But rather than dismissing world-class as a tired cliché, in this post I’ll spend a few minutes trying to understand what VCs mean when they say world-class and why they seem generally obsessed with the concept.  As always, I’ll add my personal take on the issue along the way.

First, let’s start with a definition:  world-class, quite literally, means among the best in the world.

World-class chess players come from all over the world to play each other at events like the World Chess Championship.  World-class tennis players come from all over the world to play each other at events like the US Open.  Once in a while someone who’s very, very good — but not quite world-class — gets into a world-class competition and receives a quick reminder about what world-class really means.  Think: yesterday’s 6-0, 6-0 routing of amateur teenager Beatrice Capra, ranked 371st in the world, by Maria Sharapova.

So how does world-class apply to Silicon Valley managers?

• There are world-class companies at which one may have been formerly employed.  Oracle in enterprise software, Google in Internet search, SAP in enterprise applications, PayPal in Internet services, IBM in databases, VMware in virtualization, Salesforce in SaaS-delivered CRM,  or — let’s not forget — BusinessObjects in BI.

• There are world-class universities from which one may have graduated.  Favorites in Silicon Valley including Stanford, MIT, Berkeley, Carnegie Mellon, and Harvard.

• There are world-class exits. VCs are in the business of generating returns for their limited partners.  Operational managers are in the business of building companies.  Often, these two goals are aligned; sometimes, they are not.  I world argue, for example, that YouTube at $1.7B and Bebo at $850M were world-class exits.   I don’t believe either were world-class companies.  Google is still struggling to make an operating profit off YouTube, let alone get an return on the $1.7B invested.  AOL shut down Bebo just two years after buying it.

I believe that when VCs say world-class they mean primarily two things:

• Fits the part.  You can think of Silicon Valley recruiting agencies as central casting:  “somebody call central casting and get two Nerds and a  Bimbo.”  Think:  “somebody call Heidrick and get two sales RVPs and a marketing guy.”  Fitting the part often entails having attended the right universities and worked at the right companies.  For certain jobs, it entails personality traits — the room should hush when the world-class sales VP enters.  The world-class corporate development VP should be as inscrutable as destiny.  I’d dare say it might also tacitly include being the right age or gender, which I believe is one major problem in the Silicon Valley system that I otherwise admire.

• Has been part of a team that delivered a world-class (or at least regional-class) exit.  That is, someone who’s made somebody — preferably me — some money.

I believe that as a result you end up with two types of “world-class” managers:  drivers and passengers.  To get into the club, you need to have attended great school X, worked at great company Y, and been on a team that delivered great results Z.  But, once in the club, you find two types of people:  those who were key to driving those great results and those who — despite being very good in many respects — were just along for the ride.

This is not lost on all VCs.  I remember when interviewing at MarkLogic that a well known and very smart VC kept probing me in certain areas during the interview.  The prodding continued to the point where I exclaimed:  “oh, you’re trying to figure out if I was a driver or a passenger on the BusinessObjects bus!”  While purely spontaneous, the exclamation was probably worth its weight in gold.  Mere awareness of the dividing line is a good indicator as to which side of it you’re on.

Strategically and operationally, I think there is a huge difference between drivers and passengers that comes out when they are placed in a new situation.  When placed in their next company:

• Drivers assess the situation and develop strategies and tactics appropriate for the new reality.
• Passengers do what worked last time.

Due to some smart choices (Berkeley), some work (an MBA), and some luck (a battlefield promotion at Versant), I have been an e-staff level executive in enterprise software since 1993.  In those 17 years, I have seen a lot of world-class managers come and go.  And I am repeatedly stunned by the number of otherwise very intelligent people who show up and do what worked last time.  Often with the very same cohort / entourage with whom they did it.

Now, for passengers, to the extent that this-time is situationally similar to last-time, things are actually quite good.  However, disaster strikes when it is not.

I’d say there are three key traits for recognizing passengers:

• Ego.  Ironically, drivers tend to be more humble about their past successes than passengers.  Drivers understand that role that teamwork and luck (i.e., right place at the right time) played in their success.  Passengers, on the other hand, tend to give themselves undue credit for just about everything, ignoring the possibility of Fooled by Randomness effects.

• Showing up with all the answers.  When you ask drivers “what are you going to do?” at new company X, they will say something like:  “I have no idea.  I need a few months to assess the situation and then make a plan.”  Passengers, on the other hand, will quickly bark off a list of 10 things that need to happen in the first 100 days.

• Job hopping.  I think passengers end up job hopping as a result of their desire to repeat the formula.  When it works, they stay and often succeed.  When it does not, they bail.  In fact, quick bailing is a key success strategy for passengers:  you can/want to do X, so go find situations where X is what’s indicated.  Drivers will tend to do longer gigs with different strategies and tactics.  Passengers will tend to do in-and-outs repeating the same strategies and tactics.

I think for many VCs the world-class manager is actually a form of hope, a silver bullet, a Santa Claus in which they want to believe:  “if we could just get someone world-class in here, then everything would be better.”  I’m sure that sometimes works out, but I wonder if it wouldn’t work out just as well substituting the word “competent” for “world-class.”  As in:  “if we could just get someone competent in here, then everything would be better.”

In my 17 years watching lots of e-staff-level execs come and go — all of them “world-class” on their start dates — I have to say I’m a skeptic.  I’ll go for people who are drivers, people who reason, and people with low egos any day over the alternative.

That’s not to say that I don’t believe in excellence:  Steve Jobs is world-class.  Larry Ellison is world-class.  Hewlett and Packard were world-class.  Marc Benioff is world-class.  Tom Siebel is world-class.  Bernard Liautaud, while lesser known, is also world-class.

World-class does exist. But none of those guys — or anyone close to them — is going to be an executive at your struggling $15M semantic something startup.  And Maria Sharapova isn’t going to give your kid tennis lessons, either.

1. I have a flawed and incomplete understanding of what it feels like to work for me.
2. My success — and that of my people — depends largely on being the master of obvious and mundane things, not on magical, obscure, or breakthrough ideas or methods.
3. Having ambitious and well-defined goals is important, but it is useless to think about them much. My job is to focus on the small wins that enable my people to make a little progress every day.
4. One of the most important, and most difficult, parts of my job is to strike the delicate balance between being too assertive and not assertive enough.
5. My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe — and to avoid imposing my own idiocy on them as well.
6. I strive to be confident enough to convince people that I am in charge, but humble enough to realize that I am often going to be wrong.
7. I aim to fight as if I am right, and listen as if I am wrong — and to teach my people to do the same thing.
8. One of the best tests of my leadership — and my organization — is “what happens after people make a mistake?”
9. Innovation is crucial to every team and organization. So my job is to encourage my people to generate and test all kinds of new ideas. But it is also my job to help them kill off all the bad ideas we generate, and most of the good ideas, too.
10. Bad is stronger than good. It is more important to eliminate the negative than to accentuate the positive.
11. How I do things is as important as what I do.
12. Because I wield power over others, I am at great risk of acting like an insensitive jerk — and not realizing it.

And here are some thoughts on them:

1. While 360 degree feedback studies can help managers understand themselves better, I agree that, by definition, managers will always have a flawed and incomplete understanding of what it’s like to work for them.  By the way, in general, I think managers always need to assume they are missing information, regardless of the topic.
2. I agree strongly with this one; I think the media puts too much emphasis on the big, breakthrough idea and virtually none on the mundane business of clarifying operational goals, getting people to agree them, and then holding people accountable for delivering them.
3. I semi-agree with this one.  I think quarterly operational goals are critical, annual goals are important, and some general sense of “where we’re headed” is important as well.  But I do agree that a big part of a manager’s job is getting those small, everyday wins that my colleague Martin Cooke refers to as “1% changes.”
4. I totally agree with this one and struggle with it every day.  On one hand you have experience and opinions and want to show leadership.  On the other you don’t want to run over your people.
5. I’ve seen myself in this way only when it came to certain constituencies (e.g., the board, bankers, analysts) and not in general.  Perhaps I should.  I’ll mull on this one.
6. Yes.  See 4.
7. I am a big believer in understanding both sides of an argument before deciding.
8. I think this is a very important point and every manager, including me, surely believes:  “it’s OK to make a mistake, just don’t make the same one twice.”  The question is does our behavior actually reinforce that view?  People listen to words, they watch behavior, and they weigh the behavior about 10x relative to the words.
9. I agree that innovation is important, and not only in large things.  I think the business media tends to equate innovation with “the next big thing.”  To me, innovation matters in all things, both large and small.  And if you agree with Sutton’s point 3, it matters perhaps more in small matters than in large ones.
10. While I’d never consciously thought about this issue that way, I do have an innate tendency to worry more about driving out the negative than collecting the positive.  Some of my philosophies (e.g., mediocrity intolerance) reflect that.
11. Yes, and it’s easy to miss this one.  As a CEO you can get so results oriented that you can forget the how whilst focusing on the what.
12. Indeed.

Palantir Party Wagon Might Be Taking A Break

[...]

Big money is spent here, which help pay for elaborate parties and groovy soundtracks for demo videos. Palantir is ‘trying’ to lead the effort to integrate, visualize, analyze and make sense of the world’s information.  Palantir employs no sales-people, and consists mainly of ‘drunk on the Kool-Aid’ engineers.  The tactics mirror making the user feel uber cool and sexy with James Bond stylized programs and parties that are just missing the bunnies and the Playboy grotto! Let this speak for itself!

I have a few thoughts on this.

• Does that look fun? Yes, particularly if you’re 28, hip, and single.
• Does it make me want to buy Palantir’s software?  No.  As in, not at all.
• Is it consistent with a company that claims to have no marketing?  No, no, and no.   Unless the “engineering” budget paid for the party and a public relations “engineer” arranged for the video.

This company very much reminds me of the bubble-era MicroStrategy which, for those trop jeune to know the story, did not end well.  My take on watching the rise and fall of bubble-era MicroStrategy:

• It was a fun, fun, fun place to work, but Daddy did end up taking the t-bird away
• It was not a great company from which to buy software
• It was not a great company at which to learn the business of software
• It was not a great company at which to build your career

Caveat emptor.  And caveat laboris as well.

While there are many things puzzling about the situation at HP, the role they describe for Jodie Fisher is not:  it’s called wingman. (Or I suppose wingperson, but I’ll just say wingman because wingperson sounds weird.)

What does a wingman do at corporate events?

1. Learn who’s coming to the event, determine who the executive needs to see for which reasons, and commit as much of that information to memory as possible.
2. Pre-brief the executive on who he or she will likely meet during the evening (e.g., We’ll see John Jones, CIO of Acme, who you last saw two years ago at the user conference — so don’t say nice to meet you.  John has helped the company several times with reference requests — be sure to thank him for that –and he is in negotiations with us for a large server deal.)
3. Keep the executive moving so he or she can meet as many people as possible during the event.  (i.e., I’m sorry, but can I grab Mark?)
4. Rescue the executive from bad encounters — remember alcohol is served at these events so you almost invariably get the drunken employee airing grievances or confessing deep admiration or the customer/partner who’s had one too many.

All that is a lot of work, particularly point 2 because you need to assemble a holistic picture of the customers — and there might be scores of them at an event — across geographic divisions, product lines, departments, and if you’re really good, history.  That’s why you might make $5K or more for doing it.  I think wingmen are a best practice,  although I also believe a healthy dose of truly spontaneous time should be included in the mix.

The typical wingman is the VP of marketing or communications who might perform the role instinctively, without considering him/herself a wingman.  Sometimes, the wingman might be the partner on the account from the PR agency or, I suppose, an independent contractor.

I have no idea about the specific situation at HP, but I do know that the bigger a company gets, the more you need wingmen (even at internal events) — and at over 300K employees HP is one big company.  I also know that while many questions may continue to surround the situation at HP, the concept of wingman and whether it’s a necessary role at large corporate events should not be among them.

• Valuations are up.  Up-rounds beat down rounds 55% to 27%, with flat rounds making up the difference.  F&W’s venture capital barometer showed an average price increase of 30%.
• DowJones VentureSource reported that $7.7B of VC was invested in the US in 2Q10 across 744 deals.
• VentureSource reported 79 acquisitions of VC-backed firms, for a total value of $4.3B
• There were 17 VC-backed firms that executed an IPO in 2Q10, compared to 9 in 1Q10
• Fundraising by VCs declined in 2Q10, with 38 firms raising $1.9B, compared to 38 firms raising $3.7B in 1Q10
• 90% of VCs surveyed expect the number of venture firms to decrease between now and 2015.  (I suppose they all think it’s the “other guys” who are going to fold.)  Reasons cited include:  difficultly in achieving successful exits, unfavorable tax policy, and an unstable regulatory environment
• The Silicon Valley Venture Capitalist Confidence Index produced by USF professor Mark Cannice declined to 3.28 in 2Q10 from 3.65 in 1Q10, breaking a five-quarter streak of increases.  The drop was attributed to shocks from the macro economy and shocks to the venture industry itself.
• 18% of rounds in 2Q10 were A rounds
• 27% of rounds were up rounds
• Of down rounds, D rounds led by series at 36% of down rounds
• Software had 34 financings with 73% up and a barometer increase of 51%
• Internet and digital media had 23 financings with 52% up and a barometer increase of 43%
• 40% of rounds had liquidation preferences
• 17% of those rounds with preference had multiple liquidation preferences, 71% of those were in the half-closed interval (1,2]x
• 35%  of rounds had participating preferences

• Following IT spending increases of 9% in 2007 and 6% in 2008, IT spending declined 10% in 2009
• Goldman Sachs forecasts IT spending to increase 7% in 2010
• Web conferencing and email top CIO SaaS adoption at 27% and 21% respectively
• BI and data warehousing are at the bottom of CIO SaaS adoption at 1% each.  BI-as-a-service still seems to have trouble taking off; while I hear good things about Birst, one cannot forget LucidEra

• Median enterprise value (EV) to revenue (R)  ratio of public software companies was 2.1x
• $1B+ companies have a median EV/R ratio of 3.1x
• <$100M companies have a median EV/R of 1.1x.  This means the size arbitrage lives on; big players can buy revenue at 1.1x and sell it at 3.1x
• The median public software company (in the SEG Index) has an EV/R of 2.1x, EV/EBITDA of 12.8x, EBITDA margin of 16%, TTM revenue growth of 0%, and TTM revenues of $218M
• SuccessFactors, Concur, and Salesforce are high flyers on the EV/R ratio at 7.6x, 7.5x, and 7.5x respectively
• SaaS companies have a median EV/R of 3.4x, EV/EBITDA of 32.3x, EBITDA margins of 9.2%, and TTM revenue growth of 11%
• SaaS companies with above-average growth had an EV/R of 4.2x while those with below-average growth were at 2.2x

• There were 5 IPOs in 1H10:  SS&C, SPS Commerce, Convio, Broadsoft, and Motricity
• The median offering amount was $58.7M
• The median enterprise value was $203M
• The median EV/R was 3.8x
• The median EV/EBITDA was 42.5x
• The median first-day return was 1.4%

• 7 software companies filed S-1′s in 2Q10:  Qlik Technologies (about whom I blogged here), IntraLinks, Tangoe, RealPage, Ellie Mae, Tripwire, and AutoNavi
• 4 of those 7 are on the SaaS model
• The median proposed offering is $86M
• The median annual revenues is $73M
• The median net income is $10M
• The median TTM revenue growth is 20%
• This suggests a shift from the 50/50/0 IPO bar that I have previously discussed based on these reports (i.e., $50M+ in revenues, 50%+ growth, and 0% EBITDA).  These medians suggest a higher bar in terms of both revenue and profit, but a lower bar on growth.  Note that the bar is inherently a flexible concept (e.g., smaller size can be offset by higher growth) and one that most definitely changes over time.

• There were 507 software M&A deals in 2Q10
• Total value of the M&A deals was $17.5B, up dramatically from $4.3B in 1Q10 and $3.3B in 2Q09
• The high dollar volume was boosted by mega-deals including SAP/Sybase ($5.4B), TPG/Vertafore ($1.4B), IBM/Sterling ($1.4B) and Allscript/Eclipsys ($1.2B)
• The median M&A deal was done at a EV/R of 2.1x and EV/EBITDA of 12.0x
• By category, development tools and IT asset management topped the M&A EV/R ratio at 3.5x, with healthcare in second at 2.7x, and BI/GRC at 2.6x.  ERP and messaging/communication were at the bottom with EV/R of 1.0x and 0.9x.

• What is a relational database and why would I need one when IMS is doing just fine?
• What is a business intelligence tool anyway why would I need it in addition to ReportSmith?
• What is a data warehouse and why would I need one in addition to my operational databases?
• What is search engine optimization and why should it matter to my marketing team?
• What is server virtualization and why would I care?
• What is a social network and why (in the world) would I want to part of one?

One of my top marketing rants is that pioneering new markets is difficult enough that vendors shouldn’t make the task any harder by muddling their message along the way.   While this would seem obvious, it happens all the time.  Why?

• A diversity of internal opinion on how to describe the company and/or its product.  This is normal.
• A lack of marketing leadership in establishing one clear “correct answer” that the company should follow.
• A lack of discipline in sticking to one message on the part of the field and/or marketing team members.

Invariably, when pioneering a new market, there will be a variety of internal opinions about how to talk about it.  For example, as a technologist, I could honestly describe MarkLogic Server in any of the following ways:

• XML database
• XML server
• Content database
• Document database
• Unstructured database

There are pros and cons to each of these choices.  While our media customers like the term “content,” it does not resonate with our Federal customers who see a data/content dichotomy as meaningless.  For years, we were gun shy about calling MarkLogic Server a “database,” because that would tend to prompt a reaction of “oh, we have one of those, it’s Oracle, thanks for coming by.”  So, for years we referred to MarkLogic Server as an “XML server,” attempting to follow the example set by Arbor Software who positioned its multi-dimensional database system as an “OLAP server.” Recently, we decided to come out of the database closet and, going forward, you will see us positioning MarkLogic Server, arguably more accurately, as a database for unstructured data.

But that’s not the point of this post.  This post is about consistency.  Note that we have quickly found 15 ways to position MarkLogic Server.   {XML, content, document, semi-structured, unstructured} x {database, server, platform}.    The question for marketing should be:  which way is best.  The question for everyone else should be:  which one did marketing pick?

Why?  Because it’s better to be consistent than better.

Imagine in your heart-of-hearts that you think “content server” is simply a better answer than “unstructured database” and you decide to use your own lingo instead.  The first thing you might do wrong in this instance is bleed.

Customer:  What is your product anyway?

You:  Well, that’s a great question.  It’s actually quite confusing and did you know that there are about 15 different things we could have called it.  Marketing — and you know those guys — what’s the expression “if you can, do, and if you can’t do marketing” — ha, ha — well, marketing decided to position it as an “unstructured database” but I think that’s a bad answer, so I actually think of it instead as a “content server” because it really does serve content — and boy does it go fast — and some of my buddies on our DC team call it an XML database, but that’s bad because everybody knows that Gartner hates XML databases — ix-nay on the atabase-day, har, har  — and it isn’t really all about XML, it’s really about marking up semi-structured information, you know?  Uh, what was your question again?

The are many problems with bleeding on the customer:

• You’re talking instead of listening.  Look how many words you took to answer the simple question of “what is it?”
• You’re confusing the customer, giving three or more different answers to one simple question
• You may think you’re making yourself look smart with a great analysis, but to a sophisticated listener, you are making yourself look dumb instead
• Most important, you are confusing the customer.  He/she asked a simple question and you were unable to give them a simple answer.  Quite possibly he/she had several follow-up questions in mind, all of which were forgotten during your stream of consciousness response.

The fact is that selling a new technology is hard enough that you shouldn’t make it harder through inconsistency and bleeding.  It isn’t easy to understand what MarkLogic Server is and we don’t have the benefit of a category with 3-5 other vendors all evangelizing the same idea.  If you’re in a similar situation, then you have to ask yourself:  shouldn’t you make things as simple as possible, speaking precisely and consistently so we can make it as easy as possible for customers to understand our message?

If you agree, that means two things:  (1) you need marketing to step up and choose:  to define the standard vernacular –ideally in a conversational Q&A-style format — and then drive it into all marketing communications and (2) you need to lead by example in sticking to it.  If you think marketing has chosen poorly, do not bleed on the customers (or fellow employees).  Go raise your concerns to marketing.  If you think there are common questions that need standard answers that are not yet addressed, then go to marketing.

When pioneering  a new market, your primary competitor is confusion, and inconsistency is his ally.

• All cash transaction, valuation undisclosed.  See below for some fun and math, trying to guestimate it from standard ratios.
• Greenplum had raised $61M in venture capital.
• EMC intends to create a new “data computing” product division and to have Greenplum CEO Bill Cook run it, reporting to Pat Gelsinger.
• This the second of the specialty data warehouse DBMS vendors to get acquired.   Microsoft acquired Datallegro in 2008 at a rumored valuation of $250M.
• Greenplum was ranked a visionary in Gartner’s Data Warehouse DBMS magic quadrant in January.  They were positioned about 70% on vision and about 49% on execution.   The leaders were Teradata, Oracle, IBM, Netezza, Microsoft, and Sybase.
• Greenplum’s CEO and two co-founders have posted an open letter to customers and partners which argues that EMC is “uniquely positioned to dramatically accelerate the Greenplum vision of building the enterprise data system of the future.”
• In addition to their DBMS, Greenplum offered an “enterprise data cloud platform” called Chorus, which includes something called the Greenplum Data Hypervisor.
• This Wall Street Journal article quotes EMC talking about “great synergies” between Greenplum and VMware which to me are non-obvious.  Perhaps they’re related to the prior point.
• EMC will continue to offer Greenplum’s full product portfolio to customers
• Note this, buried at the end of the press release:  EMC plans to deliver new EMC Proven reference architectures as well as an integrated hardware and software offering designed to improve performance and drive down implementation costs.  Pretty clearly, this says a data warehouse machine/appliance is coming.

So what does all this mean?

• That storage vendors are going to continue to move up the food chain.  EMC has done a slew of acquisitions — Greenplum looks to be its 53rd — and I expect that to continue.  Storage itself is changing as it continues to include more networking and memory technology.  But storage vendors are changing too, not content to get stuck in the commoditization trap.

• That yet another type of vendor is now attacking the database market.  In addition to (1) a slew of startups focused on specific niches, we now have (2) SAP via its acquisition of Sybase, and (3) now EMC via Greenplum attacking different segments of the ~$15B/year database market.  The big three oligopoly should not sleep too soundly at night.

• With my Aster Data board hat on, I’d say that EMC is only getting part of the picture.  Basic data warehousing on big data is only part of the equation.  What customers ultimately want to do with big data is analyze it, and that requires the high-performance execution of complex analytics on big data — something that Aster Data does uniquely well.  Most of the data warehouse DBMS market is focused simply on reducing the price/performance for basic data warehousing.  To my knowledge, only Aster Data is focused on that plus enabling complex, high-end analytics.

Here’s my estimate on the valuation range.  This is based on math, guesswork, intuition, and standard ratios.

• LinkedIn says Greenplum has about 130-140 people.
• Enterprise software company revenue often runs about $250K to $350K/employee.
• This implies revenues of $30M to $50M.
• Software companies typically sell for 1-2x revenues when they’re in trouble, 2-3x revenues when they’re plodding along, and 8-10x revenues when things are hot.
• Netezza, for example, currently trades at 4x revenues.  (But remember, that’s to buy one share.  If you want to buy them all, you’ll have to pay a premium.)
• Greenplum, to my knowledge was doing pretty well.  Let’s take 5-8x as my guess on the revenue multiple.
• This implies a valuation range of $150M to $400M.
• It’s hard to imagine that their last funding of $27M in January 2008 was done at anything less than $100M post-money, and possibly a fair bit more.
• This, in turn, implies that no VC would want a 1x return over 2+ years for a company that was doing well.  If true, this wipes out the low end of the valuation range.
• This leaves me estimating the valuation at somewhere between $300M to $400M.

Bear in mind that it doesn’t take much to swing these numbers because they are built by multiplying estimates and ranges.  A few changes here or there and I can $200M.  Or I can get $500M.  My real hope is that I have enough offsetting errors that I end up close to the right answer!  If I get new information that either changes my estimates or simply provides the facts, then I will try to update this post and share it.

Let’s look first at what MarkLogic is about:

1. Unstructured data.  This means not only dealing with data in odd structures (e.g., sparse and/or semi-structured data), but also handling words and all the challenges that go with them.
2. Scaling on cheap hardware.  In effect, scaling like Google, using racks of inexpensive pizza boxes instead of big, expensive computers with expensive SANs attached.  This is accomplished via shared-nothing clustering.
3. A non-relational data model.  MarkLogic Server uses the XML data model.
4. Document-orientation.  MarkLogic is a document-oriented system, meaning that the fundamental modeling unit is the (XML) document and that the system includes search functionality, in the same way that a smartphone includes a GPS.
5. Ad hoc queries.  A reductionist mission statement for MarkLogic Server is “to perform database-style queries on unstructured information.”  (See diagram below.)
6. Standard interfaces.  We believe in standard interfaces, in part because it’s in our self-interest to do so.  Standards help de-risk the purchase of new technologies from high-growth vendors.  We support a number of W3C standards XQuery, XPath, XML, xHTML, XPointer, and coming soon, XSLT.
7. ACID transactions.  We’re database guys.  While we’ll let you turn off the transaction system and are in the midst of implementing replication with a consistency dial, by default we do ACID.

One interesting way to summarize these points is to build a database for the Internet era.

If you look at what I’ll call the “new NoSQL systems” are about, you’ll see:

1. Unstructured data, dealing with tweets, updates, graphs, and profiles more than information that fits nicely into tables.  Interestingly, despite this, most of the new NoSQL systems do not integrally include search.
2. Scaling on cheap hardware.  In this case ranging from magnitude 100 to magnitude 100,000 nodes.
3. A non-relational data model.  Various new NoSQL systems are key/value oriented, document-oriented, or graph oriented.
4. Document-orientation.  While not all new NoSQL systems are document-oriented, some NoSQL systems (e.g., MongoDB, CouchDB) are.
5. Primary key look-ups.  The new NoSQL systems are not about ad hoc queries.  See this  (profanity warning) cartoon, which pretty  much says it all.  Some of the new NoSQL systems allow secondary indexes, but one way key/value stores go fast is specifically by disallowing additional indexes beyond the primary key.
6. The new NoSQL systems are simply too new (most are version O.XX.XX) to have evolved to standard interfaces.  This means that an application built for Hadoop is not easily moved to Cassandra.  Don’t confuse “open source” (i.e., you can see the source code) with “standard API.”
7. BASE transactions.  The new NoSQL systems trade traditional database consistency for 1,000 to 100,000 node scaling and performance.  In the end, who cares if you lose my “Dave’s in aisle 7 at Safeway” tweet?

If you look at the overlap, you’ll see that MarkLogic and the new NoSQL systems overlap on points 1, 2, 3, and 4.  While we certainly can provide key/value storage (think of two-element schema <key>key-id</key> and <value>value-payload</value>), we provide considerably more index options and generally perform faster using our own search-engine style indexing than b-tree indexing used by both traditional RDBMSs and the new NoSQL b-tree indexing.

On point 6, I think we have a huge advantage, not only because we are using standards, we are using Internet standards from the W3C.

On point 7, as mentioned, we are largely ACID people, but we are working to give users more flexibility to lower the ACID bar in order trade for other variables.

All in all, I agree with Ron.  I think MarkLogic was NoSQL before NoSQL was cool.

• Things get partisan:  sales wants X, marketing wants Y, finance wants Z.
• Discussions turn blame-oriented.  Instead of working to solve problems, people work to avoid blame.
• Managers lose interest in understanding the alternative positions.
• People don’t listen to each other, often because they’re too busy thinking of what they’re going to say next.  (Resulting in what one friend calls “parallel independent conversations.”)

The solution is to force managers to articulate both sides of important issues.  If a person is advocating thing X instead of thing Y, I want them to be able to clearly and convincing explain the advantages of both.  The best decisions come, in my opinion, when you hold two opposing ideas in your mind at once, and then choose.

When done correctly, you will see:

• A focus on solutions, not blame.  Example:  “help me understand how you want to solve the problem.”
• Managers looking forward, not back.  This flows naturally from the prior point.
• Managers practicing active listening, a great technique for trying to understand the other person’s point of view.  Example:  “so, Ted, you’re telling me that you think we’re doing too many tradeshows that result in poor quality leads — is that correct?”

But seeing both sides of an issue only gets you halfway to your goal.   In many big companies, the unintended dysfunctional consequence of doing so is passivity and fence sitting:

• Well,we could do A or we could do B.  Frankly, I’m open.
• The consensus in the meeting was that both A and B were good options.  (This hits my “launch” button!)
• Well, there are certainly advantages and disadvantages to both options.
• We should pick the option that keeps the most other options option.  (Also known as The MBA Credo).

Somewhere along the way in corporate America, managers forgot that they are paid to make decisions.  The point of seeing both sides isn’t to avoid decision making.  The point is to make better decisions.

To ensure a focus on decisions, I usually run a line of questioning that starts with the decision and backs up from there.

• What do you think we should do?  (And push for a single answer)
• Why do you think we should do it?
• Why should we do the alternative?

If you’re already performing these techniques, great.  If you’re not, give them a try and let me know how it works.