Nov 7, 2008
"How do you take a country off oil?" is the business problem he's trying to solve. In his model, you are charged for the miles driven and not the battery. The price of a battery and electricity is $0.06/mile for an automobile. In his startup's model, the battery is not part of the purchase price of the car. He will build the network and will purchase electricity to charge batteries. Israel and Denmark are introducing significant taxes (60% - 180%) of the purchase price of gasoline-powered cars as an incentive to drive the adoption of electric cars.
Renault-Nissan will manufacture the initial eletric cars that will be used on Shai's electric network. The cars will arrive between 2010 and 2014.
- When Digg launched, Kevin kept his day job and worked on Digg in the nights and weekends.
- He hired his initial developers on elance-- one in India and one in Nova Scotia. This worked initially, but he hired local developers as the site grew to deal with scalability issues.
- As the founder and CEO, he was the face of the company. He recommended Gary van der Chuck - "Personal Brand."
- Start a podcast. It's a very cheap way to get publicity.
- Use the blog to get PR.
- Even now, Digg is launching new products with rented servers and Amazon S3 for storage.
It's funny seeing these guys on stage. On Wednesday, I asked the Microsoft guy to "keep it down" during one of the sessions.
- They developed their platform on open web technologies.
- There are different levels of platform, some that are application-specific and others that are more general.
- They are interested in advancing the capabilities in the underlying platform, such as the web browser.
- In the battle of Windows vs the Web, the Web has won.
- The platform: (1) drives activity in the ecosystem by enabling users to contribute, drives the creation of new ecosystems, such as virtual goods, and (3) is a great marketing vehicle.
- The platform allows developers to create new engaging experiences and monetize those experiences.
- The Travel Channel developed a Facebook application that generates more traffic than their dedicated web property.
- Feedback from developers is critical.
- 400,000 developers signed up for the Facebook platform, which far exceeded the goals from the original business plan.
- Facebook announced a collaboration with Salesforce at the Dreamforce conference.
- Building a platform with 3 goals: (1) comprehensive platform, (2) choice, so you can take what you like, and (3) take advantage of computing power available on the client.
- As you introduce new versions of the platform, compatibility with previous versions is important.
Elon is also starting two other start-ups:
- Solar City: solar systems available on a lease basis for residential and small business. Recently completed a large financing round, 3x the previous round.
- SpaceX: a 6-year-old start-up dedicated to space exploration technologies. His fourth launch successfully entered orbit.
- The Internet
- Renewable energy
- Space exploration and taking life to other planets
Highlights and take-aways:
- "The Internet has killed Karl Rove politics." - Ariana
- "The truth keeps intruding into people's rooms." - Ariana (in reference to the power of the Internet in politics)
- The Internet medium demands authenticity from politicians.
- Joe talked about a "mywhitehouse.gov" as a portal used by the President to reach out to citizens to develop policy and legislation.
- There is no such thing as "off the record" anymore.
They've raised $355M
- Has a catalog of content that must be generated, along with the price (e.g. $15).
- Writers who are part of their network can checkout a title, write the content, and are paid for that piece.
- They have a similar model for generating video content for online advertisers.
Webaroo currently has 12M users of SMS GupShup. These users send 500M messages/month, which represents 7% of all SMS messaging in India. Use cases for this product: micro-blogging, news, social networking.
Some interesting data from his presentation.
- Globally, there are 1.4B users of http, and there are 3.5B mobile subscribers
- The majority of growth in mobile subscribers is in rural areas, with most handsets costing less than $50 (unsubsidized).
Nov 6, 2008
Carbonetworks - Michael Meehan
- Provides companies a platform for managing their carbon footprint and strategy.
- Incorporated in 2005. 300 corporate subscribers to date, growing at 2-3 per day.
- 3D views of real places online. You can walk around outside, walk in to shops, zoom around.
- Source of product information to find healthy, safe products.
- Are there carcinogens in products?
- Web-based and also launched an iPhone client. Also available by SMS message.
- VC concerns: start-up or public service? content-generation cost? velocity of new products developed is quite high.
- Platform for online predictions by users.
- Revenue model: sponsored questions by marketers. $1/question.
- 1M predictions with 200K questions since its launch one year ago.
- Streaming live video from cell phone to the web.
- Use cases: sharing video with friends, bloggers, Ashton Kutcher, travel diaries, media companies for live news.
- Works with any J2ME phone.
- Platform that supports multiple back-ends: facebook, twitter, itunes, blogger, tumblr, youtube.
- Will be embedded in Nokia 5800.
- VC concerns: monetizing video,
- VC's liked: IP, differentiation,
- Sells solar panels on-line.
- Online quote for solar panel installation.
- Web site has a video-based
- On target to meet $2.5M first-year revenue goal.
- For each presentations, there were very widely varied reactions/feedback by the different VC's.
- The passion of the entrepreneur during the presentation does have an impact.
Growth is their primary driver, and they're busy opening offices around the world: Dublin, France, London. Facebook revenue is in the 100's of millions, but Mark wasn't specific about the revenue generated by the brand vs the channel.
Facebook currently employees more than 700 employees, and they are still hiring. They are aggressively expanding their Sales effort, especially internationally. In France, 7% of the population uses Facebook. Facebook Connect: a new platform for developers that is currently in beta.
- His 2007 energy consumption was 17000W, but the global average is only 2200 W.
- The US government uses a significant amount of energy on our behalf.
- Current worldwide energy demand: 16 terraWatts (TW)
- These figures can be used to determine how much alternative energy must be generated to reduce dependence on energy generation from fossil fuels.
When asked "How will Twitter make money?" Evan first drew a blank and then steered the conversation to how people are using Twitter in new and cool ways. I guess Mark Zuckerburg (Facebook) set the precedent for this question. Where did all the capitalists go?
Joel has an old-fashioned revenue model (his words, not mine) where Current TV licenses content to cable companies, for distribution to households. Joel also appears to have 20 years on Evan, so I guess things like money and revenue are more top of mind for him. :-)
Current TV has user-generated content as well as user-generated ads. Viewers in fact prefer viewer-generated ads. Despite this being a panel session about media, there were several technical glitches in pulling up the video segments during the panel. (Kinda ironic) Toyota sponsors Viewer Created Ad Messages (VCAM's). The one that was shown for the Prius was quite good and better than most of the Prius commercials I've seen. Several other large companies, including Loreal, have sponsored VCAM's.
General Sorenson showed an interesting chart that shows commercial technology and army usage of that technology on the same graph. There's basically an 8-10 year lag between the development of a technology, such as the Internet, and the deployment of that technology in the Army.
Battle Command Knowledge System (BCKS). The Army is using software similar to WebEx or Go-To-Meeting for their training and battle planning.
Command Post of the Future: a Web 2.0 app that integrates satellite, video, VOIP, 3D topography, DB access, and collaboration tools for real-time battle management. This tool was developed by DARPA.
In their overall architecture, the Army is using Keyhole Markup Language (KML) to access data from Google Earth and other mapping databases. Field units are using RSS to stay informed with battle commands and information.
For $400, 23andme will map out your genome and provides a report that provides insight into your traits and diseases. Pretty scary stuff! Reminds me of the movie, Gattaca. But, intriguing as well. I lost a lot of money in biotech stocks in the late 90's when the results of the human genome project were given out to the public domain. Maybe I should try the kit and reap some rewards from my early losses, I mean investments. ;-)
Cardiovascular disease is the number 1 killer in the USA. There are new start-ups that are working on developing blood tests that will indicate a disposition to heart disease.
Nov 5, 2008
Larry Brilliant - Google.org. 1% of the equity of google, 1% of the profits, and 1% of employee time will be used for non-profit purposes. The 1% model was "borrowed" from Marc Benioff at Salesforce. They use a VC-like model to decide which causes to fund. They go after "big problems" that need solving where Google can make a unique difference.
Mary Meeker - Morgan Stanley
- Lots of financial data on the economy. (slides)
- Facebook: 161M visitors
- Youtube: 329M visitors
- Skype: 370M visitors
- Paypal: 65M visitors - $15B total payment volume (TPV). Non-eBay payment volume up +49% Y/Y.
- Ad supply > demand, so CPM's are dropping.
- China added 73M Internet users in 2007. USA added 9.8M.
- China added 86M mobine subscribers in 2007, India added 68M.
- Novatium: $100 network computer for Indian market. 50M middle-class households in India, but only 8M have computers. Their market: the 30M households who visit cybercafes.
- NetCore: using SMS for news channels & search on cell phones. SMS is also being used for advertising on phones in India. 4x the traffic of twitter.
- Increase US government spend in green energy to $1B/yr. (E.g., healthcare: $32B/yr)
- Double the number of engineering and science graduates in the USA (from 30K/yr to 60K/yr)
- Restore DARPA to its former self as a research driver, but focused on energy.
- 2000: $100B VC money invested (50% in Internet ventures)
- 2007: $37B VC money
- 2008: $15B VC money
- 2009: $8B VC money
- Doesn't think there will be a market for exits for a couple of years. Prepare and "hunker down"
- Kleiner: spending 30% in digital, 30% in green, life sciences a little smaller.
- Act now. Get a loan or secure more financing.
- Protect the vital core of the business. Cut once, cut deep enough.
- Make sure you have 18 months of cash on conservative revenue forecast. Talk to current investors and ask for additional funding now.
- Defer facilities expansion, capital, and software.
- Re-evaluate R&D priorities.
- Renegotiate any and all current contracts & leases.
- Everyone in the company should be selling the company's value prop.
- Offer equity instead of cash.
- Secure cash in government-backed securities instead of money-market funds. Still thinks a major bank will fail.
- Know your revenue plan. Understand the leading indicators. React quickly.
- Over-communicate. Do not sugarcoat.
Raven Zachary - (www.raven.me) product management consultant for iPhone. Helped with the Obama iPhone app.The iPhone is unique for three reasons
- It's persistent: mobile broadband, always-on, in your pocket.
- Mobile web: 13M iPhone units (source: Apple), 3-6M iPod touch (estimated by Zachary)iPhone OS generates 74% of all mobile web traffic. Beats Windows mobile, Symbian, sidekick. Blackberry is great at e-mail but generates the least mobile web traffic. The Sony PSP generates twice as much web traffic.
- Application distribution. Over 6,000 apps in US. 1/3 are games and entertainment. Revenue share: Apple keeps 30% of revenue.
- June 2008 - 6M iPhones (sold 1M 3G iPhones in 3 days, 7M 3g iPhones in 90 days)
- Sept 2008 - 13M iPhones
- Dec 2009 - expecting 50M iPhones
- 500 apps at launch, 7200 apps now.
- 90% of people download apps. Other phones: 20%
- 5 iFunded companies: whrrl, pelago, iControl (control appliances in home), BooYah! (from world of warcraft guys), ngmoco
- >3000 proposals received so far, met with >200 companies, >5 actively engaged, 5 funded. This is 20x other platforms/spaces. Looking for companies that can scale, rather than lifesytle apps.
- Plans: business vertical, consumer vertical are the largest, healthcare (12%),
- Would like to see more enterprise apps for the iPhone. 40% of all Fortune 500 have iPhone app in trial.
- 12M iPhones (250M phones total in US). iPhone app downloads: 14M/week, rest of US: 3M/week
- iPhone is changing behavior: browsing news, playing games.
- iPhone developers in short supply.
- Inherently mobile use cases
- Context over content
- Real-time, immediate utility (apps that need 3-5 mins of training, the usage drops off)
- Frequent usage
- Inherently viral
- Massive scale possible (address a large audience)
- Natural business model
- Cross platform with mobile integral (attract web users and mobile users)
- Take advantage of iPhone platform.
Tom Conrad (CTO, Pandora Media)
- Largest Internet radio broadcaster. ClearChannel has 20% of all radio.
- Apple reviews all app-store apps. Takes 24 hours to 7 days. Brew takes 1-6 months to review, at a cost of $2500, and uses NTSL for testing.
WuFoo – Kevin Hale
- Online HTML forms builder
- Can embed form directly into website, including CSS.
- Can process online payments: through PayPal, Google Checkout,
- Business model: hosted, monthly subscription fee: free - $199/month.
- Y-Combinator seed funded: $18k + angel money $100k. Profitable. Based in Tampa, FL
Yoics - Instant networking
- Built into various devices to network-enable them. For example, surveillance cameras.
- Can load the yoics client onto other PC’s
- Business model: license the technology to manufacturers.
- Bootstrapped by 2 founders. Raise money from there.
DropBox – founder Drew
- Share files across computers. Synchs files across computers. Files show up in a folder, using standard file management. Files are synched across network.
- Can easily “export” files by dropping them into the dropbox folder.
- Files also available over web. Files are automatically versioned. Can restore to previous versions of files or undeleting.
- 9 person start-up: Windows, Linux, Mac.
- 2 gigabytes free. 50 gig: $20/month or $100/year.
- Developed prototype in 4 months (while working at another start-up). $15k in Y Combinator + $5k loan for 9 months total.
Disqus – Jason
- Management system for blog comments.
- Central place to track all my comments on web sites. Can also follow comments from other disqus users.
- As a publisher, can manage/moderate/view comments from all websites.
- Supports blog platforms, but needs a plug-in that you drop into
- Biz model: subscription model. Also looking at going to bigger publishers.
- Financing: Y Combinator funded 1 year ago: $15k in summer 2007.
Mighty Quiz - Kelly Bennet
- Trivia site – you can make your own quizzes.
- Can plug into blogs or social networks.
- People can create questions. Other people can rate questions (thumbs up/down)
- Authors can write questions. Can add questions to categories. Automatically pulls in images from Yahoo images.
- Portable, available as a widget.
- Cyworld (social network) imports Mighty Quiz widget.
- Y-Combinator funded: $10k. Raised few hundred $100’s K. Based in San Francisco.
SlideShare – Rashmi Sinha (CEO)
- Share power point presentations online.
- Space on the web to upload and share presentations.
- Presentations converted to YouTube-like video format. Users can comment on presentations.
- Typical use case: people upload a presentation, then link to their website/blog.
- “Meet Henry” presentation: a preso format for advertisements. Has created a category
- Can also synch presos with audio. (mp3 file or podcast) to create a slidecast.
- Traffic: 9M unique visitors last month. SlideShare avail on LinkedIn. Some traffic from organic search.
- 2000 presos uploaded / day (not counting LinkedIn)
- Funding: $0 funding. Built prototype while working at other companies. Launched, written by TechCrunch. Revenue from other funding. 2 years into company, secured angel funding then Series A.
Posterous – Garry Tan (co-founder)
- Blogging by e-mail. No sign-up required.
- Blog directly from e-mail account. email@example.com.
- Automatically expands links into pictures/video widget.
- Use it as a way to share pictures and videos with family.
- Raised $50k from Y-Combinator from Boston session. Launched in the summer.
- Biz model: premium services.
Rescue Time – Tony
- Time management software
- Measures which software and websites you’re using. Provides aggregated stats to manager. Lets people know how they compare to their average team member.
- Tracks apps (Word, Excel) and individual web sites (active use).
- Can also block different websites
- Lets managers get data by dept, group, etc.
Poll Everywhere - Jeff Dunap
- Text participation during presentations.
- Realtime participation by people sending SMS messages.
- $0.30/participant/month for size of 100’s of people
- For 250 person audience, costs $65/month. Monthly charge =
- Financing: $9k (self-funded), $20k (Y-Comb), cash flow positive, based in Chicago & Boston.
Sep 26, 2008
Sep 11, 2008
- Chrome doesn't support the TinyMCE editor, which is used by Atlassian Wiki. As a big Wiki user at work, the lack of support for the rich text editor was a big deal.
- Chrome doesn't support plug-ins ala Firefox. Although I didn't miss my Alexa plug-in, I did miss the Selenium IDE.
Sep 3, 2008
Aug 30, 2008
After mid-day, the fog cleared, the sun came out, and the weather warmed considerably. It was a fun day of catching up with friends, throwing the football around, playing catch, and of course eating. Throughout the day, we munched on assortment of Indian dishes, pasta salad, sandwiches, and snacks. And after we watched the sun set over Monterrey Bay, we headed home for Silicon Valley.
Aug 24, 2008
After lunch in downtown Palo Alto, we did a little window shopping at Magnolia Video and then headed over to the Apple store. Fifteen minutes later I was all set with my new 16GB iPhone 3g. Although the guy at the Apple store denied any reception issues or 3g performance issues, later that day I did install the iPhone software update to correct the 3g performance issues. And thanks to some help from Jeff Brewer, I've got my Exchange e-mail configured on my iPhone.
Now I've just got to figure out how to blog from my iPhone. I'm not sure the little touchscreen keypad's gonna do it, however.
Aug 23, 2008
#21: UC Berkeley
Check out the entire list for yourself.
Aug 21, 2008
One of my former colleagues, Gamiel Gran, is now an associate at Sierra. Over a nice pinot noir, Gamiel and I reminisced about some of our adventures at Cassatt, including a very memorable trip to SAP headquarters in Walldorf. During the course of the evening, I bumped into quite a few Cassatt alumni: Steve Levine, Polly Sumner, and Karl Perron, a former Cassatt customer.
During the past few weeks, I've run across PayCycle customers at several social events. Today was no exception. I spoke with one individual who use PayCycle for his small business and another who uses our household payroll product. And both were happy customers!
As the sun set, I sipped a nice cotes du Rhone and a full-bodied cabernet. I also sampled some cheeses, including a tasty blue and a gruyere. Finally as the patio lights turned on, I called it a night and took the familiar drive up Sand Hill Road, cut across the Stanford campus, back to familiar mid-town Palo Alto. Just in time for the men's 400m!
Aug 14, 2008
Jul 27, 2008
Now Kaboodle is different in that it doesn't sell anything. It's not an e-tailer, and it's not a web presence for a bricks-and-mortar site. I think of Kaboodle as digg for shopping, even though thefolks at Kaboodle didn't like my analogy.
For this to make sense, think of yourself as a young shopper-- a teen or twenty-something. As you surf around the internet, you can basically tag items (shoes, blouses, skirts, pants, pursues, you get the picture) and these to the collective catalog on kaboodle. From Kaboodle, you can put together different outfits, and you can also rate different items. Kaboodle shows you where you can buy these outfits, and off you go to these other sites to purchase your items!
Kaboodle's revenue model is advertising (just like every other Web 2.0 site). I thought it was a creative way to apply a Web 2.0 model to shopping. From a technology perspective, Kaboodle is implemented with JSP, Servlets, and Apache Spring, and it runs on Tomcat.
I don't know if I'm going to shop there, and I'm not sure I'll pass on their url to my daughter. But, who knows? Maybe she's already been kaboodling!
Jul 26, 2008
The event was attended by over 1000 entrepreneurs, techies, and VC's. And there was a healthy distribution of established tech companies, mid-sized start-ups, and brand new start-ups. Web 2.0 was definitely in the air.
I attended with Jane Willis from PayCycle, and we ran across several colleagues from our pasts. I ran across Milton Howard, a former colleague from Cassatt, who was attending with Michelle Fisher, CEO of Blaze Mobile. Michelle's 18-person start-up has developed a platform that allows folks to pay for services using their mobile phone. Milton and Michelle (who are flanking Jane in the picture) were attending to chat up VC's who might become Series A investors. Good luck, Michelle! As it turns out, Milton has been a loyal PayCycle customer for many years. He uses PayCycle's household payroll product to pay for his nanny.
After another hour of navigating through the crowd, Jane and I decided to find a quieter area on the patio, someplace away from the music and crowd. While we were chatting, two gentlemen greeted us and let us know how happy they were with the PayCycle product. Ike Eze and Tuyen Vo are serial entrepreneurs, and they've just started their third start-up, Centrro. They must have done okay from the sales of their previous start-ups, because they're self-financed and not actively seeking VC money. With their latest start-up, Ike and Tuyen have developed a platform for brokering credit card applications and loan applications on behalf of financial institutions. They have just a few employees and many contractors, and they're very pleased with the PayCycle product. They did have some suggestions and product ideas for me and Jane, which we'll talk over with our teams when we return to the office.
I did run into a few other folks during the event, including a potential business partner we had met with earlier that week. It was a perfect summer evening in Menlo Park, and I had a health sampling of samosa, spring rolls, and weissbier. I decided to call it a night around 8:30pm so I could head home and start the weekend with the family. It was my first TechCrunch party, and it was definitely a great event. I look forward to the next one.
Jul 13, 2008
PayCycle provides an online payroll service for small business, and they have 75,000 customers. In fact, three of my former colleagues are customers. PayCycle is a SaaS implementation that's implemented as a J2EE application, sans EJB.
My new workplace is located in Palo Alto, just a few doors down from Fry's. I've been good so far, with regards to purchases from Fry's. I have "window shopped" for Sharp's new 65" LCD hi-def TV. "How much is that TV in the window?" you may ask. Well, at a current stick price of $4500, I'll wait another year and pick it up for 3 grand. For now, all I've purchased during business hours is a Hershey's bar and some gum. The wife is really proud of me, and I'm a little surprised myself, to be quite honest.
I'll still continue to blog about enterprise software, but now with the end-user's perspective. Over the next several posts, I'll talk about our development environment, how we're using virtualization, and talk about some new initiatives. So keep reading, and if you're ever at Fry's, stop by for a visit.
Jun 20, 2008
When I joined in October 2004, we had just started developing the Collage 3.0 product release, with the codename "Armstrong." The longer codename was "Armstrong, the moon guy, not the bike guy." That was one of the years Lance Armstrong won the Tour de France, but the release was named after Neil Armstrong. After shipping Collage 3.0 in February 2005, we took that one small step and firmly planted our flag in the sea of utility computing. (Remember, it's a moon metaphor.)
Over the next 15 months, we released three more versions of Collage. In January 2006, Collage 3.2 "Apollo" introduced support for Solaris. In April 2006, we shipped Collage 3.3 "Spyglass" which introduced support for managing virtual machines. Along the way, we ended our era of space-flight codenames and started a new era of famous golf courses. Okay, you can aim for the stars, but as far as I know only Alan Shepard has teed it up on the moon.
After the Collage 3.4 "Starbuck" release in February 2007, we transitioned to a new development process. Large releases were replaced by small projects that could integrate to Head of Tree asynchronously. There were two invariants: Head of Tree was always shippable, and projects integrated when they were complete and bug-free. At anytime, there were about a dozen projects "in flight." (Okay, we didn't get away from all the aerospace metaphors. We have too many pilots in Cassatt for that to ever happen.)
This was a pretty significant change in how PD operated, but the results were great for the company and the customers. In 2007, there were over 80 integrations to Head of Tree, and the time to deliver new features to customers was dramatically reduced. There was a renaissance of product functionality. We added support along many dimensions: new hardware from Sun, 64-bit support, Xen VM's, new VMware versions, additional networking support, performance enhancements, stability and robustness.
And then in November 2007, we launched the new Cassatt Active Response 5.0 product line. While supporting our utility computing mission, we added support for power management of engineering labs and dev/test environments. Since then, we've continued to add features incrementally. Just recently, Cassatt Active Response 5.1 introduced demand-based policy that should prove very helpful in power-management and utility-computing environments.
So as I leave Cassatt, I leave with mixed feelings. I've enjoyed my time at Cassatt and look back at fondly at our accomplishments. I will miss all the talented folks I had the chance to work with. But I know "it's a small valley" and our paths will cross again.
Jun 11, 2008
Let me know you what you think.
May 21, 2008
Web 2.0 is moving into Enterprises, whether you like it or not. She calls this the “consumerization” of enterprises. This is one of the most significant trends in enterprise computing today. All of the existing business software vendors are eyeing this market.
Web 2.0 applications bypass traditional controls that enterprise IT has in place for business data and processes, which introduces an additional need to mitigate external threats. However, Wang advises against blocking 100% of Web 2.0 content in organizations in order to avoid employee backlash.
If you’re developing your own Web 2.0 applications or services, security must still be considered. Web 2.0 apps are more difficult to secure than traditional apps.
Information security considerations
- Content governance: much Web 2.0 content is unstructured. Content moves freely between the web, email, IM, P2P, FTP, RSS. This moves outside normal security tools.
- Data security and control
- Identity management
- Archiving and retention
- Privacy and Intellectual Property: IP is owned by the web 2.0 site. Businesses should understand IP ramifications of using Web 2.0 sites. For example, content posted to Facebook is owned by Facebook and not the author.
I just wrapped up this morning's last keynote at Forrester's IT Forum. Marta Foster discussed the transformation of Procter & Gamble's IT organization at her keynote entitled "Bringing IT from the Back Office to the Boardroom."
Procter & Gamble was founded in 1837 with headquarters in Cincinnati and $76.5 Billion annual sales. P&G has 23 billion-dollar brands.
During these 15 years, P&G expanded IT capabilities around the world, resulting in duplication and inefficiency. In 1999, P&G underwent a major re-organization to address some of the inefficiencies from the period of growth. P&G created global business units (e.g., Laundry) with global P&L, market development organizations, and Global Business Services.
At the time, most of the business leaders considered IT to be a cost, but the IT group wanted to become an innovation agent for the company. At a company level, P&G commits to 4%-6% annual growth to its shareholders. IT wanted to find ways to contribute to this top-line growth.
- Unite IT and core Business Services. Current Global Business Services consists of 8500 employees, of which 4000 are IT.
- Drive shared services across Business services.
- Shift thinking from “technologies” to “solutions.”
- Change the back office to become a business driver.
P&G organization: Global Business Units, Market Development Organization, Global Business Services, Corporate Functions. IT was renamed to Information & Decision Solutions (IDS) to reinforce the change in mission and vision.
Three structural drivers: global organization (3 data centers
Three core strategies for how they work
- Run as a business: changed approach from being a cost center (focused only on cost reduction) to (cost, service levels, value creation, service management, “total user experience”) aligned to P&G approach (P/L, market share, sales volume, brand management, consumer benefits).
- New IT strategy aligned to business needs: virtualization (replace physical product mock-ups with virtual reality applications), personalization, and real-time decision-making. (decision cockpits that can be personalized by employees – 20,000 cockpits now, growing to 35,000. Goal is for employee not in manufacturing to have their own cockpit – about 70,000 in total.). Virtual Solutions are now used on 79% of all P&G initiatives. Personalization: pampers.com began as support for one site. 49 countries, 26 million visitors/year.
- Measure for success. For every service, measure client satisfaction, service levels, user sensing, employee survey, scorecards, top-to-top connections with a 10-point scale for each category. Over past 3-4 years, $600M cost savings to date, 16% increase in user satisfaction, client sat at 8.7 (highest ever).
The IDS (IT) team has adopted a “Flow to Work” Design that attempts to breakdown traditional organizational "silos." People are encouraged to work across the organization and take a top-level business view on projects instead of focusing on their functional area or place on the org chart.
The acquisition of Gillette demonstrated some of the recent changes. P&G integrated Gillette and achieved all synergies in 15 months, whereas previous acquisitions of that size have taken 3 years.
- Maintain top-to-bottom focus on mission
- Top management support is essential.
- Communicate, communicate, communicate.
- Commercialization is critical. All new technologies must find a home/purpose in delivering a product to market.
- New models need new skills and capabilities.
P&G's green initiatives
- Reduction of daily paper printing, focus on reducing consumption in facilities.
- P&G has started measuring and reporting on carbon footprint for the company.
- P&G is also involved in green initiatives with key customers (Walmart, Target) with a focus on the reduction of product packaging.
- Reduction in travel: P&G is Cisco’s largest installation of tele-presence rooms. Global travel budgets reduced by 15%, IDS reduced travel by 40%, used a portion of the travel savings to fund video conferencing.
On a side note, today was a more balmy day in Las Vegas. Yesterday, the high was a blistering 104 degrees (yes, but it was a dry heat!). Today, I was greeted by cool breezes and 76-degree weather, with an expected high of 86.
May 20, 2008
Earlier in the afternoon, I attended a session by Simon Yates, a Forrester VP analyst. The session was entitled "IT Infrastructure and Operations: The Road Ahead."
Yates covered many different topics during his session.
Success imperatives for IT that he is seeing from Forrester's clients (mostly large enterprises):
- Stay ahead of next-generation data center technologies.
- Consolidate IT for cost, efficiency, and simplification. Yates seeing a lot of interest in consolidation from their clients—very high demand over a short period of time (6 months).
- Deliver always-on, always-available infrastructure within an ever-tightening budgetary envelope. One interesting quote: “Every year is a recession in IT operations.”
- Enable user productivity through mobility.
- Automated and simplify IT processes. ITIL, Forrester is developing research around IT management and automation.
- Maintain and optimize core IT systems.
- Virtualization everywhere: servers, storage, networks, and clients. Improving server manageability and server flexibility is the number one reason for virtualization (41% consider very important and 46% consider important). Reducing hardware costs is the next reason (43% very important, 39% important) CIO's are “talking about virtualization at cocktail parties like it’s their favorite martini.”
- Next-generation data center technologies could fundamentally. Change the economics of IT. Cloud computing has burst onto the scene. This could have a profound impact on how people build data centers.
- Mobility requirements are driving investments in infrastructure to support a changing workplace.
Gaps in the virtualization portfolio
- Management tools: need management that is common across silos. Most management tools from the “Big Four” are designed for physical things.
- Sercurity tools can’t see into or protect virtual instances.
- Licensing: still a black art that gets even more complicated. MSFT licensing is even more complicated in a virtualized environment.
- Organization challenges: ownership and responsibility as virtualization bridges traditional functional domains (e.g., storage management).
Cloud computing is on the horizon. Yates urged attendees to get ready for the onslaught of cloud-computing products and initiatives from systems vendors. Most enterprises are not ready, and most cloud-computing providers are not ready yet either.
- 87% of CIO’s plan to restructure IT operations, and 60% have already started. Basically looking at traditional silos, such as storage, and looking at realigning to business imperatives and changing technologies.
- Consolidation of everything- data centers, storage, applications, and IT staff. Automation will drive the consolidation of IT staff.
- New requirements drive IT ops professions to develop new business and technology skills. CEO’s and CIO’s want to invest in the personnel they have.
Changes that will happen in IT:
- Distributed authority will give way to centralized oversight. Instead of many mini-CIO’s, control will be centralized under the CIO.
- Bottom-up projects will be replaced by top-down initiatives from the CIO.
- Tech silos will be broken down and replaced by tech interdependency. There’s a push for IT service management instead of functional silos. There will be ITIL projects in the coming 6 months.
- Technology specialists will transform into personnel with cross-technology skills. These individuals will be required to “see beyond their silos” and understand how IT affects (and can improve) the business.
- Traditional tech metrics will give way to business-centered metrics. IT performance will be measured at a business level.
IT skills requirements are changing: technical versatility, business knowledge, interpersonal skills.
- IT departments are shifting from the management of things to the automation of process and services.
- Increasing interest in ITIL and increasing adoption in tools for automation. After consolidating hardware, companies are turning to ITIL (to consolidate process after they’ve consolidated everything physical.
Here are some highlights from his keynote.
IBM sees three business drivers that are impacting IT today:
- The changing face of globalization (transformation from exporting to multi-nationals to truly distributed global enterprise).
- The rising tide of information (more devices, need for real-time analytics).
- New business models that are evolving as new technology arrives (B2B, B2C, new uses of the Internet, rise of social networking).
Lechner spoke about several cloud-computing efforts in industry, academia, and government:
- Google, Univ of Washington, and 6 other universities are working on how to design apps for the cloud.
has deployed some clouds to foster collaboration between the government and university. Vietnam has deployed some clouds to provide compute resources to software start-ups. China
Well, here are some highlights from Bobby's talk:
- Business model innovation is a top priority, but most companies invest in new product/service invention.
- IT leaders miss innovation by focusing on cost & quality.
- On-going investments vs game-changing ideas: there is an “innovation continuum” in between the 2 extremes. Companies find it more difficult to fund projects in the middle.
- P&G sources new products from “innovation networks.” Half of inventions are sourced from outside of the firm. They have identified individuals who play different roles in the process: Financiers (fund the projects), Transformers, Brokers (coordination of the network), Inventors.
- P &G has a website for their partners and customers. With 53 people, they generated $3Billion in new revenue from products invented outside of P&G.O
- Cameron suggests that companies should have dedicated funds for innovative projects that are separate from “business as usual” projects. Verizon has a separate fund of $2-3 Million/year for innovation.
- Cameron discussed some companies that have created innovation pipelines. Idea generation is everywhere, running on its own funding, governed by innovation team. Iterative/agile delivery to develop an early prototype before commercialization. This pipeline for innovative projects runs parallel to the regular process.
- Take tactical steps now: People – build an innovation culture. (IT: senior managers spend 2 weeks / year out in the Field / business) Process: have a portfolio management process in place. Review the portfolio to show funded/unfunded. Technology – use tools to capture ideas from employees & outside, make the portfolio visible.
- Technologists must know the cost to the business. At Fidelity, IT knows about the cost of each trade. IT asks “how do I knock $0.25 off the cost of a trade?”
- Increasing innovation remains one of top 3 goals for most CEO’s. today. (survey of 1400 CEO’s by Forrester)
has created a Biopolis (technology park) that houses 2000 scientists in 2 million square feet of R&D space. Singapore Kimberley Clarkhas created a 3-D usability lab for shopping and understanding buyer behavior. This virtual “lab” is located in and consists of three walls with projected displays. As shoppers walk with a shopping cart, the displays change. Kimberly Clark tracks the subject's retina to see where people are focusing. The goal is to try out new packaging, products, marketing, etc. in a virtual environment and see how people respond to new products before they appear physically on shelves. Wisconsin
May 13, 2008
A long, long time ago, in a state far, far away, I was an EDS employee in Plano, Texas. I was a Research Systems Engineer back then, developing an in-house CASE tool that was used to generate form-driven DB applications. That was 1991, shortly after Ross Perot had departed, and Dick Brown was CEO. EDS had "relaxed" its dress code back then: double-breasted suits were allowed, and striped shirts were also acceptable. The employee manual did stipulate that the stripes could be no wider than 1/4", and shoes with metal buckles were still verboten. Employees had to wear their suit jacket whenever they travelled to another floor, another building on campus, or the cafeteria. And you had to wear a tie 24x7, even at midnight in the office. (But you could loosen our ties then.)
I'd imagine that EDS has relaxed its dress code since the 90's, but it's corporate culture is vastly different from the "HP Way." It will be interesting to see how this merger pans out.
Apr 15, 2008
Even though this customer was located in rural New Jersey (and I mean rural), they're experiencing some of the same things our West Coast customers are seeing:
- They have a large dev/test environment with servers that are used for QA, performance testing, build systems, and replicating typical customer environments.
- On average, their systems can be idle 30%-50% during non-business hours, but their utilization is much higher during business hours.
- They have negotiated a pretty good discount with their local utility, but electricity is still $0.12/kWh. In another month, their rate is increasing to $0.14/kWh.
- During the summer, the price will increase due to increased seasonal demand from all those air conditioners.
Mar 29, 2008
I'm sure there were plenty of idle servers on Saturday that could have participated in "Earth Hour." There are probably some idle servers right now in your data center (or engineering lab) that could be powered down. Most data centers are sized for peak traffic/workload that is generally 5-10 times the average traffic/workload. And once you get outside the production environment, there are even more servers in dev/test environments and engineering labs. And you know that those servers aren't being used 24x7.
What if you could power off those idle servers when they're not needed? Better yet, what if your data center or engineering lab could power down idle servers and then power on additional servers as they're needed? The solution is here today and easy to implement. (Read more)
Mar 12, 2008
I've been involved in some discussions with a customer who's also maxed out their data-center capacity. They still have floor space in the data center, but they've run out of power. And they're in one of those states where electricity is cheap and plentiful. However, the cost of pulling power into the data center will still cost into the high 6-figures (and that's dollars not Yen).
So they're exploring ways to use their data center resources more efficiently. As they deploy new applications, they deploy more servers. (Sound familiar?) However, not all those apps are needed at the same time. Some apps are provisioned to support the maximum traffic. Other apps are cyclical ones that are only during certain time periods.
So this customer has realized that they can still deploy more applications (and servers) by powering off servers that are not needed. This is an easy step that can be done without changing any of their infrastructure or changing the way they deploy their applications. So, they're able to get more headroom out of their existing data center without having to build a new one. Remember, not everyone has a $400 stock!
Jan 9, 2008
Yesterday, some friends of mine just went live with MyPetStreet, a new social network for pet owners. MyPetStreet provides some unique features for pet owners:
- Aggregated content and news feeds related to pet health, news, and product information.
- An repository of pet service providers and resources from the local community.
- A forum where users can find expert opinions, share pet owner insights, and ask questions to other pet owners.
- A unique lost-pet service that uses a combination of Web 2.0 technologies and old-fashioned plastic tags.
- Searching for service providers is implemented using AJAX and Google maps. You simply put in your zip code, search criteria, and voila! The service providers pop up on a map. (Check it out)
- Content management is provided using Drupal, an open-source content-management framework.
- The site is implemented using LAMP: Linux, Apache, MySQL and PHP.