Interesting view on making money in business

I had the chance to be a key note speaker at PROMISE (and ICSE workshop) last week. The group uses datamining and A/I techniques to look for patterns and make predictions on a variety of things, like where in code defects might occur, or how much effort a project might entail. 

I was there because we had  a project a few years a go running to predict which bugs might cause customer escalations, using similar techniques. I was responsible for implementing the fixing of these bugs proactively. My talk was geared around how to put a business case together and run such a project, and ultimately why in this case it was wound up before major benefits were realised.

There were loads of other great talks and papers, but the other keynote speaker, Murray Cantor from IBM had some interesting points, one of which I wanted to pull out here.

He said that there are three things you can monetize. Innovation, Customer Relationships, and Cost structure. For example, you can Make money by having the first product to market, or a good close relationship with the customer or buy doing it cheaper than anyone else. He  drew this in a triangle like this

 Monetize Triange


So this got me thinking as to where Sun fits in to the picture. First off I'd say it's a different place from IBM who put huge resources in to having a close relationship with the customer (Murray indicated he felt IBM was somewhere on the Innovation/Customer line). However It isn't purely at the Innovation point either. We provide Innovative technologies to help lower costs both for our customers (hey Free Software anyone - check out http://opensolaris.com), but also by automating things like system management thus removing cost and complexity (Take a look at our xVM strategy to merge virtualization and system management at http://openxvm.org, thus removing some of the headaches to running a virtual data center). Oh and did I mention our coolthreads hardware? So I think we're probably somewhere between the Cost and Innovation points.

I'm not saying this is a full theory of business, but I found it a useful thought experiment to see the different value propositions of various companies business models.


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Chris W Beal

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