Lawrence Scott

Thursday Feb 28, 2008

Iron Maiden, Trust Communities, and Disruptive Behavior

Just another day in the life... Dinner in Mexico City and who do we see? The rock group Iron Maiden shows up at the hotel where we are eating and we get filmed as part of the entourage. Wonder if we will be able to sell it to HBO? Better bet is a YouTube appearance I suppose. And that brings me to Web 2-enabled disruptive consumer behavior.

Interesting discussion at breakfast. Who do banks compete with at a consumer level? In this age of social networking, the answer is not readily apparent. Here are a few things to think about.

Traditional competition: Other Banks and FS Providers
Banks fought for a slice of the consumer pie (deposits, loans, other services) via better branch placement, ATM locations, convenience, superior product pricing, etc. Do consumers still shop that way? I suppose... but ask your teenager (a.k.a. next generation of financial services consumer) how they decide what and where to buy.

The missed wave: Non Bank Financial Players
No, I'm not talking about the credit card companies (but ignore this scenario at your peril). I'm talking about that dreaded six letter company, PayPal, now owned by that happy and highly profitable four letter company, eBay. The banks had their chance to own PayPal and they took a pass. Now what happens to the remittance business? It goes to the low cost provider of a "trusted" payments service. Case in point: two weeks ago I had a chance to go skiing outside Zurich, but my credit card would not work so I asked a friend to pay for my lift ticket. I reimbursed him in Euros (he lives in Germany) for the Swiss Franc-based lift ticket via my credit card-linked US dollar PayPal account. No muss, no fuss. Think about that Mr. Banker... By the way, lift tickets in Switzerland are much cheaper than in the US.

The next wave: Telco's
What's the most ubiquitous consumer device? Yup, the cell phone. And who manages your cell phone account - the carriers. With the advent of Near Field Communications and related wireless technologies, why not be able to use your phone for Over The Air (OTA) provisioning of an e-wallet? It's happening in Asia and parts of Europe today and will be coming soon to the rest of the world. By the way, with the billing sophistication of the telco's, I am more than confident that they'll figure out how to manage the netting process that banks use today, say in the RTGS process. The settlement mechanism for wireless roaming looks interestingly like the netting process banks employ.

The X (or Y) factor wave: New Media Companies
Yup, it's the nightmare scenario. I know why Google and Yahoo (and Microsoft) have been in the search business. I just wasn't sure about the longer range plan. Ask a question, get an answer. Ask questions and get the right (or a desirable) answer often enough and you tend to build up trust with the provider of that answer. All those questions mean consumer eyeballs which translates to a trusted community. Community equals a market segment (or many of them) with highly targeted and specific buyer profiles, a marketer's dream. Google bids for wireless spectrum. GooglePay is launched. The Android phone appears. Okay, too far fetched? Try this scenario instead.

Proximity marketing (SMS message to your mobile device while you're walking through the airport, sponsored by Google) leads to personalized product promotion (24 hour travel insurance underwritten by Google-vetted insurance carrier) with real time pricing ($1 policy for traveling anywhere in the US) completed via mobile micropayments utility (charged to your cell phone account, just like the SMS message, and settled via GooglePay). Monetization of trusted community is now complete. There's a bank in there somewhere, but I'm just not sure they are getting their fair share... Or perhaps this one is too far fetched as well?

Hey Iron Maiden guys, when will you be streaming your music over the web and allowing me to listen via my home wireless music system or other wireless consumer device, and paying for it via my mobile e-wallet? So there you have it: the convergence of finance, telcos, and new media via Web 2-enabled disruptive consumer behavior. Now off to see if we made it onto YouTube yet.

Posted at 03:27PM Feb 28, 2008 by lscott97 in Sun | Comments[1]

Thursday Feb 21, 2008

Buying, not Selling

Spent time in Europe last week with a number of account teams and their customers. Heard a comparison from a customer's perspective of relative priorities of technologies and the same prioritization from vendors. Here's a summary of some of the more interesting bits.

Greatest Disparity
By more than 2:1, vendors were pushing Business Intelligence (BI) solutions. Fewer than half as many of their customers thought it as important.

Greatest Shocker
By an order of 5:1, customers were more inclined to rate Web 2.0 as a higher priority. We are seeing banks embrace Web 2.0 less as a product play and more as a process play. It's less about what you are marketing and more about how you are marketing and to whom.

No Surprise
Storage was a dead heat. Both vendors and customers felt this was a priority. Phew!

Greatest Disparity #2
Again, in a 2:1 delta, vendors felt SOA had a greater impact than their customers. Are vendors sending the wrong message here, or are the difficulties of implementing enterprise SOA finally pushing firms to reconsider their strategies?

No Surprise (Sort of)
IT Governance, Compliance, and Business Software (ERP, CRM, etc.) were closely aligned, although in all cases, the customers attached greater importance than the vendors.

Greatest Disparity #3
In a testament to mobile computing (aka Blackberries, etc.), the topic of Unified Communication held the greatest nominal delta for customers and vendors. By more than a ratio of 5:2, customers saw this area as problematic, more so than vendors wanting to offer solutions.

So the question is this: are we selling what customers are interested in buying? In some cases the answer is "yes", but in others, it's a clear "no". And it seems that while customers are focused on how to make the operations run efficiently and with the least risk, vendors are pushing forward with new technologies (the "shiny penny" syndrome). I'm still reeling in shock over the Web 2.0 comparison.

Do's and Don'ts

In this same session, we had a senior IT executive give us the benefit of his experience with account management. It was a great insight into "how the other half lives". Here goes, with apologies in advance to those of you in the know as I have modified portions to protect the parties involved.

Account Management Do's
1) Do focus on long term relationships
2) Do promise only what you can deliver
3) Do build credibility by occasionally providing solutions which result in lower profit/revenue
4) Do solve the customer problem first, then talk about compensation
5) Do talk about your customer challenges, not yours (!)
6) Do be brave and demo your new products live

Account Management Don'ts
1) Do not focus on short term revenue
2) Do not show up at client with nothing to say
3) Do not take the blame if it's not your fault
4) Do not deflect the blame to others during a crisis (solve the problem!)
5) Do not change the RFP process by selling higher (it will come back to bite you - IT managers have long memories)
6) Do not behave as a localized company when your customer is global

Yup, lots of this is common sense. Common sense begets candor which begets credibility which ultimately begets commitment. The best practices above are really about a "customer first" mentality. We need to be relentless in our customer-centric approach. It's more about "buying" and less about "selling".

Posted at 05:28PM Feb 21, 2008 by lscott97 in Sun | Comments[0]

Tuesday Feb 12, 2008

Teams and Dreams

The one good thing about a Monday early morning flight to San Francisco is that it tends to refocus the mind at such an early hour. It also dulls the pain when your football team loses the championship game after going undefeated through the entire season and the playoffs. As I sat in the barber shop chair this afternoon, the great bit of wisdom I heard was this: "No one else has ever been able to claim they went 18-0." Indeed, that is the ONLY way to view a disappointing end to an otherwise thoroughly enjoyable 18-1 season.

So why do I relate this story? On occasion, the veil of excellence is pierced by a misstep. Several years back Sun took its eye off the ball on Wall Street. And as a result, a competitor emerged in the OS space who has enjoyed a very profitable run at Sun's expense. Well, no more. I'm happy to report that after our run of excellence and that misstep, we are back on track. Yes, I am talking about Solaris in capital markets. Sun has had a focus for the past 12 months now on regaining our leadership position. From the recent announcement that Reuters has licensed our Java Real Time technology to a series of customer wins at brand name firms, our commitment to our core IP as a way to demonstrate engineering innovation and industry leadership. And the recent news that Forrester had established Sun's operating system bet had paid off in the European banking community pointed toward a relentless commitment to excellence. Something a football team can relate to!

At last week's Sun Analyst Summit, numerous Sun luminaries talked about delivering on our commitments. And our recent acquisitions position us to crack new markets, with new customers being the lifeblood of any commercial organization. As importantly, we talked about growing through partners and strategic partnerships. Sun's work with Reuters, Intel, and Cisco is an assembly of four of the industry luminaries to solve for the challenges of ultra low latency in an era when millisecond increments have been replaced in some instances now by microsecond metrics. So the ability to measure, tune, and predictably deliver orders to the securities market is of paramount important. And it is through a close collaborate partnership such as this one that Sun will grow, our customers will benefit, and we will collectively demonstrate industry leadership. And Solaris is a critical part of that solution.

So collaboration and teamwork are fundamental tenets of any organization's success. Single-minded focus on a goal usually permits you to achieve your intended result. Sun has and will continue to team aggressively to achieve our goal of participation on the network. Our partners and customers recognize and value of this approach. And our philosophy tends to be "1 + 1 = 3". Same goes for the result.

And oh, yes, the Patriots did lose the US football Super Bowl. Kudos to the NY Giants who played an excellent game. So as our professional baseball team returns to the diamond after a championship run and our basketball team enjoys the best record in the league, all of our competitors need to know one thing. No one remembers who finished second. We certainly won't. Wall Street, Sun is back and won't settle for second place again.

Posted at 04:59PM Feb 12, 2008 by lscott97 in Sun | Comments[0]