Clouds of common sense

I came across this article today, and it gave me a pleasant surprise.  I’ve had the public/private cloud debate many times over the past year, and to me a private cloud always wins. Basically it boils down to this, if your data is so valuable, why on earth would you put it in a public cloud? Yes, there’s the cost argument, but that’s like being back in 1999 and having a hosting company host your site. It’s a only short term solution because the costs will and do come down.

I’m also glad that CFO’s are wising up to the OpEX shuffle. It struck me as bizarre that no one ever bothered to look at the long term implications.  It’s like everyone was managing to the next quarter, maybe next year. But what about 3,4,5 years out – oh, right, someone else’s problem because you won’t be there anymore.

Lego goes beyond marketing

What’s impressive about this Lego story is that it highlights how a company, a toy company, goes above and beyond to fulfill a wish. Does Lego score branding points, sure, but that wasn’t the purpose. They simply wanted to make a fan happy. And as a result they made the rest of us Lego fans happy too. Nice work Lego.

Sorry, it is the product.

So I just read Mary Jo Foley’s take of the Sinofsky exit.  She seems to be leaning more towards politics rather than product as to why Sinofksy is gone.

Here’s what she’s saying  (in a nutshell – please read her post).

  1. Sinofsky railroaded his vision over others.
  2. MS is now going to focus on collaboration, it’s clear – because it’s in the proxy.
  3. Since 2) is the going forward focus and 1) is also true, then ‘hit the road Steve’.

Seriously? What kind of company would MS be if this is how they treated their senior executives?  Why would you work there if you were just an average employee? (I’m sure Google, Facebook, or Amazon are hiring)

Look I’m not a fan of Sinofsky but he is a skilled executive and for MS to cast him aside for ruffling some feathers is just ludicrous and simply a waste of value.  And lets face it, is this really the first time that Ballmer is hearing about this? Really? I hope not.  I mean, his “politics” where acceptable leading up the launch – you know that product MS is betting its future on –  but now, whoa, sorry Steve. And who really gave Sinoksky this power – Ballmer. Even Forstall wasn’t forced out due to politics alone – it was the product and what followed.

I simply don’t buy the politics argument. Was it a factor – sure. Was it the the main reason. – no. And if Win 8 is a run away mega-hit then his politics would be forgiven or at least tolerated. So to me, that leaves only the product.

Sinofsky is shown the door.

I should have guessed this was coming when I read this morning that Ballmer told a  French interviewer that Surface sales were “moderate”. When you are a Goliath like Microsoft the term moderate == underperform == fail. You when spend that much money and have such a large existing user base you expect more than moderate.

Though one can’t really say this hasn’t been coming for months now. Afer all the whole Windows 8 launch/reception can’t be described as euphoria.  So now the question becomes, when will Windows 9 come out and will be look more like Windows 7?

 

 

 

Renters of Capitalism

Today I read a Fortune interview with Jack Bogle and he used a phrase that intrigued me  – ‘renters of capitalism’. The phrase describes an investor which has a short term focus. This type of investor is a speculator rather than a long term owner of the stock. Jack didn’t get specific on how one defines short term or long term shareholders, but a recent article in Harvard Business Review does.  In “What Good Are Shareholders?“ Justin Fox and Jay W. Lorsch point out that the average holding period for investors has dramatically shrunk. They report that:

In the 1950s the average holding period for an equity traded on the New York Stock Exchange was about seven years. Now it’s six months.” 

Their article covers broader shareholder issues and it’s worth the read. I just wanted to highlight this piece of it to give some perspective to Jack’s phrase.

So if you ever wondered about, or were frustrated by, a company’s focus on the short term – this is a good culprit.

Why GM’s Randy Mott has it right

Ok I confess I am not a fan of GM. You know why? Because I owned a early 90’s Pontiac Grand Am – so there! That was about 20 years ago now and I still remember telling the service manager that I’ll never buy another GM. (still true)

But this post is not about old GM, it’s about today’s GM and their new CIO Randy Mott. Now I’ve never met Randy and probably never will but I will say he’s got it right. If you haven’t seen the recent news well here’s the quick jist of it. GM, under Randy’s watch, will reverse their current outsourcing strategy and bring most of the IT work back to GM staff. You can read the very long version here.

Put aside the difficulty of executing this strategy for a second and then ask yourself why the change? I believe that it fundamentally boils down to the fact that current vehicles are nothing without the software. If that sounds ridiculous or grandiose – it’s not. I stole that from Marc Andreessen who said the excate same thing about Apple and Jawbone in Wired. You can split hairs and say that Marc is mainly focusing on true tech companies and that’s clearly not GM.
Well guess what, GM IS a tech company – just like (surprise!) Caterpillar. Last week at Fortune’s Brainstorm Tech conference in Aspen, Colorado, their Chairman and CEO Doug Oberhelman spoke about how important software is to them. He credits software for making the diesel engine more efficient, and that many of their 500 yearly patents come from software.

So is Randy Mott taking – as Chris Murphy states in the InformationWeek article – a  “high-risk strategy”? I’m sure Chris would agree that strategically this isn’t a large risk, it’s the logical conclusion of GM checking out the weather charts and having a “come to Jesus moment”.  The greater risk strategic is to do nothing at all. Innovation has lead to cars which are no longer purely mechanical creatures and with electric cars on the horizon,  it’s the software that has the ability to shift the competitive landscape.
Executing this strategy is however a maelstrom of risk. Conjuring up strategic vision is simple, anyone with a napkin and a pencil can come with a pie-in-the-sky plan. The hard, long, and tricky part is ALWAYS executing the strategy. I’m sure Randy will have a lot of 9 to 9 days in front of him and Mondays will really be a bitch, but if it works he’ll set GM up for the future.