Daily Entries

Can India based IT giants transition into providing cloud based services ? It is a big challenge for their management.

Thu, 19 Aug 2010 12:03:40 -0400

Can India based IT giants transition into providing cloud based services ? It is a big challenge for their management.:

The business model and revenue model for cloud based services is completely different from an outsourcing business. It is highly unlikely that India based IT service giants will be able to make this kind of transition. Even if they can successfully pull this off, the revenues from cloud services will not be incremental. The $s will moving in from their own traditional services.

Cloud based services need heavy upfront investment on infrastructure and intellectual property. There will not be any cashflow for a while - at least for few years. Any revenues are unpredictable since it is meter (pay-per-use) based with no long-term contracts. These basic factors will put significant pressure on the profit margins and their operational budgets.

Are the Indian based IT firms and their management ready to take on this challenge ? This transition should happen quickly. Their competitors are innovative, agile and well funded start-ups in western countries.

Why there is a healthy relationship between democracy and...

Thu, 19 Aug 2010 07:39:00 -0400

Why there is a healthy relationship between democracy and sustainable prosperity.

Stability: Foundation of democracy is freedom for the citizen. Freedom gives citizens to express their opinions and objections. These encourages lot more transparency and an opportunity for contrarian views. Those forces help resetting any serious flaws in the system before they get out of control and turns out be a total disaster. Eventually democratic countries will never have to face any citizen uprise and the country never forced into any kind of revolts those turn into revolutions. Stable society is essential to achieve consistent level of prosperity.
Property rights and ownership: Democratic systems can only support principles of property rights, meaning citizens can claim ownership and hence individually one can accumulate their assets. Ownership has a magical power - it gives any normal person a sense of achievement and higher level of motivation in life & work. Property rights encourage investments and hence job creation. An ability to create new jobs is the primary indicator of a prosperous country.
Slow but steady: Democratic based systems tend to move slow and resist any sudden change. Sometimes during any crisis most of us tend to feel that slowness is a big hindrance for our progress. But it is essential for testing the implications of a proposed change by giving it some time to work it’s way through the system. Slow transition gives us an opportunity to make needed adjustments and reset our expectations. End result is stability.

Microsoft may loves to target start-ups by providing free stuff. This will not help them to compete with free open source.

Wed, 18 Aug 2010 11:33:00 -0400

As an software engineer and founder/CTO of a technology start-up (WizioTec Corp.), I got quite interested to explore Microsoft’s BizSpark program. This is a special program offered for a start-up. After reviews the plan, I was not convinced to give their tools & software a serious consideration. I feel Microsoft seem to have not found a way out of their traditional software distribution model. This approach works for a vendor that is dominant and controlling the market, eventually forcing the purchase decision. Apple is an example of such companies.

Following are some of the reasons why I think BizSpark does not work for a typical start-up, while considering other free and open source options.

Free development tools will not just cut it, who will build the software. Today the labor is lot more expensive compared to the cost of tools.
There are not many high caliber engineers available in the market to develop the software utilizing Microsoft tools, especially to build a complex and innovative solution. Even if you find such talent, most start-ups can’t afford to hire them.
Offshore development based on Microsoft tools will be quite expensive and risky. Also I am thinking the terms of BizSpark program does not support any kinds of outsourcing to offshore engineers. Most importantly it will be a nightmare to find qualified offshore Microsoft developers.
Majority of start-ups engineering workforce consist of fresh graduates and engineers with few years of experience. In this talent segment, top level of expertise around Microsoft tools is rare to find, when compared with other open source tools and software.
I don’t really understand the reasons for Microsoft allowing only start-ups with less than 3 yrs old. This criteria will block out serious start-ups. They are generally the ones who may be willing to evaluate new Microsoft tools.
The infrastructure to support Microsoft runtime is lot more expensive and require high level of expertise to configure and manage servers. Cloud service providers for Microsoft platform are still immature and these services may be costly, especially considering an open source stack such as LAMP.

It is not a good strategy for a start-up to create too much dependency on a platform which they don't own.

Fri, 13 Aug 2010 08:35:00 -0400

There has been many start-ups those who developed wrappers to twitter platform. Every time I come across such start-up, my concerns always been

What kind of business did they create for themselves. The reason for high valuations in market place for a technology startup is -the intellectual property, low start-up costs [labor is the most expensive part] and high margins, when they can generate revenues. Twitter dependent start-ups landed up spending lot of time and created not much for themselves. In contrast, they worked for free to help twitter in testing-out their platform and expand their reach to new users. An example of this - 2 years later Magpie, advertising on Twitter is put up for sale.
What happens when twitter themselves move into the niche this start-up created. It is easy for twitter to monitor and evaluate niche areas, since every of twitter applications use their APIs. Once twitter decide to move in, it is very easy for them - either can be build something in-house [now they know what works and what does not work] or buy a start-up at cost price. For example twitter moved into mobile client market with least resistance and minimal efforts.
Why do investors back such start-ups. These are purely speculative investors. They are gambling on the hope that twitter may buy their start-up one day. If such exit happen, since twitter is only one buyer and there will be too many competing start-ups for sale - investors should feel lucky if they can break even on their investment.

I see the same issue in the commercial software side. For example salesforce.com is heavily promoting their platform & APIs to 3rd party application developers. I do see some advantages for a start-up in this case. They may be able to initially ride on salesforce’s buzz. If they can execute their strategy and target a niche market, a start-up may be able to develop a revenue generating business. But most of the revenues will come from services - customized solutions for individual client -this is not a pure product play. By the way, start-ups have to acquire their clients and salesforce.com as a company will not be of much help.

RIM (BlackBerry) fight with foreign governments is exposing their delicate business model.

Thu, 12 Aug 2010 12:26:51 -0400

This video simplifies the understanding on how RIM encrypt/decrypt messages using its infrastructure - Video On NDTV

Following are my thoughts why RIM is having these issues

Their messaging route is a mix of public (internet) and private (company’s intranet) computer networks and a mix of mobile and land based networks. Each segment is managed by independent vendors, there are many points of failures and depends completely on the reliability of these foreign operators. RIM has lot of over-head to make all this work and must be passing on the cost to their customers.
Air waves used for mobile transmission falls into the control of individual governments. Anyone involved in the transmission of data/voice over mobile networks are forced to follow the rules of that country. It western countries are lot more liberal, does not mean every country must fall inline. In fact citizens living in the western countries must question their own govt’s liberal policies.
Mobile phones are the primary mode of communication used by terrorists and govt must need a way to monitor such malicious activities on the mobile networks. To do that the data on the mobile careers must be readable for govt surveillance. BlackBerry users constitute very small portion of the cell phone users and those can’t be excepted from this. This totally undermine the govt monitoring.

My curiosity was ’Why RIM is fighting this hard with foreign govts, even going to the extend of shutdown their support in those countries ?’

If RIM allows decrypted messages through their transmission route, then their expensive infrastructure make no sense for their clients. They will be better off using any smart phone which supports access to the internet. This move will killing RIMs niche business which they are selling to corporation under the pretext of being highly secure.

I like to refer this concept more in line with ‘Citizen...

Wed, 11 Aug 2010 13:21:30 -0400

I like to refer this concept more in line with ‘Citizen eCommerce’ or ‘Inbound eCommerce’.

This team at Grommet picks one product a day and presents them well. These are interesting facts and useful details about the product which a buyer would like to know before they make a purchase. In this way the buyer is much more informed and comfortable in making a purchase decisions either online or offline.

This approach that leads to an eCommerce transaction is a much better way to buy, as compared with traditional visit to a local retail store - where I constantly sold to by a sales person.

Starting a company to be sold is not a wise business plan.

Wed, 11 Aug 2010 08:28:00 -0400

Starting a company to be sold is not a wise business plan.:

Slide’s recent exit (bought by Google) has few lessons for start-ups

Don’t start a company with a sole intension of being sold. Focus on building something which can be self-sufficient in a reasonable amount of time. This will provide lot more options for share holders (investors, employees & founders) to make an happy exit.
Don’t build revenue models depend on online ads. This market is dominated by few large players and only exit is to get bought-out by one of them. Chances of becoming the next facebook is next to impossible. Even facebook will have lot of issues generating revenues based on online ads and scale-up their operations.
Plan B & C is a good idea while a start-up refines the business model. In this process if you have crossed Plan F, that is a good sign of a failing venture.
Those days are mostly gone when start-ups with no real revenue models were bought out by large players. Revenue traction is the good validation for any business model to do a large acquisition. It has not been a major criteria past few years for VCs investing during pre-revenue stage. But things have changed with there as well.

‘I am a geek. I am always been a geek’ - Helen...

Mon, 09 Aug 2010 14:37:00 -0400

‘I am a geek. I am always been a geek’ - Helen Greiner is the co-founder of iRobot. She holds a B.S. in Mechanical Engineering and an M.S. in Computer Science both from MIT.

There are very few women contributing (compared to women in our workforce) to technology entrepreneurial echo system. I started to think, Why ?

1. Women is generally risk avert. Risk taking is #1 character of being a successful entrepreneur.

2. Women generally not interested in financial aspects of running a business.

3. Business generally is not #1 priority for women entrepreneur, hence investors tend to think twice before investing.

4. In early days of any new venture, an entrepreneur is the master sales person. Women tend to shy away from getting involved in sales process. They are more inclined towards engineering, operations or management - those are later stage activities.

It is a simple and fantastic concept. I would like to call it as...

Mon, 09 Aug 2010 07:56:20 -0400

It is a simple and fantastic concept. I would like to call it as ‘network education’ system.

In the process of sharing the expensive education with under-privileged kids, those kids who are teaching are learning a very valuable and practical lessons - leadership, mentorship, effective communication with masses, self-confidence and most importantly.. a good-heart. These can’t be easily taught in a school setting.

Immoral CEO disgraced HP - Embarrassment for the brand, huge let down of management in the eyes of their employees.

Sat, 07 Aug 2010 12:54:00 -0400

Immoral CEO disgraced HP - Embarrassment for the brand, huge let down of management in the eyes of their employees.:

This is a simply case of the human not having the basic morality.

Morality is very essential character for someone with management and leadership responsibilities. This is not the first case, in which management level individual at large corporation has disgraced their company and employees. No standard background check will provide insight into someone’s morality.

This incident started me to think

How can HR acquire the morality score for an individual, before making an offer ?
How can a company manage the risk of an employee who demonstrates low morality at work ?
How to define and measure the morality ?
What % of current workforce pass morality tests ?
How to track an employee’s morality and predict the brewing trouble before it turns ugly ?

Google is not good at consumer facing (web UI) - failing to create a successful social networking platform.

Thu, 05 Aug 2010 17:52:00 -0400

Google is not good at consumer facing (web UI) - failing to create a successful social networking platform.:

Google’s seem to accept their inability to create a successful social networking platform on their own. This is giving some life for other start-ups in this space, hopes of being buyout by Google. It is not that simple.

Google is forced to compete with Facebook since they have built significant clout and start to attract online ad revenues - that’s google’s bread-and-butter.

Creativity around excellent UI is essential for social media platform. Google never developed these skills in-house since all their core offerings had intense algorithm based back-end/server-side development.

Facebook managed to attract top UI talent in bay area and it is almost impossible now for Google to get them. There is no company that Google can acquire which has a team and the product to match facebook.

Facebook on the other hand need to build search capabilities. They may be able to get such talent from the market by directly poaching into Google & Yahoo. But still Google owns the majority of online ad inventory. Generating large revenues for facebook will be a big challenge.

My opinion: It is a good time for Google to purchase facebook, instead of looking for options. Given the current situations this will be quite expense for Google. It is the first real challenge thrown at Google’s management. Can they step-up and defend themselves successfully ?

Gaming the education system in India Kids in India are very...

Thu, 05 Aug 2010 11:28:00 -0400

Gaming the education system in India

Kids in India are very smart. They can be easily groomed towards understanding - how to play the academic process (entrance/qualification tests, semester exams) and acquire a degree.

The teaching institutes in India are paid well by parents to train their kids to game the prestigious entrance exams including IITs and IIMs. If everyone start gaming the education system, what kind of talent the industry will get to hire when these kids get-out with a degree in their hand ?

11 and 13 year old brothers to become India’s youngest MBAs

Community bank lending to local business - keep it simple

Tue, 03 Aug 2010 13:28:00 -0400

Community bank lending to local business - keep it simple:

Local controls and community based economy is the basis on which the US was founded and constituted. Large corporations and financial gambling started during 80’s and they are the ones who caused the recent downturn.

Community banks and lending to local businesses make lot of sense. But there is no lobbyists in Washington representing them. The senate kills a bill which could have given community banks more money to lend to small businesses.

US states with financial issues are increasing the retirement age for their employees - It is a quick fix, what's the alternative.

Tue, 03 Aug 2010 09:16:00 -0400

US states with financial issues are increasing the retirement age for their employees - It is a quick fix, what's the alternative.:

Most US states have serious issues with their finances. They can’t provide retirement benefits as earlier promised to their employees. So easy solution for them is to increase the retirement age.

Now these state employees are forced to work longer and no one can expect them to be motivated. You can imagine the level of service residents of the state will get from them. It is not the best value for their tax $s. These employees will be least interested in any changes at workplace, especially involving the adoption of new technology and process improvements.

My opinion: It is better for states to negotiating on retirement benefits and let their employees to retire as promised. Hire next generation workforce and adopt new technology. That is a better way to serve state’s residents and improve their quality of life.

Facebook should consider an IPO soon, rather than waiting until 2012

Fri, 30 Jul 2010 07:24:27 -0400

Facebook should consider an IPO soon, rather than waiting until 2012:

Social media can be moody and hence defining business models will be challenging. It is wise for Facebook to get the public money when there is a big buzz in the market. Once fame fades-off, it will make it difficult to raise IPO. If earnings get lighter and revenue growth reach stagnant levels it may become impossible.

Don’t underestimate Google’s ability to execute on social media plans.

Rice growing - a family business & a well run company ?...

Thu, 29 Jul 2010 08:51:48 -0400

Rice growing - a family business & a well run company ? It is a by-product of the industrial revolution in the US. This is a nice model to copy for developing countries such as India to give a lift to rural areas.

Microsoft is a company to watch as it transitioning to be a legendary company.

Thu, 29 Jul 2010 08:24:08 -0400

It is a natural evolution in business for every successful & dominant company to start coming down after hitting their peaks. Historically this has happened to many legendary companies including Digital, Wang, Kodak, Ford, etc. Following are some of the indicators of such downward trend

1. Heavy PR efforts, especially involving wall street and hiring paid professionals to write about them.

2. Stagnate revenues and stock price for a long duration. This forces the company to distribute dividends draining cash-in-hand. Then they start to sell corporate bonds to raise debt.

3. Management - Early few departures (those are generally the best ones) followed by high retention rate at executive level.

4. Decreasing relevance of company products and services for their core client base.

The company can be categorized as a legendary when no one really care about them anymore and finally the company becomes irrelevant. I think the downward journey for Microsoft has started few years back and they has few more years to go.

Microsoft hosts annual financial analyst meeting

"Freedom with only one meal a day and tattered rags on is a million times better than slavery in gold..."

Thu, 29 Jul 2010 07:42:22 -0400

“Freedom with only one meal a day and tattered rags on is a million times better than slavery in gold chains.”

- Vivekananda from “Memoirs of European Travel,” written in Bengali. Complete Works, 7.392.

Greylock’s Henry McCance on Why the Firm Moved Its HQ to Silicon Valley and How Boston Must Find Its Google | Xconomy

Wed, 28 Jul 2010 16:22:53 -0400

Greylock’s Henry McCance on Why the Firm Moved Its HQ to Silicon Valley and How Boston Must Find Its Google | Xconomy:

Henry McCance said “Boston must have its Google”. It made me to think, did he mean a start-up which match the characteristics of google ? That is

1. A business model which is highly scalable and profitable. Until Google, Microsoft was the yardstick. So it took 20-30 yrs for a dominant company to emerge.

2. Highly committed & competent founders and early stage employees. Google’s founders got out of school and continued to build the business leveraging their phd work, ie 3-5 of work. I also guess they had not accumulated too much student debt.

3. Highly competent management team to execute vision. It is very difficult for anyone with 15-20 yrs experience to bet their whole career on a start-up. They will also be risking their family’s economic future. Massachusetts residents are quite conservative, they will not agree.

4. Google did ride on a new and emerging trend - the internet at it’s infancy. There has not been such opportunities in recent years, closest was the RFID which faded out in few years. Infact, Boston area was leading in RFID start-ups.

My opinion: No one can expect to see a company like google emerge in next few decades. Boston area has a least chance to do so.

Facebook Wings - Dating application

Wed, 28 Jul 2010 11:11:51 -0400

Facebook Wings - Dating application:

1. That is lot of data to process quickly, it can be quite expensive - “Wings syncs all of the information from your Facebook profile, friends structure, and other social accounts like Foursquare, Pandora, Twitter, Netflix, and more, to automatically build your full dating profile, with zero effort from you.”

2. Hope you will get it right - “Our patent-pending, social compatibility algorithm analyzes the multiple personality dimensions of our other Facebook singles to find you perfect matches!”

3. Free does not make money, except it costs you a ton. These are the indications for low barrier to competition - “You’re only 1 click away from activating your full profile and meeting perfect matches for FREE!”