Tag Archives: ibm

IBM Watson is just fine, thank you !

Posted on by • Posted in Uncategorized • Tagged , , , , , , • 19 Comments

ibm-bets-watson

Over the last couple of days, I have seen a bunch of articles on my social media feed that are based on a research report from Jefferies' James Kisner criticizing IBM Watson.

I am a big fan of criticism of technology – and as folks who have known me over time can vouch, I seldom hold back what is in my mind on any topic. I strongly believe that criticism is healthy for all of us – including businesses, and without it we cannot grow. If you go through my previous blogs, you can see first hand how I throw cold water on hype.

Unlike my usual posts, I cannot claim to be an impartial observer in this case. As much as I am a geek who wants to make my opinions known on technology topics, I am also an IBM executive , and I run a part of IBM GBS business in North America that also includes services on IBM Watson (including Watson Health) . I also own IBM stock via ESPP and RSU. I don't set product direction for Watson – but my team does provide input to the product  managers. So I was in two minds over the weekend about blogging about this – but net net, I think I will go ahead and say some things about this , and as always I am happy to debate it and stand corrected as need be. So here we go.

IBM Watson's primary focus is on enterprise, not consumer !

This should be obvious to most people but perhaps the technical and use case implications are not super clear when they conclude Watson is in trouble.

Lets take an example of something that is often used to make the point in favor of consumer AI tech – Alexa. I often get asked Watson versus Alexa/Google assistant questions. You can tell Alexa or Watson to check the weather and they will both do it. The big difference is – Watson keeps the context of the first question while you ask the second question, and Alexa treats the second question as if the first one was independent of the second one. In the set of use cases Alexa solves, this is not a big problem – but the ability to keep context is important for the use cases that Watson solves, like customer service. In a customer service scenario, you cannot engage in a conversation without knowing and interpreting what has already been said.

That said – it is very easy to combine Watson and Alexa. For example , if you have echo installed at home, you can invoke Watson via a voice command and keep having a conversation without even knowing it is Watson that you are talking to.

While Watson cannot solve every possible customer service scenario – it can solve several and deliver very high value. For example – lets say you are a utility company that gets calls from clients who want to pay a bill, check a balance, find outage restorations etc. Those are all things Watson can do just fine, and leave the high value tasks – like being an energy advisor , or a retention specialist – to expert humans. Imagine the type of value generated for that utility, and the consistent and fast customer service for their clients . Consumer AI does not tackle these kinds of problems – and that is a big difference. There are many such examples like this in enterprise side of the house – like this video about how Watson acts as an expert engineering advisor for Woodside, and H&R block using Watson as a tax expert.

IBM Watson does not share one client's data with another client

This design principle is very key to enterprise clients. Data security and privacy drives a lot of AI decision making. Consumer AI generally keeps the data all users give it and uses it to learn and get better. I am sure those companies have high ethical standards and the data won't get misused. But that is not how enterprises look at their data. It is important for clients to have full trust that their data is not shared with others that they don't want to see it.

A lot of the criticism that Watson takes a long time to learn and needs data in a specific format that is hard to do for clients come from this principle being not fully understood. Watson can learn from a given client's data – usually unstructured data – and keep getting better, but will not use company A's data for Company B's system to learn. Even if we ignore Watson and look at data science as a general topic – there is no way to shy away from an AI model having to learn. That is the core of the value prop of AI.

This is not to say every client starts from scratch. In many cases, there is a well established starting point. Lets take a Telco call center as an example. If a client wants to put Watson to augment a telco call center, they don't need to build intents from scratch. Instead, they can use "Watson for Telco" that has hundreds of prepackaged intents and just add of change as needed. Over time, this will be applicable to all industries. These are all repeatable patterns – another point that observers don't seem to notice.

IBM Watson has plenty of successful implementations , including Healthcare 

The Jefferies report calls out MD Anderson project uses that to extrapolate that Watson is doomed. I don't see any mention of Mayo Clinic trials,  Or Barrow ALS study, or  Memorial Sloan-Kettering-IBM Watson collaboration   .  Where is the balanced analysis that led to the dooms day conclusion ?

Watson is in clinical use in the US and 5 other countries, and it has been trained on 8 types of cancers, with plans to add 6 more this year. Watson has now been trained and released to help support physicians in their treatment of breast, lung, colorectal, cervical, ovarian, gastric and prostate cancers. Beyond oncology, Watson is in use by nearly half of the top 25 life sciences companies.

IBM Watson is delivered as APIs that its ecosystem can easily use

When Watson won Jeopardy, that incarnation was largely monolithic. But that is not how Watson works now. It is now a set of APIs. I am under no illusion that IBM will be the only game in town, although I strongly believe we are one of the best. Partners and clients will build Cognitive applications using Watson in a much more productive way because the functionality is exposed as APIs.

This gets painted as a negative by some of the articles. You can't have it both ways. As I mentioned above, where it makes sense to package something for a given industry or domain, IBM or someone in the ecosystem will of course package it. But the decoupled nature is the most flexible way of innovating fast and at scale in my opinion. The fact that billions of dollars of investment is directed into this field is good for IBM and its ecosystem – let the market decide on merits who succeeds and who does not.

IBM Watson some times needs consulting , but it only helps adoption

Let me also point out the role of consulting – be it my team at GBS or another consulting company. Clients are still largely tip toeing into Cognitive computing. They need significant help to understand what is possible and what is not in their industry and their specific company – which is what we call advisory services. The actual integration work is not complex and can be done by in house teams or a qualified SI. The other service I often see that is requested by clients is for design. In some other cases, they also need services for instrumentation (like in IOT use cases).

If we rewind couple of decades and go to the time when SAP was just starting out in ERP, What was the role of consulting ? Did consulting  services help or hinder the adoption of SAP globally ? None of this is any different from any other technology at this stage of its life cycle. So I am not sure why there is an extra concern that adoption will tank due to consulting.

IBM Watson team does great marketing, and we already have amazing AI talent 

To be perfectly clear, I am not a marketer – nor do I have any serious knowledge of marketing other than a couple of classes I took in business school many years ago. However, I am VERY proud of the work IBM Marketing has done about Watson. Its an early stage technology – and that needs a certain kind of messaging to get clients to take notice. If all we did was fancy videos and panel discussions and there were no customers using Watson today, I would have gladly joined the chorus to boo Watson. But that is not the case – All over the place leading companies are using it and as I have quoted above, several are public references.

From what I could learn internally, there are about 15000 of us working on this at IBM. This includes about a third of IBM Research. And we are hiring top AI talent all the time. In fact if you are an AI developer and want to work on Watson, shoot me an email and I will get you interviewed right away. While we of course use job boards etc to attract talent, that is not the only way we find people. We already have more AI folks than a lot of our competition – so perhaps that should be factored in to the discussion on "look at job postings, IBM Watson is short on talent" part of the story.

So why is IBM not publishing Watson revenue specifically ?

I am not an official IBM spokesperson – and I am not an expert on this topic. So this one aspect – I have to direct you to people with more stars and stripes than me in the company.

Advertisements

Rest In Peace, John Leffler !

Posted on by • Posted in Uncategorized • Tagged , • 40 Comments

My wife and I got engaged this day 13 years ago . She had to leave early for work and I called her as soon as I woke up to wish her happy anniversary. As soon as I hung up, my phone rang again. It was my friend and ex-colleague Jen from IBM. She was in tears and she gave me the shock of my life – that John Leffler is no more !

A huge flood of memories have been going through my mind since that call. And the sense of disbelief has not fully left me yet. I had spoken and exchanged texts with John late last week. Dhanya and I had saved the bottle of champagne John had sent us for Christmas for a special occasion. We had met in Phoenix a few months ago for a nice dinner (that is where this photo was taken – sadly, the last time I met John in person) and he told me that he had started using twitter after I started pestering him about it a few years ago.

Screen Shot 2015-01-05 at 1.09.09 PM

We were planning to meet for dinner again in New York in a couple of weeks. We even had some plans to collaborate on the work front after John’s retirement from IBM.

As much as we will all mourn his untimely demise, I think it is more important to celebrate his life. He was a one of a kind guy – as a human being, as a family man, as a top consulting executive, as an SAP industry veteran, as a mentor and friend to many of us , and as a leader. Here is a blog I wrote about him few years ago https://andvijaysays.com/2012/06/08/sapphirenow-2012-interview-with-john-j-leffler-of-ibm/

I had known John for close to ten years now I think – but it is for the last five or so years that we got to know each other closely. Before that, I had the opportunity to present some of the cool innovations my team was working on from time to time and he was always supportive. But I did not know him very well then other than as the top leader of IBM’s SAP business – and he certainly did not know anything much about me either.

Our friendship really started with a call I got on a late afternoon in December of 2010. I was home after a long week at a project – and John had just finished an exec meeting in east coast with SAP CEO and IBM CEO. My name had come up in that discussion briefly – and that was the reason he called me. John asked me to fly to SFO the next day to meet him for breakfast.

I will never forget that breakfast. John showed up on time – but with his phone pressed to his ear, and talking animatedly to someone. He motioned to me that he needs 10 minutes more. When he finished his call – he spent about the next 20 minutes apologizing to me for not starting the meeting on time ! For context – at that time John ran a multibillion dollar global SAP business at IBM, and I was just a newly minted Associate Partner. It was a big deal for a junior dude like me to even get a few minutes with John – many senior partners in the firm would never get that opportunity with John’s busy schedule.

Our meeting was supposed to be for an hour – but Joanne, John’s most trusted EA, had extended it to 90 minutes. John asked me about my background – not just my career, but my school and college life, my hobbies, how I met my wife and many other things. That took all of the scheduled 90 minutes. John had not looked at his phone or watch this entire time, and had given me his full attention and I was worried that I lost a golden opportunity by just doing small talk with the big boss.

So I politely asked him for a follow up meeting – only to be told that the 10 minutes he was on phone when he came into the executive lounge, he was just asking Joanne to cancel every other meeting he had for the day to spend time with me. So we spoke for another 5 hours or so till we had to leave for SFO for our flights home. We ate lunch together at SFO terminal and he gave me his trademark big hug as he boarded his flight, and said “You are not someone who works for me now, you are my friend”.

And he truly became my friend – and an excellent mentor and coach. He was my sponsor for my partnership appointment process, and he was the executive sponsor for the largest deal I ever closed at IBM. Any time I would need help with a customer or someone at SAP, John would gladly jump into a plane and come help all he can. He did not teach me how to sell or how to be an executive (though I did pick up plenty of tips and tricks by watching him at work) – instead, he taught me – by his own example –  on how to deal with everyone as a good human being, and I will be grateful to him for ever for that.

He was the ultimate people person. Every time I have eaten at a restaurant with John, be it an airport eatery or a fancy steakhouse – he would ask the waiters for their names and will introduce them to everyone at the table. Every time he met a customer – he would convince them that their friendship and long term success was more important to him personally than the short term business opportunity at hand (I remember Tom Rosinski telling me over beers that getting John to the customer meeting was pretty much the one sureshot way of winning any deal.). To the best of my knowledge – the man never did anything with a short term gain in mind. Treating people as people – not as vendors, customers or employees – that is what set him apart in my mind.

When I decided to leave IBM – there were two guys that I absolutely hated calling with the news because I truly felt that I was letting them down after they supported me all the way. One was Ken Englund, who I regard in the same high esteem as John. And the other was of course John. If I remember right, I caught John when he was coming out of a Church on a Sunday. I told him the news, mostly with profuse apologies. He took a minute to digest it . I totally expected him to yell and scream . Instead, he told me that he thought I made an excellent choice and that he is happy to be my reference if Bill McDermott or Vishal Sikka wanted to give him a call. For the record, Ken did exactly the same when he heard the news from me too. And about 2 weeks after I joined SAP, John flew to Palo Alto to take me out for a nice dinner to celebrate.

When I decided to leave SAP, John was one of the few people I called on for advice. He offered me a job in IBM in 10 seconds – but once he understood that MongoDB is where I am headed, he took the next two hours understanding what the company did and what my role will be. For a second time, he offered to be my reference. And yet again – he took me to a nice dinner in NY city to celebrate my new adventure.

He would pick my brains every couple of months on industry trends and SAP market. Some times he would call to just chat about random things . Irrespective of whether I agreed with him or not ( we disagreed often – and he would then tell me that I and Matteo were usually the ones he thought will give him contrarian views the most) , he always made it clear that he genuinely valued my input. He would always ask about my family as well in every single call – even though he had never met them in person. I have met John’s wife a few times at IBM and SAP events – an amazing , very pleasant and friendly lady, who clearly supported John fully during his demanding career. I have not met his children yet (he would talk about them a lot and tease me about what is in store for me and Dhanya as our daughter grows up) – and I hope to meet them very soon. I can’t begin to imagine what they are going through. I know they are incredibly proud of John – and they should absolutely be proud – he was already a legend when he lived. You will be in our prayers .

Talking about family – several colleagues at IBM and SAP, across the ranks, were family to John. This is true in reverse too.  I spoke with , emailed and texted many of them today after I heard the news. We are all devastated . John had touched so many of us in his own special way. While we all grieve – we are all honored and blessed to have known John. And he will continue to live through all of us .

Rest in peace, John ! And thank you for everything you did !

Where does IBM go from here ?

Posted on by • Posted in Uncategorized • Tagged • 2 Comments

As always – all of this is just my personal opinion here .

As a former IBMer, I was absolutely delighted to see that the IBM CEO finally said last week that the company is letting go of its 2015 EPS strategy. The best time to do that was the day she took over as CEO, but better late than never.

It was a ridiculous goal to begin with. The board and the previous CEO Sam Palmisano did not set Ginnie and the company up for success with this EPS of $20 by 2015 goal. I don’t know too many employees or executives in the company that truly believed this goal was achievable. IBM is like the military in many senses – it is a command and control style organization. So when the marching orders came, people shook their heads and then dutifully went out to try their best to make it happen. If there was a corporate equivalent of a death march – this would surely have made the shortlist.

There are only three ways in general to boost EPS

1. Cut cost
2. Increase revenue
3. Buy back shares

IBM tried as hard as they could on 1 and 3, but doesn’t look like they did much on 2.

For sure – IBM has a LOT of management overhead. Between all the companies I have worked for and have consulted to – I don’t think there is a more matrix management oriented company than IBM. When I had my first quota carrying role at IBM, I remember five or ten people (most of them I did not know ) would check in to see if I am on track to close a given deal. Most of them just managed spreadsheets . This is just the sales side of the equation. Similar kind of overlay functions existed in every part of IBM. So, yes – Sam absolutely was right in assuming that he can cost cut his way to EPS nirvana just by firing people if nothing else worked .

Unfortunately – that is not what happened, at least as far as I know. The top heavy organization more or less continued to exist – probably because they were the decision makers. Instead the people who got cut were the ones who were paid a lot less, and who actually had skills to do actual work. Well eventually some of the top management also got their pink slips – but more of a too little too late case.

The double whammy of a result is there for all of us to see – revenue going down all the time for last several quarters and then later profit stopping to go up .

IBM did try to buy back shares as a way to boost EPS . (IBM also pays a good dividend every quarter ). It helped for a while – but then that is the money that did not get spent on buying companies or reinvesting back in its own business . This is money that could have resulted in new revenue , but that is not the path IBM took. I don’t have the exact math – but I think IBM spent probably four or five times the money they spent on M&A on share buy backs .

So now what is next ? How will IBM regain its glory ? Here are a few thoughts that I wish IBM Management will consider

1. Minimize the management over head . There is absolutely no way to justify 10 people checking in on every deal .

2. Sell off aggressively every part of the business that is low value . I would start with hardware and consulting – both have low value parts . What is low value for IBM might actually be what another company might need to grow . Like say consulting – there are multiple indian outsourcers who might do well to buy parts of IBM services business to move up their value chain

3. Bring back “respect for the individual” as a core value . Start treating employees on par with the customers and shareholders . Employees are the ones who need the most attention now . Take care of them , and they will take care of customers better . And that will take care of shareholders a lot better over the long term than buying back shares . It’s the sustainable model unlike the last attempt

4. IBM has an amazing leadership training program – I know that first hand . And it has more leadership bench than most of its peers . What is missing is that such enablement is not there lower down the ranks . If IBM needs to be a powerhouse in IT again – the customer facing organization needs the kid of leadership training and attention that executive ranks get .

5. Put the best sales and technical teams possible on cloud , big data and Watson . There are plenty of good people in IBM who could be retrained on these areas. And there are experts who can be – and need to be – hired . For existing business, automate everything repeatable like crazy . Make delivery excellence truly mean customer success as much as profitability .

6. Set realistic expectations with employees , customers and the street . Set stretch goals – IBMers can meet and exceed stretch goals . Just don’t venture again to the realm of impossible targets .

Despite all its current troubles – I am still an optimist on IBM returning to its past glory . There are three things that make me an optimist on IBM’s future

1. IBMers – past and present – are a special breed . I have all the confidence that the good people left in the company are as good as any in the industry to make the turn around possible

2. IBM has a brand value that opens doors at customers across the globe . IBM needs that brand to sell more cloud , Watson and bigdata solutions to customers .

3. Through thick and thin, IBM has invested billions of dollars on research . The time to plant a shade tree was in the past and IBM got that right big time . That has already paid back IBM many times in past and I am fully confident that it will continue to do so .

As they say , Once and IBMer , ALWAYS an IBMer !

Apple and IBM, a view from the peanut gallery

Posted on by • Posted in Enterprise Software • Tagged , • 4 Comments

Apple and IBM are both companies I hold in great esteem – in the top 5 of all companies I care about. I worked at IBM for a long time, and I own a lot of Apple devices. I have small investments in the stocks of both companies . My day job is to make partners successful for my employer MongoDB – so any enterprise alliance news is something I look at as a learning opportunity  Naturally it picked my interest significantly when I heard the announcement . My instinct was to say “Wow Ginnie scored big”. So, here are my thoughts on the alliance – strictly my personal views and not that of current or past employers.

There is very little in common between IBM and Apple to begin with.

1. Apple is a much more prosperous company than IBM – be it Market cap, revenue or margins. And its no secret that Apple is the senior partner in the relationship. IBM’s CEO flew to CA to do the announcement with Apple’s CEO, and not the other way around. If this happened in IBM’s prime years, Tim Cook would have landed in JFK and taken a limo to Armonk 🙂

2. Apple is more prosperous than IBM with MUCH less employees than IBM has. On top of that the IBM internal organization is heavily matrix oriented to take care of its complex business. It would take some Eisenhower-esque leadership to get all the right teams focused on this initiative. (But honestly, I am not all that worried since I know first hand that when it comes to leadership, IBM has some of the best in the corporate world in their ranks.)

3. Apple is extremely focused – it has a much smaller portfolio around which this massive empire has been built. IBM portfolio is like encyclopedia Brittanica in comparison 🙂 . When I looked at the joint announcement first – I smiled thinking “wow you could not have expressed in a more cover-all-bases generic way”. 

4. Apple makes money from hardware and IBM has been steadily divesting hardware business

5. Apple provides a workplace that is cutting edge and has an awesome cafeteria – IBM to my knowledge does not even provide free coffee to its employees . Apple prefers jeans and IBM prefers suits. The impedance mismatch in culture is palpable.

6. Although several employees at IBM use Apple devices in a BYOD mode, the company standard issue has always been a thinkpad laptop, and not a Mac.

Why does this alliance make sense ?

Just like with the law of magnetism in physics – opposite poles attract !

1. Apple is a company that thrives on innovation. But they need something to keep the market happy during the time taken between innovations. IBM opens the doors to the top enterprises – voila, a whole new addressable market delivered on a platter.

2. IBM services is pretty good at production support and maintenance. Many large companies have outsourced support to IBM – and combine Apple care with what they do today, there is a clean new upsell package for IBM GBS and GTS. 

3. People don’t give enough credit for IBM’s design investments. IBM has a solid design team that does an amazing job – the most famous being the public facing sporting events like US Open. So when it comes to creating the 100 apps – design is something that IBM can rely on being a differentiator. Same goes for advertising – IBM makes some pretty impressive ads. I am thoroughly enjoying the ones I am seeing during US Open, although I don’t see any mention of the Apple collaboration in any of them. 

4. IBM has an asset that they don’t seem to be able to use effectively so far – that is IBM Watson. It frustrates me to no end seeing IBM take incremental steps in pushing Watson. I think this partnership is the most fantastic way for Watson team to push its case before the biggest corporations on the planet. A Watson on every iPad ! . In fact I think rather than do the generic announcement they did – I would have preferred to see 100% of the focus on just Watson and Applecare for the enterprise. The rest seem like noise to me

5. IBM has strong alliances with many ISV partners like SAP, Oracle, MongoDB etc. And most enterprises already use solutions from these ISVs. IBM has a great opportunity to further the value of Apple alliance by building apps around what enterprises already have. 

6. IBM has sheer size in its favor . A massive overhaul of enterprise tech landscapes need armies of consultants. Apple does not have that army, and can’t recruit fast enough even if god forbid they want to do it. That is a huge advantage for this alliance. 

And finally, what is the big risk factor ?

This is largely a Global Business Services (GBS) led effort if I understood it correctly from the announcements. GBS is a well managed machine with extremely low bench at any given point. So if a massive investment is needed in headcount , time and budget – it will need to be taken away from billable engagements. That is a really hard thing to do unless another part of IBM can pick up the slack to bring in the money to keep investors happy. The only viable division that can pick up slack is the software group. Since Ginnie did not reset Sam’s 2015 EPS roadmap – IBM cannot take a lot of risk on losing focus on existing revenue and bottom line. That in my mind is what the risk is – there is a significant upside in the long term if everything works out well , but it needs making big bets in rejiggering the existing business for IBM. 

If IBM won’t take that risk ( and I REALLY hope that they will take the risk, and convince investors to cut them some slack) – then it will be business as usual for both companies, and this will be yet another partnership announcement that did not pan out. 

 

Once an IBMer …

Posted on by • Posted in Uncategorized • Tagged , • 7 Comments

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 !

Posted on by • Posted in blogging, Enterprise Software, SAP, Uncategorized • Tagged , , , • 94 Comments

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

Posted on by • Posted in Enterprise Software, SAP • Tagged , , , , • 7 Comments

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.