Great posts by Vincent in December of last year investigating the ‘High Tech’ nature of Software. Click here and here to read those posts. It got me thinking and I decided to post my thoughts. Before we can answer the question – Is Software High Tech, we need to ask a more fundamental question – What is ‘High Tech’? According to Wikipedia’s entry, High Tech is the most advanced technology that is currently available. Now, any innovation first starts as high tech but turns into low tech gradually over the period of time. I guess when the paper was invented, it was quite high tech. Today, from Post It to tissues – paper is ubiquitous and no one gives another thought asking if that product is high tech anymore. Same is true with telegraph, radio, TV etc. Yesterday’s high tech is today’s low tech. Once it becomes low tech, it’s a matter of time before it becomes a commodity product.
How fast it dives into the depth of commoditization depends on how profitable the product is going to be. These products are so out of the box that most of the people don’t see how that product is going to be useful. Here is classic example how IBM’s CEO Thomas Watson once quipped that there is “need for 4 or 5 computers in this world”. You can also read how Telephone and Telegraph were first dismissed as some fancy non useful applications. Just few years back Craig Barrett the then CEO of Intel said that at $100 Computer (OLPC) proposed by MIT Media Lab was a ‘toy’ and not going to be useful. When people figure out the product’s usefulness, the innovators that had the audacity to have the vision for that product will end up make lot of money. Bill Gates’ vision of ‘computer on every desk’ ended up making a lot of money for Microsoft. But those hefty profits will attract more competition and the profit slowly erodes.
Andy Grove, the ex CEO of Intel made a poignant point when he said “He who commoditizes last wins”. This was in the context of intense competition of Semiconductor industry. So, even a very ‘High Tech’ microprocessor will some day becomes a commodity. Same is true with respect to Software. At one point, Microsoft Office was the cutting edge application that dramatically improved office productivity. Today, software by itself is no longer high-tech.
If software is low tech, is it commodity yet? Some people belong to the camp that contends Software has already become a commodity. This is where Nicholas Carr created furor when he called software (IT in general) a commodity (just like electricity) in his infamous Harvard Business Article ‘IT Doesn’t Matter’. I strongly differ in my views. In fact, I dedicate my personal blog writing on how to align IT with Business Strategy (a shameless plug!). Even though software is low tech, it does need some qualitative intervention to create differentiation. Think of Google and its Search Engine. Not only it’s search and indexing algorithm are unique (somewhat), it has created an entire ecosystem of advertisers bidding for keywords, search engine optimization techniques, and a new way to market online. Another example is Apple. With its ingenuity aided by unique combination of software and hardware, it had redefined mobile phone (which has begun to become a commodity product) to create a very differentiated must have product.
Some day when Intellectual Protection is no longer an issue, when every innovation is shared and distributes seamlessly, only then software will become a commodity. Until that day, in my humble view, even though software by itself is not high-tech, it’s far from being called commodity product.
“Project Team Rewards: Rewarding and Motivating your Project Team” by Joran Beel was originally his Master’s Thesis at Lancaster University Management School, UK. In this Joran tackles the issue: how to motivate project team. He points out that general project management literature usually ignores rewards and that is disappointing considering the fact that vast research has been done with respect to the psychological impact of the rewards on the individual as well as the team. The author makes a good point that the psychology of reward system is mainly relegated to Organizational Behavior under General Management. How to motivate and provide incentives to a project team member has never been a part of Project Management literature even though a strong correlation exists between the success in the executing a project and the incentives that motivates the team member.
This book provides a good overview of Motivation Theory. There is an in-depth study of advantages and disadvantages of rewarding team vs. individuals, recognition vs. incentives and timing of rewards. The author also examines the intrinsic and extrinsic motivation and the pros and cons about these motivations.
The extreme reward opponents criticize the whole concept of extrinsic motivation. They propose to focus on intrinsic motivation since intrinsic motivation is stronger and deeper in nature. The author says that no research exists for proponents of extreme reward. I was surprised to read that only scant research is available by extreme reward proponents considering the fact that Adam Smith and his philosophy of capitalism is based on the allocation of ‘reward’ system.
Second part of the book focuses on the author’s research and explains the question
- What is the current role and use of rewards in project teams?
- To what extent could the development of a ‘project team reward model’ increase project team motivation and project success?
- What could a ‘project team reward model’ look like?
In general this book is academic in nature. Adding some practical tips would make the book interesting. The author does a good job in covering the breadth of literature that exists related to motivations. What’s missing is the latest trend towards peer production or global collaboration. How and what motivation works in a world where new communication technologies are democratizing the creation of value? I believe if the author attempts to answer this question, the value of the book will increase exponentially.
If you manage a team and would like to understand different aspects of rewards/motivations, I urge you to read this book. Click on the link, the online version of this book is free for the readers of TechItEasy.org! You find more information about the book on its website www.project-team-rewards.com
Microsoft’s 1st fiscal quarter earnings were blow out. Its profit soared 23 percent to $4.29 billion, or 45 cents per share, from $3.48 billion, or 35 cents per share, during the same period last year, as brisk sales of the new ‘Halo 3′ video game, Windows and Office helped it breeze past Wall Street’s expectations. Because of this the stock hit 6 years high. The result, driven by products including Windows Vista and Office 2007, was viewed as evidence that the 32-year-old company still has growth potential. Underneath all this good news, I think, survival of Microsoft itself is at stake.
Let’s start by looking at Microsoft’s Business Strategy. Its core asset is its Operating System (initially DOS and then all the UI built on top of it). Using its core asset Microsoft has built a software empire. The ‘network affect’ created by its near monopoly market share (90%) of its Operating System (OS) has enabled an ecosystem of software solution providers around it. These value added software application have created the franchise of its OS more valuable. Microsoft itself builds and sells several add-on applications on top of its operating system. Microsoft Office is the most important of all the applications that’s built on top of its OS and has become the ‘cash cow’.
Microsoft’s strong ‘economic moat’ has been constantly attacked over the past 8-10 years. But it has aggressively managed to defend itself. Now, several disruptive offensive forces are making Microsoft’s moat vulnerable. First of all, SaaS or On-Demand software delivery model is going to be a formidable challenge to all the software applications written specifically for Microsoft OS. For example, Google Doc is a tempting alternative to Microsoft Office for the individuals and small organizations. There are several other open source on-demand applications that are getting ready for the prime time to challenge Office software. With Microsoft Office software being challenged with a new delivery model, it will no longer remain the cash cow. The advances in distributed computing and software security will keep pushing the boundary on SaaS delivery model. SaaS, with it pay-as-you-use payment model along with mobility access are some of the positive factors that will make even the large organizations investigate its usefulness in their organization. This is forcing software solution providers to break away from sole Microsoft OS franchise. Soon, most applications will also be offering with the On-Demand delivery model.
The other disruptive force is Virtualization. There is a huge demand to ‘maximize’ server utilization, and this is making Virtualization the highest priority for many company’s CIO. This trend will entice the application vendors to write their own kernels designed to run in virtual environment and knock off Microsoft OS from the server. With more technological innovation, virtualization will make Microsoft OS less relevant.
The third disruptive force is Demographics. The ‘iPod’ generation worldwide is more comfortable with Apple product and considers PC as “Dad’s” computer. The anecdotal evidence point out that majority of students entering university now own Apple computer. In few years the ‘iPod’ generation that will be joining the work force will be not ‘savvy’ enough to use PCs. The large organization’s IT department will be forced to provide infrastructure to support Apple Computer to attract new work force.
Virtualization, Demographic changes and On Demand Delivery model will work in tandem to make Microsoft’s core asset irrelevant. Its not that Microsoft does not understand the threats but it’s too big and too slow to change and challenge these above mentioned disruptive forces. Does that mean that Microsoft will vanish into thin air some day soon? Not really, but change is urgently needed at Redmond.
Currently, Microsoft organization looks a lot like IBM of 1970s. IBM had almost monopoly on the mainframe business and its ‘cash cow’ was add-on hardware services after installation. With the rapid emergence of PCs (lead by Microsoft), IBM tried several ways to fend off that disruptive force (first with denial, then by building their own OS). When every thing failed they went through massive restructuring. IBM evolved from a Mainframe Hardware Vendor into a Software Solution Provider. IBM of today is vastly different from IBM of 1970s. I contend that Microsoft will go through some painful metamorphosis similar to that of IBM. It will be forced to reinvent itself into a new company. Steve Ballmer is too much of an insider to effectively bring about successful change management. They need an outsider with new set of eyes and ears. I personally believe Ray Ozzie will be elevated to a more powerful role to guide Microsoft through these changes. They may even hire a few executives from outside to bring in some much needed changes. Microsoft will still be relevant in 2020 but what will be its core competency then, will be interesting to monitor. The days are numbered for the Microsoft in its current incarnation.
Bangalore based startup wants to build social networking site for the poor. babajob.com and babalife.com are both the brainchild of Sean Blagsvedt. Sean is originally from the US, worked for Microsoft in Redmond and then in Bangalore India. He got the idea for starting a social networking site for the poor when he heard from the noted Duke University economist Anirudh Krishna, who found that many poor Indians stay poor not because there are no better jobs, but because they lack the connections to discover better jobs. In a poor nation like India where majority of people, who live in an informal economy, get the temporary jobs by word of mouth i.e. their existing network.
babajob.com (Sean calls it LinkedIn for the Villages!) and babalife.com (which is like Facebook for the poor) can be successfully used to help expand the network of millions of cooks, maids, construction workers, drivers, and others. How can one create a social network for the target audience where very few are literate let alone computer savvy? That’s the challenge that Babajob faces. But, their model — pay people who help the poor find jobs, looks promising. This is a perfect confluence of Altruism and Capitalism and can be successfully used to alleviate poverty at a faster rate. The same model can be applied to other countries in South Asia as well as Africa and Latin America. Currently babajob.com and babalife.org offer services only to the surrounding areas of Bangalore. The plan is to eventually expand to the rest of India soon and then to the entire world.
Read more at International Herald Tribune’s article Internet revolution reaches India’s poor.
I finished reading Tim Ferriss’s exceptional book 4 Hour Work Week few weeks back. Tim says that there is a shift in the way we put in ‘hours’ at work. 40 hour work week is outdated in this innovation economy. The book is filled with lots of practical tips on ways to reduce one’s work hours without reducing productivity. This book made me think, Can IT workers work less than 40 hrs a week and be equally or more productive that what they are today?
First of all, why do we work 40 hours a week? Who came up with that number?
According to Tim Ferriss, it’s an arbitrary number we have collectively agreed to ‘work’ (I am sure he is half kidding when he says that). But seriously, this is how we have come up with 40 hour work week. Sunday has been a day off from work since biblical times because of Sabbath (In some countries its Saturday, anyway its day for spirituality). In late 1920s Henry Ford was having employee retention problem and hence decided to give Saturday off to his workers (What a perk!). It was Henry Ford who also decided on the 8 hour Work Week. There are 24 hours in a day and Ford could have 3 shifts of 8 hour to maximize his capital utilization (for more read article in Wikipedia and blog by Hispanic Pundit). There you have it: 8 hours ‘times’ 5 days ‘equals’ 40 hour work week.
In a semi-skilled assembly line work environment from where 40 hour work week has emerged, productivity is highly correlated to number of hours worked. If 1 worker produces 30 widgets in 1 hour, it’s fair to conclude that in 2 hours that same worker will produce approximately 60 widgets.
But the important question is: Does this reasoning hold true for an IT worker in the knowledge economy? We all know that the answer is NO. IT Worker’s time is not strongly correlated with time. Granted more time IT programmers spends more lines of code he/she writes. But the inspirations and ideas to program come in bursts; you can spend 3 hours OR 5 minutes to come up with the same solution. This is not typical only to IT workers but to all knowledge workers. Measuring success by the number of hours spent for any creative/innovative work is an antiquated technique that is leftover of industrial era.
It’s not a simple transition but organizations need to start measuring success by deliverables instead of time spent. If the incentives are structured around this philosophy, I will not be surprised if the IT worker will have a 4 hour work week. OK, that’s a stretch but I am very confident that IT worker may spend far less time than what they do today. Not only that, thanks to technology, location they will be working from will be far more exotic than the current cubicle!
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