RobertCruz03

HP + Autonomy: Cloud innovation?

2011-08-19T09:52:00.000-07:00

HP’s announcement yesterday reflected, in HP’s words, a move toward “enhanced cloud software and services offerings”. Given analyst projections for cloud growth rates, this makes sense. However, fulfilling this objective with an acquisition of Autonomy is confusing. Few of Autonomy’s vast array of acquired technologies where designed and built to harness the TCO advantages and scale offered by cloud. Many are simply hosted versions of products built to be deployed behind a customer’s firewall. Most of Autonomy’s products address specific business user-driven use cases, such as discovery, content management, and regulatory compliance – unlike most of HP’s current software assets which focus on IT management and infrastructure.

What does makes sense is that, by expanding its portfolio of products for big-data identification and extraction, HP flings open the door to new storage, infrastructure, and services opportunities, which align well with Autonomy’s $750k average selling price. What is also clear is the challenge faced by big-iron technology firms in embracing technologies that move data out of their on-premises repositories as they have way too much at stake in terms of existing technology assets and revenue streams to protect. HP is apparently recognizing from their customers the challenges of making data available for purposes such as regulatory compliance and discovery – but they are attempting to solve this problem with old school solutions. This makes the acquisition comparable to Oracle buying Siebel as opposed to SFDC. Growth strategy by moving into new markets, yes: ‘enhanced cloud software and service offerings”, not so much.

What Autonomy Brings to HP’s Party

Autonomy provides a grab-bag of disintegrated technologies that range from enterprise content management, to search, to records management and ediscovery. These tools are unified under the Autonomy “Idol” marketing umbrella, but are in various states across integration for the different generations of acquisitions. Most recently, Autonomy acquired the Iron Mountain Digital assets, which induced the former Mimosa Near Point archiving and Stratify legal review tools. Amongst all the assets, the IDOL search engine appears to present the most value to HP, as it gives HP a stronger story versus IBM and EMC in the big-data identification and extraction game. It also closes a gap in HP’s enterprise content management portfolio, where they have struggled for years versus the likes of IBM/FileNet and EMC/Documentum. In the discovery space, HP now has additional assets and installed customers utilizing the Stratify platform, which presents a professional services opportunity for HP if they chose to have an opinion in that market. As it pertains to archiving, HP is moving toward sunsetting its own refrigerator-like archiving appliance, which had little market uptake, so HP should be able to sort out the Autonomy Consolidated Archive/Zantaz/ Nearpoint/ Digital Safe, and other Autonomy acquired assets at some point into a coherent road map.

Archive Market Impact

HP is clearly focused on IBM and EMC in strengthening areas that it has been have been traditional short suits. As Autonomy was already focused on large customers with an ASP of $750K, HP should have no problem converting the acquisition into $2M-$3M projects with lengthy implementation cycles and required upgrades to hardware, storage, and infrastructure investments. As such, it should allow HP to pursue non-HP penetrated F250 accounts – if it can figure out how align its selling efforts that are focused today on very different buyers.

As a $10B deal, it does provide heightened over-all IT market awareness of domains such as archiving, as Autonomy is a recognized brand within the search market and is also positioned within the leader quadrant for information archiving by Gartner. Expect both IBM and EMC to respond by accelerate their efforts in this area – EMC is already known to be moving away from its Email Extender and Kazeon products, while IBM continues to work toward any meaningful penetration from its Smart Archive offerings. Don’t be surprised if Oracle adds a new horse to the mix at some point . In the short term, given the large customer focus, non F250 existing customers using Zantaz, Nearpoint, and HP’s retired archiving products should be looking for new homes soon.

My Take

HP is apparently taking note that customers are struggling with the challenge of making data available for purposes such as regulatory compliance and discovery – but they are attempting to solve the problem with old school products. The move demonstrates that big iron companies are not where innovation in the cloud is happening – they need to protect their assets and drive hardware and storage demand. Being able to search and index data from multiple on-premises, cloud, and hybrid repositories sounds fun - and I'm sure will make for excellent demos - but find customers that are doing this with Autonomy alone today. Nice vision statement, however.

I hear from customers daily that are attempting to escape from the management challenges, on-going investment requirements, internal resource needs, and unsustainably high TCO that this combination creates more of. Autonomy will help HP compete more effectively with IBM and EMC for large customers, and will give HP a stronger technological voice in the enterprise search arena. But I do not expect the combined HP-Autonomy will be driving innovation that allow customers to realize the benefits of cloud scale, while delivering the security and privacy capabilities that meet the high standards required for legal discovery and regulatory compliance.

Embracing Disrputive Technology

2010-03-25T12:04:00.000-07:00

Interesting article in CIO Mag 3/24 on how growth of disruptive technology will impact the traditional role of IT, its relationship to business units, and how it can operate along side the competing objective of doing more with less.

http://www.cio.com/article/575563/Why_the_New_Normal_Could_Kill_IT?page=2&taxonomyId=3000

Given the fragile state of the global economy, the furious adoption of consumer social networking tools, and the ongoing cry to squeeze out more cost by band-aiding aging legacy infrastructure, CIO calls for a new model of collaboration between IT and business that breaks existing paradigms. Amongst the recommendations, the article calls for:

A New IT Mindset:
- engaging with business has to change from an autocratic mindset to a partnership one;
- traditional business processes resembling "replication and incremental refinement" have to shift to "disruptive and transformative";
- infrastructure management moves from "reliable and expensive" to "flexible and cost effective";
- enterprise apps strategy consisting of "on-premise mega-vendor apps and legacy suites" evolves to "augmentation with best of breed solutions in hybrid deployments."

All good, but how does the existing shtick between IT and business impact "disruptive" technology exploration and adoption?. By disruptive, I am referring to any non-incremental technology that fundamentally changes the way the individuals perform their tasks and how the company delivers value. I do not throw a blanket over every chic web 2.0 and social networking gizmo, nor even cloud computing in its entirety as it is often focused on reducing cost or improving the manageability of systems.

'Externally disruptive' innovation that creates differentiation in the market is not the focus here. What is more relevant to the IT/Business dialog is internal disruption, where new methods are devised to reach customers, and where existing boundaries of IT policy are stretched. Many examples: the use of Twitter inside the company as a collaborative tool; the creation of blogs and Facebook pages created by company employees, but that are used by prospects and customers for product or market information; the use of employee-owned smart phones that are increasingly useful for business tasks, such as the delivery of proposals and marketing information. Information clearly has the ability to move with greater fluidity - yet many companies lack consistent processes to select the appropriate solution, do not have meaningful measures to determine the impact upon productivity, nor policies that define what is acceptable and what is not. As the article points out, one of the biggest obstacles to overcome is simply IT risk avoidance, where the old paradigm of carefully testing and managing the roll-out of new technologies is now clearly dated.

Don't Be Afraid of a Little Failure
- It is imperative for CIOs is to explore and experiment with disruptive technologies (Web 2.0, social media, cloud computing) that users and customers have embraced. But IT can't be intimidated by failure, said several leading CIOs. CIO David Grooms added: "You should try and fail really small.... You test, take some risks, adjust and go back. But you really can't take that long. You can't take three years to develop an app. You must launch and learn."

Clearly, the market is defining a new breed of CIO to emerge that can be the catalyst to drive a new level of IT/LOB collaboration. Business units can lead, IT can vet and enforce, but rules of the game need to evolve first. Companies that successfully manage the adoption of disruptive technology internally will measure their CIO not just on containing IT spend, but also in how they set clear ground rules for the evaluation of new technologies and hold business units accountable for ROI.

Cisco CRS-3 - just a big router? Big Deal?

2010-03-09T14:21:00.000-08:00

Early reports seem to mostly view the Cisco announcement today as a big marketing build-up for a big box router. 'Big Deal'. 'That's what they are supposed to do anyway - follow router #1 with a bigger, cheaper version'. 'It won't make my internet go faster'.

I think some folks are not seeing the Bigger picture, which is essentially: Attention large corporations and service providers: It is Cisco + vmware + NetApp against the rest of the computing universe. Join us for the most complete ecosystem to deliver video-intensive content with a pre-integrated, virtualized, cloud-based infrastructure.

The alliance is not news per se, but it is interesting to see all the components (somewhat) coherently laid out, with video clearly identified as the killer app. An interesting story if you are AT&T, or other major early adopting corporation that is enamored with concepts such as "pre-integrated , virtualized, cloud-based infrastructure" or the "data center of the future".

What is most interesting to me is where this alliance leaves the other industry elephants:
1. HP: clearly and unambiguously on the outside, in particular after Cisco severed the support agreement with HP Services. HP reaction? An end-to-end HP alternative comprised of HP's growing networking portfolio (via 3com), variety of storage alternatives, and other boxes galore. Expect tighter alignment (or at least increased volume of marketing messages) between HP and Microsoft, in particular focused on virtualization and Live Meeting-based collaboration tools if HP wants to play the video card.

2. IBM: another go-it-our-way player, although the opportunity should be large for a tighter alignment between IBM and Juniper on the core networking infrastructure pieces

3. Oracle: likely to see more elephant tap dancing here. Cisco is not going to limit its ability to draw in core database capabilities, so it is likely continue to sing a friendly tune, in spite of the data center vision conflict with the acquired Sun assets.

4. EMC: another co-optitive relationship given the EMC's storage share and existing relationship. There are plenty of models to follow for companies that partner both with EMC Storage and NetApp, so this is most a field positioning issue. In selling this vision to the service providers and large corporations, I think EMC is well served with the strategy of using vmware to plant a footprint, then let the storage guys fight their battles based up installed base leverage.

For customers, these large multi-elephant marketing exercises can be equivalent to swallowing 3 basketballs. So, let's assume actual CRS-3 projects hitting the street will be modular, so that customers will not be asked to make unnatural architectural decisions or have to invest in repetitive architectures. It is a game very familiar to IBM, HP, EMC in the IT infrastructure world, let's see if Cisco has managed to hire in the data center selling strategy maturity to make this palatable. If not, it is just a big box.

In-House E-Discovery Solution Built in a Day? Not so fast...

2010-03-08T11:26:00.000-08:00

Posting today on the eDiscovery 2.0 blog asks, "Can an In-House eDiscovery Solution be Built in a Day?

The answer is neither yes or no, but why?

Sure, you can purchase a tool to address a portion of the eDiscovery lifecycle as quickly as your corporate legal and accounting departments can move contracts through signature routines. Better questions are:
- can you put an in-house solution into production that addresses all phases of the eDiscovery lifecycle in a Day? Probably not, AND
- can you put an in-house solution into production in a Day that addresses your unique patterns and frequencies of litigation, while addressing today's largest cost inefficiencies? The answer is No.

Two good questions that require further analysis:

1. Where should the prudent practitioner begin?

Absolutely agree with the author that a focus on process and solid, fundamental project management discipline is a good strategy to counteract an overabundance of over zealous vendors pitching soup-to-nuts, end-to-end, cradle-to-grave, all-encompassing solutions to a problem defined only at a very generic level. Have seen many a poorly written RFP stating a desire for an "EDRM solution". Well sports fans, there is NOT a shrink wrapped answer to a process involving long lived, multiple linked workflows with evolving requirements and parameters defined by adversarial parties. As the author states:

...make sure the business problem has been well defined and establish detailed requirements before venturing into the marketplace. So, why are so many companies sending out form RFPs containing canned text expecting to find a miracle “end-to-end” e-discovery solution in a relatively short period of time? The answer, I believe, lies both in the abundance and availability of generic information about e-discovery and the fact that most companies looking to bring e-discovery in-house are already feeling the pain of rising costs and demands on existing staff. They are, in short, trying to conquer their e-discovery problem in a day. To truly conquer the problem, it should be attacked from the areas causing the greatest pain and expense first, and those areas should be thoroughly examined using proven project management techniques.

One key element not addressed above is the need to work with a process expert to draw the picture of today's process for managing litigation and ediscovery requests. It is easy to automate processes, based upon whatever tools the consultant or vendor is familiar with or is pushing, or preferences of one or more of the stakeholders. But it is also easy to simply pave over broken, inefficient processes. Great technology dropped into a broken process still produces a bad outcome. Stakeholders in 'As Is' process definition from IT, GC office and outside counsel, and RM need to be involved, but they should not lead the exercise. Bring in an in-house process shark, or hire an outside legal consultant - ideally with experience as an "IT/Legal liaison", i.e. knowledgeable of legal technologies as well as corporate legal department litigation workflows.

The importance of this exercise cannot be understated if an organization seeks to be thorough in assessment of both risk and cost reduction to ediscovery processes. The need to complete this exercise should make the answer to the "Can an In-House EDiscovery Solution be built in a day?" Why would you want one in a day?

With executive sponsorship and the appropriate process knowledge, this exercise does not need to be overly time consuming. But clearly, companies will need to actively fend off a variety of technology vendors aggressively pushing products and their cost reduction stories in order to close a software deal before end of quarter.

2. How does the company decide which portions of the e-discovery workflow to bring in-house?

Big question faced by most large organizations today. Unfortunately, the answers provided by this article stops short.

The answer is relatively simple: you follow the money (right out of the front door in many cases). Where is the company spending most of its e-discovery budget, and are those portions of the workflow good candidates to bring in-house? Typically, processing data and review are the most expensive phases of any e-discovery project. The logic here is simple: if you send 100GB of ESI to outside counsel to review, it will be more expensive and time-consuming than sending only 20GB. Thus, processing, analysis, and first-pass review are great candidates to be brought in-house from an ROI perspective, and bringing these phases in-house could facilitate a form of early case assessment given the right solution.

Yes, following the money will reveal that 70-80% of the total cost of ediscovery is outside legal document review. Companies should actively explore process improvements that directly impact legal document review expense, such as

- Approaches to reduce document volumes; both with email archival and records infrastructure that better organize the digital landfill, along with in-house data culling tools

- Improving document review efficiency; by in-house counsel taking a more active role in the selection of preferred review platforms (for either in-house use OR to recommend that outside counsel use in dealing with outside service providers - note, this is key to reduce the finger pointing between outside counsel and service providers over deltas from promised review rates and philosophical disagreement over review workflows)

- Alternative sourcing review to lower cost document reviewers; either by working directly with contract-based review resources, following the Kelly/Half model, or using an LPO

Processing has its own unique workflows and requirements (throughput, accuracy, etc) , with a variety of tools and outside services that should be evaluated separately.

Pointing toward document review cost as the largest cost bucket is simple - finding the appropriate solution to address this bucket is more specific to the company. So, in addressing the question of what components of the eDiscovery lifecycle should be brought in house, I suggest examining the following:

1. What is the past pattern of litigation: is there a type of litigation that represents more than 50% of eDiscovery activity (e.g. IP vs. general contract vs. government investigation, etc). Each category entails different information types, volumes, and custodian pattens. In general, the more homogeneous the pattern, the more suited it is toward in-house management.

2. What is the typical frequency and size of litigation: the more consistent and/or the pattern (e.g. pipelines tend to explode once every 18 months), the better suited for greater in-house management. Exercise: plot previous litigation on a timeline, with each matter represented as a bubble (size of the bubble representing data volume). Dispersion of data by size and occurrence should be a key variable in the sourcing question.

3. What is the typical impact of litigation: does litigation typically involve 'bet the farm' matters or 'slip and fall' - ultimately, the issue of in-house vs. service provider is a sourcing and specialization question - if the nature of litigation is high risk, then "special handling" is merited.

Litigators claim that every matter is unique, but simple analysis of past patterns of litigation can help to set reasonable expectations of the potential time/cost savings to be realized by bringing more in house.

Aside from past litigation patterns, companies should also examine the following in order to determine areas best suited for in sourcing:

1. Existing IT infrastructure and standardization of email, storage, and other electronic content repositories (or lack thereof);

2. Quantity and quality of available skills: what volume of litigation are you staffed to handle today? Do you have tech savvy legal support people? IT folks with at least a high level eDiscovery knowledge base?;

3. Internal experience in using outsourced providers - for example, existing processes and procedures for management of critical IT systems where data flows in and outside the firewall;

4. Company risk tolerance

5. Clarity of ownership for eDiscovery processes - including defined processes for purchase of eDiscovery tools, internal SLAs between IT and legal for discovery requests;

Ultimately, companies that have a more predictable occurrence of small impact litigation - and who are reasonably resourced and ready - can expect to see larger potential ROI from use of in house tools. Those with less predictable, higher impact matters - and those with leaner infrastructure - should expect the returns to be less attractive, in particular when considering the investment in tools and skill development to properly manage the technology. For those in between, expect more to adopt a "hybrid" approach, where they have eDiscovery Playbooks calling for small matters to be handled internally, but the occasional high risk matter sent out for "special handling" as a standard exception to the normal process.

Build an In-house eDiscovery solution in a Day? Not so fast.

What to do when you spot trouble on the horizon

2010-03-05T09:56:00.000-08:00

Interesting article today in Entrepreneur Magazine that describe the dynamics faced by our consulting clients, and where TA2 Consulting can be of greatest value.

http://www.entrepreneur.com/management/article205340.html#

With a start up failure rate of more than 80%, the article points out that

...there are strategies savvy entrepreneurs can use to stop a business from going under. Startup veterans say that when there's trouble on the horizon, entrepreneurs should consider making changes in product direction, cash burn rate, business model, potential new markets and the management team.
Changing direction and market niche is not uncommon. "I think every company we invest in goes through major course corrections before they hit on that formula and really have success," Ibrahim says. He adds that he expects there to be changes along the way. When the sky is falling, CEOs should always be prepared with suggestions and solutions to fix whatever isn't working, he says.

So, who can a company turn to when a course correction is necessary?

For the past 3 years, TA2 has been providing Business Transformation Consulting services, focused on providing a quick, objective, yet thorough assessment of where a company is today - and a recommended set of actions needed for course correction. We do this as an extension of the company's management team and Board, leveraging our hands-on leverage experience in companies such as HP, Microsoft, FileNet/IBM, SFDC, and several start-ups. Our engagements tend to be divided into 3 phases:

1. Provide and evidence-based, candid assessment of where the company is today (20% of engagement)

The objective of this phase of the engagement is to shine a light on the critical issues standing in front of the company today, diving into the details of financials, sales pipeline and funnel, and competitive dynamics. We seek to dive at a more granular level than the typical cycle of QBR/BOD meetings allow, identifying the critical threads that require attention and that can create the potential for greatest short term impact

2. Review existing plan of where you are going (10% of engagement)

Review of 'the plan' operates with the assumption that changes in the market have made business plans written 2 years, or 1 year - even 6 months ago - largely obsolete. In assessing where you are going, our focus is to quickly examine all options that the company and board should consider to move forward - whether they be within the existing business model, or alternatives that should be driven forward to make best use of available resources, funding, and runway.

3. Clarify and execute course corrections (50% of engagement)

A key differentiator of the services provided by TA2 is our ability to not simply provide a nicely produced set of written recommendations, but to actually put those recommendations into action. For this phase of the engagement, we will work with the management team to execute on the financial, sales, and/or marketing adjustments identified within Phase 2 of the project. This phase is typically highly tactical, involving rolled-up sleeves, on-site presence that we provide to ensure that required changes are implemented, status of key issues actively tracked, and progress vs. goals can be proactively measured.

For more information on our services, please call us at (650) 867-9028, or info@ta2consulting.com

Intel Ventures steps up: need followers

2010-02-23T09:33:00.000-08:00

Very encouraged to see a Silicon Valley giant step up with $2B to address the issue of capital shortage amongst new U.S. ventures - and on the same day that Juniper announces a $50M fund.

Details of the "Invest in America" initiative are still to emerge, but Google, eBay, Cisco, and 24 VCs are apparently signed on. The model can hopefully serve as a catalyst to deal with liquidity shortages of emerging stage firms, capital access of new ventures, as well as commercialization support for later stage firms. What Intel has said is as follows:

The chipmaker is in talks with venture capital firms to seek investment ideas. The investment plan would not require raising additional capital, the business daily said, adding that the response to Intel’s proposal was not immediately known.

Intel Chief Executive Paul Otellini is scheduled to give a speech Tuesday at the Brookings Institution, the paper said. Brookings said in its invitation to the event that Otellin’s speech will focus partly on “the need to create a culture of investment in the United States”, according to the paper.

While Intel Ventures is already recognized as one of the largest and most active inside Corp Dev units, the news here implies a new model of collaboration with the VC community that can hopefully address the early stage market constipation that is leaving the early stage world sluggish. If an explicit objective for this model is nailed down and agreed upon by both - e.g. "creating a culture of investment targeting U.S. firms with on-shore manufacturing" - then we have the beginning of a model to address a number of short terms economic issues, namely the creation of U.S. based technical jobs and/or re-sourcing of previously outsourced operations.

As scary as this statement sounds - this would also appear to be the sort of venture that could be supported by state and federal government in the form of tax incentives, such as relief against FICA obligations. Given the current jobs bill in front of congress, perhaps this is not as outlandish as it appears on the surface.

Would love to this "Invest in America" model take hold and be followed by the other SV Corp Dev units at HP, Adobe, Oracle, and Apple. Great opportunity for these companies to take an active role in spurring US innovation and market leadership.

More ECM/Discovery alignment: Iron Mountain acquires Mimosa

2010-02-22T15:27:00.000-08:00

Another pair separates as the ECM/eDiscovery stars continue to align.

http://www.ironmountain.com/mimosa/

While only a $40M company and $110M deal, this move is significant in that it broadens IRM's market access with 1,000 additional customers utilizing Mimosa in front of their Exchange-based infrastructures. This provides greater reach for the IRM Digital's portfolio of SaaS and software offerings, and allows them to directly address large corporations who are reluctant to embrace "cloud-based" solutions with an in-house offering. Having an email archival story also allows IRM to influence a top "left side" EDRM investment decision (email management), and thus add to their "right side" ROI (reduction of document review cost via fewer/better organized needles in the haystack to begin with).

As IRM states, its solution portfolio is now rounded out with:

"Mimosa NearPoint joining a broad portfolio of content archiving, data protection and recovery, and eDiscovery solutions from Iron Mountain Digital. As a valued customer and partner, you now have access to a broad set of tightly integrated solutions for information management to reduce the costs and complexities associated with storing and managing information, while helping to identify and reduce risk.
This combination of the NearPoint on-premises archiving software with Iron Mountain's cloud-based technologies allows us to manage your information wherever it resides - inside your firewall or in the cloud. This ability to archive and manage your data on-premises, in the cloud or through a hybrid model provides you with greater flexibility and choice for managing your information.
With "location-independent" archiving, we will help you transparently and seamlessly move data between the on-premises data center and the cloud.
IRM can now offer you a complete end-to-end eDiscovery solution by combining NearPoint for collection and preservation, with Stratify eVantage, an on-premises eDiscovery appliance for early-case assessment, and Stratify Legal Discovery services for review and production"

Competitively, this move also opens up new potential channel plays for IRM given Mimosa's tight architectural alignment with Outlook and partnership with Microsoft. This could be interesting as MSFT continues to lag in its discovery efforts, and IRM could craft an interesting story for companies who might otherwise consider Symantec or IBM for email archiving.

Nobody wants to forklift an existing email archive, so companies have become much smarter in avoiding investing in technology today that can become a major IT migration task later. Having a variety of deployment options appears to be a great 'pain avoidance' selling point for IRM to exploit.

As IBM appears content with rolling out a full information governance/GRC suite that appeals primarily to its existing installed base customers, the next ball is in Symantec's court. Expect them to react with either more emphasis on partnership with data analytics and culling technologies, eDiscovery review platform providers, or with service providers that can bring depth of knowledge around eVault.

NBC Olympics - classic example of old media lack of new world understanding

2010-02-18T12:16:00.001-08:00

Unfortunately, the Olympics are the latest victim of an old school media company not understanding the impact of social media, real-time data access, and time shifting. Innovators in the new world of converged media they are not.

- I don't want to wait until 11:00pm to see Shaun White fly, when he had landed 7 hours earlier

There is no economic or technological reason why NBC can't STREAM events LIVE to those sports junkies who want to see sporting events as the occur (2 examples yesterday, hockey to come). They can continue to package up the made-for-TV stuff on tape delay for those who want the human interest angle. They lose NOTHING, as the broadcast streams are a sunk cost. Since these are largely different audiences, seeing something via live stream as it happens will not have a significant impact on prime time viewership.

At very minimum, for NBC to go to the length of blocking any streaming sites originating for US-based computers - further highlights how far NBC has its head in the sand.

This is just another unfortunate example of what has been demonstrated elsewhere - NBC has a fundamental lack of understanding of new media. Too much information flows instantaneously today via Twitter, live web streams,etc and with time shifting technology such as Tivo now prolific. NBC just doesn't get that attempting to control content so that it can be presented when they want, how they want are over.

Silicon Valley reinvention

2010-02-11T10:51:00.000-08:00

Given yesterday's report on the state of Silicon Valley, how should the Valley deal with these issues? How does it "re-invent itself"?

Up until this current economic decline, I would have advocated an answer of "we are the center of the technology universe. Best universities. Biggest magnet of talent. Sand Hill Road. Just stand back and let market forces do their work"... something akin to magic wrapped in osmosis sprinkled with IP fertilizer would lead to perpetual market leadership. Come on, we ARE Silicon Valley.

Today, I'm not as strong a believer in that formula. Not with many of the leading technology firms based here, and doing better financially of late. Not with many of those firms lobbying for increases in H1-B Visas while the State lingers with 12.5% unemployment, and declining funding for education. Not with the term "jobless recovery" becoming more than a theory as companies have become quite adept at squeezing increasing levels of productivity out of smaller workforces. And, most importantly to this economy, the small business engine is sputtering because of the lack of access to affordable capital as the VC and comparable channels are largely hunkered down performing triage on their existing portfolios.

Potential solutions? Likely to be 'in the box platitudes that get bogged down into endless duels of ideological, political and economic models. Small government and reduce the budget deficit vs. find the right formula to stimulate growth. Task force and roundtable hell.

Some ideas?
1. Selective use of tax credits to achieve specific goals. For example, $1,000 per employee hired in CA, $1,500 for those new hires that are offset against quarterly decreases in off shore investment
2. FICA relief for hiring those that have received unemployment benefits for more than 3 months
3. Funding expansion of university engineering programs that are currently impacted. Underwritten by Google, HP, Intel, Cisco, Apple with bankable tax credits - that would at least provide a longer-term stake in the skill development issue versus seeking immediate gradification via H1-B Visa holders
4. Drive partnership with the VC community to bring forward early stage ideas to market-ready products. Start with GM to use idle facilities (e.g. Nummi) and GM to build competing prototypes - similar to the NASA unmanned vehicle competitions
5. Increase state grants and provide short term tax exemptions to new ventures formed in partnership with the state's top engineering programs, to tighten the linkage between education and innovation.

Because the future of Silicon Valley and this country's position of innovative leadership is at stake, the time is now to think about game-changing formulas for business, financial, and government collaboration, that can get us beyond the tired, "big government vs. cut taxes, reduce deregulation and jobs magically appear" endless rhetoric.

Innovation: The Silicon Valley Challenge

2010-02-10T15:41:00.000-08:00

Article in the NYT today describing the risk to Silicon Valley in the current economic downturn, and implications for innovation.

Silicon Valley’s economy is sputtering and risks permanently stalling, according to an annual report by a group of researchers in the region. The region lost 90,000 jobs from the second quarter of 2008 to the second quarter of 2009... The drop in the number of midlevel jobs — the engineers who drive much of the Valley’s growth — has been sharpest. And when companies do hire, they are cautiously hiring independent contractors instead of regular employees, and are hiring abroad, according to the “2010 Index of Silicon Valley” report, which was produced by the Joint Venture: Silicon Valley Network and the Silicon Valley Community Foundation, two local nonprofit groups.
Other economic indicators are also gloomy, the report found.
“We show no evidence that the recovery has arrived,” said Russell Hancock, chief executive of Joint Venture.

While lower VC funding and patent registrations are down, the report also calls out longer term issues of brain drain and the lack of funding for capital intensive industries that fueled SV's initial claim to prominence.

Factories that once made chips would have to be revamped to make solar panels, and venture capital firms are unlikely to be able to provide enough money to build such capital-intensive companies. Venture financing of green technology companies slid 37 percent last year.
With green technology, “it’s not whiz-bang software guys in garages, but utility-scale projects you must do with a federal partner”.

So what are the implications to the nation's economic recovery?

Silicon Valley’s poor economic health will affect the nation as a whole, said Judy Estrin, former chief technology officer of Cisco Systems and author of the book “Closing the Innovation Gap". “Silicon Valley is both a barometer of the rest of the country and a spark for the rest of the country, and if we don’t protect that innovation culture here, it’s going to be hard to sustain an innovation culture in the country,” she said.

Innovation: work together or die alone

2010-02-04T16:04:00.001-08:00

Speaking of innovation, an interesting article NYT op-ed from a former MSFT exec speaking (http://www.nytimes.com/2010/02/04/opinion/04brass.html?partner=rss&emc=rss). He asks the important question:

...why Microsoft, America’s most famous and prosperous technology company, no longer brings us the future, whether it’s tablet computers like the iPad, e-books like Amazon’s Kindle, smartphones like the BlackBerry and iPhone, search engines like Google, digital music systems like iPod and iTunes or popular Web services like Facebook and Twitter...Microsoft has become a clumsy, uncompetitive innovator.

His assessment: Microsoft never developed a system for innovation (hence, lack of ability to serially innovate). Consequently, the company has been too early in some markets and too late in many others. However, in his view, the larger issue is unmanaged internal competition that is afraid to challenge corporate cash cows:

Internal competition is common at great companies. It can be wisely encouraged to force ideas to compete. The problem comes when the competition becomes uncontrolled and destructive. At Microsoft, it has created a dysfunctional corporate culture in which the big established groups are allowed to prey upon emerging teams, belittle their efforts, compete unfairly against them for resources, and over time hector them out of existence. It’s not an accident that almost all the executives in charge of Microsoft’s music, e-books, phone, online, search and tablet efforts over the past decade have left.

Others have compared Microsoft today to what IBM was in the late 80's and early 90's - profitable, with enough financial and technical resources to place enough bets and get a few right that pay for all the failures. I witnessed the same at Sun in the mid to late '90's - clearly instilled Adam Smith-inspired values of getting resources by outdoing other internal groups. It is a great strategy, as long as emerging, game changing ideas have an equal seat at the table relative to the established revenue producers. You need to have flexible boundaries to extend or redraw functional ownership. Apple has demonstrated an affinity for this. Sun failed. Will see how long it takes for the clumsy, uncompetitive innovator to get it right in providing usable software for the converging mobile/tablet/laptop game.

Innovation: Apple and category creation

2010-01-28T08:49:00.000-08:00

If there is such a thing as a serial innovator, you witnessed it yesterday. Lost track, but I believe this is the 5th category-creating product release from Mr. Jobs (excluding non-Apple ventures) following the original Mac, iPod, iTunes, iPhone. Will give earlier versions of the iStore their due, as well as the success of selling computers through one's own retail channel, which is more about design and execution.

Why is this an example of serial innovation? Look at the reactions:
- "I don't need a 3rd device"
- "$500 for a color Kindle? Come on..."
- "Microsoft and/or Google will respond in their NEXT release"

All of these comments are missing short term facts and long term impact.

1. MARKET NEED: "I don't need a 3rd device" - how many people had need for a portable music player prior to the iPod, or managed to pick up their Walkman more than a few times? How many were concerned about the security of downloading music online prior to iTunes? How many did anything with their phones other than calls prior to iPhone (excluding the Crackberry heads). Apple is clearly centered on category creation - something you rationally cannot justify, but will likely buy anyway. Why?

2. CATEGORY EXPANSION/EXTENSION- "$500 for a color Kindle? Come on..." - As Jobs stated very well, this device builds upon the success - and mainstream, eBook category creation - executed by Amazon. Will it kill the Kindle? I don't think so, as there clearly is a market segment that is quite satisfied with a single purpose devise that performs 1 primary task better than anyone else. Don't bother them with email, games, video, etc. But the iPad can clearly extends that market by defining a market segment would see value in a multi-purpose devise and a 'good enough' feature set for reading. I see this as TAM expansion for Kindle as opposed to the opposite. Bezos should be thankful.

3. - MARKET VISION: "Microsoft and/or Google will respond in their NEXT release" - operative word, NEXT release. Who knows where Android goes, but MSFT clearly has an uphill battle in this space because of the inherent limitations of Windows in managing a touch-based interface. This illustrates the lack of ability to see the big picture - this release is NOT about the 1980-90's battle for OS supremacy. IMHO, it's significance is the ability to utilize a single platform and environment to build applications that can transcend computer, mobile, and home entertainment. Many companies have expressed an interest in participating in this 'integrated home information platform', but none have an underlying platform that are well suited to the unique requirements of each sub-segment. From that standpoint, the initial iPad is simply a transitional product release, in providing a 'proof-of-concept' that the iPhone-based development environment can deliver rich applications on a larger scale. Be clear, this is a future replacement of the home-based computing environment.

Serial innovation - the systemic ability to create market demand by redefining the way products are utilized, the ability to extend and expand current markets, and deliver tangible next generation functionality aligned in the pursuit of a clear, longer term vision

2010: the year of M+A in high tech

2010-01-11T10:20:00.000-08:00

The year is off to a fast start. Progress buys Savvion today essentially ending the stand-alone BPM market, lest the lone holdout Pegasystems. Expect a continuous flow of M&A throughout Q1 as valuations are cheap and under capitalized companies realize the Q1 is doing little to improve cash flows and market prospects. Some players expected to keep corp dev staffs very busy:
1. Cisco continuing to build out its data center portfolio, in particular in the area of systems monitoring tools
2. HP - notably because they are now hell bent on Cisco. Expect the software business unit to remain very busy, in particular adjacent technologies to complement the somewhat lonely 3Com acquisition
3. Further swallowing of stand-alone eDiscovery players into ECM and storage leaders. Would place Clearwell, Guidance, and StoredIQ on the top of the list, with IBM, Symantec, and EMC on the other end;
4. Remote and cloud-based management and monitoring tools by HP, IBM, and Oracle
5. At least 1 other mega-deal - would bet on SFDC, Tibco, and/or Open Text

Business Tranformation consulting

2009-12-15T12:03:00.000-08:00

The unprecedented turn in the market has caused a number of small firms (i.e. less than $5M revenue) to question whether the assumptions used in building their business plans continue to be valid. Across most sectors of the technology industry,
- downward price pressures have intensified to unprecedented levels
- internal costs continue to be squeezed - impacting planned marketing, demand creation and lead generation investments
- meanwhile, access to additional funding remains tight and relatively unattractive

This has lead executives and board members to ask some fundamental questions:
- Is the plan as written still valid? If not, what assumptions need to be adjusted?
- Does the existing Go-To-Market strategy make sense for 2010?
- What does today's funnel math say? How feasible is it to generate sufficient top-of-the-funnel activity to produce revenue targets?
- Should we consider operational adjustments or explore other strategic options?
- Is there a viable business here?

Business Transformation Consulting (BTC) focused on providing a quick, objective, yet thorough assessment of where a company is today - and a recommended set of actions needed for course correction, including pursuit of new strategic options. TA2 offers BTC under a flexible engagement model to quickly move from strategic assessment to action. See more information about the specific competencies offered by TA2 in the attached PDF.

Bus Dev lessons learned

2009-11-18T14:21:00.001-08:00

Recently completed a short business development engagement for a medium sized ECM service provider. Amongst other things, the project was a reminder of how companies can easily fall into the same traps that cause bus dev programs to fail to meet their objectives. Here are some of the most common pitfalls I see companies falling into:
1. Lack of clear tie to an over-riding business goal - I have found this to be particularly problematic as business development by its very nature impacts multiple functions and can affect revenue, product strategy, and market awareness. Without goal clarity, it is easy to sub-optimally pursue all of the above with mandate of simply "make things happen". I feel that having a commonly agreed upon measure of success with executive sponsors is critical before setting short term objectives to ensure the team is aligned.
2. Related to #1 - Lack of a clearly identified internal sponsor - business development priorities tend to shift, as do those who initially approve the decision to invest in this function. Because of the lack of a full functional food chain (except where VP Bus Dev aligns to CEO), it is easy to become misaligned with top sales, product, and marketing tactical goals - and easier to become vulnerable during business downturns. Remaining focused on building external relationships, while staying tuned into internal dynamics, is a very common challenge by small and medium sized companies
3. Its a 'Give To Get' game - building relationships with larger entities requires investment, whether that be more aggressive support schedule for a new platform, joint marketing commitment, or dedication of selling resource. Unless a company finds itself in a very strategically attractive position, it is tougher and tougher task to simply get stuff for free. Failure to commit resources is a quick and easy way to shut down mindshare from a potential partner.

It amazes me how many projects I have encountered where at least 2 of these issues are present. Recognizing and addressing this issues up front is the only workable solution I have found in order to avoid bigger issues later.

Alliance Use Case - ECM and eDiscovery

2009-10-16T11:42:00.000-07:00

One rationale for investment in strategic alignment are market shifts that bring previously distinct markets into closer alignment - or potentially direct collision. One good current use case is the potential collision of eDiscovery and enterprise content management (ECM).

Having experience in both sectors, it is clear to me that you have 2 distinct communities that have historically used completely different vocabularies to describe 2 different usage requirements and workflow needs - but both describing actions to be performed to the same set of documents.

So, what changed? Several factors: 1) legal requirements mandated via FRCP, 2) a drive amongst major corporations to be as cost conscious as ever before, and 3) the continued evolution of in-house tools that have gained traction based upon their cost reduction claims.

Even so, many firms continue to react to litigation with internally disruptive processes and incur unnecessary expense by handing volumes of irrelevant data to expensive outside legal counsel for review. Some legal departments have attempted to address this cost issue by investing in stand-alone tools to perform up-front data culling, but several questions are raised:

- Can companies manage legal stand-alone tools with the same standards as their enterprise IT fabric?
- Can IT, legal and RM investments be agreed upon by key stakeholders with common criteria?
- Can eDiscovery tools and ECM infrastructure just get along?

So now the alliance and M&A fun begins. Autonomy buys a portfolio to create a search-centric approach, IBM develops it eDM and eDA tools on top of its P8 infrastructure; EMC partners with Stored IQ, then buys Kazeon. Everyone else (Open Text, Oracle, Symantec, Mimosa, Guidance, Clearwell, etc.) has to be in the midst of the buy vs. build vs. partner conundrum.

For those riding the co-existence approach, TA2 can help ECM providers understand the eDiscovery domain, and vice versa. ECM providers must position their solutions within the confines of a framework such as EDRM, and eDiscovery providers need to define their value in terms of an over-all GRC strategy. This requires definition of joint value propositions of existing solutions within the partner's framework, as well as expertise to provide business development support to mixed legal/IT audiences, who will not view the issues or selection criteria similarly.

But first, it requires the ability to speak the language of the other's domain. TA2 can help.

Setting Strategic Alliance Objectives

2009-10-09T12:08:00.000-07:00

So, how can a company set objectives for alliance activities? This is where many companies struggle, and often delay investment because the perceived lack of ROI.

I believe a part of this struggle can be tracked to the definition of strategic alliance - it is a relationship that impacts multiple functions within organization, and impacts marketing, technical, product, as well as sales functions. The challenge is to define and measure value with respect to less quantifiable goals such as increased market access, a more complete product value chain, etc. This is one reason I have found senior executive to be binary in their view of the value of strategic alliances - they either get it or they don't.

Hence, the attached diagram above. With axes of importance and maturity, alliance rankings can be mapped. Embrace is a fully monetizeable relationship, support both by revenue goals as well as product, technical, and marketing goals. These ripe relationships are successful based upon competitive impact. Grow is probably the toughest quadrant to manage, as strategically important, yet less mature relationships can move in many different directions. These relationships move upward based upon mind share gain and instituionalizing the joint value proposition across both organizations. Reactive relationships are important, but perhaps in fulfillment of only a single functional goal. They require response, but not incremental investment. Maintain is probably the most straight forward - these relationships need to be supported with goals of increasing self-sufficiency and reduced transactional cost.

Use of such an approach to differentiate relationship value, the goals for each category and investing according to those goals are key to sucessful alliance programs.

Strategic alliance investment prioritization

2009-10-07T14:46:00.000-07:00

Practically speaking, how does a firm use an analytical model to set alliance priorities? Sounds simple enough to follow a hierarchical portfolio approach, but many companies still end up following tactics that scramble for attention from market leaders and/or spend unnecessary cycles fending off partner-wannabees that are willing to through a deal on the table.

While one cannot expect to eliminate reactive approaches entirely, we have found best practice in 1) using some method to quantitatively create a pecking order, 2) develop discrete tiers where common objectives can be established for firms in that tier, and 3) explicitly assign resources and investment allocation - independent of funding level. In other words, 1 resource should be able to build a plan to provide minimal coverage based upon this allocation; this allocation can then scale as the organization can apply additional funding.

TA2 has successfully deployed this model within a variety of SaaS and enterprise software providers - helping those firms to satisfy year 1 objectives and build an approach for future growth.

Strategic Alliances - Need, Fit, Reach, Maturity

2009-10-06T15:08:00.001-07:00

To continue from the previous post, 'strategic' alliances are relative. What is needed is a model to prioritize the existing and potential value to be derived from an investment in alliances. I've used the following approach in multiple environments with success - Need, Fit, Reach, and Maturity.

One important note - these items can be assessed via a simple scoring approach, or weighted based upon agreed upon executive management priorities. Also important to note that the weighting should consider the perspective of the partner as well, not just that of the firm.

1. Need: assess the scope and scale of the needs that can be addressed by growth of the alliance. Highest scores address each of the following:
- Company Need: Addresses a clear and immediate product or technological need as expressed by existing customers, or required to pursue new opportunities
- Product Need: Fills a product or technological hole, or extends basic product or architectural capabilities to improve alignment to identified market or customer opportunity
- Partner Need: Fills an existing hole in each other’s partner portfolio that is currently unsatisfied by other partnerships

2. Fit: Extent to which partner capabilities are complementary to the firm's capabilities. Highest scores address all of the following:
- Strategic Fit: in pursuit in common goals or aligned against common enemies
- Architectural Fit: consistent architectural base/philosophy
- Feature Fit: product integration does not make joint bids uncompetitive; road maps are not on collision course
- Market Fit: both companies can compete more effectively vs. common enemies
- Solution Fit: integrated products provide logical base relevant to vertical or functional solution strategy
- Customer Fit: percentage of existing customers using partner technology, and/or strong overlapping funnel

3. Reach: Assessment of the value of assets that extend internal capabilities. Highest scores address all of the following:
- Technology Reach: access to incremental pools of technical resources or expertise
- Market Reach: market presence, brand name awareness, market coverage/footprint, company size
- Customer Reach: access to, and knowledge of, buyers and influencers beyond those generally accessible via standard sales processes

4. Maturity: Assessment of the ability and effort required to execute on joint initiatives. Highest scores address all of the following:
- Organizational maturity: have FileNet & Partner had previous success with this type of relationship?
- Alliance Maturity: Presence of multiple, well established executive level relationships
- Product Maturity: State of current product integration, and investment required in order achieve partner’s desired level of platform support
- Solution Maturity: depth/breadth of partner awareness, and level of expertise around key joint initiatives
- Customer Maturity: quantity/quality of field engagement, existence of common customers and reference accounts

Once the assessment of each existing and potential alliance has been complete, prioritization of investment can be completed using a portfolio model that will be described in subsequent posts.

Strategic Alliance defined

2009-10-06T14:15:00.000-07:00

First, some terminology to sort out.

What is the difference between a strategic alliance and channel partner? Between an 'alliance' organization versus 'business development' team? Are they all synonymous concepts?

At this highest level, I think it is easiest to view strategic alliances as relationships that impact multiple organizational functions (sales, marketing, product, technology) - not just act to fulfill revenue. In doing so, they can have material impact on the competitive trajectory of a firm. For example, I started with BroadVision when the company had less than $20M of trailing year software revenue. My task was to use companies like HP to help the company appear big, and thus more formidable relative to the IBMs of the world and less hampered by the ankle biters at Open Market, Connect, etc. So we descended upon Cupertino and Palo Alto, and spun up a value proposition that appealed to HP Services in their fight with IGS. We landed a couple of quick wins which gained internal attention. We found an internal alliance organization desparate to make it appear that HP was in the ecommerce game (which it effectively wasn't). We were able to trade off some high profile positioning in a few HP ecommerce marketing campaigns against some future commitments to support some obtuse HP product initiative (of which there were many). We used to buzz to help secure a win inside of HP. These activities impacted sales, marketing, product and technology direction. All of which put BroadVision on a different competitive plane that opened doors to Citibank, Home Depot, Wal Mart. This was a strategic alliance.

Note that the term 'strategic' is not binary - it varies by the extent of the NEED, the degree of FIT, the amount of REACH, and level of MATURITY. By measuring an alliance on each of these criteria, an organization can PRIORITIZE the energy and investment in places in building these relationships, and can build and scale a program in a way that directly coorelates to company objectives.

More on NEED, FIT, REACH, MATURITY, and PRIORITIZATION models to follow.

Inorganic growth

2009-10-06T13:56:00.000-07:00

What? Counter-green movement? Non bio-degradable?

Offering consulting services focused on inorganic growth essentially entails exploring and using any available resource to address a market - other than those you already own and pay to address the market. If today's model entails use of an expensive direct sales force, inorganic means channels, alliances, self-serve, referral-based and everything else. If you can measure the difference between your Total Available Market (TAM) and Served Available Market (SAM), this is essentially SAM expansion. Managing resources you control is an understood task - building mindshare and incenting those you don't to act in your behalf is more difficult.

TA2 can help you to identify and qualify the inorganic. New geographies. Alternative channels. Alliances that create unique combined value propositions. SAM expansion.

About TA2 Consulting

2009-10-06T13:16:00.000-07:00

To describe the objective of TA2 is simple - we are focused on helping companies to identify and capitalize on new revenue streams. Sometimes fulfilling this objective is well defined and straight forward - such as for those seeking to establish strategic alliance programs that had not previously existed, or to take on a new geographic market, such as Latin America. Sometimes it is more challenging, such as defining a new method of reaching a market via hybrid channels, or in executing a complex OEM or reselling relationship.

I have operated TA2 since 2001 and have found that the ability to help companies with this task requires versatility, out-of-the box thinking, and experience in working with multiple set of organizational sizes, cultures, and decision making styles. Getting things done inside a complex organization is the 'science' - the art is being able to understand the style, objectives, and cadence of the firm or market you are attempting to work within. This is what I bring to the table - the ability to work without structure, or without complete tactical definition or game plan, or within a dynamic market undergoing major disruption. This value comes from many lesssons learned within several well run organizations (Anheuser-Busch, HP, FileNet), and many more growing pains in high growth firm (BroadVision) and those within economically challenged, competitively brutal markets (too many to name). All of which TA2 to offer unique, hands-on insights, a blend of strategic and tactical perspectives, and a proven track record of accomplishment - not just intellectually interesting consulting deliverables.

More info on services and typical engagements to follow.

- rc

Welcome to TA2 Consulting

2009-10-06T12:58:00.000-07:00

This blog is focused on providing information on TA2 Consulting and its Principle, Robert A. Cruz Jr. Target audience for this blog are companies interested in exploring the services and expertise offered by TA2 in the areas of strategic alliance development, channel management, emerging market analysis, as well as short-term operational assignments.

Mr. Cruz is based in San Mateo, CA., and brings more than a decade of business development, sales, and strategic planning successes to TA2. Mr. Cruz also serves as Vice President of Business Development and Strategic Alliances for Daticon EED, a major provider of Saas-based eDiscovery solutions. Prior to EED, Mr. Cruz served as Vice President, Strategy and Business Development for Adomo, Inc., a provider of converged communications solutions. Within that role, Mr. Cruz served as advisor to the CEO and Board of Directors in a variety of strategic initiatives, including participating in the deal team whose activities culminatined in the company's sale to Avaya. Earlier in his career, Mr. Cruz had served in a variety of sales, business development, and alliance management roles for industry leaders including FileNet Corporation, HP, and Sun Microsystems, and emerging stage firms including BroadVision, Inc. Mr. Cruz holds an MBA from Stanford University Graduate School of Business.

More information to follow on the specific services offered by TA2 Consulting.