As an engineer and closet sociologist, I love stories about cultural change — especially those brought about by modern technology. I’d like to share one that came to my attention recently …
It is well known that the pace at which the average Indian is being freed from the bureaucratic heritage left behind by British India has been accelerating since disruptive changes in economic policy were made in the early 1990′s in New Delhi.
A striking example of this change was flagged at the SAP World Tour in India recently (August 2011), where the village of Soda, in the state of Rajasthan, was the center of many eyes. Soda, for context, is in one of the most backward areas of Rajasthan. Led by Chhavi Rajawat, a young and dynamic professional (she is apparently India’s only Sarpanch (village head) with an MBA) who traded in a career in corporate management for one in village management, Soda is leading a huge transformation in how villages govern themselves — from tracking life events like birth, marriage and death, thorugh the trickier issues around land titles and management to the financial aspects of running the village’s budget. And, along the way, she hopes to educate her 10,000 fellow villagers electronically! (Chhavi, for the record, appears to be doing at the village level what Chandra Babu Naidu was attempting at the state level in Andhra Pradesh not too long ago.)
“If India continues to make progress at the same pace as it has for the past 65 years since independence, it just won’t be good enough. We’ll be failing people who dream about having water, electricity, toilets, schools and jobs. I am convinced we can do it differently and do it faster. In three years I will transform my village. I don’t want money. I want people and organisations to adopt projects in my village as often projects fail owing to lack of a local connect and that is what I am here to provide by bridging that gap,” says Ms. Rajawat.
And, that is precisely what SAP is doing in partnering with Soda. SAP is bringing the same software that has helped 800M consumers lead healthier lives and helps produce 78% of the world’s beer to “e-nable” the Soda Grama Panchayat (the village council). This software will help the village government to improve public administration processes and transparency while supporting better and quicker decisions. (Is this any different than what the average CEO wants for his/her company?)
Want some visibility into how projects are progressing? Check out http://soda-india.in/others. Want to write to Chhavi? Write to email@example.com!
Clearly, change is in the air… one village at a time.
Teardowns are the bread and butter of the consumer electronics and automotive industries. (An example of a teardown of the Nintendo 3DS [IEEE Spectrum, June 2011], is appended at the bottom of this post.) I recall product teams at GM tearing apart the latest cars from the competition. While it bothered me that a perfectly fine <name your favorite manufacturer’s> car was being destroyed, it was an invaluable exercise to understand how they designed every part of the car, how they built the car, etc. Product strategy, manufacturing technology, supply chain and distribution strategy, and cost structures were reverse engineered, documented and holistically synthesized for competitive reasons — all from publicly available materials/information.
My team has adapted this approach over the last few years to understand our competition in the software market. While the exact process might be different, it is conceptually very similar.
My observations from these exercises:
- The teardown brings sharp focus on the critical competitive dimensions — from sales to marketing and development.
- It energizes and aligns the team. Everyone, from the person(s) who created the teardown report to the audience leaves with a phenomenal sense of what each one can do individually and collectively to gain an (unfair) advantage
- A good framework is absolutely critical to driving good insight
- Helps identify the chinks in the competitor’s market and product strategy. By extension, highlights what we need to push in the market
- Helps identify what the competitor is attempting to do next
- Understanding the income statement and balance sheet along side the product gives you a very good and complete picture of what is going on
- Why is the marketing spend as a % revenue so high?
- Is the sudden increase in R&D expenses a sign of a push into adjacent markets? If so, which ones? Should i be worried?
- Do they have a stash of cash? What will they do with it? M&A? Stock buyback? Grow?
Rahul Asthana has a powerful example of a teardown. I am sure that you have thought of or use other ways of getting a good handle on the competition. Do share your work, either in your blog or in a comment below, for everyone to benefit from!
Mobility and mobile apps for the enterprise space have been on my mind and on that of my team of late. In a recent blog, I looked at mobility from the customer’s perspective. Kosin Huang wrote about the benefits that mobile apps and devices bring to SMBs.
I was, therefore, very interested in Dennis Howlett’s blog yesterday, as it got me thinking about mobility from the developer’s perspective — one I hadn’t considered previously. Dennis states that apps (and, in particular, mobile enterprise apps) are here to stay and wonders about:
- The viability of a mobile (enterprise) apps market and the associated business model
- The impact that the economics of free (and paid) apps have on the development community, especially in light of the fact that many vendors are giving away their mobility apps for free.
Dennis summarizes his view: “… the notion of free mobile apps is insane” (presumably from the perspective of the individual developer.)
Curious, I looked around and came across an interesting report from Distimo:
No surprises – the top 300 free apps were downloaded a cumulative 3 million times/day while the paid apps were downloaded just 350,000 times/day. A perfect example of a power law. The same report states that “serious business apps” (don’t have a definition for you since I don’t have the full report) were up by 185% and grew the “strongest” while frivolous apps like angry birds grew the fastest at 802%. It is pretty clear that Dennis’ statement that mobile enterprise apps are here to stay is spot on.
The economics of the development of mobile apps are determined by:
- Who creates the app? (The vendor; an ISV; an individual developer)
- How the app is monetized? (By selling the app; By selling software related activities – like services)
- When the app is monetized? (Once, at sale; Recurring; Upon up-selling)
- The costs of placing, selling and supporting the app (Marketing; Sales; Support)
Starting with Dennis’ Q#2: Might not the answer lie in the above two paragraphs?
- The vast majority of apps will not make money – at sale. They can deliver revenue to the creator – in due course, and from related activities
- The vendors can “give away” apps; but, they are making their apps that much stickier and are driving additional sales of traditional sources of revenue – seats.
- Partners/ISVs will come out ahead, whether or not they charge for the apps. The 350,000/day downloads of paid apps are certainly contributing to the Apple exchequer. Why won’t the same dynamic hold for the partner’s coffers – many free apps and a few, but well rewarding, paid apps. Further, unlike consumer apps, there is always the services revenue that accrues from configuring the backend ERP/BI systems that collect, manage, and organize all of the company’s operational and financial data.
- Individual developers, one can argue, can roughly benefit in the same way that the ISVs do. But, based on my observation of the numbers, the number of individual developers in the enterprise space is very small. So this is, perhaps, a moot point?
Perhaps, a good way to think of free apps is in the context of a merchandizing strategy – “get 2 free, then buy 1!” The one that the customer buys more than pays for the loss leader…
Question #1 centers around the economics of an additional route to market. Instead of paying the vendor their royalty for the software that the VAR sells, the app seller is paying Apple a 30% “channel” fee. Apple, clearly, is the winner here. Does this mean that the ERP vendors will create their own app stores, just as the RIM and Android folks are doing, so they can create a “critical mass of apps” and add to their revenue stream? Will they charge a lower channel fee than Apple to attract sellers? While we wait for the answers to evolve, what is clear that there is a cost to accessing an aggregated market, any which way one cuts it.
It seems to me that there is a role for free mobile apps. And, that the paying apps will carry all the players financially while the collection of apps (paid and free) will deliver greater value to customers and mobile end users – and continue to drive greater traffic thru the apps mall. And, the toll collector will get his pound of flesh along the way.
(My thanks to Manju Bansal for hearing me out and helping clarify my thoughts!)
Yesterday’s Wall Street Journal (July 28, 2011; page B5) had an article by Joe Mullich entitled “5 questions SMBs should ask when going mobile.” The article identifies 5 questions:
It ends with a thought-provoking statement that “mobility is about reenvisioning — a reimagining of workers roles, technology needs, and the basic manner in which business is conducted.”
Since the article was sponsored by Dell, the questions (and the associated answers) are device-focused. I am therefore going to take the liberty to extend this great set of questions to explore the business dimension that Joe flags.
Mobile apps, clearly, need to enhance employee productivity, decision making, and customer relationship management across key industries including manufacturing, professional services, consumer products, retail, and high tech. For example, sales representatives can access customer information, product availability, and promotions in real time while managers can respond to business processes such as workflows, alerts, and purchases with all of the context required to respond also in the palm of their hands! For this to be a reality, the mobile system you choose needs to have the ability to connect with the sources of the core data. Otherwise, its like carrying around a gleaming iPad2 that doesnt connect to the web… you can use what’s already there — but you cant use it interactively while on the go.
When hackers starting attacking PC’s first, the raging question was “Do you protect the PC or the apps in backend or both?” Seems to me, you need to do both…but with a tool that can do this programatically, rather than on a one-off basis. Your admin should be able to set “rules,” so the (back-end) apps accessible to your mobile device, the data on your mobile device, and the mobile device’s functioning can be remotely controlled. With large savings to boot!
The perennial “build vs buy?” debate persists. The decision, more often than not, is based on your IT dept’s beliefs and on what is available out there… SaaS models clearly show that using remotely managed apps with generally acceptable functionality is the way to go. So, unless you really believe that you need special apps, you are better off using pre-built/pre-configured solutions that fit 90% of your needs. And, when that isn’t feasible, look for a good tool with the required IDE capabilities so you quickly code once and use (natively) multiple times!
I am hoping that your IT folks will like you (and, me!) for asking the right questions before making the buying decision… All the best!
Update: Aug 3rd, 2011: Mobility seems to be on my team’s mind… Here are Kosin Huang’s thoughts on “Why Mobility in ERP matters to SMBs”
I’ll also add a pointer to the webinar that Steve Drake of IDC and I did recently on this topic.
John Wilkinson, SAP’s VP of Business Analytics for Global Ecosystem and Channels, joins me in my latest quarterly SAPInsider “SME Insights” column to explore how small businesses and midsize companies are overcoming three important challenges that they have traditionally facedin making good, data-driven decisions: ensuring the integrity of information, democratizing the availability of information, and controlling the cost of ownership.
Read the article to see how our customers are benefiting from sharing data internally.
Sneak preview — next up, an interesting interview that delves into how corporate headquarters can integrate with subsidiaries of different kinds (sales offices, manufacturing plants, warehouses,…) and drive efficiency up.
About two decades ago, General Motors dangled an intriguing problem in front of me — “Can you help us get robots to work with humans? We need to do this; otherwise OSHA is going to fine us!”
I turned down academic offers and decided to spend “a few years in industry” working on this problem (the rest, as they say, is history… I still dream of the day I can go back and teach!). Working with colleagues from Northwestern (Ed Colgate and Michael Peshkin) and Berkeley (Hami Kazerooni) as well as colleagues within GM (Nagesh Nidamaluri, Jim Wells, Steve Holland), we created a new category of devices called “Intelligent Assist Devices” (that included “cobots”). Working together, we created a consortium by bringing in diverse companies like Ford and US Postal Service to launch a little revolution in the material handling business. I certainly had a blast taking a vague problem statement all the way to companies building product [Gorbel, Stanley Tools] Click here for a simple explanation of what we did.
I was reading the IEEE Spectrum earlier today when I was surprised to come across an article in which President Obama announced the $500M Advanced Manufacturing Partnership that will, in part, focus on the “next generation of robots.” Reading further, I discovered that the goal of this effort is to design and create robots that “work alongside human workers the robots need to be smarter and safer.”
As I read the article, my mind went back to our pioneering work (see picture above). And I must say that I am very pleased to see the United States Government funding such a fascinating and critical area.
I conclude by quoting Autelio, a line worker in the Fort Wayne truck plant who was responsible for installing the HVAC core into every truck that was passing by his station, one a minute: “Thanks for working on this for us. I hope to retire to my farm in Arizona — healthy and safe.” His comment still rings in my ears so many years later — it certainly helped frame what was arguably the most satisfying experience of my career. I join Autelio in thanking President Obama for making this significant investment in robotics.
In the “10 Questions” section of the June 20, 2011 issue of Time Magazine, historian David McCullough shares his thoughts on the impact of the dying art of letter writing on the study of history. He’s concerned about “… the loss of the process of working out your thoughts on paper, of having an idea that you would never have had, if you weren’t [writing] being a handicap…. Writing is calisthenics for the brain.”
I found myself nodding my head in agreement as I read the article at the barber’s shop this morning. I have always noticed that writing forces me to put my ideas down — visible in black and white, warts and all. The process forces me to clarify my own thinking, getting to the heart of the matter. Helps me to communicate clearly, simply, and well.
However, unlike McCullough, I am less concerned that people have stopped writing. Just looking at the sheer number of blogs and tweets, I believe that people are writing — but in different media, using newer and different tools. What I am concerned about is the fact that writing today is both ill-focused (high volume, conversational, less thoughtful), short (140 characters), and ephemeral (where, oh where, are yesterday’s tweets?). The question in my mind is whether historians, a 100 years from now, can find, aggregate and interpret this mass of data, and build a “holistic” sense of what we are thinking about and attempting to communicate.
I will do my bit for posterity by continuing to write “complete” articles
I’ll start off by admitting that I am a big fan of Lady Gaga’s — more for her market savvy, somewhat for her music (even if I am, sad to say, tone deaf), and less for her over-the-top clothes. So, it wasn’t a big surprise that an article entitled “Lady Gaga Romances India – Taps into local expertise to tweak her expertise in a Bollywood remix” in the June 2nd, 2011, The Wall Street Journal, caught my attention. The long and short of it the article was that Lady Gaga sees a large market in India (700 million people under 30), just as Brittney Spears (and, presumably, the Beatles) before her. While Lady Gaga spoke to her need to be the “Fame Monster” and her goal of bringing her music to these millions while expanding her base, her promoter in India said something that really got my attention – “The key is understanding what works in the US and in the UK. And, taking the extra steps to serve the South Asian market.”
Consumer India (aka, India’s Mythical Middle Class)
In parallel, Rajesh Kumar, my colleague who runs SAP’s India Marketing team gifted me an interesting book by Rama Bijapurkar, apparently one of India’s leading marketers. Entitled “We are like that only,” Ms. Bijapurkar uses reams of data and her decades of on the ground market experience in India to help others understand the Indian Consumer. Her central theses:
Every company has to identify its own “my India Strategy,” not try to craft a “One India” model – you need a “Made for India” strategy that you need to be willing to give time to succeed – something Lady Gaga and team appear to have groked!
- This “Made for India” strategy needs to be built recognizing four key tenets:
- The nature of developing economies is fundamentally different (than developed economies). The socio-economics and associated purchasing power/patterns are very different – while the addressable market might be the same, it’s the product of a large number of consumers buying in smaller “bites”;
- Emerging markets are not virgin markets. More than likely, there already are Indian alternates priced and configured for different market segments (e.g., bicycles, motorcycles, 3 wheelers, small cars, cars)
- Emerging markets today aren’t what developed markets were in their infancy. So, something that worked 20 years ago in the west will likely not work in India;
- Countries change around their DNA. So, your products need to adapt – think of the woman, draped in her colorful sari, riding a scooter…
Rama shows that using traditional segmentation models is too restrictive and, potentially dangerous, in the Indian market. (e.g., Pepsi and Coke, shooting to quench the thirst of India’s consumption-ready middle class, haven’t quite seen the growth they expected to see.)
What does all of this have to do with the Small Businesses and Midsize Companies (SMB) Market?
All of this takes me back to Rajesh Kumar’s and my daily challenge: How do we grow an SMB business in India? Do the lessons from Bijapurkar’s work on the dynamics of the consumer market parallel those of the SMB market?
My belief (ok, hypothesis) is Absolutely, yes! I base this on my experience in 2007, where, as CodeGear/Borland’s India Country Manager, I sold developer tools and databases to IT companies like Infosys and Wipro, Public Sector firms like Hindusthan Petroleum, and to quasi-public firms like Mahindra & Mahindra. “One market” I thought when I first arrived. “Thousand markets” was my conclusion as we closed out the successful spin-off of CodeGear.
Which implies the need for a portfolio of solutions – available via different go-to-market approaches, using different channels, priced, packaged, marketed and delivered differently – for the firm to be truly successful. While the proverbial bicycle manufacturer is apparently in a similar business as the moped manufacturer, their needs and corporate/owner dynamics are so different that one size will not fit all. Selling to this market is a task that is daunting at best.
Back to where we started
So, here’s to Lady Gaga crooning “Mera Dil….,” a new Bollywood number composed by AR Rahman and accompanied by Anoushka Shankar on the sitar; delivered on the silver screen, via YouTube and on many of India’s numerous TV programs; and aimed at reaching the under-30, Liberation Generation among the Rich and Consuming classes. She’ll, hopefully, have figured by then that there aren’t 700M folks awaiting her! But, that there is a ton of money still to be made!
Somewhere over Nova Scotia, June 6th, 2011 – I write this as I ride on Lufthansa’s AB380 en route San Francisco – Frankfurt. I had to ride on this plane, ever since I saw it swing by, towering over us, while on an earlier trip to Orlando precisely 3 weeks ago. Ok, I’ll just admit it – I am just a child when it comes to these sorts of “engineering marvels!” I needed the “fix.” I’ve been in marketing for too long!
I so vividly remember to this day, the sheer excitement of flying Air India’s “Emperor Vikramaditya” (?) – a royal member of AI’s Jumbo jet fleet – back on December 2nd, 1980. (My brother, Srinivas, celebrated the longest birthday of his life.) The aircraft was gigantic, the lines to board were long, the plane was clearly “modern,” flying was a true treat, and Boeing ruled the commercial airwaves. We flew from Bombay to London’s Heathrow and then on to NYC’s John F Kennedy airport. We were served by generally gracious air hostesses (an “in” job in those days) using proper crockery, provided serious silverware, and, believe it or not, the food was good! (I can still describe the omelet I ate on that flight, some three decades later. In stark contrast, I can’t, for the life of me, recall what was served to me just 4 hours ago.)
So, has anything changed??
With the AB380 replacing the mighty Jumbo jet, has the “old order changeth, yielding place to new?”
Let’s start with some observations:
- If you had blindfolded me and let me loose in the cabin, I would not have known I was on such a large aircraft – the 3-4-3 seat configuration is the norm in wide body jets…
- The upper deck is 100% reserved for business and first class passengers
- How deceptively small the aircraft looks – its only when you compare it to the other aircraft in the area do you realize how big it is. (See picture with a 747 landing near us)
- How quickly (i.e., after a short run up on the runway) and effortlessly the plane took off
- How incredibly quiet the cabin is, once in the air
- The fact that there are only 8 First Class Seats (Add 98 Business Class seats and some 440 (44 rows of ~10 each) in Cattle Class and you get something like 556 passengers on board)
- Changes for the better
- Technology is to be seen everywhere – from the white light LED’s through the personalized entertainment systems in every seat and the four gigantic engines to the winglets at the tips of the long, slender and flexible wings (that I estimate rose a good 10 feet between when the aircraft was on the ground and when we are in the air!)
- All 550+ people on the flight boarded painlessly in about 30 mins! (They had 3 jet ways – one for the upper deck, one for the front half of the lower deck and one for the rear half of the lower deck.)
- Storage space in the cabin seemed plentyful; despite a packed flight (Do we thank Bin Laden for this change?)
- Changes for the worse
- The food is utterly mediocre. I have the sense of being on my own, rather than being pampered by the Royal Maharaja and his dedicated courtiers as we were back in 1980.
- Seating is certainly more cramped
- Changes invisible to the untrained eye
- I am sure that the aircraft is fundamentally greener and burns a whole lot less fuel – both on an absolute scale and on a per capita basis. The hundreds of miles of wires have been dramatically reduced in length, all of the plastic has eliminated weight, and composite materials are everywhere in the structure (a fact that would have thoroughly gladdened my father’s heart, given the many years he spent studying the fatigue properties of composites and evangelizing the use in products ranging from aircraft to cooling tower and windmill blades)
My conclusion? Not a whole lot has (visibly) changed! While utterly disappointed, I guess that this isn’t that different than comparing the Pontiac station wagon my uncle picked us up in at JFK to even a Buick I might buy today… it is after all a body and an engine on four wheels steered by yet another wheel. Yes, so we have a stiffer unibody, a lot of electronics optimizing the engine and the power train, but, in the end, as Mr. Ed would have put it, “a car is a car is a car.” I wasn’t going from a bullock cart to a jet plane. Sadly, it’s all about incremental innovation, once in the category.
The gizmo I enjoyed the most?
The multiple on board cameras that let me (and, for that matter, anyone else on the plane who cared about it) look forward from the top of the tail, the bottom of the belly, and (I think) the nose of the aircraft throughout the flight.
The highlight of the flight?
A personal tour of the cockpit – large enough to house 3 pilots, bunk beds and all –once we touched down in Frankfurt!
Safe and happy flying!
Orlando, May 17th, 2011: Bill McDemott and Jim Hagemann Snabe, SAP’s co-CEOs, just delivered their keynotes — and in doing so, advanced SAP’s efforts (read my recent article on this topic — “SAP’s best kept secret”) to tell the world about its offerings for SMBs.
They highlighted Under Armour and FreshDirect — customers that are now large, but were SMBs when they started with SAP. The growth stories that their CEO’s shared are pretty impressive and worth listening to on the Sapphirenow.com. Under Armour uses SAP’s ERP and SAP BusinessObjects Business Planning and Consolidation solutions while FreshDirect uses SAP’s SAP Business All-in-One and SAP BusinessObjects Edge BI solutions.
Additionally, they announced SAP Business ByDesign’s 500th customer!
The SME (SAP-eze for SMB) campus at SAPPHIRE NOW is jazzed!