SAF: Pensent d’escalier


The Forum left me with two nagging questions:

  1. What was Ray Lane talking about?
  2. Why is Microsoft pressing software + service?

Ray has some reasonable credentials [1, 2, 3, 4], however, I found his presentation scattered at best, and thus was unable to appreciate the message he was trying to convey. Based on comments from others, the difficulties I faced were not unique. Either the message itself was flawed or the delivery was not easily consumable. I decided to follow through.

To summarize, the major points Ray made:

  • The software industry is one that is highly concentrated in the US
  • The industry has a pricing model disconnected from value
  • Hand-in-hand commoditization and consolidation will lead to globalization,
  • Technical innovation drives from the platform up forcing major application change; this has to change. A model has to be found that allows applications to persist in an environment of platform change
  • Innovation is generally thought of as technical advance, but the reality is that finding the killer app is rare. Technical innovation, as it may be, by the big software producers is contained within the context their products, manifested primarily as incremental steps.
  • The major thrust in innovation is currently happening in the process of content (Intellectual Properties) creation, pricing and deployment models.
  • Social networking or the power of community reflects an innovation in the way content is created
  • Open source reflects an innovation in creation and pricing
  • Aligning content to my individual needs reflects an innovation in the way content is delivered
  • How does this translate into a corporate context? Can we use the personal experience as a model for the enterprise?

The salient point is that many of these innovations are happening in the personal sphere, not the business. Hence Ray’s contribution is to identify key characteristics of what’s happening in the personal space and to create 7 laws that merge the personal with business behaviour, or the personal business:

  1. Service individual needs.
    Individuals need to get value and it grows bottom up in the company.
  2. Should be adopted organically.
    Should only survive if the individuals and company get value.
  3. Contextualize personal information.
    Allow the systems we have today to work for us by knowing where and who we are. Tremendous amounts of information can be extracted from existing systems and applications
  4. No data entry required.
    Think of a CRM system; six months to deploy and then one has to enter all the data.
  5. Delivers the value instantly; don’t have to wait 2 years
  6. Utilize community and social relationships
  7. Minimum IT footprint

So, in the end, are these important additions to our knowledge base or are they self-evident? Are they ivory tower or practical concepts? Do they present deep insight or a shallow comment? Based on what I heard in other presentations the application of some of these laws is not necessarily straight forward to the business environment. For example, the public internet has massive scale that no company can replicate; a 1% contribution rate on the internet can result in achieving some threshold, but in the business 1% would be sorely insufficient. But, having said that the issue with this example is with the solution, not the goal. It just means that the solution as delivered into the personal sphere does not necessarily work in the business world. So if it takes 20% contribution in the business space, so be it. It just means that we need to find another solution to incent more contribution.

The contribution: a set of stretch objectives (or characteristics), that if achievable, will take some extended period of time to realize. A waste of time? No, regardless of whether a goal is perceived to be achievable or not they are good to have so as to set some direction (and they may drive some innovation too).

On the theme of software + services, it was unclear to me why this was such a hot topic? Why would Microsoft describe a vision that for many has already been achieved? Frankly, it makes them look behind the leading edge only seeing a vision now that for many is long passed by.

In the presentation Charles stated that there is a debate going on in the industry positioned as software versus services, and thus forcing “either or” positions. Clearly then, by stating software and services, Microsoft is trying to change the debate from or to and. Why have both and not just one? They are alternative deployment choices: internal deployment and external deployment.

Some characteristics of software (internal) deployment include: increased control; longer time to deploy; on-going maintenance and operational skills required; increased complexity.

Some characteristics of service deployments include: dependency on someone else; privacy and regulatory concerns; reduced customization; reduced time to realize value; simplifies operational environment; reduced deployment issues.

Based on these characteristics, Microsoft offers the following guidance: a services deployment model makes sense for commodity components; a software deployment model makes sense for high-value (and probably differentiated) applications.

So that’s something interesting. It is and.

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