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The End of Cloud Computing? Chavez to Bomb the Clouds..

Zoli Erdos — Sun, 15 Nov 2009 14:51:52 -0800

Well, not really *that* Cloud.. but it’s the weekend (for a few hours), so light weight posts are in order. :-) Reuters reports:

Venezuela's President Hugo Chavez says he will join a team of Cuban scientists on flights to "bomb clouds" to create rain amid a severe drought that has aroused public anger due to water and electricity rationing.

Chavez, who has asked Venezuelans to take three-minute showers to save water, said the Cubans had arrived in Venezuela and were preparing to fly specially equipped aircraft above the Orinoco river.

"I'm going in a plane; any cloud that crosses me, I'll zap it so that it rains," Chavez said at a ceremony late on Saturday.

Cloud Seeding is not a new concept: amongst others the Mayor of Moscow plans to resort to it to keep snow away from Moscow (no more White Christmas?), the Chinese reportedly used it to clear the air for the Beijing Olympics, and it’s an old trick of the long-gone Soviet leadership to provide such “air cover” for their big military parade.

But don’t worry: “our” Cloud will be OK. Oh, and they won’t reach Cloud Avenue either. :-)

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Build the Brand or the Business? - O2 and BT

David Terrar — Sat, 14 Nov 2009 11:16:49 -0800

When it comes to the real principles of marketing I've always been guided by Al Ries and Jack Trout. Their books like Positioning, Marketing Warfare, or The 22 Immutable Laws Of Marketing are essential reading. Even though some of the material is over 20 years old, it's still perfectly valid in today's market. Jump in with 22 Immutable Laws (from 1993) - just over a fiver well spent on Amazon (and get Seth Godin's Meatball Sundae and Tribes while you are at it, to bring you completely up to date with new media and permission marketing). Ries and Trout's laws of brand focus and perception are completely relevant in a week when O2 surpassed BT as the largest Telco in the UK.

On TelecomTV One Martyn Warwick reported:

"Yesterday BT reported a 45 per cent decline in pre-tax profits and now, just 24 hours later, comes the news that O2, (the company formerly known as BT Cellnet and currently owned by Telefonica of Spain) has grown to such an extent that it now has more UK subscribers than it's former parent. O2 has 21 million customers in Britain for its mobile service whilst BT has 19.4 million landline subscribers. "

I was immediately reminded of a relatively recent Al Ries post titled "Building a Brand vs. Building a Business" on Branding Strategy Insider. This is a great summary of three of his concepts - "The Law of Leadership", "The Law of Perception" and "The Law of Focus". He says:

"Are you building a business? Or are you building a brand? Silly questions, you might be thinking. Naturally, you are trying to do both.

But that might be a mistake."

Al goes on to talk through how Dell became number 1 in personal computers by focussing on business-to-business and owning the word "direct" in the mind of the market. But then he says:

"What did Dell do next? It forgot about building the brand and started building the business. First Dell moved into consumer personal computers, undermining its position as the "business" PC specialist. ("Dude, you're getting a Dell.")

Then Dell moved into consumer electronics, undermining its position as the "personal-computer" specialist.

Then Dell moved into retail distribution, undermining its "direct" distribution position."

They ended up losing the number 1 position in personal computers to HP. Al goes on to show examples of how valuable it is to be the number 1 in a category, compared to the number 2. He has some great examples of brands that we know well, but don't know what they stand for any more. BT have been building their business with a lot of diversification in to software products, or initiatives like BT Workspace which they started, but subsequently dropped. Now they are thinking about getting back in to the mobile phone market. They should learn from their O2 offspring and focus on the brand (or a collection of brands), not the business.

(Cross-posted @ Business Two Zero)

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Accenture Survey Identifies Companies’ Innovation Improvement Opportunities

Hutch Carpenter — Fri, 13 Nov 2009 07:33:33 -0800

Accenture released a survey of 630 executives at large U.S. and U.K. companies, Innovation: a Priority for Growth in the Aftermath of the Downturn. The report discusses enterprises' view toward innovation during the Great Recession. This information in general is useful for anyone following the field.

Just as interesting are the nuances that come out in the survey, that point toward opportunities for improving innovation. There are clear gaps in innovation management that reduce companies' effectiveness. Let's examine several of these with an eye toward how the gaps can be bridged:

Organizational innovation structure
Looking for the silver bullet
Advancing existing markets and products
Well-defined innovation strategy
Innovation-related challenges

Organizational innovation structure

Accenture asked executives how innovation is structured at their organizations. Their responses:

45% => Part of R&D organization
29% => Formal innovation organization
16% => Not a designated responsibility of any one department
10% => Part of marketing

Now the heavy R&D department focus may be industry-specific. But looking at that data, I can see two opportunities for improving innovation.

First, the heavy reliance on R&D departments presents a significant opportunity. R&D departments are fantastic for innovation, and their role is critical to developing game-changing new products. But there's a large amount of untapped innovation energy in the rest of large companies. Employees whose job titles don't include the technical R&D designation, but nonetheless are faced with solving problems each day. These are smart folks, and need to be part of a larger innovation strategy.

The other opportunity that can be seen is that 61% of firms do not leverage a formal innovation organization. Imagine not having a formal sales group, or finance department of HR. Everyone wings it in how they approach those key corporate activities. Would performance suffer? You bet. A number of Spigit customers have professionals whose job is to focus on ways to help the organization get better at innovation.

Who in your organization is thinking about the strategy, culture, processes and systems to drive innovation?

Looking for the silver bullet

Accenture asked executives to state their level of agreement with a series of statement about their organization's innovation. The statements included this one:

My organization is looking for the next silver bullet rather than pursuing a portfolio of opportunities

Here's how the executives answered that one:

33% => strongly agree
25% => agree
16% => neither agree nor disagree
22% => disagree
4% => strongly disagree

58% of respondents agreed that their companies were overly focused on silver bullet innovation. This is, as Jeffrey Phillips wrote, the Olympics of innovation sport. Finding the BIG IDEA that can disrupt markets is highly valuable.

Making it your primary pursuit isn't.

Large companies consist of thousands of processes, products, and customers. If the focus is too much on silver bullet innovation, what happens to all the good ideas that can have an equally powerful impact en masse? How about the innovation culture silver bullet thinking instills? The mindset excludes a lot of employees from innovation.

Pursuing a portfolio of small, medium and BIG innovations balances the approach and leverages much more of the organization's Innovation IQ.

Advancing Existing Markets and Products

Accenture asked the executives to characterize the primary goals of their companies' innovation efforts:

53% => increase share in existing markets
49% => add new value to a current product
45% => enter new markets
42% => introduce an entirely new product category

Notice the top two priorities. Improving on what you've already got. This is smart, in that existing markets evolve, and companies that are slow on the switch will find themselves losing share in their primary cash flow generators.

This is where involving the greater organization in innovation becomes incredibly valuable. Who knows better what is happening with your current markets than employees in the trenches? They're working to satisfy evolving customers demands, they know where the company's strengths and weaknesses are firsthand.

They may not always have the "right" solution, but achieving perfect 10's in suggesting new ideas should never be the point. Rather, workers have an internalized understanding of opportunities for improvement in existing markets and products.

If the focus is on improving existing markets and products, leverage the collective wisdom of those working on them every day. Don't rely strictly on an R&D group, or a cadre of cloistered executives.

Well-defined innovation strategy

Accenture asked respondents to rate how much each of a series of statements applied to their organization's approach to innovation. One of the statements was this:

Our organization has a well-defined innovation strategy

41% of respondents agreed with that statement about their companies. Which means 59% did not.

In another post, Corporate Innovation Strategy: Making Your Own Luck, we discussed the value of establishing a formal strategy to improve innovation. It started with the premise that there continues to be a view toward innovation as random acts of creativity. This is unfortunate, because it treats a key driver of corporate performance as out of the control of the company.

From that post, an innovation strategy consists of four elements:

Establishing the culture and expectations that everyone has valuable ideas to contribute
Providing direction for innovation efforts
Setting up a common basis for everyone to share and collaborate on ideas
Putting in place specific processes to turn good ideas into real initiatives

A theme we continue to pound on is the need to think holistically and systematically about innovation, leveraging the entire organization in the process. Establishing an innovation strategy is required to make this happen.

Innovation-related challenge

Accenture asked respondents to rate a series of answers to this question:

What would you say are the innovation-related challenges facing your organization over the next two years?

Here are the percentages for four of the answers:

42% => Predicting future trends
32% => Identifying changes in customer behavior or emergent and unmet needs
29% => Getting cross-divisional teams to work together
28% => Changing the organizational culture

Predicting future trends: Seeking a crystal ball. This particular challenge does seem to be the province of a dedicated R&D team. People who can step back from the day-to-day and consider longer term evolutions in markets. But how about putting these people together with the folks responsible for daily execution on the corporate mission? AT&T does this in its Spigit implementation. AT&T Labs researchers participate with the rest of the organization in their innovation efforts.

Identifying changes in customer behavior or unmet needs: As Gary Hamel discussed at the Spigit Customer Summit, the pace of change in markets is accelerating. But most companies' practices toward see signals of those changes have not. Here's a question: as customers begin to alter their behavior, who is best-positioned to see that first? The folks at the edge of your organization. In the post, Is Enterprise 2.0 Just for Knowledge Workers?, we argue that incorporating groups like account management, customer service, sales and field operations into the innovation process is critical. These are the groups that will hear t5hings first.

Getting cross-divisional teams to work together: Silos of knowledge and perspective will be an ongoing challenge for organizations of certain sizes. The inability to bring different perspectives to bear on ideas becomes an inhibitor to innovation. Ideas fail to evolve into polished innovation. Lack of input by a group often translates into lack of commitment toward an initiative. Creating a basis for sharing across departmental, geographic and technology barriers represents a valuable opportunity to improve innovation.

Changing the organizational culture: Employees will take their cue on innovation from the culture they see around them. As described earlier, if an organization has a "silver bullet" approach to innovation, that can have a negative effect on the amount of time and energy employees put toward innovation. A company that encourages and rewards innovation efforts across the workforce is one that is going to realize the full benefits of its employees.

Take a look at the Accenture report. There's some good information it it. And think where your organization's opportunities to improve innovation are.

(Cross-posted @ the Spigit Blog)

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T-Shirt Friday #17 - AppLogic

Ben Kepes — Fri, 13 Nov 2009 06:39:00 -0800

Everyone knows that professional conference goers like myself attend events not to listen to presentations, not to network but to collect schwag. Over the past couple of years I’ve done fairly well collecting tech t-shirts and I decided to create a weekly series critiquing tech companies t-shirt offerings in the expectation that a company with a great t-shirt is a prime candidate to have a great product also. Click here to see the series.

If you’d like your t-shirt reviewed, flick me an email to arrange things. The judges decision is, of course, final and very little correspondence will be entered into (perhaps).

Cool companies shouldn’t have bad t-shirts. I picked up this AppLogic crew neck at the Web 2.0 Expo early in 2008 and have to admit that I’ve not worn it yet. While actually a pretty high quality shirt, the logo on the front is just to much of a contrast to the color of the shirt, while the byline on the back “Real Men Don’t Manage Servers (Anymore)” while on topic for the intended audience, is just too uncool for words.

Hot

Great for a painting shirt or if there’s work to be done out on the ranch
It didn’t cost a dime

Not

The logo clashes too heavily with the color of the shirt
The byline on the back is just plain bad
Made in Haiti… where suffocation is preferable to actually breathing the air

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Windows Azure TCO Calculator

Krishnan Subramanian — Fri, 13 Nov 2009 02:48:13 -0800

It has been just over a year since Microsoft announced about their Cloud Computing platform, Windows Azure. This year's PDC is just around the corner and Azure is going to dominate the event. You can check out some of the sessions you can expect in this year's event. For those who were in deep coma during the past year or so, I will quote the Windows Azure site for a brief introduction.

Windows® Azure is a cloud services operating system that serves as the development, service hosting and service management environment for the Windows Azure platform. Windows Azure provides developers with on-demand compute and storage to host, scale, and manage web applications on the internet through Microsoft® datacenters.
Windows Azure is an open platform that supports Microsoft and non-Microsoft languages and environments. In addition, Windows Azure supports popular standards and protocols including SOAP, REST, XML, and PHP.

I was never excited about anything Microsoft offered in the past but I am really excited about their Cloud initiatives. I have a strong feeling that it has a disruptive potential, in spite of my own feeling that Microsoft is not pushing it harder. In fact, their aggressive pricing has already forced Amazon to bring down their pricing on EC2. A truly competitive cloud marketplace is good for customers and impact of these pricing can be felt all through the cloud ecosystem.

While talking to companies who are interested in exploring the cloud based infrastructure, I realized that most of them are a bit confused about the TCO savings and want to have a clear idea on the kind of value they can get with the move to clouds. Microsoft has announced a TCO calculator cum report generator which offers a detailed take on the kind of cost savings one can expect when they move from an in-house virtualized datacenter to Azure cloud. It may not accurately predict the TCO but it offers a good estimate on the kind of savings one can expect. It is a very good tool for companies looking to move their IT infrastructure to Azure cloud.

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A fun (and potentially infuriating) mental exercise

Derek Pilling — Thu, 12 Nov 2009 16:22:02 -0800

Every couple of years, I run into this probability puzzle that reminds me just how bad humans are at assessing probabilistic outcomes. Its called the Monty Hall problem, named after the famed Monty Hall game show.

The puzzle goes something like this.

Suppose you are given the opportunity to choose between three doors. Behind one door is a prize of significant value; say $1 million. Between the other two doors are near valueless prizes. Pick a door, any door.

Now that you have picked a door, the host, Monty, opens one of the two remaining doors, revealing that there is a pile of coal behind the door. The $1 million is clearly still behind one of the doors that remains closed; perhaps the door you originally selected. To make things interesting, Monty gives you the opportunity to switch doors; you can keep the door you selected originally, or switch to the other door that remains closed.

So, do you want to switch doors? Are you better off keeping the door you originally selected or switching to the other closed door. I know what you are thinking; it doesn’t matter right. There is a 50% chance the price is behind the door you picked and a 50% chance it is behind the other door. After all, there are only two doors remaining and you get to pick one. You might as well keep the door you originally picked.

What if I told you that your instincts are wrong and that the prize is two times more likely to be behind the other closed door than the door you originally selected. You’re thinking “Derek is crazy; this non-linear stuff has eroded his ability to think logically.”

Lets start over and try the exercise with 100 doors. You picked 1 of 100 doors; you have a 1 in 100 chance of picking the door with the prize on the first try. Now the game show host closes 98 of the other 99 doors, leaving the door you selected and 1 other door closed. Remember, you had a 1 in 100 chance of getting the door right on the first try. That means that there was a 99 in 100 chance the the prize was behind one of the other 99 doors. But 98 of them have been closed.

Do you see now, there is a 99 in 100 chance that the other door contains the prize and only a 1 in 100 chance that the door you originally selected contains the prize. I the three door example, there is a 1 in three chance the prize is in the door you originally selected and a 2 in 3 chance the prize is behind the other door that remains closed.

Still don’t believe me, this Wikipedia post has a lengthy explanation here.

Our brains just aren’t very good at dealing with probabilities; or the randomness we face in the world. I get a kick out of that and try to keep that in mind whenever I’m making a big decision.

(Cross-posted @ Non-Linear VC)

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‘Why Linked Data?’ presentation at Defrag Conference

Paul Miller — Thu, 12 Nov 2009 16:14:23 -0800

The presentation I just delivered here at Defrag is now on slideshare, in case you want a look.

Why Linked Data?

View more documents from Paul Miller.

(Cross-posted @ Cloud of Data)

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How to Deal with Skeletons in your Closet

Mark Suster — Thu, 12 Nov 2009 09:43:15 -0800

This is part of my series with Advice on Raising Venture Capital.

I recently wrote a post on how to Deal with your Elephants in the Room during your VC meetings. Elephants being big issues that the VC will be thinking whether you bring it to his/her attention or not. My advice with Elephants was that you need to take them head on in your first VC meeting because the VC is already thinking about the issue whether you bring it up or not.

But what about issues that might have a slightly negative connotation that the VC couldn’t know in advance? Skeletons in the Closet are these types of issues. They are issues, though, that your VC would certainly find out during due diligence or at a minimum you’d be ethically obliged to tell them.

Some examples:

A large company has told you that you need to change your brand name or they’ll sue you for trademark infringement (this is a real world, recent example)
A company has just filed suit against you for product patent infringement (obviously more serious)
Your CTO and leading technology visionary has just announced he’s quitting
You’re not happy with your existing investors
Your largest customer just cancelled its order
Large parts of your tech system are going to need to be rearchitected
You have a prior record as a felon (yes, this has happened)

These are all things that you know you’ll eventually need to tell your VC and ethically you must tell them before they fund you. But when in the process should you tell them?

I’ve had this debate several times with VCs – sometimes they agree with me and sometimes they violently disagree. In this particular case – I’m right. Here’s my advice: Don’t reveal your “skeletons” in the first meeting but you need to tell your sponsoring partner before the full partner meeting.

Why shouldn’t you tell them up front? Is it displaying a lack of ethics to avoid some of these facts? I don’t think so. I have often said that fund raising (like any sales process) can be related back to human instincts and therefore explained via dating analogies. All prospective partners say that they don’t like to “play games” yet it is human instinct to do so.

Some VCs would tell you that you need to lead with all of your dirty laundry – but in reality this way they won’t fund you (whether they admit it to themselves or not). So here’s my analogy:

Let’s say you’re in your late 20’s and you’re in a bar trying to meet your prospective future partner. You wouldn’t reveal the first night you meet girl / boy of your dreams that you snore like a bear, would you? I guarantee the night would stop there. It is important that he/she sees your positive attributes first. She loves a man with a great sense of humor. That smile! He’s so kind to people. He likes kids! Did you hear that he was an entrepreneur?

So eventually it will be known that you snore. By then she has at least seen your good points for what they are rather than being biased by some smaller issue that she eventually would realize isn’t that big of a deal. Or if it’s a big deal to her, she’ll abort just as a VC would.

BUT (and there’s always a but) … you need to reveal your snoring habits to your sponsoring partner before the full partner meeting. Why? Because that individual is your champion within the VC firm and is going to bat for you with his/her partners telling them how great you are. You can’t send them into battle without the full details or you’ll lose a supporter.

It’s ok to not admit to snoring on the first meeting but it’s not okay to ask somebody to champion you without complete information. If they back you in the full partner meeting and then later have to reveal your secrets to his/her partners you’ll not only lose the deal but you’ll lose a friend and contact (along with your reputation).

UPDATE: @BSierakowski wrote to me on Twitter and pointed out that I didn’t really deal with how to begin to reveal your Elephant in the Room. This is a tough one because every VC process will go differently depending on how hot your deal is perceived to be, what the general market conditions are and whether that partner has other deals in his pipelines.

But let’s assume a standard pace. Let’s say it takes you 3-4 weeks to get from your first meeting with a single partner to get to the full partner meeting. Let’s assume that you have 2-3 one-on-one meetings with the partner and several phone calls. My suggestion is that you get through the first 2-3 meetings and feel out whether the partner is comfortable at some point putting you in front of his/her partnership. If the answer is “yes” then before the full partner meeting is scheduled I suggest the following process:

Call the partner to say you want to sit down to go through some final details before the full partner meeting is scheduled to be sure you’re all on the same page
Ask that this meeting be 1-on-1 (e.g. no principals, associates or analysts) because you have some sensitive stuff you’d like to go through before the partners’ meeting
ALWAYS have this discussion in person – even if it means jumping on a plane and flying 5 hours
Sit down and have a 1-on-1 discussion. Lead with the information early in that meeting. Make it clear that you wanted to reveal the information before asking that partner to sponsor you in front of his other partners
Make sure you walk the partner through the details of how and why you believe you’ll be able to overcome this issue
If the partner grills you on why you didn’t tell him sooner you can answer in two ways. A) you can explain that you felt it was important that people judge your business for its positive attributes that you are passionate about and your commited to making sure your Elephant won’t harm the company – OR – B) tell them you read this post and followed my advice and you won’t let that happen again

(Cross-posted @ Both Sides of the Table)

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Cloud Is Not What You Think It Is

Krishnan Subramanian — Thu, 12 Nov 2009 08:35:01 -0800

Yesterday at Defrag, during a panel on Foundational Infrastructure and Enabling Technology, some of the panelists were trying to stretch the concept of cloud to suit their agenda. I thought I will clear the air here on those concepts. It is time for us to accept the widely adopted definitions and take the discussions to the next level. I have put together some of the myths promoted by people with varied business interests. These may not be the actual statements made in the panel but it is something I have heard from many sources including some of the panelists.

1) Myth: Cloud is not built for fault tolerance

Truth: A well architected cloud should have fault tolerance built in. I do agree that Amazon EC2 instances go down due to some issues on their datacenters. However, EC2 need not be the poster boy/girl of Clouds. With EC2, it is imperative for the app developer to architect their app using EC2 instances running in different availability zones. A single Amazon EC2 instance is not Cloud per se, though I can argue against my own claim. AWS EC2 is called cloud because it offers you an option to run multiple instances in different availability zones and use the programmatic control they offer to these instances to almost eliminate the downtime and make your app sit on a fault tolerant infrastructure. Here is a request to my friends who are over enthusiastic in offering their own views on Cloud Computing. The concept of Cloud Computing is much deeper than what many in the industry want it to be. I hope everyone accept the widely adopted definitions and go forward.

2) Myth: Virtualization is an important part of Cloud Computing

Truth: This is plain wrong. Even though most of the Cloud environments use virtualization, it is not necessary. Take the case of Google. They have built their cloud without the use of virtualization, using low end 386 machines. I can take 10K 386 machines and throw mapreduce kind of fabric on top of it and I can call it a Cloud. Just because majority of the cloud environments use virtualization, one cannot claim virtualization to be essential for the very definition of Cloud.

3) Myth: Cloud are not useful in HPC

Truth: Even though HPC requires powerful CPU for their processing, it is possible to tap into the Cloud for some of the HPC computations. Sometime back, scientists from MIT did some benchmark tests on Amazon EC2 and found that it is a credible candidate for small sized HPC applications like low order coupled atmosphere-ocean simulation. We have already covered here at Cloud Ave about how Wolfram Research is tapping the power of cloud computing inside mathematica to do some HPC calculations. Platform Computing is tapping into Clouds to seamlessly redirect peak workloads from their internal HPC infrastructure to external cloud resources on a pay-per-use basis in order to optimally meet service levels. Even though I do agree with the argument that the cloud cannot replace the cluster of high end machines, I don't accept the bold claims, like the one made in yesterday's panel, that HPC cannot be done on Clouds.

Well, there are many more myths going around in the web about Cloud Computing. I will talk about them on another occasion.

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Billflo Powers (Almost) Seamless Invoicing

Ben Kepes — Thu, 12 Nov 2009 02:18:00 -0800

Back in April I reviewed the newly launched service that billFLO provides. In their own words billFLO;

billFLO focuses on eliminating invoicing friction for SMBs. We work with the likes of Quickbooks, Freshbooks, Less Accounting, Harvest and Blinksale to enable users to send and receive machine readable invoices straight into their accounting system.

At the time of my review, I was a little negative about the concept for two reasons;

I firmly believe in open standards and open data. Any time a third party tool is required just to make two offerings “talk” to each other I get a little antsy
At it’s launch, billFLO required its users to go to the billFLO website to authorize invoices, while I understand the time savings to be made from eliminating manual entry of data, having to visit a third party site to allow importation just kind of rankles with me. As I said at the time;

I'd prefer to see billFLO automated so that users didn't need to take an intermediate step and manually click on import to get invoices into their own system - ideally once a vendor has been "approved", their invoices would come through automatically every time.

Well it seems Ian Sweeney, CEO of Anoowa, the parent company behind billFLO, was listening. billFLO is today releasing its seller API which allows any accounting system to quickly use billFLO’s invoicing functionality. By utilizing the billFLO API, any accounting system can exchange invoices seamlessly with other systems utilizing billFLO. Well kind of seamlessly - unfortunately for my “low touch” desires, the API is seamless on the send side only. The reason being that accounting systems don’t have the UI to manage the importing process. ERP systems on the other hand tend to have this ability along with workflow for approvals etc.

Currently all the billFLO services are free to use, be that sending billFLO invoices (from billFLO seller or via the billFLO seller API) or managing and importing billFLO invoices with billFLO buyer. billFLO tell me that they do plan to introduce premium services for the billFLO buyer (aka Accounts Payable users) in the future.

As Ian is so keen to point out, around 20 billion paper invoices are exchanged every year and, based on average statistics, that amounts to six hours manual entry for a small business receiving 100 paper bills a month. billFLO not only saves time, but does so in a way that reduces the chances for operator error. A screencast showing the functionality is below;

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