Monday, July 23, 2012

Nicira sold for $1.26 billion to VMware

Updated July 23, 2012

On January 10, 2012, I wrote the entry  Network Virtualization (NV), The New El Dorado. I analyzed specifically Nicira and M2Mi (Machine to Machine Intelligence) which were and still are the major players.
According to VMware's Bogomil Balkansky in  Business Insider 

VMware was already creating similar technology to what Nicira was doing. By buying the company it gave itself a big shortcut to own this new multibillion market. 
How the $1.26 billion valuation was decided, I don't know, Business Insider does not know, most people don't know it.
These nice boxes have a value of $1.26 billion

But it proves once again the magic of  Andreeseen Horowitz

My analysis at the time concluded M2Mi  network visualization is a clear working product. I presented more details about M2Mi technology in Why Include the Network Virtualization to the Cloud 

According to M2Mi web site, the company has a stellar list of partners: IBM, Oracle, Cisco, Intel, Ericsson and Joyent 

Does it mean M2Mi can reach the one billion plus valuation too?

Time will tell. IMHO, they have a solid product working, while VMware must polish Nicira to offer the Network Virtualization solution they need as part of their suite of products. Quoting Ben Horowitz
VMware/Nicira are going after the $37 billion data networking market, particularly new data centers being built with cloud computing, says Horowitz. With OpenFlow, they have a good chance to grab a lot of it.
 With this huge $37 billion per year market size, there is plenty of room for other key players. "Cisco has been put on notice, but has also been given a big opportunity to create great new hardware" says  Bogomil Balkansky.  Ben Horowitz adds "technologically, from a programming standpoint, there are more distributing computing guys than networking guys, so it very much fits with VMware, more so than with Cisco.


Wednesday, July 18, 2012

Why Marissa Mayer will be good for Yahoo

The tons of advise Marissa receives from all directions can be summarized by two quotes.

“Bringing in Marissa Mayer gets people’s attention,” said David Hallerman, a principal analyst at eMarketer. “The sheer attention that they are getting because of hiring her will be helpful for a while. But it will only carry them so far,” he warned.
Deal Book writes
For weeks, experts had been predicting the appointment of Ross Levinsohn, a gregarious executive who was Yahoo’s head of global media before he became interim C.E.O. The company was expected to focus on its media and advertising businesses, and Mr. Levinsohn, with his deep ties to Madison Avenue, fit that bill
 Marissa's response stated clearly
  I am a product person and I like design a lot and I like innovation
This is a blog about Product Management essentially and Marissa statements are music to our ears. As I wrote in this blog in June 2006,  "We need more Chief Product Managers as CEOs"
What is new in 2012 is  the proliferation of the ideas of Steve Blank, , Bob Dorf  and Alexander Osterwalder on how to generate a business model that creates products with steady and scalable revenues. As I summarized it on Ahrono Associates web site
Startups do not execute business plans, they go from failure to failure until they define themselves. Startups are not versions of larger companies. A startup is a temporary organization designed to search for repeatable and scalable business models

Large companies will discover that when providing new cloud offerings or any other ground breaking offerings, they must create departments and / or subsidiaries  behaving as small businesses 
  • A startup answers the question "Where will the money come from?"
  • Business plan was used for startups for decades,yet  no startup business plan survives the first meetings with the customers.
  • The Customer Development Team replaces the traditional Sales, Marketing and Bizdev. The team's mission is to validate the revenues model and business assumptions in front of customers. The team MUST HAVE a founder with the authority to change the company strategy
  • We use the Business model Canvas
  • Customer Archetypes.  A complete story of who they are and what they want, to use in both product and customer development
  • Sales Closer is the person in the customer development team responsible to "close" the early evangelis sales to key customers. They are not sales managers and will not become sales managers.

This is exactly the situation Yahoo is in today. Whatever strategy and products Marissa will focus on,   under the pretext of a product presentation, the customer acquisition teams visit as many as 100 customers each and get them talk in order to fill  the following table

List of Problems
Today's Solution
New Solution

 This is disarmingly simple to do, yet Yahoo did not do it. Like many large companies and arrogant management, they thought they were above the elementary. See for example how overtook as #1 mail application.

Relying more the lean company terminology of Blank et al, Marissa will pivot towards solutions that create healthy growth and customers Yahoo really wants.
The secret of success is to read the results with intelligence, intuition and expanded consciousness. Marissa has all this.

This is where Marissa will excel, by re-building health

Wednesday, July 11, 2012

Why Mobileiron stands out in MDM, according to Gartner

 Note May 27, 2015
This article was written three years ago. Recently the stock dropped around 50% from the peak. Here is a quote from Benzinga
"The March quarter miss seems to make clear that the company has less channel visibility and control than thought. The lack of visibility into how deals are progressing, as well as how those deals will be constructed (e.g. perpetual, subscription) seems to have contributed to the quarterly shortfall. Additionally, MOBL does not provide any KPI metrics (e.g. subscribers, users, average pricing or monthly ARPU metrics) that would allow investors to see progress developing long-term subscriber value," the analysts stated.
 One potential positive outcome may be that the Board and VC investors may be more willing to consider a potential sale of the company at 3-4x revenue," the analysts added.
The revenue growth estimates for 1Q and 2015 have been reduced from 34 percent to 22 percent and 34 percent to 21 percent, respectively.

See also the related article Founders, Super-Founders and other companies

The news above supersede the optimistic tone in the article below, based on hopes that did not materialized.

MDM is Mobile Device Management Software

Mobileiron stands out because its' strategy is not designed to make the BYOD employee - who brings its' own device at work - to feel micro-managed. He wants to be as happy at work as he is at home A happy employee is productive and a free spirit

The Gartner Magic Quadrant for MDM lists the companies based on "Strengths" and  "Cautions"  bullets. There is a concern with BYOD user satisfaction. Many, if not most of the companies on the Gartner  list are traditional wireless management software producers. They care about cost.

But it is not how much it costs. It is how much more money I make. As I repeated so many times on this blog, people thrive via profits, not by cutting costs. Yet it seems so much easier to allocate costs per employee, rather then profit per employee.

Take for example Zenprise, also a MDM leader - quoting from Gartner paper:
Zenprise, based in Redwood City, California, was founded in 2003. It is a small company focused solely on MDM. It has a full feature set for life cycle management, including cost control through usage monitoring.
The emphasis is mine. The idea that some Orwellian invisible enterprise monitors my costs,  defeats the purpose of having freedom to create and be productive. Maybe the cost monitoring, like Mobileiron, is just made the for the  users to be aware.There is only an inch distance from making people aware, to making people feel under pressure.

Referring to Mobileiron, Gartner first strength is worded like this:
MobileIron has great visibility and adoption in the MDM market in multiple regions. MobileIron owns high levels of mind share in the MDM market, and appears frequently on shortlists.
Figure 1.Magic Quadrant for Mobile Device Management Software
Gartner Mobile Devices Management Software

What is the reason for this great adoption, is clear in the White Paper on Strategy,
  • Sustainability
    User experience is the litmus test for policy sustainability. If it breaks, so does the program
  • Device Choice
    A BYOD program that doesn’t support current and intended purchases will have limited appeal. The program must be dynamic, as new devices appear every year
  • Trust
    The trust level for personal devices may be different than for corporate devices. Privacy policies will vary, as will user expectations. For example, users may accept not being able to use social networking apps on corporate devices, but that type of policy is unacceptable for personal devices.
  • Liability
    “Does moving device ownership from company to employee increase or decrease corporate liability?”. Some companies say No. Other companies say Yes, but whatever variation in liability  should not threaten or discourage the BOYD user.
  • User Experience and Privacy
    The core tenet of successful BYOD deployments is preservation of user experience.
    These programs will not be sustainable if user experience is compromised when employees start using their personal devices for corporate email and apps.
  • Economics
    The hidden economics of BYOD center on increasing productivity, managing the cost of complexity, and realizing the value of more responsible employee usage.
The concern for the BYOD user is remarkable, but in my humble opinion, the economics must go beyond costs, and perhaps go in terms of profits. We can view the BOYD company users as pay-per-use (the payments are from company side) service delivery. Can one express the productivity in terms of profits (not costs)?  

Sunday, July 08, 2012

Bring Your Own Device (BYOD) changing the essence of cloud

At Verizon Wireless ten days ago, I was asked whether I want to pay insurance for accidental damage on my Droid Bionic:  $7,00 per month. Can you imagine owning a product that monitors BYOD support infrastructure costs and  user satisfaction for each device,  charging $1 per device per month? what about $5 per device per month? 

People as employees are fed up with what their company provided tools can do. They bring in their own. The iPods, iPads, iPhones, iEverything made by Apple, Androids, Droids, Windows, and soon the new Firefox phone HTML5  to be marketed by Telefonica.

This is just the beginning, because what we call cloud is made up today more of mobile devices then servers.

Who manages those mobile BYOD in an enterprise now? Mostly nobody yet. However there are  players that got the idea, like Mobile Iron BYOD solution. Their solution seems to cover everything, like device choice, user experience and privacy, trust, mobile application design and governance, liability and economics, etc.

Facebook has 500 millions of mobile devices and starting Friday, they have an application to send personalized adds to each mobile device. Twitter made 5x more revenues from mobile adds than desktop adds. The US economy 9x Africa's, but Africa has twice as many mobile phones. Africa has no servers and no corporate IT and any corporation must run as cloud . 
I wrote in my entry about Google presentation at Cloud Slam '12
Google wants to transfer the incomparable cloud consumer behavior to the corporate world. Why Apple is a great company? Because of Steve Jobs? To some extent, but they are great because they cater to the consumer IT. There are now more than 6 billion (billions!) mobile subscriptions and 1.2 billions are 3G subscriptions.There a total of 2.2 billions subscribers at higher speeds, so the mobile 3G plus are more than a half .The cloud is not about moving old applications to the cloud (which IBM considered as a centric issue), but about creating new applications taking the advantage of the social and other services available out  there
This means BYOD will be part of the organic business model of an enterprise and there is no way back. See Facebook and Twitter above. One day, all enterprises will have at scale the similar challenge to make BYOD part of the profitability of the company 

If any enterprise has an IT run by a CIO and staff of hundreds, sometime thousands people, they have to adapt their infrastructure to accept BYOD, and this cost money and headaches. There is a need for product research to determine the costs associated, but here are some metrics
  • Mobile Data Protection (MDP)
  • Network Access Control (NAC) 
  • Mobile Device Management (MDM) tools
  • BYOD satisfaction surveys
  • Productivity metrics (TBD)
  • Satisfaction Surveys
  • ...
There is no product today to deliver this information and do some analytics. The first question is: "Analitics for what?"

This is one of the reasons we should read Why I Like People with Unconventional Resumés. by Claudio Fernández-Aráoz:
 I like candidates who have followed non-traditional career paths. That's why I look for people who have shown the penchant for personal disruption
The primary catalyst for BYOD is that employees have personal preferences for devices other than those that the enterprise has traditionally provided them. Many organizations look at BYOD as a possible way to reduce costs, the real value of a well-designed BYOD program is increasing employee satisfaction and productivity, and speeding up the rate of technology adoption in the enterprise.

This is why "people with a penchant for personal disruption" must be involved. I am a great supporter of Umair Haque eudaimonics, which preaches that the more happy people at work are, the more productive they are. And the more productive they are , the higher the profits will be. This is what a BYOD management system must achieve, and NOT the instinctive, short sighted goal of reducing costs that might cause user unhappiness. 

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AI and ML for Conversational Economy