February 2009

I have started writing in kalugu.com, an online magazine that offers insights into south asia. There are a bunch of writers there and i am happy to be a part of that setup. I have done my first post on “Barack Obama says no more tax sops to outsourcing firms – its significance” and it can be read from the link provided.


There is this telecommunication company that is run by my friend and they offer voice, data and video solutions to corporations. I was a part of the conversation that they were having internally on their pipeline. There is one instance that I specifically want to recount here.

To one of the corporations in their pipeline, they have proposed a voice solution, which is quite superior in quality and it matches the cost of their existing vendor and this company has decided to go for it. This solution would decrease their communication expense easily by 30% without compromising on the quality. They have in principle agreed to go with the solution but the order is not getting placed. One of the reasons can be attributed to bureaucracy involved in decision making, but apparently the ultimate decision maker in the organization has also given the green signal to purchase. Still, the  order isn’t forthcoming. I was a part of this session where the reasons were being discussed for holding back the Purchase Order.

1. They are concerned about the quality of service, which is not the case because they are convinced on the quality

2. Price points are not high, because this is as good as what they can get from anyone else

3. Support again is not an issue, as the provider is in the same city as the customer. They have strong SLAs that will ensure quality of service

4. Budget again is not a problem for the organization, as this investment would certainly reduce their communication spend and they can see it from day one.

In spite of all this being overwhelmingly in favour of this telecom company, they still aren’t getting the purchase order for them to implement the solution. Then we realized, that it is a “techie-run company” and their priorities aren’t about reducing costs and it is more about improving their process, do value addition to their customer engagements, create IP, look at account growth and increase business acquisitions.

But then, entrepreneurship is all about doing more with less, and being frugal without compromising on the essentials is a way to go, whether or not the recession is on. This definitely is a challenge for  a “techie-run” company.

“If you don’t have control in your business, then you are running a charity and not a business”. This was the statement that was made by a friend of mine and he has been quite successful in running multiple businesses and that too profitably. It set me thinking, as to how control is related to business.

Successful business is all about results and not activities. But then being a control freak, you may not allow many activities to go through and will invariably become a bottleneck in the process. Assume that you have three different business units and all the three units report to someone on top who is a control freak and who wants to approve with his eyes and ears open to every dollar that gets spent by each of the business units, then results would be hard to come by. This form of control goes against business.

At the end of the day, all you need to exercise control is on time and money (time after all is money!). Minimize the amount of time spent and maximize the money earned. In other words, greater productivity, greater profits, happier customers and successful business. This is precisely what needs to be controlled and this needs to be coupled with efficient delegation and measuring the result of every spend. Three points to keep in mind would be:

  • Define what you plan to spend (you can’t control what you can’t define)
  • Measure your spends against what you expect to achieve (Every $ spent needs to get you more than a $)
  • Prioritize your spending on what works against what doesn’t

This will result in better business and happier stakeholders.

It has been sometime since I have posted anything in my blog and it has been slightly over 5 months. I am back to active blogging on this space and there have been some changes in what I am personally doing as well. I will have them updated in the next few days. Coming to the main portion of this post….

There is a lot of consolidation happening across the ISV space; quite a few big names are getting absorbed into other companies. Peoplesoft, Siebel, JDEdwards, Hyperion, Business Objects, Cognos, Opsware, Webmethods and JBoss have got acquired. Add to this, we have Pilot Software, Inxight, Outlooksoft, Applix, Telelogic, Xensource, Agile Software, Altiris and  WebEx. Some of the reasons for this trend are:

  • Commoditization of software sector
  • Need for big platform vendors to take over new markets as growth in their own businesses
  • Weak IPO market or weak stock markets
  • Competition from Open Source alternatives and investor pressures

With this trend, only the big platform players will survive and the ones that come to my mind are IBM, Microsoft, Oracle and to an extent SAP (maybe this could well get acquired in due course of time). Is the situation as bleak as it appears to be, and for all my money, it may well not be the case as there is far too much innovation that is happening on the ground:

  • Big names that have survived this are primarily vendors who are privately owned and are less commoditized.
  • New wave of startups – in virtualization, SaaS, enterprise web 2.0 have emerged and will grow to large ISVs and the cycle will continue
  • Pure plays will always be there as long as innovation takes place