Wednesday May 23, 2007

More CFA Examinees in Asia

Chartered Financial Analyst (CFA) designation has become a license to work in financial services anywhere in the world. Its appeal goes global with the globalization of financial services.

More people will sit for the CFA exam in Asia than in the US this year, some 52,900 as compared to 45,400, Financial Times reports this morning. CFA examinations began in 1963.  Originally for analysts, it has become popular with asset managers and traders. Only half the candidates have traditionally passed the test.  The rest "dop out during the course, which typically lasts four years.

Wednesday May 02, 2007

Narrow Strategy

Narrow strategy understands the world in terms of conflicts and opponents.

In this narrow view of the world, relationships are rarely built. They are more often broken or leveraged against each other.

Broad strategy understands the world as communications and commerce among interdependent parties in relationships that can always be conceived to exist for mutual benefit.

In this broad view of the world, relationships are not only sought but also fostered. They are nurtured with care to be embedded in networks of value for all.

Tuesday May 01, 2007

The Business of Software

After the usual foreword, Michael Cusumano opens his book, The Business of Software, by outlining the main chracteristics of that business:

In how many businesses does making one copy or one million copies of your product cost about the same? How many businesses have up to 99 percent gross profit margins for their product sales? In how many businesses do many products companies eventually become services or hybrid companies (that is, providing some customization of product features and technical services such as system integration and maintenance), whether they like it or not? In how many businesses is there frequently a ten- or twentyfold difference in productivity between your best employee and your worst one? How many businesses tolerate some 75 to 80 percent of their product-development projects routinely being late and over budget, with "best practice" considered to be 20 percent on time? How about a company where people who build products often consider themselves artists rather than scientists or engineers and have the mercurial temperament to go with it? In how many businesses are customers "locked in" to a particular vendor because of product decisions someone made a decade or two ago that can't easily be reversed?

…[G]et the strategy and the management side right, and the software business can be like having a license to print money…But get the business model wrong, and—to borrow a metapor from Frederick Brooks's The Mythical Man-Month—software companies can resemble dinosaurs futilely trying to escape the death grip of an ancient tar pit. The more you struggle—that is, the more time, money, and people you pour into product development, sales, and marketing in the hope of a turnaround—the deeper you sink and the quicker you die. In the software business, this is not only because the more people you add to a late software project, the later the project can become—a rule of thumb now described as "Brook's law" (and not always true). But the broader downward spiral can accelerate for a whole company and become self-fulfilling as present and potential customers flee from software producers unlikely to survive long enough to deliver, support, and upgrade their products.

Cusumano's summary strikes all the important chords when it comes to describing the characteristics of commercially produced software. It misses some important characteristics of open-source software communities and economic networks dependent on them.

In an open-source, community project, which (company or private) participant is the producer? Who is paying the production cost? Who is reaping the benefits?

However, when it comes to a business built on bundling of open-source software or on applying such software to solve specific problems through various kinds of software extensions and customizations, we return to the general laws described by Cusumano.

Then, there are a whole set of companies that may appear to some as software companies, say Google, but they are in fact not software companies at all even if they may produce a great deal of software.

This class of companies are indeed more like modern-day AT&Ts or Sprints. Modern day equivalents are web service (e.g. Google Search) or content (e.g. YouTube, Orkut, etc.) or Internet communications (e.g. Skype) concerns. Cusumano's description does not really apply to these companies either. These companies are not in the business of selling software but rather in the business of selling service for a fee (subscription or advertisement). They do software to the extent it helps them to render their services useful and appealing.

Thursday Apr 26, 2007

Self-Expression and Leadership

Business leadership books often contrast leadership with management. While managerial skills might prove useful for certain kinds of leadership, leadership involves something else. As Warren Bennis notes, "No leader sets out to be a leader. People set out to live their lives, expressing themselves fully. When that expression is of value, they become leaders."

Tuesday Apr 10, 2007

English and Business

English may be the language of business today but many know that there are no guarantees it will remain the language of business tomorrow. In fact, more business was conducted among nations (per capita) prior to World War I, when there was no uniform business language, than around the late 1990s, at the height of the .com boom and when English was the lingua franca of business. (See Robert Barro's Getting It Right: Markets and Choices in a Free Society.)

Saturday Feb 10, 2007

Search as a Marketing Tool

People at technology firms, particularly those focused on web technologies, have used Inernet search as a marketing tool for some time. Other firms, e.g. manufacturers, service providers and consumer product companies, have done the same but their demands have given rise to a whole new industry that creates and supports search-based marketing tools. Wall Street Journal's Kevin J. Delaney reviews the state of this industry in "The New Benefits of Web-Search Queries" (Tuesday, February 6, 2007).

Saturday Feb 03, 2007

E-Commerce Growth Unabated

Some analysts believe e-commerce growth will continue unabated, concluding that many profitable private companies will take their time before going public. 

Thursday Feb 01, 2007

Business Predictions

Financial Times' mutli-media program View from the Top provides an intelligent collection of business interviews. For example, there is a recent interview with Robert A. Iger, President and CEO of Walt Disney focused on new digital platforms for content generation and distribution, including comments on "user-generated content," locally-generated content (with the Disney name) and content consumption in general.

An interesting feature of these Financial Times' interviews is the prediction delivered at the end. Here's Igor's prediction:

I predict that the internet-enabled computer media experience will be the primary media experience for our children’s generation as they grow up.

Wednesday Jan 17, 2007

Mobile Ads

A recent Wall Street Journal article by Amol Sharma features AdMob's system for placing ads on content directed to mobile users. (Subscription may be required to view this article.)

AdMob connects content providers and advertisers. Since advertisers cannot negotiate with individual operators or content providers for ad placements, AdMob has a market position well-suited for growth.

Under AdMob's system, as with Google's on the Internet, advertisers pay only when a user clicks on the link. Advertisers go to AdMob's Web site, fill out a form, and make a bid for a click in one of several categories, such as news, entertainment or communities. The bids for a click generally range from five cents to a dollar.

Surveys show that reception to mobile ads remains mixed even when some benefits accompany an expressed willingness to view the ads. Consumer studies completed in August of 2006 show that some 51% of mobile users do not want to receive any ads at all even if they can get free applications for their mobile devices.

Tuesday Dec 12, 2006

Marsh's Harsh Review

Rob Marsh writes a harsh review of Paul Arden's Whatever You Think, Think the Opposite. I did read the book last week and found it had some redeeming qualities. Marsh may be expecting too much, and Arden may be delivering on something other than what Marsh seems to be expecting.

Monday Dec 04, 2006

Strategy and Commerce

Where commerce takes hold, strategy finds its limits.

When an opportunity for commerce surfaces itself, a fair deal grounded in reality can always be found to work for all parties. Even if not globally optimal for any individual party, the deal may be composed to be locally optimal and it will always be better than no deal. Of course, all deals happen in a temporal scope and while some can last for long periods, no worldly deal can prove to be an eternal giving away of rights. (All deals involve giving away some rights in exchange for receiving some other rights.) History shows that commerce needs a convincing regime of peace to conclude, not the guise of forced power differentials extracted by strategy nor the shadow of costly battles filled with empty hallucinations of stratagem.

Friday Nov 10, 2006

On Weblogs and Fair Disclosure

Securities and Exchange Commission Chairman Christopher Cox seems to have responded to Jonathan Schwartz's questions regarding the use of blogs for fair disclosure, Siobhan Hughes of Dow Jones Newswire reports. This is a historical dialog worth noting by those interested in how technology can effectively be used to meet various regulatory requirements.

Thursday Nov 02, 2006

Red Hat, Suse, Oracle and Microsoft

So, what does Oracle's Red Hat announcement and Microsoft/Novell's Suse announcement mean to you?

Why does it seem to me that  this is all good for Sun and Solaris and not very good for the various flavors of Linux?

Tuesday Oct 31, 2006

The Lessons of Flickr

Financial Times has a short story about the lessons of Flickr as a startup and "the rise of a new kind of Internet entrepreneur."

Dependence on outside funding seems to be waning, open-source tools lower "barriers to entry for aspiring web entrepreneurs," "start-ups do not need to break the bank to create an IT infrastructure," blogs and other social networks provide efficient out-bound marketing, and "the latest generation of internet entrepreneurs have plenty of exit options available."

Open Source -- Buy vs. Build

To use open source software within the IT operations of a business should not necessarily involve a buy vs. build (TCE) decision for every IT division of every firm.

Many companies, including Sun Microsystems Inc., now offer open source software for that very purpose, i.e. for IT operations.

Financial Times, has an article today, exploring the issue from the buy vs. build (some call it "buy vs. make") perspective, particularly for small business. "Simple-to-install combinations of open source products for the smaller business" seem to be the key to doing business with open source in that particular market segment.

We begin talking of installation patterns.

It is odd, but now, with hardware and software prices bottoming, installation, i.e. the human choices that are made to create a usable deployment, represent the highest cost of system start-up.

Monday Oct 30, 2006

America's Best Young Entrepreneurs

Sun Microsystems Inc.'s Sumaya Kazi has been selected as one of America's Best Young Entrepreneurs by BusinessWeek for her work on an online media company she runs during her off hours outside of Sun "to spotlight and connect young minority professionals with each other and with the non-profit world": The Cultural Connect.

Wednesday Sep 20, 2006

Haas Ranked by WSJ

It is good to see my alma mater's WSJ ranking improve.

[Read More]

Tuesday Sep 05, 2006

Born or Bred

Are entrepreneurs born or bred?
[Read More]

Sunday Sep 03, 2006

Industry Structure and Competition

How valid is a competitive analysis based on current industry structure? [Read More]

Software and Market Share

In software business, market share becomes key. The trick, of course, will be how to define the relevant market. [Read More]
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