.  Sanjay’s approach is to think big, and not be reactive to competition. I got the feeling that his biggest priority now is Mobility. He is working on simplifying how SAP mobility works on all dimensions. I will be keeping an eye on this, as I believe this is a huge market for SAP to dominate if they get it right.

And then there was the keynote. It started off well – with some awesome music. That music is by far the best opening I have ever heard at any SAP event. But all the good vibes I had at that point vaporized in a hurry once Mika Brzezinski came on stage and started asking for who in the audience are democrats (ans – a minority) , and who are republicans (ans – a huge majority) .  And from then – it was kind of downhill for me personally, and I tuned out completely for next several minutes. If she had a brand of humor, it was not one that I recognized. In general – I think this part of the keynote was a waste of time.

And then Bill McDermott entered the stage in a sharp suit, and did a very “presidential” speech. If he runs for political office, I think he will do very well. He definitely is a talented speaker. His main message was that today, it is a world of consumers – and that mobility solutions are the way to get to them. He sees a massive market for that. He also gave plugs to HANA ( biggest thing that happened in Big Data  – which is quite a stretch I would think) and Social (which is very well deserved for my buddy Sameer Patel, the new GVP for Social at SAP).

The big takeaway from Bill’s speech were that business should aim for speed, simplicity and personalization. And I thought he was spot on. I am waiting to see how SAP solutions will evolve to cater to their CEOs vision.

The best part of the keynote for me was the customer panel that included Burberry CEO Angela Ahrendts, Ace Hardware CEO Ray Griffith and Coinstar/Redbox CEO Scott Di Valerio.  I would highly encourage you to watch the fascinating panel discussion on video from SAP’s site. The CEOs seemed to love HANA and mobility and social. But if I understood them correctly – their experience with SAP software  is mostly (if not only) in the business suite. HANA, Mobility etc sounded more like things they like for the future, and not something they are already doing in the present.  It is rather ironic that despite Bill talking mostly about new generation technology solutions – customers are still only exploring the business suite which has been around for a while.

In between all the blogger meetings, I did get some time to spend at the IBM booth demonstrating our cool HANA based solutions to customers, partners and analysts. Our innovation center did a tremendous job building all this out, and I would shamelessly shout from rooftops to encourage everyone to check out the solutions there in next 2 days.

It is 2 AM here, so I am going to stop here for now, and get some sleep. Tuesday is a big day, and I am looking forward to learning more about SAP’s plans.

IBM Watson – what better use of analytics than fighting cancer ?


From 1992 – when I joined the mechanical engineering degree class in TKM College, till today – I have been a fan of Analytics.In fact, I am pretty sure it is the engineering education that put this fascination in me. And it was my statistics professor Mr. Kalyanaraman who took it to the next level.

Nothing fascinated me more than numbers and making inferences based on them. It was not as if I didn’t realize that texts and pictures and all the so called “unstructured” data was very important – it is just that I always felt that there was plenty more to be done in the “small data” world of numbers, before any one worried about “big data” . I have kept on questioning the value of the insight that will come out of big data for most companies, since they cannot even make decisions based on relatively small and highly structured data from pre-defined sources.

And then, along came IBM Watson and it changed my perspective on analytics and big data completely. Although I work in IBM, I don’t work in the team that works on Watson directly. If I am envious of any one professionally – it is that group of colleagues who get to work on Watson. Watson captured my imagination from the first day I heard about its plans to play Jeopardy on public TV.

Now, god knows how I don’t suffer marketing . I attribute it to the compulsory marketing classes I had to take in B School. And the irony is that IBM has world class marketing. So when IBM trumpeted Watson from the roof tops, my natural instinct was to cringe. But as I thought through the implications – it became clear that Jeopardy was the perfect way for IBM to avoid evolutionary steps, and make a grand leap into the future of analytics. Jeopardy needed everything – ability to consume big data with no structure, ability to understand natural language, truly massively parallel processing, ability to work on commodity hardware, lightning speed, ability to make a decision, ability to learn and many more. And it was a safe test bed to see if technology can stand up to that stress in an environment that is not “life and death” types, but useful enough to make a determination if this has a future.

Right after Watson won Jeopardy against the “human” champions, the IBM team started focusing it on real world problems. And this is where I was most fascinated by the choices of that team and its leader, Manoj Saxena.

IBM has a huge army of smart sales people, who could have very easily sold Watson in some form to a large number of clients across the globe.It would not have been hard at all – my own clients have asked me multiple times how they can use Watson to help their business, without me having to bring it up. As we know, IBM is a publicly traded company with a published roadmap for earnings till 2015. But instead of taking a short term view of cashing in right away, they took a long term view of proving it out thoroughly in the real world with real customers.

Instead of trying to do too many things across all the geographic regions that IBM does business in, they chose to focus on a small number of very specific high value use cases in healthcare, insurance, banking etc. And they partnered with some of the best in class clients in those industries to do so – and in public,not behind closed doors. Now, that is good marketing – the kind I can relate to. Let the customers declare the vision and the success, not the vendor.

The use case that makes me most excited is the cancer treatment one where IBM is teaming with Memorial Sloan-Kettering Cancer Center. Like everything else, there is of course a commercial angle to this – and I can imagine this to earn IBM good revenue. But that revenue could also have come from many other use cases. It is the humanitarian angle that impresses me the most. Cancer research and knowledge can now be spread across the world in very short time once this project succeeds. Doctors outside major research hospitals can reduce a lot of dependence on opinions and guess work and experience, and do a lot more “evidence based” decisions. Of course I don’t expect Watson to ever replace a doctor, but Watson has the potential to be the strongest weapon an oncologist has in the fight against the deadly disease. That is not evolutionary – it is revolutionary. It makes me wonder how many other big problems can be solved by the judicious use of analytics theory and technology.

Please watch this and listen to Dr Norton explain this

And finally, I like the sense of reality the IBM team and the clients who are partnering with them display. They clearly explain what Watson can and cannot do , and how long it will take to get there. Now, I know a lot of my friends like innovations to be out in the market quickly – and I understand where they come from. So on this cancer treatment use case, I pinged a few friends who are doctors in India, who I know from childhood to understand more. It sounded like on an average it takes anywhere from 8 to 12 years according to them for information on diagnosis and treatment to become common knowledge from the time it is published. According to them, they will be thrilled if they can cut that time by a third. So even if Watson can start being of help to cancer patients in couple of years, it will be a big deal, and quite fast in “time to market” .

I am sure the Watson team will have its ups and downs in this journey – but I think it will be well worth the proverbial blood, sweat and tears. I wish them the best. And tonight I will dream of doctors in my Grandom’s village having a pocket Watson with them when they help their patients fight their diseases.

 

Innovation and the Time dimension


On labor day, I was vacationing in CO, and picked up this blog post by Vinnie Mirchandani ( @dealarchitect on twitter) to read while my family was getting ready for the day’s activities. http://dealarchitect.typepad.com/deal_architect/2011/09/ibm-we-need-more-innovators-less-integrators.html . Vinnie had earlier penned http://www.enterpriseirregulars.com/40863/we-need-more-applegoogleamazon-moments-less-ibm-moments/. I picked up a lively and healthy debate with Vinnie on twitter, and then Martijn Linssen joined in.  He is @martinlinssen on twitter, and I am @vijayasankarv.

 

Vinnie is a well respected analyst in the industry, as is totally entitled to his opinion. However, I do think the thought process in this case has some flaws.  I have an equal amount of respect for Martijn, and respect his opinions as well. We had to stop the twitter debate abruptly since I had promised to take my daughter to the zoo.

 

So here is me picking up that thread. I do work for IBM since 2006, and am very proud to be an IBMer. However, these are just my opinions, and not that of IBM’s .

 

How does one define innovation? Vinnie gives his metric to define innovation here.

How much of IBM’s revenues comes from new products innovated in the last 5 years? Because that is the benchmark that Apple and Google and Amazon blow IBM away on as what I consider a legitimate claim to innovation

 

I think it is a really bad metric to judge innovation of an enterprise company.  Here are a few reasons why.

 

First off – I truly admire Apple, Google and Amazon for what they have done and what they are doing. They truly deserve the accolades Vinnie and others bestow.  I use them all as a consumer, and am happy with all of them.

 

However, Apple comes up with a new product version say every year or less – like the iPad. Since it is a brilliant product, a lot of consumers pay about $1000 give or take each year to buy the next version . That is pretty much a 100% recurring annual cost. Enterprise customers cannot even tolerate 22% maintenance fees. How many vendors can manage to get a savvy enterprise customer to fork 100% every year for the next big thing?  And unlike the consumer world, the enterprise world generally needs backward compatibility.

 

Martijn made a point that IBM thrives because of great sales skills. I questioned that asking him how many customers will stick with a vendor for long term just because the sales people were rockstars. Martijn came back with some good points – mentioning shelfware and government contracts. Even if both are true, what percentage of the $100B revenue will come from shelfware and government? I think the reason IBM survived a 100 years – most of them as a leader – is that great sales was paired with greater delivery.

 

IBM developed Sabre for American airlines many decades ago – before I was born. And it is still being used widely – and not just for airline reservations. That is innovation that has withstood the test of time. It did not need annual revisions that cost 100% more money from customer every year.  If I am an enterprise customer – which one would I like? something that changes every year, and costs me practically 100% of my initial investment every year? or something that I buy once and pay a much smaller maintenance fee annually to keep up to date for decades?

 

Apple revolutionized how we consume music with iPods. iPhone and iPad were phenomenal successes as well. And they came out in a span of few years or less of each other. Very impressive. But guess who started an entire industry around personal computers? IBM did.  And how many years did it take for the next big thing to come up? a few decades.  An investment in a PC is not something people did in a recurring fashion every year. And even with mobile devices catching up – PC is not exactly dying.  Doesn’t that count as innovative? Or is it not innovative because it was not done in last 5 years?

 

By the same token, IBM sold off its PC division to Lenovo in 2005 when they figured that the margins of that business were not going to help take IBM to the next level. Wasn’t that brilliant for the shareholders that IBM invested in high margin services and software instead of low margin PC business? And Lenovo is a very successful company too and shows good numbers to its investors.  Why is that not innovative?

 

Vinnie goes on to say

IBM prides itself as supporting and leveraging Open source but cordons it off from its own proprietary and profitable products.

 

So is it Apple that is the shining example of all things open? Apple decides what works and does not work with their products. It is not open, and it can get away with it in consumer space. IBM is way more open in its products – and supports multiple systems to integrate with its products. Sure it can be argued that it could integrate more – but the point is, it is fairly open, and has been an active proponent of open standards.

 

Vinnie makes a point of IBM as more of an integrator than an innovator.  He says

If IBM was truly innovative it would be automating and commoditizing much of that labor – its own and that of the rest of the market.

 

Here – there are 2 issues. Is it bad to be an integrator? I would categorically say NO, especially if you are the best (or one of the best) in your business. Second – IBM has very innovative service solutions. IBM does not solve services problems by just throwing warm bodies at it. They are one of the few companies that bring high-end consulting, software, assets, hardware  and research capabilities all together to solve the complex problems of its customers.  It is a large company, and hence many people have different perspectives on IBM. Some exceptional, some good and some bad and some really really bad. Bad press gets more publicity – but that does not take away anything from a company that has been an icon for a 100 years.

 

Vinnie’s blog closes of with this

What I find disconcerting is that even at the top IBM confuses its nice margins from milking old software and old data centers and old partners like SAP as “innovation”. This WSJ article I should  have written about a while ago summarizes that state of delusion.

 

Sure SAP is  a few decades old. Sure it could also be more innovative like everyone else. But one should also not forget that a good portion of Global business runs on SAP. And IBM is one of the biggest partners of SAP globally. ERP projects get a lot of bad rap for being costly to implement and maintain. But the number of successful projects definitely outnumber the unsuccessful ones, although it hardly ever gets reported on.  And OLD does not mean BAD if it still works effectively. Sockets API for Unix was unchanged for a long time since it was written. Was it BAD? Full disclosure : For most of my life, I did SAP consulting. So I probably am biased on this topic :)

 

If Lotus is 20 years old, what about Microsoft office?  Why do customers use something that originated more than a decade ago? Shouldn’t that be anti-innovation too?

 

Martijn said HP invests more in R&D than IBM, and so does many other companies. Not sure if that is a fact – but I do know that IBM invests quite a bit on R&D, and in terms of number of patents and number of PhDs employed, I wonder how many other companies will come close. And how many other companies have 5 Nobel prize winners?  Does that sound like sustained investing in innovation?

 

Of course IBM has had its fair share of challenges. When I did my MBA, we used to discuss endlessly how IBM nearly died, and how it strongly came back. So I am not saying it doesn’t have its problems. But irrespective of all that – I firmly believe that IBM is one of the most innovative companies in the world. In fact, it is one of the core values of IBMers

Innovation that matters- for our company and for the world.

 

 

Are you an expert?


Experts come in many flavors.

A couple of weeks ago, my 4-year-old daughter made a statement that warmed my heart…”My daddy works for IBM, and My uncle works for HP..guess what, IBM is bigger than HP !”. My euphoria  didn’t last long – pretty soon I figured out that she didn’t have any grandiose ideas of comparing IBM with HP – all she meant was IBM has 3 letters, while HP has only 2. But that was enough in her mind to reach the conclusion that her daddy worked for the bigger company.

Then it dawned on me that I too make plenty of such conclusions – and probably a lot many others too. Human mind apparently likes simple answers – and as long as the simple answer is not disproved, we won’t go much farther to find another answer. Over the holidays, I got to catch up on a lot of reading , mostly on two topics very close to my heart – Dogs and Management. And on both topics – I can see plenty of examples of this.

I think that once  you are an expert on something – like say stock market, dog shows or horse racing –  you feel compelled to give an explanation for anything that happens in your field. Keeping quiet is apparently not an option.  Being logical or being fact based in your argument is not a necessary quality of such experts either.

Take dog shows – you will keep hearing that “this breed is doomed..it no longer resembles the great dogs of a 100 years ago…and does not resemble the third sentence in the breed standard..” . Except - the standard was written by people who were no more smarter than the people who live and breed today. Also, while they created the breed, and knew the function the breed was supposed to do – those folks did not have the benefit of health and genetics studies that happened in last few years. So – we still hold on to a standard that was written a century ago and think god wrote it.  Also, over a period of time – context is lost. If a standard says ” the dog should look like a clever hunter” – how will the dude living in an apartment in NYC know what a clever hunter is? ..Same with eye color in some breeds..”darker the better” – although no one knows why darker eyes are better.  And it is easier to create a time machine than to revise a breed standard.

it is worser with business management – where there is always an explanation on why something has happened, and it is always after the fact – never ahead of time. When I was doing my MBA in the nineties, Cisco was the cult. Every one wanted to be like John Chambers. Cisco did everything right – I have lost count of the Harvard Case studies I have read on Cisco – from supply chain management, to mergers and acquisitions, to raising employee morale. Cisco could do no wrong. Every business magazine – business week, Fortune etc – wrote cover stories on Cisco every few months. And then tech bubble crashed, and Cisco went down. The pundits at these magazines  didn’t skip a heartbeat – they wrote cover stories immediately on how Cisco did everything wrong. How they never listened to customers, how they did Mergers in cowboy fashion, and so on. I don’t remember having seen “We were dead wrong about Cisco in our prior analysis” from any pundit.

The ecosystem in which we live constantly evolves – and possibly, there are no black and white answers to every question any more. But do we need this compulsive obsession to find a simple answer to every thing?  Einstein said something along the lines of “Everything should be made as simple as possible, but no simpler” . I think the man had a point.

The one field that hates simple answers that I know of is  horse racing – have you ever read that a horse failed just because he was slow? The horse failed because he didn’t like the surface he ran on, or because his jockey was no good, or because his trainer didn’t put him in the right race – but never because he was simply  slow !!

Maybe there is a middle ground between where the management gurus stand and where the horse racing pundits stand – but then, how would I know - I am no expert.