Tuesday, November 20, 2012

Notes From E2 Innovate in Nov. 2012

I did it again.  I got to attend another conference with a free expo pass, specifically E2 Innovate in Santa Clara.  I only had time to attend the morning keynote addresses on the first day due to some pressing engagements in the afternoon.  I made it worth my while anyway by taking notes on whatever it is the tech sector is up to these days.

I arrived way too early because I'm just so driven to be the first to register at conferences.  While I was catching up on some reading I noticed a wonderful opportunity over by the coffee stand and continental breakfast table.  This whiteboard at the E2 Innovate Conference and Expo was a blank slate just begging me to cover it with sarcasm. The organizers suggested that each breakfast table have "topics" but it fell to me to cause a ruckus with some real innovation.

Here's the transcription in case my writing isn't legible.
Topic 1:  Bonanza!
Topic 2:  How to Avoid Getting Owned/Pwned
Topic 3:  David Petraeus Goes "All In" With His Biographer
Topic 4:  Cloud Software Piracy for Fun and Profit
Topic 5:  UFOs:  Fact or Fiction
Topic 6:  The Fiscal Cliff and Your Mother-In-Law
Topic 7:  Reducing Drunken Antics at E2 Innovate

The freelance media guy at my breakfast table was doing some interviews and wanted me on camera.  The attention hound in me said that was a-okay.  He asked me how I innovate and I gave an extremely poor answer; I think I said something really garbled about how I go to these conferences to listen for people's "knowledge gaps" and then respond.  Man, was I dumb.  I should have said that I listen for people's lies so I can ridicule them and make people angry.  Alfidi Capital admires innovators but this isn't some experimental tech lab where I'm designing the next wonder widget.  I innovate by thinking up weird things to say.

Alright, it's time to find out whether I learned anything from the illustrious speakers.  Paige Finkelman introduced each one.  In case you haven't been following my musings, she introduced the Enterprise 2.0 Conference I attended last year.  I'm glad she's still around.  She showed some slides on the history of the lawnmower but the end result of every lawnmower innovation was still a thing that cuts grass.  Likewise, her point was that the end goal of every innovation in business is still to make money, so enterprise software should leverage more meaningful experiences for customers.

First up was Ben Fried, CIO of Google, talking about "Google on Google."  What a conundrum!  It's simple enough to avoid tautology but demands some thought.  I just Googled "Google" and came up with Google this and Google that.  What could this mean?  Only Google knows, so let's get back to the guy's speech.  He said two factors drive enterprise technology:  the rise of global-scale consumer web services, and the rise of tech-savvy workers even before they enter the workforce.  I learned a new term called "peripheral self-service distribution systems," which respect workers' ability to get a job done.  These things are bins and shelves where people can check out the tools they need and drop them off when done.  Google's bins are often full at the end of the day because responsible adults bring items back.  Wow.  That is a revelation for me.  My experience with large workplaces has led me to believe that such personal responsibility is impossible.  The military never trusted me with equipment unless I signed detailed hand receipts for everything right down to a computer mouse.  Large investment firms trusted me with paper clips but senior people were rewarded for stealing whatever they could grab out of my hands.  Google's culture sounds too good to be true.

Mr. Fried shocked me with more revelations about his colleagues' maturity.  Googlers can choose Windows, Mac, or Linux systems plus whatever personal productivity tools they need.  Their monthly "tech bill" shows the cost of what they select.  That is incredible.  I'll have to see it to believe it.  Somebody get me a tour of Google's campus.  Mr. Fried said this user choice reflects respect and empowerment, and users help to minimize costs.  I was stunned taking all of this in.  I really think it helps that leading tech brands like Google have the prestige to attract the best talent.  It must be great to hire only smart people in the first place.  Irresponsible people get weeded out in the hiring process.  Working with nothing but superstars is a luxury I would have loved in my formative working years, but then I wouldn't have developed the bitterness that caused me to launch Alfidi Capital.

Mr. Fried said IT departments shouldn't skimp on tech buys for workers; yeah, that's easy to say with all of the money Google makes.  He gave up a classic quote:  "Enterprise software is a racket, and we are all the suckers."  Once again, that's easy for him to say because Google sells the enterprise solutions that suckers have to buy.  He closed by endorsing cloud computing because it saves money through metered cost of usage; unused time for support systems thus incurs no cost.  Hey, that's a hidden plug for Google Docs.  I love reading between the lines.  I also love Google.  Their Blogger platform is the host for this blog and their AdSense program makes me money.  Google rules the interwebz because it's just so darn good at figuring out what people do with information.  I should have bought Google stock years ago.  I like this guy's money quote:  "Innovation can't be installed."  Maybe not, but installing Google Chrome may be the next best thing.

The nest speaker was Michael Fauscette, talking about the next generation enterprise platform.  His initial thesis was that connectivity matters throughout economic, social, and technical domains.  Connectivity enables a platform shift to smart things in meters and systems.  Businesses must be flexible and adaptable because knowledge sharing is the new power in enterprises.  I like what the guy's saying, but his thesis that people find value and respect in a decentralized, transparent enterprise applies mainly to knowledge workers, not the semi-skilled labor that predominates in many sectors.  I guess I come from such a deprived background that hearing people talk about respect and trust in a workplace is a severe culture shock for me.  The guy said something about how transactions turn into decisions that build relationships, and IT people must build systems to enable this flow. Well, I don't have any relationships here at Alfidi Capital, and the only decision I make is about how often I run my mouth.  Whatever transaction that becomes is between Google and my advertisers.  BTW, this dude is brilliant but my world is oriented backwards from his description.

Mr. Fauscette said that aging core systems behind corporate IT can't be replaced but a "social layer" can be overlaid to enable collaboration.  Great idea; it sounds like a market opportunity for someone who can make a scrolling message feed run on code translated from FORTRAN.  He also said cloud services will be granularized and modularized, not like big-box software, and the must be context-aware to think of what the user wants.  He endorsed "sense and respond" as the new business model and thinks every app is a system of relationships.  That IMHO poses a challenge to app developers who focus on games and other solipsistic apps that have little to do with connecting to other people to get things done.  Collaborative apps, like the Google Apps that Mr. Fried liked so much, are probably the hot market for developers.

Next up was Kevin Cavanaugh from IBM, talking about participation with activity streams.  The only real participation I do with activity streams is challenging my Facebook friends with weird news items so maybe there's an insight here I can use to be even more provocative.  This guy says we should measure ROI in terms of an underlying process like product delivered or sales generated.  He said a major Mexican cement producer cut its time to market by moving expertise to where it was needed instead of moving material.  He eventually argued that worker productivity can be enhanced by analyzing activity streams that enterprise apps measure.  IT pros should have analytics for the social use of systems.  Mobile capability is the design point for social systems and their embedded transactions.  Okay, if I understand this correctly, IT people need to find ways to mine employees' activity to show their bosses how they add enterprise value.  I think the IT community is reinventing itself beyond being a corporate cost center and into something the C-suite relies upon to make business decisions.  I'm more interested in the IT enablers for business intelligence and knowledge management but the whole cultural change is a breath of fresh air.  I'm pretty sure the IT community will always need socially inept geeks and misanthropes at the bottom rungs of coders and techies but their managers need a real business mindset.

I had no idea that the next talk on "new walled gardens" by Fritz Nelson and David Berlind would be the best one I heard that day.  They gave a rundown of some recent enterprise tech acquisitions and said that more big companies are buying ventures that develop social and communication tools built for clouds.  Companies have figured out that having competitors' apps on their platforms hurts their sales of apps and mobile platforms.  The walled garden is a tech company's self-contained ecosystem of platform, apps, and cloud services.  Tech companies want to provide more services to get you addicted to staying in their walled gardens.  Whatever device they sell is merely a front end to the cloud-based enterprise apps in the garden.  They taught me another cool new term:  "personalized digital cloud," or PDC.  I guess that's the suite of cloud apps whenever you log on to your mobile thingy when you're outside wandering around.  I hope people don't do that while they're driving.

These guys then compared the "signal strength" of Apple, Google, Amazon, and Microsoft.  They all have infrastructure for app stores, storage, devices, search, commerce, and other popular tools.  I noticed that Yahoo wasn't even on their scorecard!  Yahoo tried to be the original walled garden but their core offering never got beyond search.  They mentioned it afterwards as a potential partner or acquisition target for another media company that may build out its own walled garden.  They said the IT corporate workforce eventually won't be able to manage the complexity of several walled gardens.  Business users will eventually pick one comprehensive solution, and the lack of a walled garden approach will eventually doom minor tech platforms.  They expect acquisitions to fill gaps in the "signal collection" of search and commerce.  Consumers themselves will be forced to choose a walled garden.  This is all pretty heady stuff.  I'm a non-mobile holdout with simple tech needs so I have the luxury of keeping my tech options open.  I think marketers can profit by figuring out what a consumer's tipping point would be for complete adoption of a single walled garden.  Ease of use?  Security from identity theft?  Sheer number of options available?  IMHO the greatest incentive will be to erect switching costs for users who defect from one model.  Right now there is very little cost for someone who abandons Google for Microsoft or vice versa.

Now we get to the VC panel on venture money for red hot enterprises.  The moderator was Christina Farr from VentureBeat.  She introduced the partners from various VC funds.  Here's my recollection of what they all said, interspersed with my sarcastic comments.

Startups are now thinking up consumer-oriented tech that helps people do their jobs better; I wish they'd think up some tech that would keep stupid people away from me so I could do my job better.  Tech ecosystems have made it much easier to start new companies that offer niche enterprises; I think that's a kind way of saying that overengineering big ERP systems provides job security to subcontractors.  Deep enterprise software capability is now blending with consumer-oriented expertise, and consumer distribution metrics are now being used in enterprise-wide architecture.  I take that to mean ERP buttons now have to be pushed by non-programmers who grew up on first-person shooter games.  Time card punched yet?  Ka-pow!  Budget report submitted?  Ka-boom!  Low conversion rates require enormous uptake from millions of users to make a viable business, so think hard about price points after free adoption. Yeah, tell that to Zynga, where 95% of their gaming audience never converts to paid games.  They'll probably go down the tubes after people who pay to play their sorry games on Facebook get hooked on the next free thing.  There are still many messy problems in enterprise IT:  data management, business processes, middleware.  Startups can unlock ROI with solutions for those problems but that will take a long time due to companies' inertia.  Here's my solution:  Create an app that C-suite execs can use to send automated nagging alerts to their CIOs demanding they convert legacy systems ASAP. I'd call it the Nag-O-Matic.  A startup in a hot, trendy space doesn't necessarily entice VCs to invest.  VCs want entrepreneurs who have precise insights into their market and have a defined path to cross the chasm.  A series of execution steps matters more than a hot product.  VCs are really smart and hard to deceive, at least compared to the fools who threw money away in the 1990s on Internet startups.  There are vertical opportunities in health care, education, engineering, and government due to lack of progress since the client/server days, and this means opportunities for vendors.  It also means special opportunities for vendors owned by underrepresented demographics.  Those big old-school employers often have supplier diversity programs that buy from entrepreneurs who are veterans, women, and minorities.  They recommend reading Aaron Ross' Predictable Revenue describing the software sales process.  They also warned that entrepreneurs shouldn't think they can "sell vitamins as aspirin."  IT customers are sophisticated and know what they want.

Well, this concludes another exciting adventure at an enterprise conference.  It didn't take me long to walk around the expo floor because there were only about two dozen exhibitors.  I had to make like a tree and leave because I had a bunch of other work to do that I couldn't do from there; like I said earlier, I'm still a tech dinosaur in some ways and I don't need a whole bunch of mobile gizmos just yet.  I do need to figure out how to get tech women appreciate the extreme manliness that I exude.  Call me, babes, and let's do some innovation together after hours.