I spent a couple of days at the big annual event for bankers last week in Boston hosted by BAI.  They also had some high quality speakers, two of whom, Jack Welch and Al Gore,  I’ve had the brief honor of meeting previously. The third was Ram Charan, noted author and educator, and as this is the first time I heard him in person, I must say that he was excellent. All of them are plugging their books and writings including AL Gore’s latest, Our Choice: A Plan to Solve the Climate Crisis. But that is expected and I look forward to reading VP Gore’s latest.

What I thought was to a degree absent was a session on how cloud computing can assist banks, especially those that fall in the below $10B in asset range. These could be represented by banks, Savings and Loan’s (S&L) or Credit Unions (CU).

Here is what I thought was there and what was missing:

Some banks are using cloud computing for the traditional Software as a Service (SaaS) capabilities including sales such as Salesforce.com.

Some are using it to augment some of their infrastructure needs including data storage.

A few are using it to augment website capabilities.

What I didn’t hear was a bank or other financial or lending institution that started its core operations around cloud computing. And I think there are still a lot of valid concerns why this is not happening as rapidly as in some other areas of business. Let are my thoughts:

First, banking is highly regulated and likely to get more so, not less. Consumer and depositor data is closely monitored as part of the Gramm Leach Bliley Act. Cloud computing opens some doors to loss of data security.

Second, the OCC and OTS have considerable oversight in regular audits of large and small banks. Getting caught in a bad audit is not something anyone wants.Cloud computing may not lend itself well to an intense audit.

On the other hand banks, new, upcoming and traditional all can benefit from this approach. Traditional banks get to employ new services faster and quicker, while new banks don’t have to invest in a lot of Information Technology (IT) assets to get moving.

I would hope that next year we’ll hear more concrete stories of how banks are employing and deploying greater and wider services through cloud computing providers such as Amazon, IBM, Google, Oracle and Microsoft, as well as some of the outsourcers, Independent Software Vendors (ISV’s) and bank services providers including FIS, Metavante, Harland and Jack Henry.

If you would like further information on this topic, please feel free to contact me at ralphs@rgsmanagement.com 

Since I tend to frequently use what I suggest, I keep getting asked lately what technologies I’m suggesting to help some of my clients. This is not a simple question since it typically depends on the client. What’s good for one situation is not always good for the next. In a sense, I could answer this from different perspectives and to make this personal I’ll use my background as a backdrop. You could do the same since, particularly if you have a broad range of experience or have a specific knowledge base. 

From one perspective, as a former IT Architect at AT&T Bell Laboratories, I typically pushed the edge of applying and incorporating the latest technologies. Since there were legions of programmers around me, if the technology performed poorly, I or someone around me could probably fix it. This is the least likely scenario today in business and although the first to be mentioned here, is my last choice – unless - this new technology could provide you with a significant edge against your competition. This frequently occurred with some of the big capital markets companies like Citi or Goldman Sachs where a microsecond head’s start in trading can be everything (first mover always wins in that market).
 
From another perspective, as an end user of technology and former Risk Manager in the financial and insurance world, I can say I gravitated towards first fully understanding the software programs that I had access to and what their strengths and deficiencies were. I then tended to experiment with commercial off-the-shelf programs that I could manage myself. So I would sometimes try a new software program using a subset of the data and information that I had at hand. Since I knew the data intimately, I frequently tried running new software alternatives against that data to understand whether the new results were better, or more importantly I tried to discover whether I could gain some fresh insights into this old data. If the new program didn’t take me a lot of learing time and was easy to install, I knew I was on to something. As an example, I used this approach successfully to deliver just-in-time risk reports to our large customers using a software tool that no one was using at the time. It took me from a manager to an Asst VP early in my career.

Lastly, I think there is the case of smaller companies (under 200 employees) who simply can’t get too far down the track with new programs. With this set of users, and I have some, focusing on simplicity and complementary programs is the right approach. These tend to be Microsoft Office only shops – maybe with some specialty programs like CAD (Computer Aided Design) if they are an engineering design firm for example. In fact, the operative technique here is to use programs that easily fit together and have been integrated together by many companies.

In short, keep these in mind before adding new technologies:

• What are your business needs – first and foremost?
• What technology resources, capabilities and people do you have and will this drain them from doing other worthwhile projects?
• Does it complement and add value to what I’m doing? What are some complementary and low-risk technologies that I could use?
• Is there a short term ( < 6mos) bang for the buck? Long term ROI doesn’t make it with many managers today.
• Will it require a lot of integration with other programs?
• Can I get a business user to trial it quickly?
• How will it get supported (internally/externally)?

So what are some of the technology picks that I like for business? I have a number of them depending on your size and on whether you’re a wealth management company, a health care company developing its web presence, a small or medium size business grappling with the basics, or a large or small business trying to understand its customer base. I will outline some of these good ones in another blog – or feel to connect with me. Feel free to offer your thoughts, favorites or other comments as well. I’d love to hear them!

And The Race Is On!

After developing and selling technology for the capital markets and financial services industry, I’ve learned some things about the value of real-time information. The same now seems to hold true for online social information sharing. Let me explain what I mean.

In the world of capital markets which includes brokerages and wirehouses, such as Morgan Stanley, and traditional banks such as Bank of America and Citi, real time information becomes an incredibly valuable commodity (or more precisely necessity). First, the aggregators and distributors of capital markets real time information include the likes of mega-info companies including Thomson-Reuters and Bloomberg. Second, some of the suppliers of this data include stock exchanges such as NYSE. And third, the users of this information include financial traders, mutual fund managers, wealth managers and financial advisors – to name a few. Those users or recipients of this real time information spend a lot of money on purchasing and employing this data to give them an edge about a company or fund that they might invest in (or not).

What is evolving analogously in the world of social media is quite similar. While instant messaging was the early leader in delivering real time interpersonal information, it’s the advent of Twitter that is really making this a potential business phenomenon and necessity. Twitter is the supplier of all this instant opinion information.

Just recently, Microsoft and Facebook announced initiatives to aggregate and promote Twitter information. They are the equivalent to Thomson-Reuters at this point. Of course Facebook, not to be outdone, would also like to be a competitive supplier in this market and is now allowing some real time views (aka status updates) of information posted by its 200 million users to be more publicly accessible. While Microsoft, through its new Bing search engine, is providing an index to the most followed Twitterer’s , bringing Twitter information to its search engine in less than a minute (near enough to real time).

So why is this trend important? It may provide businesses and marketers the ability to look at consumer interests, buying patterns and the effects of new product releases in near instantaneous fashion.

There is one issue that should be important to everyone. In the world of capital markets, real time information is about stocks and investments for the most part – relatively innocuous from a personal standpoint. However, in the world of Twitter and Facebook, the information is about us and our behavior. This type of real time market segmentation information has the potential to infringe on our privacy rights. Many of us have already seen our personal data being used for purposes that go beyond our consent. So while I look forward to the next wave of social media progress, we also need to be vigilant in how this affects our social communities and privacy.

Current Trends for Facebook and Twitter

At one time, SIFMA was the singular top conference in capital markets and I believe in the 1990’s there were as many as 8,000 attendees. In those days, when I was planning and managing this event for companies including Sun Microsystems and Sungard’s Mint division, the goal was to coordinate all the sales, PR and partnership meetings and presentations so that the staff were not overwhelmed and in the right place at the right time.

There was even a time when I had to order up 2 additional suites to augment our busy floor booth. The suites were geared for round the clock meetings including whisper meetings where we discussed our roadmap to certain clients. And over the past 4 or 5 years, I’ve been attending a fun post-SIFMA client-vendor business dinner, which includes an afternoon of fishing held in the Hampton’s and Montauk on Long Island.

After attending a number of other conferences over the course of the past year, I’d like to offer up some ideas for SIFMA to rebuild its once heralded stature. Here’s some food for thought:

• An event like this begins with industry leadership. I attended a banking event a couple of years ago and the speakers included Ben Bernanke (Fed Reserve Chairman), Jack Welch (CEO GE), Sheila Bair (FDIC Chair) and David Gergen (CNN). Even got to talk to Jack and his wife for a while. Sure, few events are likely to get this caliber of speakers, but consider doing a simulcast from Washington to make it easier for some government employees to speak remotely. And from the tech side, how about Larry Ellison of Oracle or Steve Ballmer of Microsoft.
• Content is King and the full conference price of admission does not warrant the expense for this level of information. I paid full fare last year – thank goodness that I didn’t this year as the agenda suffered further deterioration.  SIFMA must get more speakers from the industry to tell their story. Even some recently unemployed industry veterans could work. There’s no substitute for industry speakers. Have a vendor track if you’d like, but don’t let it dominate everything.
• Build interest before the event. Try a pre-conference mini virtual event to test the waters on content. Or survey the industry to find out what they want to hear most.
• Gather followup after the event. Consider a half-day virtual event for those that couldn’t make it featuring highlights from presentations and exhibits. 
• While the Hilton may have become sacrosanct over the years and a move to the Javits facility on the West side is probably over-kill and would undoubtedly sacrifice intimacy, the SIFMA organizers must consider some rearrangement of the current facility which will create enhanced interest and flow in the exhibits. The addition of the TMC Theater was a plus, but it was too small and even having Frank Abagnale, subject of the movie Catch Me If You Can starring Leonardo DiCaprio, did not quite make it. If SIFMA got Leonardo DiCaprio instead – well that would have been something – but of course that’s not realistic.
• One last important comment – use more social marketing including Blogs, LinkedIn and Twitter to network this event.

I could probably come up with a half dozen more, but maybe I can turn it over to you for comment.

In any case, I’m a stalwart and will continue to attend SIFMA if only to keep up with friends and have some interesting conversation. See you next year.

As most of you probably know, Microsoft, up until a few days ago, had been using its Live Search engine with MSN. However, Live Search from Microsoft has been in a bit of classic web branding quandary as livesearch.com is owned by Tyler Tullock (not Microsoft) who is trying to retire on the ownership of that domain name by either selling it to Microsoft or getting compensated by driving traffic to Google (and to be fair, he did own the domain first).  On the enterprise search side, Microsoft leads with FAST, the engine they also purchased about 18 months ago – but FAST doesn’t appear to play a major role in their consumer oriented approach – at least at this time.

The big money and market share play is around consumer search and Live Search at least had little or no brand or market control compared to Google or Yahoo. So Microsoft, in its quest to gain a share of search player status, has been investing in their latest incarnation of search which we know is branded as Bing. Bing now has its own website, name and look and feel.

Accordingly Microsoft has been investing heavily in promoting Bing, I believe to the tune of nearly 9 figures – a hefty sum these days for advertising and promotion.  But what’s the alternative? According to their Q3, March 30, 2009 financials, overall revenue was down 6% and online advertising revenues took a double digit drop of 13%. So it makes sense that Microsoft needs to know if they can build a competitive market in search in the near future and the timing is hopefully propitious for them as they enter their new fiscal year.

How will Microsoft know if Bing is successful? That question was posed last week to Scott Howe, Microsoft Corporate Vice President, Advertiser and Publisher Solutions Group, during Federated Media’s Conversational Marketing (CM) Summit in NY. His company, aQuantive Inc., was bought in 2007 for something like $6B, so it was no surprise that he had his own Mercedes limo driver parked out in front of the Hudson Theater in NY waiting for him (on 44th Street in the theater district, that is usually reserved for real entertainers).

In any case, he was asked how much he thought it was worth to Microsoft for a percentage point gain in market share (paraphrasing of course). Obviously, and as he replied, Microsoft is not looking for incremental gains, but something that elevates them into the high teens and beyond. Anything else in the big picture is probably a failure (my comment – not his).

So if Bing booms, then Microsoft scores big time. It will likely eat into Yahoo and Google’s market share, causing at least for Yahoo a further decline in value –something that they can ill afford. And what a great way for Microsoft to start the New Year. On the other hand if Bing bombs, then Yahoo’s stock possibly increases making it both more expensive and probably more imperative to get back into negotiations with Yahoo. In either scenario, Microsoft should know by the end of their Q1 which direction the market wind is blowing.

Bing already seems to be picking up some early momentum (several percentage point increase in market share) and the search engine and its interface have some pretty nice features. The question is whether it’s enough to get people to migrate and stay migrated.

To begin with, sound partnering begins with a few basic principles that I’ve turned into the 4 C’s which I believe are crucial to understand:

Collaboration and Cooperation: joint, value-oriented partnerships are dependent on a sound quid-pro-quo. If you start with a one-sided contract, it usually ends up disastrously. There has to be something in it to help both parties grow, financially and otherwise. If you don’t have that, consider walking away.

Coopetition: almost any large company that partners with another company today (large or small) often has overlapping capabilities. In the world of technology, IBM and Microsoft have huge partner ecosystems, yet in many cases overlap some set of technology delivery with their partners. Overcoming and understanding how to deal with this phenomenon is key to working with large multi-dimensional partners.

Chemistry: good partnerships span more than just one individual.  Executives, sales, marketing, finance, legal and engineering all get involved at some point in the partnership continuum. It’s up to the partner managers for both companies to build joint long-term commitment and to help forge multiple relationships with their key counterparts.

Given the above, what elements of partnering 2.0 should you be giving consideration to? Here are a few thoughts on what you can point towards:

Web and SEM: leverage all the key elements of web marketing to elevate your partnership’s value to your customers. Go beyond just building out a partner tab and page on your web site. Cross-link web pages of value from your partner as links on your page and vice-versa. Exploit jointly agreed upon keywords on both sites.

Joint Marketing Collateral: Build multiple pieces of collateral between both companies. Use multi-media where possible such as videos. Make sure joint webcasts and other web collateral are easily accessible from both sites.

Social Media Campaigns: use blogs, Facebook and Twitter to play a role in a joint marketing/branding effort. Keep your joint social media dialogues slightly less glitzy and be prepared for honest criticism – as this is a two-way street that is less controllable from the corporate side. Offer something of value (a Starbuck’s card for $5 as an example) for completing a survey for instance.

Joint digital branding, PR and advertising also play critical roles into your joint efforts. But more on that later. 

One of the companies that you should be looking at include Intel’s latest partner efforts, as well as their new branding campaign. Admittedly not everyone can afford 7 figures, but you can get creative with 5 figures quite easily.

Please feel free to comment on your best partnering ideas as well as the companies that you think are doing it well.

In this blog, I’d like to explore a few thoughts on internet search, enterprise search and content management, since last week I attended, for the second time, the Enterprise Search Summit conference in New York City.

Since I also attended the Search Engine Strategies Conference (SES) in March, it’s difficult not comparing the two conferences. The attendance and sheer size of SES is an order of magnitude greater than the Enterprise Search conference (2000 attendees vs. 200) and the mega-companies such as Google and Microsoft have a much larger showing at the SES conference.

It is commonly presumed that enterprise search is meant to manage the search for content inside the business firewall, while internet and web search is geared to find content for the general public. In general that is true, although companies such as Microsoft and their FAST and Sharepoint offerings as well as Google and their business search division have blurred some of these distinctions. Since I don’t want to spend an entire blog on differentiating how enterprise search differs from internet search, a decent summary of some of the distinctions can be found from New Idea Engineering (an enterprise search company).

Since I’ve spent time in all 3 areas, in some of my ensuing blogs I will attempt to look more closely at each area separately. But to begin with, and without trying to sound like a Gartner or Forrester analyst, I’d like to offer my 10 predictions and observations:

·  Google and Microsoft will largely control search both from an internet search, as well as to a large degree enterprise search as well.

·  Google will have to purchase or invest in a larger business-side search organization to further penetrate the enterprise area. Its skills, as evident from the Enterprise Search Conference, are clearly quite thin on the business end.

·  Google and Microsoft will buy, invest in or invest organically in more social networking companies and capabilities (Twitter, Facebook, etc) to broaden their offerings and public reach.

·  Microsoft, to maintain a player status, will buy Yahoo to replace MSN and its Live Search search engine which have too little market share. Google still commands 65% +/- marketshare. Microsoft will then have to determine whether they can embed some of the capabilities of FAST into Yahoo.

·  Enterprise search and content management will be constructed on a Microsoft model including Sharepoint and FAST, further marginalizing companies such as IBM, EMC and Open Text

·  Microsoft, through its Sharepoint offering, may eventually own the entire new content management space. Google Apps potentially have a play in this space, but for the present at least is not ready for enterprise prime time at a major corporate level quite yet. I don’t see anything dramatically new from EMC or IBM and I hope Open Text can keep pace to keep everyone honest so to speak. But today’s software industry is based on revenue and market share, and this industry is moving so quickly, only those with the deepest resolve and pockets can keep with it.

·  Business intelligence and analytical ability will become further embedded in the internet search engines (not just enterprise search). As evidence, FAST, originally a focused internet search engine that morphed into an enterprise search platform, has some significant capabilities in the business analytics area (guided navigation for example).

·  Companies such as SAP and SAS who are attempting to move into the search side with their analytical engine will have to form alliances, build API’s or license their technologies via an OEM agreement, or they will be wasting their time.

·  Other enterprise search vendors such as Autonomy, Endeca, Vivisimo and Exalead may to have to focus on certain vertical industries to be a viable play (eDiscovery is an example), or be bought.

·  Finally, search (internet and enterprise) and content management will further converge technologies and provide capabilities to the end user that can locate content – whether structured or unstructured – either in a dimensional way (folders and files) or in a more search friendly way.

In the blogs coming up, I plan on discussing more on these relevant topics as well as share some related work I’m doing in the healthcare and medical area around search, marketing and social networking.

I’ll begin by providing some evidence of how important this is to both the vendors and buyers of cloud computing technologies.  As an example, I recently attended (May 5-6) the Microsoft Developers Conference in NY City. While I don’t put myself into the core developer space, I certainly try to listen to and learn from the developers of technology. This years conference was in fact MC’ed by a couple of Microsoft executives that come from their Cloud Computing Platform Group, Doug Hauser and Mike Werner.  Both of them talked about the committment that Microsoft is making in terms of material, equipment and people resources to their internal and customer-focused use of cloud computing. 

Companies such as Microsoft, as well as Amazon and Google, each have their own strategies around cloud computing, including Microsoft’s Azure, Amazon’s S3 and Google’s AppEngine. They are also buying up massive amounts of computing power to fuel their expansion and provide a new layer of centralization for software and internet services. Some estimate that these companies are buying upwards of 20% of the world’s output of servers. Even one of my daily reads, the Financial Times of London, stepped in on March 26th and did a one-page review in their daily Analysis page titled, Cloud Control.

Cloud computing is essentially architected around a stack of services and applications that can be accessed from inside or outside the firewall (corporate or personal). What that boils down to is that the end-user can gain access to a variety of software programs and services that no longer have to reside locally (on your laptop, desktop or local server). For instance, I not only use Microsoft Outlook on my local system but I have also been expanding or complementing those capabilities with services from Google, such as Gmail and their web calendaring system. And companies such as Salesforce.com have been delivering powerful internet services applications for quite some time.

What’s new here is that businesses are redesigning some of their traditional IT centers to become more nimble to take advantage of these cloud services while architecting their internal portfolio of applications to mimic the way cloud computing is being delivered externally, but controlled within their corporate firewall.

So how are vendors marketing cloud computing?  Here’s some of the benefits that I have captured in my own words:

• Free – OK not everything is free, but for many businesses you can’t get much cheaper than this – such as Gmail, Google’s calendar and contact. Essentially this is a pay as you use service over the long term.
• Fast – you can get access to application and services quickly, without investment in software, time and people resources.
• Functional - you can try different versions of similar services (CRM, etc) and compare their capabilities and functions, side-by-side, to determine which services meet your needs and situation best.
• Failure-proof - this is a win-win for IT and Lines of Business. The IT department isn’t saddled with software that requires mounds of technical expertise and the business lines are free to experiment a little.
• Fun – with all the above, hopefully cloud computing opens up some of the latest capabilities of delivering and trialing software and internet services in a benign, safe and unobtrusive way.

I’ll conclude by focusing in on one of those last words, safe.  To market and sell services, vendors and providers of cloud computing services must guarantee the safety and security of any data that we entrust to them, whether it is our email or business content.  This key precept will be one of the important building blocks and of course marketing fundamentals for a succssful cloud computing service.

Keep my data safe and provide me with a service that I can’t get inexpensively, quickly or easily on my own, and you’ll always have my attention and wallet.

To me, this has become an important topic and one that I’ve spent some time on, consulting on virtualization and cloud computing. For those that read Thomas Friedman’s, The World is Flat, you might recall that “Virtual” was mentioned as part of his 10th Flattener. But what he was really referring to is what I wrote about in my last blog – virtualizing meetings and trade shows.

On the other hand, and in the context of this blog, virtualization is a set of techniques, processes and a good dose of software applications that allow IT departments to slice and dice their computer hardware (primarily computers and servers) and data storage into smaller, separately managed logical servers and resources. To the average non-techy, this is about as intuitive as learning Greek.

So I won’t discuss the How of doing this, but rather the Why.  The Why is simply about being able to squeeze more out of your compute and data storage purchases by optimizing their capabilities. Sounds easy enough. And of course the followup question is ‘why doesn’t what we already do work as well as this technique’ - that being the purchase of one software server license per physical server. Let’s just say that this technology and its best practices have really matured in the past few years, and until now IT has not really felt safe in fully deploying virtualization to run the core business. That is changing, and in the land of IT today virtualization provides a good deal of cost savings, while preserving and extending your previous investments in technology. This is a key result in a world economy that values economizing like never before.

Virtualization can also be an important ingredient and is frequently associated with the infrastructure behind cloud computing. There’s a lot being discussed on this subject and some actual business and products being developed and road-mapped. But I’ll address the marketing and sales behind this in another blog - since this is a much broader topic. But suffice it to say, that cloud computing and virtualization often appear together in the same context. 

There are a few major players in this arena, VMware and Citrix (through its acquisition of Xen) are the big ones. VMware is the most dominant commercial vendor maintaining an approximate 55% market share, while Citrix had its roots in the open source arena and has maintained a smaller market share. Microsoft, Sun and others have valuable components and versions of their own that work primarily with their operating systems. And of course there is a substantial partner, channel and vendor ecosystem that has developed for this market. 

Since what goes on at the top of these companies is so critical, part of the sales and business maturity process have become evident in the leadership of these businesses. VMware, which was owned and now spun off by EMC, recently went through a change at the top, putting in place Paul Maritz, a mature and seasoned veteran of building organizations by replacing one of the original founders, Diane Greene.  Why…EMC still owns a majority of stock of VMware (was about 90%) and those shares will likely become more valuable in an untethered company, one that is not “totally” beholden to EMC technology.  Xen has been managed the last few years by Peter Levine, an old colleague of mine via a UNIX International committee in the early 90’s and a veteran of Veritas (now Symantec),  and Peter put his stamp of leadership on Xen by selling it to Citrix – and remaining with Citrix as their EVP. Why…Citrix is not only a much larger company but is one that is highly complimentary to Xen, providing much of the software that allows us to create virtual conferences and connect to our remote compute resources (Go ToMyPC).

Since I’ve attended both physical (real and in-person) trade shows and events and User Group meetings from VMware, as well as virtual trade shows and on-line webinars, I’ve been impressed by their attempts to put virtualization into a decent ROI sale context. This is one of the top two keys to selling most technology and I would say that VMware has created a reasonably well-refined ROI template that you can use to judge cost-benefits.

However, I think the ability to sell virtualization’s ease of management, and safety and reliability have been less evident. Indeed, VMware has to rely too often on its partners to supply necessary “fail-safe” technologies (backup, disaster recovery, etc) to complement its offerings. True, this is changing, but it has delayed virtualization’s adoption. When I started in this business, it was all about how to get to five 9’s (99.999% uptime), which equates to 5+ minutes of downtime per year as memory serves. Virtualization will surely head further upstream in the eyes of CIO’s with more fully demonstrable and certifiable studies of uptime, MTBF (mean time between failures) and the many other quality metrics associated with running a data center. And these measures of reliability have to be associated with the level of training, processes, and other investments in order for the virtualization vendors to make a fully vetted case and to ensure a faster sale’s close cycle. One suggestion - try giving us a chart with the number of 9’s versus the level of effort (time, money and people) that I have to put in to get to that level of uptime. That is the true benchmark of ROI vs. safety that will propel and sell this technology that much faster.

Another – try adding in elements of data storage and desktop virtualization into a comprehensive ROI model and safety equation, and maybe throw in a chart on application virtualization.

There’s clearly a lot that has evolved in getting wider spread sales and adoption of virtualization, but there’s still a lot to be improved upon.  I’d love to hear your thoughts on some additional ideas.