As I sit here this Tuesday before Thanksgiving, in seat 9C on a United flight flying west to east, I am crowded and agitated by the individual sitting in seat 8C who has been trying to get their seat to lay horizontal for the last two hours (hey buddy it’s a limited recline), but thankful for the time I am afforded to ponder what was, what is and what will be. Fueled by thoughts from a meeting I am returning from and other recent conversations and encounters I’ve had over the past few weeks. This blog post is a digest of some of my thoughts and their genesis. I should note that there are a few thoughts conveyed on various topics in this post, which I tweaked over the last month. I apologize in advance for anything that may seem incoherent or disconnected.

With a National Sales Meeting (NSM) approaching and a short presentation slot to fill, I have been thinking about the best way to convey my thoughts, my vision, and a call to action. I’ve started to crystallize my ideas over the last few weeks, as I have been critically thinking through the business, what once was, what is, what will be, why, and most importantly, my reasoning. I am also thinking about some of the thoughts conveyed in a book I recently read entitled “The Everything Store: Jeff Bezos and the Age of Amazon.”  In the book, the author (Brad Stone) discusses how Amazon (specifically Jeff Bezos) replaced using PowerPoint to convey ideas, instituting what has become known as the six-pager, a four-to-six-page memo/narrative. The reasoning is that PowerPoint-style presentations somehow provide permission to gloss over ideas, flatten out any sense of relative importance, and ignore the interconnectedness of ideas. I am a “narrative” sort of person; I enjoy deep thinking and conveying not only my ideas but my reasoning, my inspirations, my thoughts on potential outcomes, etc… I enjoy context, and I believe context is a critical component when trying to convey intangibles like belief, passion, and motivation. I like and respect how Amazon forces people to think deeply; far too often, we assume people will not read memos, emails, etc… We live in a world where we seem to believe cognition is assisted by attempting to get our point across using pictures and captions of 140 characters or less (lousy spelling and grammar, with the all too familiar excuse of favoring velocity of response over coherency, are a bonus). What a sad state of affairs! I am both insulted and frightened by the trend, and I expect much more. The big question is, are these the people you want to consider leaders within your organization? We need to expect more! The six-pager represents, demands, and tests everything we should expect from leadership. My presentation at this year’s NSM will be delivered via a Jupyter Notebook and will highlight innovation and try to force people to think deeply about what is possible, to take the examples provided, and to visualize what could be rather than what is. I hope this will be an interactive 30 mins, and my goal is to challenge and test the audience’s cognitive skills.

With all of the above said, let’s move on. I believe that it is undeniable that the market is shifting in such a way that cognition may be the most critical skill for success. The ability to carry knowledge forward is diminishing; the market is moving too fast. Our ability to convert knowledge to wisdom, which aids cognition, is the difference maker. We all sell widgets of some sort; the key is how we will differentiate our widgets. I believe more than ever that differentiation requires relevant intellectual property, something you possess that no one else possesses. This intellectual property needs to be translated into a dialect our customers can understand. Articulating how our unique value adds value to our customer’s business is critical. We all operate against objectives and within constraints; this next set of thoughts will focus on my perspective on services and required decision-making.

The following attempts to outline my thoughts on service engagement types, markets,  challenges, and required decisions.

Above the line

• Large-scale enterprises where professional services workflow is programmatic and sustained. These engagements, by default, fall into the as-a-service model. These accounts understand the cost of program management; they understand opportunity cost; they value quality, velocity, and on-time delivery in areas of their business that typically they would classify as context.

The potential sweet spot

• Customers with enterprise needs, but unlike large-scale enterprises who organize areas of the business as core and context, the sweet spot customer often classifies all areas of the business as core, but there are core areas of the business that are underfunded and underserved. The challenges in this space are as follows:

1. Massive market segment.
2. Lots of work to segment the market into those who understand that we run a “Professional Services Practice” and NOT “Professional Services Perfection.”
   • Those who grasp a professional services practice understand and accept failure with the understanding that improvement is continuous and iterative.
   • Those who expect perfection will be disappointed. For this segment, happiness only exists due to obfuscation and being blissfully unaware. Obfuscation is not a good strategy for developing an equitable business relationship and fostering iterative, continuous improvement. The goal should always be continuous improvement. Right?
3. It is an incredible struggle to align ability with needs, desires, and expectations.

Success is measured by how quickly an engagement sitting in the “potential sweet spot” queue can be assessed and pushed above or below the line. Engagements pushed above the line are often the most successful and value-added engagements.

Below the line

• Pretty self-explanatory. Our job is to determine if there is a way to move above the line. If not today, maybe tomorrow, but given objectives and constraints, playing below the line is not an option.

Those who know me know that I like anecdotal stories. Simple stories (narratives) that dramatize a situation to create a compelling reason to think deeply. So, in this post, I will share a compelling story that made me think deeply about the idea of Everything-as-a-Service. What I will share in this post is all real, real information, real data, real anecdotes that I have used, and most importantly, a fundamental market shift.

First, let me start by outlining some business objectives:

1. Linear growth
   • It’s not all that exciting because 1+1=2, which means there is not much efficiency or elegance being injected into the business.
2. Exponential growth
   • A desirable, more interesting, and likely more efficient outcome, but not the objective.
3. Combinatorial growth
   • This is where we want to be. Our approach focuses on efficiency and elegance, creating the ability to do far more with far less.

While exponential growth is an acceptable trajectory, combinatorial growth remains the objective. Our desire for combinatorial growth is what will allow exponential growth to persist.

I was engaged in an opportunity a few weeks ago (update: a few months ago). An account executive asked me to have a call with a prospect to talk about a fairly complex consulting engagement. After spending about an hour on the phone with the prospect, explaining our approach, answering questions, etc… the feedback was positive, and the customer was considering moving forward with us on this consulting engagement. As always, my next step was to think about execution; how would we execute? Realizing that placing myself on the project was impossible, I crafted an engagement model, identified the resources, engagement cadence, timeframe, etc… and started the wheels in motion to align these things to reduce risk and increase the probability of a successful engagement. This engagement had a finite scope, a reasonably clear set of requirements, a finite timeframe, etc… Fast forward a few weeks (update: a couple of months), and we are many revisions of a proposal later, and it has become a questionable deal, distracting and probably not worth doing. Why?

1. Unbalanced engagement model.
   • The carrot is being oversold.
   • While future opportunities should be considered, an engagement must stand on its merits. If not, the probability of success is dramatically lowered, and the quid pro quo is easily escaped due to lack of quality delivery; all the while, this was the system that was created from the onset.
2. Scope creep.
   • What starts as a well-defined and finite scope shifts to a Maytag repairman model with an open-ended T&M scope.
3. The facade of a commitment and an expectation is created.
   • A purchase order creates an implied commitment, but in reality, there’s no commitment by any of the parties involved.
4. Misalignment of expectations is becoming increasingly apparent.
   • A feeling of ownership, a supplier/buyer relationship rather than a partnership, permeates the air.

I believe Everything-as-a-Service (XaaS) has become the trend. When I say trend, I’m implying trending towards the standard, if not already there.

Let me share some anecdotes across a variety of markets (outside tech) that I believe support my belief:

Landscape professionals.  My lawn care company shows up for a mow and leaf cleanup every Friday. They require a contract, they require that the contract is for the entire season, and they are rigid on the day of the week they provide (e.g., I get a coveted Friday mow, which took me years to get). If I want something different, there are no hard feelings; my landscaper is just the wrong guy.

Pool service.  I have a pool service; they provide chemicals, clean my pool weekly, etc… The pool service requires a contract for the season; they visit each week, and often, the pool is clean, but the billing remains the same.

OK, let’s move up the stack a bit:

About ten years ago, I had pneumonia, I was walking around with it for a year or so, and it was pretty bad and in both my lungs. I was hit so hard that I passed out in Penn Station, made it home on the train, and landed in the hospital for over a week while they figured out what was wrong with me. The internal medicine doctor who finally diagnosed me was excellent and remained my primary care physician for three or four years. One day, I got a letter saying they are shifting the practice to a membership-required practice. For $2,500 a year (that was then), I could buy into the practice; if I did not want to pay the $2,500 a year, that was OK, and they would wish me luck in my search for a new primary care physician. With managed healthcare erosion impacting service quality, this doctor wanted patients who valued high-quality care, and he was not afraid to put faith in his value, to expose what was occurring in the industry and the constraints he needed to work within, he went as far as to hold seminars for patients so they could understand the why.  Sure, he lost some patients, but in the end, he moved upstream to service patients (customers) with a higher quality of service.

Let’s look at another medical example. My wife needed Mohs surgery years ago; she went to a doctor who took no insurance, who was very expensive, who was backlogged for months, yet this doctor is thriving.

Let’s look at a so-called T&M business model. How about the auto repair industry?

Anyone who knows how this industry works will know that auto mechanics use what are known as Chilton rates to quote jobs. E.g., Front breaks on a 1979 Pinto is four hours of labor at N rate. What’s important here is that the average mechanic can perform these jobs in 1/4th the time, but the Chilton guide sets the standard, and efficiency is rewarded.

I went further, racking my brain to think about the viable time and material (T&M) business.

Some might say that software developers work on a T&M basis. In this case, I would say the T&M protects the developer from scope creep and the reality that in an Agile model, the scope will change. The scope and timeframe are understood and defined, dollars are allocated to each sprint/milestone, and yes, this maps back to complexity (story points) and/or required level-of-effort, but the goal is to execute against the milestone and track burndown against the estimations.

As a parent, babysitting popped into my head.

Even my babysitter metrics opportunity cost and expects an equitable supplier and buyer relationship. When paying their babysitter, what sort of person rounds down to the nearest hour?  I remember going out with my wife when my kids were young, being tired and ready to go home, and debating whether we had been out long enough to make the babysitting engagement valuable to the babysitter. The 17-year-old babysitter had an opportunity cost that I needed to consider; a 17-year-old gave up their Friday night, but they expected to work the night.  This dialog only happened because we valued our children and the babysitter; I was sleepy, so we would go home and pay for two hours we didn’t use.

Now, how about that Maytag repairman? They are not even T&M any longer. The Maytag repairman is associated with appliance repair. Let’s look at how people do appliance repair:

1. Manufacturer Warranty
   • Fixed cost baked into the price of the new purchase for some period. Highly predictable model.
2. Extended warranty services, like an American Home Shield (AHS).
   • Large-scale break-fix operations like this require an insurance plan with a premium and a deductible for each service incident.

My point here is you can’t even get the Maytag repairman in the Maytag repairman model anymore.

Finally, let’s explore an anecdote about implied commitment and expectations:

I live and work in the New York metro area; there is a common practice of street vendors who sell umbrellas when it rains at exponentially higher prices, simple supply and demand economics. Imagine that the cost of these cheap umbrellas on a sunny day is $2, but when it rains, New Yorkers are willing to pay $10. Now imagine walking out to the street vendor with an IOU for $100 bucks and telling the vendor I am committed to them. In this case, I am providing nothing more than an IOU with an expectation that my intent to buy an umbrella from them in the future (at the height of demand, BTW) entitles me to be able to buy the umbrella for $2 (50 umbrellas @ $2). In return, my carrot is I will tell my friends that this vendor has quality umbrellas. What response do you think I would receive? It’s probably very similar to my response to many deals I look at: “WTF are you talking about?”

None of these service models or anecdotes should be challenging to grasp. To deliver quality services, predictability is required; costs are predictable; thus, revenue streams need to be predictable. To provide quality service delivery, you must staff using a predictable revenue stream, harden schedules, resource allocation, etc… If you can’t, service delivery problems, unhappy customers, etc… are a foregone conclusion. Accommodation is not a strategy for quality delivery or survival.

Everything-as-a-Service is real and powered by Humans-as-a-Service (HuaaS).  Given the finite nature of the human species, we’ve begun leveraging automation (call it ML/DL/AI or just old-fashioned automation) to create value beyond viewing HuaaS as just another widget.  To create value, finite resources must be applied to high-yield investments.  This will always mean that decisions will continuously need to be made on where to focus, and these decisions may differ from day to day as conditions change.  Doing things faster, with greater accuracy, with less risk, etc… requires intellect.  The shift from a 100:1 time to value (TtV) ratio to a 1:100 TtV ratio is at the heart of the knowledge economy.  The economic principles of an industrial economy cannot be applied to a knowledge economy.

Technology has become the modern day version of the ’57 Chevy – at least that is what I keep telling my wife. People are crawling out of the woodwork as self proclaimed technologist – It’s been a long road of abuse to nerdom and I think that far to many people are catching an episode of StarTek 2.0 on G4TV (BTW – if you have not seen StarTrek Cribs on YouTube you have to check it out) and laying stake to the techie guru throne. As I articulated this week to a colleague the road to nerdom is paved with 8th grade wedgies and significant weight loss in the 9th and 10th grade. But that got me thinking, was the cream puff ’57 Chevy the real winner in late 50s or was it the brush painted sleeper that disillusioned the crowd – that’s what the 9th and 10th grade nerds have become, that brush painted nova that cleaned the clock of cherry street rod. The key to the kingdom is learning how to stay true to your inner geek while polishing the external geek. This is one of the first weeks that I have not traveled in the past two months so I have been spending some time knocking some projects off the list, one of those project is a Virtual Appliance – While building the appliance – I do my best work between 8 PM and 3PM a true nerd quality, I realized that I really am a nerd. The proof is in the pictures so lets get started:

Pictures of the Mindstorm robot that guards the door to my home office:

As if it is not enough that I still play with Legos – BTW these are not normal legos the big box in the middle is an onboard computer – of course I have to spend countless hours writing perl and java code to make my robot do cool stuff like follow my dog around the house – My daughter thinks it is the funniest thing. If you think legos are for kids google “lego mindstorm rcx” or check out this site http://graphics.stanford.edu/~kekoa/rcx/.

Next I found some pictures that I sent to colleagues when my daughter was born – she is 6 days old in these pictures.

It’s never to early to start educating 🙂

Lastly I have amassed a ridiculous amount of compute power in my house. I think the total number of systems stands at approx 15 not including a few laptops – 1 quad proc and 3 dual proc systems. Virtual machines in the 20+ realm with most major open systems Operating Systems up and running from Windows XP, 2K, 2K3, Linux (Debian and RedHat based distros – my favorites are Ubuntu on the desktop and CentOS on the server), FreeBSD, HP-UX, Solaris and others.

I have to keep the window open in my office in the winter to keep the temperature regulated and in the summer I have a portable air conditioner that runs 24×7. You can see the AC unit in the third picture just to the left of the window – 10K BTU unit does a nice job, this year I put a drain line through the floor and into the basement sink so I do not have to empty the water every day, that was a real pain.

Lots of other equipment including RAID arrays, a Cisco IOS switch, FC Switches, a SCSI bus analyzer, and a SCSI-to-FC bridge to name a few.

It’s tough work staying atop the nerd mountain but it sure is fun, and it keeps the house warm in the winter. I also like having enough compute power to do almost anything I need to at home – It’s a huge advantage when you can work a week straight without sleep or a shower 🙂

With blogs now being used as a pervasive guerilla marketing tactic we are all to aware that many of the blogs entering the blogsphere are doing so as corporate marketing machines (wolves in sheep’s clothing). The corporate undertones of many blogs is forcing bloggers to take harsher positions to ward of the stigma of corporate influence. I myself have had corporate lobbyists solicit me to change my tone or more closely tow the corporate line. Will corporate executives every really grasp the concept of a blog and what makes it valuable? The unbridled peer-to-peer communication with no censorship is what makes this medium valuable. Unadulterated opinions from real people with a real voice, a written journal of their thoughts and opinions, not corporate propaganda. Sometimes a bloggers opinions will parallel the popular opinion and other times it is going to ruffle feathers, this is what makes blogging so great. It is the “Naked Truth”.

Interested in your thoughts.

-RJB

So on my last night of my “official” vacation I thought I would conclude the series with a post that refers back to my inaugural post from July 5th as well as pose some questions about what it could mean from a broader perspective. I just finished an article in the September 18th issue of BusinessWeek outlining how DuPount outsourced legal services to OfficeTiger a Business Process Outsourcer (BPO) recently acquired by R.R. Donnely & Sons Co.

According to the article DuPont aims to save 40% to 60% on document related work and cut $6 million from is $200 million dollar legal budget. Of course there is some associated risk but on the outskirts of Manila DuPont now has 30 Filipino attorneys, including three who have passed the U.S. bar exam. The attorneys sit elbow-to-elbow with 50 staff employees, working three shifts seven days a week they read, analyze, and annotate digital images of memos, payroll and medical records, old engineering specifications, and other documents that might be used as evidence in DuPont legal cases.

As a technologist working in the storage sector I spend a significant amount of time talking with customers about compliance and the need to facilitate e-discovery. We leverage software technologies like enterprise content management applications, Email archiving applications and full-text indexing to facilitate this. As software and hardware vendors we have a major hurdle to overcome, we have a fundamental inability to create meaningful metadata. Is it possible to automate the creation of meaningful metadata that eclipses the simple taxonomy we are capable of today? Does a BPOs ability to read, analyze, annotate, index and retrieve eliminate or decrease the need for such software products? With Asia also being a software development hotbed how long will it be before a BPO like OfficeTiger teams up with or organically grows a software development business to automate their processes hence lowering consumer cost? Where does this leave the software only vendor? Will they be at a disadvantage, with only the ability to offer a component of the total solution.

The obvious goal of outsoucing/offshoring is to cut cost but DuPont also hopes to reduce the evidence collection and processing time from 18 months to 3 months. This will be enabled by leveraging a global legal team operating 24/7. Office tiger will convert millions of archived paper records to digital format, code and index them; dramatically reducing the effort required to analyze the evidently data. It is not hard to see the cost benefits when the average salary for an attorney with five years experience in the Philippines, who has a very similar legal system to the U.S. is ~$30,000 including benefits. To put this in perspective that is about half what a veteran U.S. corporate paralegal earns and one-fifth what a first-year attorney can earn in in New York.

OfficeTiger believes that corporations are looking at more cost effective ways to buy legal services so cost does not become a variable when deciding to whether or not to defend a case. The need for alternative legal service could push OfficeTiger to ~1000 employees and hundreds of lawyers by the end of 2007. It looks to me like the paradigm is shifting in many of the markets where software vendors have focused, globalization will continue to morph the marketplace and the nimble will be best positioned to take advantage of the changes.

Read the full BusinessWeek article here .

-RJB

Microsoft has opened up the Netscape playbook! Virtual PC 2004 is now free and can be downloaded from here. If history teaches us anything the desktop attack is the first move in a campaign focused on world domination. It was the goal in the with the Internet Explorer campaign that Microsoft ran against Netscape, why should we believe this will be any different? I remember back in the day running Netscape on the desktop and server (Netscape Communications Server). First the switch came on the desktop (after all it did save corporations a ton of money), next the server switched to either Microsoft IIS or Apache. Will the world once again end up with two alternatives Open Source (XenSource) and Microsoft?

Should be interesting to watch!

-RJB

Just arrived at my hotel in Boston an I am preparing to deliver “The Evolution of? Disaster Recovery” seminar in our sixth city tomorrow morning.? I put my new video iPod (that Cisco so graciously awarded me after passing a certification exam) to good use on the way up from Newark.? I watched the “The Code (Linux)” a Swedish Linux documentary.? As a long time Linux hacker and a technology history buff I was already familiar with most of the content that was presented in the film but there were a couple of concepts that got me excited, so excited I needed to blog on them.? The first was a statement by Linus Torvalds, for those of you who don’t know who Linus is, he is generally recognized creator of the Linux kernel.? Linus has arguably directed one of the most complex collaborative software development initiatives in the history of computing.? We can learn a lot from him and the Linux development effort on how to motivate and extract the most from people.? Linus discusses how the management of Linux kernel development project morphed from a hierarchical management structure to a what he describes today as a “web of trust” where developers are empowered to act.? Eric Raymond the author of “The Cathedral and the Bazaar” and all around open source czar also has some phenomenal words of wisdom.? Eric talks about what motivates open source engineers outside of monetary gain.

• Artistic pride, the satisfaction derived from good craftsman like work
• An idealistic feeling that you are part of something larger than yourself
• A general desire to help and deliver good solutions
• Increasing ones reputation and statue within the community

I found these points to be interesting because I have always embraced the philosophy of empowerment and mentoring over dictating policy and managing to that policy.? In my opinion the difference between a good organization and an insanely great organization is the ability to apply concepts such as the ones discussed above, so everyone participates in a culture where free thinking, innovation, empowerment, reputation, recognition, and responsibility are allowed to flourish.? The concept of totalitarian rule is ignorant and stifles innovation.? Empowerment is the key to innovation and ultimately greatness!

-RJB