I found an interesting piece, a paragraph really, in the NYT while reading some of the Xerox/ACS post-deal coverage.
The services shift is driven by both financial and strategic motives. Services businesses tend to be steadier sources of revenue and profit than product businesses, which move more closely in line with economic cycles. Services businesses also foster closer relations with corporate customers, and often yield higher profit margins.
Although services can yield higher profit margins than physical products, they definitely have lower margins than software. As an enterprise software vendor, we have to watch our revenue mix pretty closely to make sure that our margins are not reduced by a large services revenue stream.
However, it is necessary for enterprise IT companies to have a services arm that provides coverage of the product portfolio. The NYT understates this as “Services businesses also foster closer relations with corporate customers.” The enterprise IT market is driven by partnering, deal-making, and face-to-face schmoozing and sales. This is why enterprise IT companies have well-compensated salespeople and business development personnel on staff. By having persistent services personnel at your client’s physical location, you have a cheaper source of sales revenue.
Went for a 27 mile ride today with a friend of mine, and the knees feel pretty good. Some of the hills that I encountered today seemed a lot less steep than when I started earlier this summer. I’m still in terrible shape, but I seem to be able to climb a little bit faster.
I do need to get some cold weather gear. It was 55 degrees out today, and the shorts and short-sleeve jersey seem almost perfect. I think my next purchase may be a set of arm and leg warmers, so I can take them off if I start overheating. I may also start looking around for a decent cycling jacket.
I have focused on enterprise IT, which is really slow and boring, since I graduated from Business School. It is fascinating to me when I find posts about consumer (social) media and Internet development that draws comparison to what I have been focused on. I really like John Eckman’s blog posting, The Assembled Web: Notes Toward a Manifesto.
9. Consumer Technology is beating Enterprise IT, and soundly. If your “in-house” IT can’t compete with a consumer-grade provider available “on the web” you need to catch up and compete or concede the function.
John’s point is relevant, in my experience, when looking at collaboration tools in the enterprise IT space. Providing access to appropriate collaboration tools is something that most companies fail at miserably. Sure, there are companies out there (typically product and marketing) that have very formal workflow and collaboration tools. But the majority of companies that don’t require highly specialized software, consumer technology is a decade ahead of the enterprise collaboration tools. You can recognize the problem when your employees use AIM and spend their time on Facebook and Gmail.
The coming round of consumer technology is going to change the way that people work. If you look at the features of Google Wave, which include file sharing/workflow/collaboration, you can see how it will be leveraged in the workspace. I am not predicting a whole-sale shift to Google for the enterprise, Enterprise IT moves at a snail’s speed. However, I agree that enterprise IT managers should concede the function, with increased competitiveness in mind, to those service providers who do it best.
The FDA banned flavored cigarettes recently. There is still some debate/discussion about whether or not it will apply to Djarums (Clove cigarettes).
John Geoghegan, director of brand development for Moorpark, Calif.-based Kretek International, said the private company has been “puzzled about (the ban) since the very beginning” because clove cigarettes constitute less than 1 percent of cigarettes sold in the U.S.
It doesn’t seem very logical to me that people would start smoking with cloves. Not only are they expensive, they comprise a very small portion of the overall market. It seems more likely that people would start smoking with any of the “light” cigarettes or with menthols (which are not banned). If they really wanted to discourage smoking, the easiest way to do it would be continue raising taxes.
“No, we’re not going to spin it off,” even if asked to by the EU, Ellison said. The EU is concerned about Oracle simultaneously owning MySQL, the leading open source database, and its own Oracle enterprise commercial database.
What I found to be even more interesting is the way he is dismissing Cloud Computing. In a time where many companies are embracing the cloud, and management thereof, Ellison is focused on the basics – databases, operating systems and hardware.
“Cloud computing is not only the future of computing, it’s the present, and the entire past of computing is all cloud,” he said.
The cloud still requires components such as databases, operating systems, and memory, said Ellison. He pointed out the seeming absurdity in which cloud computing previously was called the Internet, software as a service, and on-demand computing.
He seems to be embracing almost all aspects of the Sun acquisition, including flash storage.
There are some things that I need to figure out still, but it isn’t so bad. Of course, there is nothing that can prevent me from making ridiculous titling mistakes – the wedding was actually on 9/19, not 9/21.
Former House Republican whip Roy Blunt told a racist-tinged parable at a conference recently. I’m not sure why he didn’t just use any one of the million or so “play the hand you are dealt” analogies for his speech. I’m just astonished that he chose this story for prepared remarks, and that it wasn’t inadvertent or unintentional.
The WSJ is reporting that the organizers of the Tea Party protests are now protesting against the treatment, or lack thereof, they received from the DC Metro.
Rep. Kevin Brady asked for an explanation of why the government-run subway system didn’t, in his view, adequately prepare for this past weekend’s rally to protest government spending and government services.
As 538 reported, about 60,000 to 70,000 crazies, er people attended the protest in DC.
70 thousand people, rather, is about the number that will attend the Washington Redskins’ home opener next week. That’s a lot of people. Washington — actually Landover, Maryland, where FedEx Field is located — will be inconvenienced. But it won’t be shut down. Business will go on more or less as usual.
The protest organizers are using any and every tactic to show numbers. This includes spreading fake/old pictures. Sadly, the intelligent discourse on health reform is being hijacked by a crazy vocal minority.
Posted: September 16th, 2009 | Author:saldarji | Filed under:technology | Tags:channel, complexity, IT, marketing, partners | No Comments »
In the IT world, nothing happens without partners. And there are a lot of partners. Sun has a list of partner-type definitions on their website that shows the complexity:
Application Provider
Attached OEM
Direct Marketers
Embedded OEM
Independent Hardware Vendor (IHV)
Independent Software Vendor (ISV)
Mid-Tier System Integrator
Network Service Provider (NSP)
Original Equipment Manufacturer (OEM)
OTP or OEM Technology Provider
Portal and Web Application Developers
Registered Reseller
Service Provider
Strategic Government Systems Integrator/Government Systems Integrator
Systems Integrator/Value-Added Integrator (SI/VAI)
Value-Added Reseller
If you’re making changes or launching a new marketing initiative, you need to think about all your partners and the effects on the channel. For each change. Sometimes seemingly unimportant changes to your product or “premium partners” can piss off your entire ecosystem.
The reason the ecosystem is so delicate is because there are many, many partnering agreements. For example, Oracle touts that they have 20,000 partners. When you have a portfolio of software, and thousands of partnerships, the complexity becomes almost unmanageable. Consequently, there are a lot of economies of scale with software. By having more products and more revenue, you can afford to have an army of partnering-centric employees who keep the ecosystem in balance and prevent disasters.
