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    November 25

    A targeted advertising example

    That’s a very nice marketing idea: Advertising Microsoft SQL Server 2008 when the mouse pointer strives over the term “critical data” in an article about IBM :-)

    image

    If the marketing agency would have used Silverlight for that little tool, like they do in the linked website, it would even have been cool.

    November 24

    New Architect Center opened at Microsoft

    Miha announced the opening of the new Architect Center alpha release. The purpose:

    “Our purpose is to provide architects with the community and tools necessary to work together to develop and syndicate an Architectural Body of Knowledge.”

    Some highly valuable content is already available, e.g. the decks from the Strategic Architect Forum 2008.

    The SAP 2007 online recordings are available on the MSDN Architecture Center, operated by Microsoft’s Platform Architecture Team. This group also hosts The Architecture Journal, which is also available as printed magazine. (Btw, my favorite enterprise-focused reading still is Enabling the Service-Oriented Enterprise in Journal 7.

    November 22

    A look at services in product companies

    Mike Smerklo delivered an excellent piece (Delivering Predictable Revenue Streams) about the increasing importance of services revenue for a software company’s survival during a recession. Some key statements he made are worthwhile discussing a little further:

    “As customers defer future product services, the value of maintenance and support go up.”

    That sounds reasonable, but there are some constraints. A rational acting enterprise would significantly reduce capex. But it would also – to a lesser degree – reduce opex. An IT organization going for an extension of an application’s life cycle has to take into account not only the additional maintenance fees, but also the reduced financial budgets likely enforced by the finance heads. One potential consequence for a vendor is the need to assist with providing an ROI justification for the additional maintenance.

    “But when all the priorities come together, maintenance always falls down the list. Although important, executives typically don’t have time to focus on driving maintenance revenue.”

    Very true, but that’s not only the executives’ fault: I have yet to meet the financial analyst who values services revenue of a software company as much as customer base growth. To most software vendors that offer only captive services, the services business itself is neither cool nor sexy. Let’s have a look at the margins of the segments, taking SAP for example: Page 93 of their 2007 annual report discloses operating margins of 82.4% for the product-related business, and 23.8% for the consulting business.

    The result of the typical product focus in the IT industry, a little exaggerated: Sales reps earn a fortune for selling cool stuff, while customers have a hard time finding anybody they could discuss service offerings with. So why not simply adding a services revenue quota to the sales reps’ portfolio? Because it doesn’t work. For selling a solution that requires delivery through humans, the solution sales rep has to understand the delivery process. Being able to translate product features into customer benefit is insufficient if the customer requires services for being able to use the product. And normally one wouldn’t find the necessary skill set in a product sales organization – solution sales simply doesn’t fit to technology focus.

    What adds further to the complexity of the dilemma is the existence of a partner channel. Solution selling vendors typically have a direct sales force, because they understand the value of professional services as an integrated component of the whole product. Technology and platform vendors typically sell through indirect channels, lacking direct access to their customers, which complicates the delivery of any service significantly.

    To illustrate the difficulty, just compare Apple with IBM. A cool technology vendor versus a dedicated services organization. When do you think is the first time that an iPhone user will experience exceptional customer service? And when was the last time you’ve seen a great product, made in Armonk?

    November 11

    Quote of the day

    What a nice, encouraging message:

    “We need to be world-class in what we do. That means listening before recommending; inspiring before teaching; and thinking before doing. Make sure that your actions don’t send a message that contradicts what you say.” (Arthur Yasinski)

    I should put that on my virtual wall.

    November 10

    Quote of the day

    Great visualization of the Enterprise Architect’s role:

    EA - Measurable Value

    (Promotion of Gartner’s Enterprise Architecture Summit 2008)

    November 04

    Leadership attitudes

    Peter Drucker once stated

    “The leader of the past was a person who knew how to tell. The leader of the future will be a person who knows how to ask.”

    I've always tried to follow his advice and lead by questions. On the other side I also acknowledge that my staff has the right to ask for clear direction and helping guidance. Finding that delicate balance is a serious challenge, and I found it's even influenced by cultural background and context. The best approach? Experience, just do it, practice it. And be transparent. And provide clarity. And continuously ask for feedback. And permanently stop, look back, and check if they still follow you. It sounds quite simple - but it is not.

    Maybe I'm mistaken, but in my work environment I start to see more "telling" and less asking, more e-mail and less personal connection, more process focus and less people orientation. Or in other words: More management less leadership.

    Yeah, everybody can be a good captain in calm waters. But it's the storm that discloses leadership skills.

    Work-out lessons

    A friend told we a funny story about bystanders in the gym, watching him loose his shorts during exercises. I had made fun about the gym he's working out. Here's an even more suitable comment:

    “Nobody ever got muscles by watching me work out!” (Arnold Schwarzenegger)

    That's exactly what I would have told bystanders. And I would have bought some new shorts :-)