Dad, you too ?

My son

After coming from school my son was telling me about his day in the school. He was in excited state (as usual) and he said, “I will tell you a joke”
“Ok”, I said.
” There was one boy and he always used to tell lies”, he continued, without waiting for my ok, “One day his father bought a robot, who would slap anyone every time a person told a lie. So when the boy came home, his father asked him, where had he gone”.
” I had gone to school”, the boy said, and the robot slapped him.
” No.. no.. i had gone…. umm….mmm”, the robot slapped the boy few more times
“Finally the boy told the truth, that he had gone to movie”
The father was very angry and sad.
He said, ” in our days, I was very obedient and truthful boy, not like you”.
And the robot slapped the father very hard. !!!

My son started laughing and went away. I also had a hearty laugh.
But then I became serious.

I thought about this joke and realised it has a potential power both ways – to destroy the little boys’ faith in their parents and also to bring him to the reality.

It is a fact that we are no saints. We have had our share of mistakes and are not perfect. But the little kids think of their parents as the world of paradise. As they grow up they start realising the chinks in the parents’ world. It is better that they come to know about the realities of the world.

Not sure how soon their world of wonderland should be busted.

Show Me the Money

A great deal of activity is happening around opensource – not just in the software but through overall forces of – collaboration, openness, sharing and networking. These principles are not new to the mankind. They have been used in the context of social development, education and research in many ways.

But the key difference this time is that these principles are being leveraged for businesses. Whole new businesses have come up and entirely new concepts of doing businesses are shaping the industry. eg. Wikipedia, social networking, Innovation Exchange, Red Hat etc…

Right in the middle of our own businesses in IT industry, open source software such as Linux, JBoss, KVM, Alfresco, SugarCRM are making impact on the our customer businesses. These software offer great value to the customers at the same time pricing, packaging, promotion are significantly different from what they are used to be with proprietary software.

While on one hand open source software is a growing trend and becoming all pervasive in customer’s infrastructure, it throws up interesting questions for the resellers and solution providers as to how to leverage this opportunity – given that open source is considered free or low cost. Can it increase the % margin, can it help get net new customers, does it need more investments, what kind of skill sets required, are the promoters of these software companies – RH, Novell, IBM doing enough to support the partner eco system. What kind of changes do we have to bring about in our business practices to leverage these trends.

While some questions would require to be dealt in the context of specific software and promoters, the common areas through which partners can leverage open source software are :

Acquire new customers

Acquiring new customers is the most difficult part of the business, more so in the proprietary software space. In the growing market of open source software and solutions there is a great demand for the suppliers. There is a tremendous pull from the market. Grab this opportunity to grow your business. It is relatively low cost way.

Gain customer mindshare :

If you don’t talk about open source software and solutions, some one else is going to. Apart from this, open source software is on customer’s mind. So you better be the first one to acknowledge it and garner customer’s mindshare which leads to garnering wallet share.

Additional opportunities

When customers try one set of open source software (eg. Linux) they are ready to adopt other software also. Partners should proactively tap into these opportunities and get grow its business.

Annuity business

Most commercial open source software are sold on annual subscription basis. It is important to keep in mind that these subscription are not the AMC of proprietary software. The subscription renewal business is a good opportunity in terms of $$ value as well for forging better relationship with the customer.

Uplift your profile

Every partner has an aspiration to move to next step of value chain from box pushers to solutions vendors. You can leverage open source software opportunity to bring about that transformation as the cost of acquiring technology is very low and number of customers are embarking upon the adoption cycle are still growing at a healthy rate.

Tap into services opportunities

Depending upon your plans, tap into the services business opportunity that open source software offers. This is equally true for existing hardware partners as well as software partners. There are many areas of services that each partner can tap into. For example – Hardware provider can get into infrastructure / implementation services of OS, the packaged software provider can get into customisation and implementation of software solutions. But these areas need to be based on individual partner’s plans.

One area to be mindful of :

Expectations about margins :

I have seen many partners take up to selling opensource software just because the margins on selling traditional software are falling. If you look at the $ value of margins on open source software, very often it turns out to be lower. So one must be clear about the expectations of why it is getting into this business. As mentioned above, the advantages are many, one needs right alignment of the business.

Managers and Leaders

“Our leaders have to be admired for their thought leadership and not just competence.”
This is the quote from Mr. Subroto Bagchi’s interview in Economic Times (Nov 30, 2007)

This resonates so well with what Amita and me often discuss about.

Both of us have seen Indian and Global managers at very senior positions.
These are not the celebrity leaders, but these are the managers who are responsible for growing businesses and leading people. These managers, especially in large organisation have to be good leaders. It is not easy for people to join and connect with faceless organisation. For people, their managers are the face of the organisation and most of the time people join or leave their managers. In such cases managers carry enormous responsibility to provide not just the business competency but good people leadership.

This is where the leadership style and approach differ.

I have seen many competent professionals. They are good at their function and their job. But when it comes to leading people (there is a difference between managing and leading people), they fall awfully short.

I have personally worked with entrepreneurs, professional managers and good leaders. I have worked in corporate sector, have worked in social sector. I have seen different type of people. I have seen the difference between leaders and manager. The ability to inspire, create vision and walk on the chosen path – is the the most important aspect to be successful in being a leader – be it in corporate life or in social sector.

To be a successful leader one needs to have both the capabilities – competency and inspiring people. Just the competency can not take you too far. I have seen some entrepreneurs who had vision (later on I realised that they had only dreams), ability to inspire people but did not have competency in business areas. They simply couldn’t succeed. Some entrepreneurs I have seen who were competent in business areas but did not have the vision. Their businesses did not grow beyond a point. Good professionals did not like to stick around such people for long and hence business did not grow.

When it comes to professional managers leading the people, most manager think that managing people is good enough. They focus on giving right job description, right work to the people under them. They give pep talks so that people can deliver the numbers. The most professional managers follow M-B-O (management by objectives) process to get work done. They think by setting up the objectives people deliver the desired results. It is true to some extent. But it is not the entire truth.
People mostly look up to their managers for direction and inspiration. People like to work for such leaders. The inspired and motivated people tend to give much more than set objectives. They help create more vibrancy in the group. They help create happy and creative atmosphere. In this age of Knowledge economy, the dependency is on people than just the processes.

The good leaders provide this important ingredient – inspiration and vision (thought leadership) – which is so vital for growth than just the straight jacketed MBO or task oriented process.

(Reproduced from my old blog (2007) on different blog site)

Partnering for Success

Why do upstart / small/ medium ISVs find it difficult to establish partnership in new regions ….

ISVs find it difficult to get mindshare of resellers or SI partners specially when they want to expand beyond their geographical region. When you think more deeply you would find few reasons.

When the ISV is entering into new region, a lot of work is needed to be done for the market development. Someone has to do this work – either ISV or the local partner. If partner decides to go ahead with the market development, question is how to get returns on the investments. The traditional partnership model in IT industry works on commission basis. If that is the only form of return the considerations for investment are driven by many factors :

  • Cost of the ISV solution and the % margin,
  • The absolute value of the margin
  • Volume of sales per month
  • Potential total gross profit in a given period.

Most of the time the Potential margin itself is not justifiable to make any significant investment. When it is a decent amount, the time frame may take much longer to get the returns.

Such scenario is not new to ISV vendors and hence ISV sticks to selling directly to the customers till the time it reaches certain threshold. When ISV is looking to grow beyond its geographical region (in new territories), setting up office or appointing a sales person is too costly a proposition. And given the above considerations it is difficult to excite the partner to work on purely commission basis and earn decent returns.

What is the alternative ?

Well, ISV can try some age old method of paying the retainer-ship fee to one of the partners in the new region for initial period. I am aware of the question as to how would it work for the ISVs. Well, by paying retainer-ship fee, ISV can insist on performing the tasks of :

  • Reaching out to key customers,
  • Creating awareness of its products and solution
  • Getting the feedback from the customers
  • Getting the market feedback (about competition, pricing, solution providers, influencers etc).
  • Participate in local relevant events (by paying the participation fees of the event)

It is possible to measure the efforts through weekly activity reports and reviews. The key here is to treat the partner as your extended sales team. You are hiring a sales person on time sharing basis.

The cost of this retainer-ship would vary from 20% to 50% of the cost of one local sales person / local small office. To begin with, this activity can be done only short period 3 to 6 months.

In this process, ISVs get crucial tasks done – market development activities, prospect database and also loyalty and interest of channel partner in the new market.

ISV can build from here. This phase helps it to take further decision about :

  • Continue or discontinue this arrangement,
  • Enter into the market with direct office
  • Put more trust in channel partner
  • Focus only on period

Tiger and The King…. New learning

The other day I was telling a story (as usual, making it on the fly) and when I ended the story, I was surprised at the way I ended it.

Tiger in the Singapore Zoo, photo taken by Sachin

Once upon a time, there was a King, one day he went for hunting in the jungle. There he saw a tiger. But the tiger was lying down and not moving, his eyes were open. King looked into Tiger’s eyes. King felt that the Tiger was asking for help. So he got down from his horse and went near the Tiger. He found one arrow pierced into Tiger’s body. He went near to him and took out the arrow and cleaned the wound. Tiger started feeling better. When Tiger tried to stand on his feet, King helped him a bit. Tiger stood up, stretched his legs and felt better. King was standing there, looking down upon the tiger, feeling proud that he helped a tiger and was happy with himself. Tiger roared and before King realised jumped upon him, putting him on the ground. King was surprised.
He said ” Hey, I saved your life and now you are going to kill me?”

” Thank you for saving and I appreciate your efforts.” The Tiger said, “saving other’s life is your Dharma (your nature, your duty), you felt good about it, you felt proud about it. You got your returns. My Dharma is to kill and eat. You did you Dharma and now I am doing my Dharma, If I don’t eat you, I would starve and I would die”.
And Tiger killed the King.

Moral this story for me is that before you decide to help someone you should know his “Dharma” or nature and be prepared to face it. Helping with just good heart is not good enough, you need to know that other person/ animal does not have the same heart as yours.

Contrast this with what my grandmother or mother or even I myself would have ended this story just 5 years back. I would have ended up telling that the Tiger and the King became friends forever etc – very similar to Lion and the Mouse story I have heard since childhood.