Joining the Enterprise Irregulars- a study in Ecosystems

I am excited to report that I have been invited to join Enterprise Irregulars, and have accepted. As the Enterprise Irregular says- "We are a diverse group of practitioners, consultants, investors, journalists, analysts and full time bloggers who share a common passion - enterprise technology and its application to business in the 21st century." Over the last year, since I started blogging I have read and opined on articles by fellow Irregulars Jeff Nolan, Rod Boothby, Vinnie Mirchandani and exchanged comments and emails with others.


What does this mean for my blog visitors? You will see a new Enterprise Irregular badge displayed on my blog. This blog will be featured on the Enterprise Irregular site so some of you can read my articles and all others in one single place, or subscribe to our feed. I will also be incented to write more regularly (and be funnier?) as my blog will reach a broader audience.

Ecosystem
The Enterprise Irregulars illustrates many benefits of an ecosystem and these principles apply to many other endeavors in life including a startup or a mature business.

• Marketing: It is hard for one of us to create a brand since many of us blog part time. The EI (Enterprise Irregulars) allows us to pool our marketing resources and benefit from it.
• Influence: Not too many people care about what an individual reader with a relatively small readership may have to say. But when we speak as a group of Enterprise Software experts, our combined influence is far greater.
• Community: As I mentioned, having a sense of community of fellow readers (or fellow enterpreneurs or fellow researchers) encourages everyone to try harder.

What are your thoughts? How have you used the power of the ecosystem in your life? What about LinkedIn as an ecosystem enabler?

Time for a new VC pitch: This is not a Pipe!

"This is not a Pipe"

The modern version of this painting is "This is not a computer" by Apple.

"This is not a Computer"

For far too long, budding entrepreneurs have been asked to explain their ideas in the context and vocabulary of existing success stories- "YouTube is FlickR for videos", "RFID is barcodes without line of sight", etc. Even though I am the first to admit that it aids in communicating the idea to a novice, but it also hampers original thinking and ideas. You just have to look to Enterprise 2.0 (Web2.0 for the Enterprise) to see how the simplicity of the communication does not always map to a real product or service.

EBay was not simply Sotheby's on the internet. And Yahoo! was not just Yellow Pages on the internet. In order to create revolutionary new products, you sometimes have to think from scratch and not be limited by existing vocabulary or memes.

Several technology giants today are struggling with slowing earnings and revenue growth- they can all do well to learn the lessons of iPod (and Motorola RazR):

1. Invest in bold new ideas: Releasing yet another incrementally improved version of an OS is not breakthrough innovation.
2. Be willing to let go what it means to be a "computer company": IBM learned this the hard way in 1980s. You want to be the innovation company, the ideas company, the good customer service company and not necessarily be tied down to a particular product or manner of delivery.
3. Small teams: Only small teams with a passionate few people can come up with new products and services. As a rule of thumb, any team that cannot fit in your corner office is too big.
4. Big companies can innovate: It is easier as you grow to be a large company with billions of dollars in revenue to fall into the Innovator's Dilemma- what is right for the most profitable businesses can lead to the wrong long term consequences. Adopt one of many solutions to this well studied problem- new DNA, acquisitions, intrapreneurship, spin-in structures- to foster innovation.

What do you think? Are the large companies doomed to follow rather than lead? Have you or anyone you know tried to innovate within a large company?

Update: Sharad has posted an excellent response to this on his blog at Lack of Innovation... and suggested two alternate paths to innovation.

I believe that a big company can foster innovation one of two ways. It can either emulate an entrepreneurial company much like what Apple has done in recent years. Or it can leverage its size to follow the Toyota and Honda’s Kaizen method of breakthrough innovation. Right now, unfortunately, most IT companies are doing neither.

How do you see it?

Banking in Brazil - BRIC2.0 or Web2.0

I have been receiving these podcast alerts from Gartner and one of them caught my eye-"What Banks should know about Web2.0". The podcast available here talks about how Web2.0 will inevitably impact the banking industry. The analyst talks about how money will change hands in MySpace, how banks are using podcasts and that RSS feeds can be used to disseminate information. I am sceptical about the MySpace, don't much care for podcasting or its supposed impact on banking but agree that podcasting and RSS are useful technologies. Although it is hard to understand how this is specific to banking vs. retail or healthcare. The analyst then refers to CircleLending, a peer-to-peer lending enablement startup. A very interesting startup amongst the ranks of Zopa and Prosper.

By nicholasb (Creative Commons License)

Meanwhile in Brazil, HSBC seems to be everywhere. On my latest business trip to Mexico and Brazil, I saw HSBC truly dominate the marketing landscape in the two countries. And they seem to be doing well in India too with over 50% growth in profits. Citibank is probably the only other bank that has had so much success in its global strategy and its claim to be "the world's local bank" rings true. So how does this relate to Web2.0- it does not and that is the point. In my view, the future of banking is not Web2.0 but Brazil, Russia, India and China. I would like to coin the term BRIC2.0 and propose that more opportunity and growth is to be found by following the advice of CK Prahlad than by doing a mashup of Bank of America site with LendingTree!

For example, customers of banks in India can check their balances and pay bills by using text messaging on their cell phones. And text messages in India cost lower than 1c per message. In fact, over the next few years as banks from India and other low-cost high-capability countries set up shop in the USA, they may end up giving the US banks a run for their money. If Infosys can run IT operations of large European or US banks at a lower cost, then their friends at HDFC Bank or ICICI Bank may one day be able to provide banking services that can compete with the large US banks. And that may be the logical conclusion of outsourcing. You only have to look at how the PC industry started with outsourcing manufacturing of minor parts, then chips and now Lenovo owns IBM to wonder if one day the same could happen in other industries from banking to healthcare.

BRIC2.0 is the next generation of developing economies that are the engines of growth for banks, automotive, steel, etc. Indeed, IBM is moving its global procurement offices to China from New York. A sign of times to come... forget Web2.0, focus on BRIC2.0!

Ever heard of UFIDA, KingDee, Tally?

Well, you may never have heard of these enterprise software vendors but they are the giants from China and India. KingDee and UFIDA are #1 and #3 vendors in China and Tally is the top local vendor in India. Gartner recently predicted that a large vendor will emerge from China and India over the next 5 years. These 3 could well be the favorites for that spot. Tally is the QuickBooks of India with ambitions in mid-market ERP.

These homegrown wonders have the advantage of deep knowledge of the local markets, ability to develop software that fits the unique infrastructure of these countries. For example, connectivity to the Internet is far from ubiquitous in India. These limitations box these vendors allowing them to innovate in a space that is unique and disconnected from the global enterprise software world. And believe it or not, this is actually an advantage (see The Innovation Sandbox by C.K. Prahlad) as it prevents easy co-option by global vendors. We have already seen this play out in the consumer internet world with the success of Baidu.

Race to the top?
(by Bruno Girin)

So while we all look to climb the ladder of features and architecture and race to take advantage of Web2.0 and SOA in the enterprise software universe, we are also increasingly distancing ourselves from a market that cares about simple software that meets the most basic needs, can run in a sometimes connected world and on previous generation computers. And this market at the bottom of the pyramid is probably many times larger than the top we are all running towards. What do you think?

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