Thursday Jul 30, 2009

Deals and More Deals

Reuters deals pages are still the best and quickest source of news on deals and corporate strategy. 

For example, consider the page that summarizes global deals in terms of total number and value of deals among pairs of countries. (I agree that a complete summary graphic representation would also be good to add to the ones that capture deal totals for each country.)

Monday May 25, 2009

The Mind of the Strategist

Yesterday, I completed my reading of Kenichi Ohmae's The Mind of the Strategist: The Art of Japanese Business.

Originally written in Japanese in 1977 and later translated into English, this is a quintessential book on business strategy.

Reading it makes one wonder whether the many strategy scholars of the 1980s, 1990s and 2000s have produced thoughts that flow directly from principles already laid out by Ohmae.

The book contains many vivid examples from the Japanese business scene.

I'll try to extract some useful quotes and comments in the coming weeks.

Sunday May 10, 2009

Sun Contributor Agreement and MySQL

On my last count, there are now 20+ Sun Contributor Agreement (SCA) signatories whose names appear on the master list and who are interested in contributing to MySQL. Only this week, three new members signed the SCA.

These 22+ signatories have all been added since mid-February when we launched the new, Sun-compliant SCA signing process. Before the end of 2009, if we proceed at this same rate, MySQL SCA signatories list should grow to about 70 to 90 contributors.

In the meantime, contributions from many of these contributors have already been accepted and integrated. (I had earlier pointed to Armin Schöffmann's contribution as a simple example of how all this works.)

Some people continue to wonder why an SCA is required.

First of all, it is important to note that by signing the SCA the contributor retains copyrights while also granting those rights to Sun as the project sponsor. This granting is very specific to a particular code base and the community around it. (This is a code base that has been available under GPL.)

Second, as I have summarized, in a series of Golden Rules for Open Source Contribution-Based Communities, several important rules for such communities help it to operate well. As part of rule G, "Setting Expectations," I did mention how

2. Anticipating the future and related risk management helps all market participants to reduce transaction costs.

However, I failed to add that an important ingredient in that risk management is the management of ownership claims.

I believe this particular aspect of rule G, which is implicit there, and which perhaps needs to be made more explicit, explains clearly why something like an SCA is required in order to maintain a flow of contributions to MySQL in a form that allows clear code ownership. 

Note that other open-source communities, such as the Apache Software Foundation, also require their own contributor agreement. Often, these agreements are there to protect the maintainers of the project/product or the general integrity of the products' ownership.

BSD-based communities seem to avoid this need by posting various clear signs in various places -- in their member-initiation or commit e-mails -- that all contributions are made under BSD. However, these communities have remained somewhat fragmented due to the greater openness of BSD licenses. Don't get me wrong. I love BSD. Note that often, BSD contriutors would rather contribute to a BSD project. The whole objective of contributing to a BSD project is that you are building a based that can be used by anyone for open and closed business with that same base. This is very unique to BSD type or Apache type licenses and forms one of the main reasons contributors contribute to these projects.

So, let's now go beyond the question of SCA and see what else is going on.

The update and simplification of SCA submission process for MySQL, came along with equally important simplification of forge pages for contributors and with an effort to speed up the review of contributions and continuting with greater openness in MySQL development processes. [These apparently fragmented but hopefully useful (and ultimately coherent) steps have all been part of a larger initiative to facilitate openness, community participation and contributions. Again, please refer to the Golden Rules. Hopefully, you can faciliate and help the MySQL community to get more open and vibrant as an open-source community.]

It is important to note, here, that roots of this initiative go back to some years earlier. So, the initiative is related in part to a continuing series of efforts to make MySQL more open and more contributor friendly, including the famous "quality contribution program," which was originally launched by the MySQL community team. (In a sensem the "quality contribution program" has evolved into this simpler, more robust model and many of the lessons learned there have also been applied and used here.)

Under the SCA, contributors can contribute to all MySQL open-source products in open forums and issue tracking "systems"-- internals list, bug tracking system, worklog system. I put quotes around "systems" because there's more to be done to make these systmes work better together in a more open environment. Note that the MySQL team prefers to receive code contributions and bug fixes through the first two modes because those two modes (i.e., bugs db issue tracking and the internals mailing list) better afford two-way communications. Note, too, that contributions can be at the level of bug fixes or features.

Why would anyone contribute?

Well, there's a great deal of challenge to contribute anything to a software as sophisticated and complex as a database.

Besides the reputational effects, there's also this practical effect that once a contribution has been absorbed, the contributor will no longer have to worry about constant merges to get the effect he or she expects form MySQL.

Of course, there are many other reasons as well. For example, there are those who are just problem solvers, and find it exciting to contribute to MySQL. However, let me stop speculating on this any further. Instead, let me point you to an "internals" posting by Stefan Hinz, regarding a "MySQL University" session on replication features in 5.1 and 6.0.

Monday Mar 30, 2009

A Toast to Marten Mickos

As Marten Mickos gets ready to move on, his executive buddies raise a toast in his honor.

Friday Mar 27, 2009

Microsoft Takes Note of MySQL

In a Financial Times report today about RedHat's quarterly earnings, Sam Ramji of Microsoft takes note of MySQL and its influence as a key component in the general move towards open-source software:

Larger deployments of open-source to firms that already run the technology in a small way might be the most that happens, due to the fact that recessions make IT managers worry about risk. For the same reasons, a recession is not the time to switch a workforce to a new technology.

Microsoft is counting on that, while accepting that every leading company will soon be running at least some open-source software.

“It’s a heterogeneous world,” said Microsoft’s Sam Ramji. While Microsoft continues to warn about the legal and economic perils of relying on Linux and similar systems, Mr Ramji’s role is to make sure that open-source programs already in use can work in conjunction with Microsoft software.

That way, just because a company is using the MySQL open-source database, it will not feel compelled to put it on top of the Linux operating system. By some measures, that defence is working well – Mr Ramji said 56 per cent of MySQL instances were running on Windows.

Then again, the easier Mr Ramji makes it for IT buyers to economise by putting open-source in more places, the more they will do just that and undermine his business in the longer-term.

Sunday Mar 08, 2009

Survival and Growth

I just started reading Arie de Geus' book The Living Company, and found in the first few pages a clear echo of Chester Barnard's The Functions of the Executive. Both emphasize the centrality of survival and growth ("thriving"). Here is Arie de Geus writing about the topic: 

Like all organisms, the living company exists primarily for its own survival and improvement: to fulfill its potential and to become as great as it can be. It does not exist solely to provide customers with goods, or to return investment to shareholders, any more than you, the reader, exist solely for the sake of your job or your career. After all, you, too, are a living entity. You exist to survive and thrive; working at your job is a means to that end...

If the real purpose of a living company is to survive and thrive in the long run, then the priorities of managing such a company are very different from the values set forth in most of the modern academic business literature. Such a purpose also contradicts the views held by many managers and shareholders. To be sure, many management fashions resonate with the idea of a learning company—for example, the concepts of the "learning organization" and "knowledge as a strategic asset." But there are serious doubts that even the most enthusiastic managers and shareholders have fully explored the ramification of these concepts.   

Before writing all this, Arie de Geus, a long-time Shell employee, had led Shell's Group Planning study on the longevity of companies. The study had concluded that companies live longer depending on their (1) sensitivity to the environment, (2) cohesion and identity, (3) tolerance (and as a corollary, decentralization), and (4) conservative financing, which gives rise to an ability to govern one's own growth and evolution effectively.  

Saturday Feb 28, 2009

Relative vs. Absolute Strength

In his classic work first published in the U.S. in 1982, Kenichi Ohmae outlines the general approach of a strategy analyst. He draws a distinction between absolute vs. relative strength and  explains why strategic thinking puts a particular emphasis on relative strength: 

I make the distinction between relative and absolute strength because there is a great difference between the two with respect to the degree of urgency. Internal weaknesses or inefficiencies can usually be tolerated, at least for a time. By contrast, deterioration of a company's position relative to that of its competitors may endanger the very existence of the enterprise. In effect, it will allow the company's profitability to be controlled by its competitors, a situation in which sound management of the enterprise will no longer be possible.

The Mind of the Strategist: The Art of the Japanese Business, Kenichi Ohmae

Wednesday Oct 29, 2008

An HBR case on Wikipedia

Karim Lakhani has put together a business case study on Wikipedia. It is worth noting that Wikipedia uses MySQL as its database engine. 

Sunday Oct 19, 2008

Market Focused Strategy and the Long Term

Market-focused strategy formulation helps to solve the problems of today as viewed through our understanding of the current markets. Markets, however, tend to change rapidly in modern societies. Just observe what is going on around you, the number of products that have come and gone, and business that have failed and hailed, fashions and habits that have come to fore in the last decade. Under such rapid change, it becomes difficult to maintain stability and constancy needed for long-term strategy. For some companies, a long term strategy might run a course of a 100 years. (It is reputed that some Japanese companies have 100-year, and some longer-term, strategic vision.) To serve long-term strategy, it seems more advisable to view the firm as a bundle of evolving and emerging resources, skills and capabilities, and focus on building long-term strategy based on the synergy and the development of these resources and capabilities. 

Sunday Sep 28, 2008

Porgramming Strategy

In his Contemporary Strategy Analysis, 6th edition, Robert M. Grant writes:

We must also recognize the nature of strategic analysis. Unlike many of the analytical techniques in accounting, finance, market research, or production management, strategy analysis does not generate solutions to problems. It does not yield rules, algorithms, or formulae that tell us the optimal strategy to adopt. The strategic questions that companies face (like those that we face in our own careers and lives) are simply too complex to be programmed.

The purpose of strategy analysis is not to provide answers but to help us understand the issues.

Sunday Aug 31, 2008

Time Delays

In Competing Against Time: How Time-Based Competition is Reshaping Global Markets, George Stalk, Jr. and Thomas M. Hout wrote:

Distortion between actual demand and perceived demand plague most businesses today. To escape them, companies have a choice. They can produce to forecast and try to ignore the reverberation that would cause them to do otherwise, or they can reduce the time delays in the flow of information and product through the system. The traditional solution is to produce to forecast...The new solution is to reduce the consumption of time throughout the system.

Managing time and information in supply chains have improved considerably since Stalk and Hout wrote their 1990 book. Bullwhip effect remains universally and as well-recognized (starting with ideas rooted in Jay W. Forrester's work) as in 1990. It is also known that even in the case of perfect information flow up a supply chain, some amplification of oscillations will continue to propagate upstream of any supply chain, and the only control action that remains (in a world of "perfect" information flow) is still the reduction of time delays, some of which will continue to survive due to the physical conditions of lived time and space. It still takes time to transport goods from point A to point B.

Wednesday Aug 27, 2008

Brand Value vs. Logos

Jim Buckmaster, Craig's list CEO:

We pay zero attention to brand. We never use that word internally. We do zero advertising. We don't have a logo. We've never done a focus group. We don't care about any of that. And now we're told we have the strongest brand ever for a company our size.

What a great example, and still, isn't there a little symbol, a little logo, a little peace sign in the browser URL box?

Saturday Aug 16, 2008

Organizing Production

In his Contemporary Strategy Analysis, Robert M. Grant describes a more recent phase in the long evolution of economic organizations:

As late as 1840s, the largest enterprises in the US in terms of numbers of workers were agricultural plantations. Most manufacturing was organized through networks of self-employed, home-based workers. The English woolen industry consisted of home-based spinners who purchased raw wool (on credit) from a merchant to whom they sold the yarn; the merchant resold the yarn to home-based weavers from whom he purchased cloth. This "putting-out" system survived until the onset of the Industrial Revolution. With the advent of water-powered looms, weavers moved to factories where, initially, they rented looms from factory owner by the hour. Factory-based manufacture made this system of independent contractors inefficient—it was difficult to schedule machine time, and there was little incentive for the independent workers to look after their rented machines. The emergence of firms where market relationships among workers, machine owners, and merchants were replaced by employment relationships between the owner of capital and the workers was a more efficient means of organizing production.

The issue of relative roles of firms and markets is a central aspect of economic organization. In the capitalist economy, production is organized in two ways: in markets (by the price mechanism) and in firms (by managerial direction). The relative roles of firms and markets is determined by efficiency… 

Thursday Aug 07, 2008

Fast Strategy Introduction

Published by O'Reilly, Amy Shuen's Web 2.0: A Strategy Guide: Business Thinking and Strategics Behind Successful Web 2.0 Implementations gives a fast, well-written introduction to the strategy, economics and business of Web 2.0 companies—all based on cases that should be familiar to the reader. 

Wednesday Jul 16, 2008

A Brand

"Brand" comes from old Germanic or Norse word meaning "burn." Animals are branded, demonstrating their ownership, and a commercial brand leaves a lasting impression in a target's mind. In commerce, building a brand value creates a specific investment that cannot be portable easily. Java was separate from SunSoft. Mac brand was not taken to iPod, but the Apple brand infuses both. 

A brand is a promise of satisfaction. It is a sign, a metaphor operating as an unwritten contract between a manufacturer and a consumer, a seller and a buyer, a performer and an audience, an environment and those who inhabit it, an event and those who experience it.

The consumer, buyer, audience, inhabitant, and "experiencer" (all customers) form their own feelings about what a brand means; but they can be influenced—more than most realize—by the advertising and publicity of the manufaacturer, seller, performer, environment, or event (all producers).

Branding is the process of continuous struggle between producers and customers to define that promise and meaning. To paraphrase Karl Marx, people make their own decisions about who to be, how to live, and what to buy, but under circumstances shaped by brands' advertising, marketing, and publicity.

Matthew Healy, What is Branding? (2008)

Tuesday Apr 08, 2008

Open Source Databases on the Rise

Christopher Lawton of The Wall Street Journal reports on the rise of the open source databases:

The potential benefits in cost and flexibility have not been lost on customers. The market for open-source databases is expected to grow 35% to $270 million this year from $200 million in 2007, according to Gartner Inc. Among the earliest adopters are midsized companies, which don't always need the high-end features of conventional databases, says Carl Olofson, analyst with IDC, a market-research firm.

For example, Sun Microsystems Inc. provides supported offerings of MySQL, PostgreSQL and Java DB (Apache / Derby) to its customers.

If you're interested in discussion and community around open source database technologies for Solaris, see here.
 

Monday Mar 10, 2008

Systems: Exploration vs. Exploitation

When it comes to learning, systems and resources, James March has summarized it all:

Maintaining an appropriate balance between exploration and exploitation is a primary factor in system survival and prosperity. 

Monday Sep 10, 2007

"Core" Competence

Here, the experts remind us what the phrase "core competence" really stands for:

[T]here is a difference between "necessary" competencies and "differentiating" competencies. It makes little sense to define a competence as core if it is omnipresent or easily imitated by competitors ... A core competence is truly core when it forms the basis for entry into new product markets. In assessing a competency's extendability, senior management must work hard to escape a product-centric view of the firm's capabilities [and focus on a skill-centric view].

That should be a simple enough recipe to remember.

Sunday Jul 15, 2007

Markets and Standards

 

Much has been written about the role of dominant standards in growing markets in complementary products. In their Competing for the Future, Gary Hamel and C. K. Prahalad summarize the main points:

In the absence of one or two dominant standards, vendors of complementary products can't capture economies of scale because they must design different products for different standards.  The result is diminished potential for economies of scale, higher prices for consumers, and a market much slower to take off. Competing standards confuse customers and make them less apt to buy; many will prefer to wait until a clear winner emerges. When an industry finally coalesces around one or two primary standards, market growth spurts ahead.

For the most part, therefore, companies competing for the future are keen for standards to emerge as early as possible. Not only does this accelerate market development, it also reduces the risk of committing resources to technology or approach that ultimately fails to become the dominant standard.

This view of standards has proved valid in business history. One area where dominant standards play a very definite role involves industries that depend on very large "networks" such as the Internet, telecommunications or various other social and peer-to-peer networks.

The classical view regarding markets and standards needs to be complemented. First, we should be able to observe and try to explain the diversity of standards and markets. There are various niche markets and communities of exchange that require their own particular ways (or standards) for doing and building things. Here, we have a diversity of products that are available in each market community.

Second, standard dominance can be very "thin." Consider the (non-medical) shoe market. When it comes to the design of shoes, there are no "dominant" standards, other than the natural ones such as the bounds dictated by the physiology of feet and the demands of leather or other materials used.

Third, a particular standard can be rooted in a simple response to an inherent need, in a rather informal way. Later, it may become the "dominant standard" where the need has produced a community.

For example, we can investigate the case of giveh. In some rural communities, giveh became the standard shoe. These shoes are still manufactured by hand on a mass scale for everyday use. Givehs have surprisingly standard shapes, and one may encounter highly specialized markets in standard sole pieces, top pieces, thread, lace, etc. Here, we have a prime example of how rural communities give rise to their own standards for purposes of reducing transaction and manufacturing costs without ever holding a standards conference. The "tolerance" of these standards is good enough to serve their community and the relevant markets.

Tuesday Jun 05, 2007

Coffee

Coffee ... the world's second most widely sold commodity, after oil .... (Harvard Business Review, October 2006)
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