Per on IT!

Smaller innovators shun giveaway ethic

(letter published in the Financial Times September 25, 2008 as a comment to SUN CEO's thoughts in the same newspaper September 17)

Letter from Mr Per Werngren.

Sir, No one would disagree with Jonathan Schwartz (Personal View, Digital Business, September 17) about the broad benefits of open source and his call for free labour from software developers as there is a lot of profit-grabbing to be had from hardware, consulting and servicing companies like IBM and Sun.

Mr Schwartz, though he favours cashing in on “free software” phenomena, has failed to appreciate the thousands of businesses like mine that build innovation and depend on proprietary software. He seems to forget the positive impact intellectual property rights have had as a driving force for innovation and wealth creation through the centuries. Many of the “monolith” companies today have been built on intellectual property rights including Sun Microsystems.

Small software developers around the world without the vast revenues of Sun are not very keen to “give it away for free”.

Per Werngren,
CEO, IDE AB,
Stockholm, Sweden

India inspires me!

Stockholm -

Just back from the big Partner Summit in Mumbai, India. 500 business people met and discussed the past fiscal year from a Microsoft and a partner perspective and jointly set expectations for the new fiscal year.

Many things are special in the India marketplace. In India you have a growing economy and a growing middle class but there are challenges with many people not sharing the growth. Broadband access is poor and reliable electricity is not a given. But for every year more families share the fortunes and this creates a domestic market with fantastic growth.

I met so many wonderful partners that impressed me on their professionalism and business knowledge. It is a hidden secret that IT companies in India are often very well ran with processes and chain of command in order. In a country so big you cannot be successful if your business is depending on only a few people – you need to build with processes right from the start!

In Silicon Valley many successful startups are funded by VCs born in India and a joke is that if you do not have a VC of Indian origin other VCs will not fund you!

If I were running an ISV I would look at opportunities to sell my products in India. With a growing economy there is a big market opportunity.

Imagine having a slice of that market that is growing so rapidly! Just make sure that you have people in your company that understands the culture and the market in India – therefore you need a VC of Indian origin!

 

Regards, Per

Should you slow down or step up?

Perhaps the economy is really slowing down or it might just be a small bump on the road towards higher heights?

It is fair to say that North America and Western Europe are chillier now than a year a ago but that might not be a bad thing for you if you have the right mindset.

My mantra is that you should try to take away your customer's pain instead of just selling them 'stuff' and if you take my approach you should now try to be even better than before to listen to your customers.

It is likely that your customers will be open for a discussion around taking out cost in their operation and you can now offer services and projects that address this need. But don't sell the super big projects that will take forever for your customer to get a return on investment. Instead focus on smaller projects with a tangible return for the customer and there is a big opportunity that you will be his hero!

It is also a nice time to sell cloud based offerings because your customer will be able to take out cost without first spending an arm and leg in a fishy transformation project.

I strongly believe that you can increase your market share in a slower economy and you will be able to run your comapony with a great profit. This market share will then gow in value as the economy recover.

Regards, Per

The more profitable partners!

Some try to do everything and I believe that this is a bad strategy for the midmarket and above. Better solutions, better customer satisfaction and far better profitability can be reached when a partner try specailize in a few areas.

Honestly I think that a few areas sometimes can be too many and by narrowing down what your company does you will be able to be known for being best in town! This way you also build a better value for your company which is not bad in case you some day want to make an exit.

I also believe, and I have overwhelming supporting evidence, that picking a few verticals are very important in order to be able to maintain decent profit margins and in order to be able to get referalls. Some practice areas are "vertical agnostic" like infrastructure but it is still important to understand a vertical so that you and your team can address the right needs. And getting more customers becomes so much easier if you already have a couple of customers in a certain vertical.

Regards, Per

Selling deeper!

The time is really here for the people that are willing to spend time on solving customer problems. It is great to hear Kevin Turner today validating that becoming the trusted advisor with high integrity is really what counts if you want to sell not only in good times but also when the economy is in downturn.

In order to make this a success we need to be wise and spend the right amount of time with our customers. I have seen so many examples of sales people that overspend their time in accounts that are either to small compared to the time spent or where there are only lost opportunities. I have also seen so many great examples of sales people that are wise to spend just enough time and select the right accounts and these are the people that are heroes and mean a difference not only for their companies but also for their customers.

Regards, Per

What does the CIO want to hear?

If I were a CIO I would probably be haunted by sellers trying to sell stuff instead of business value!

I would be sick and tired of the ones that were trying to sell point solutions that I know would have a price tag for integration etc in the same level as the Apollo project!

What I would like to hear from vendors would be about solutions that takes care of a pain that I have so that the pain goes away!

I would listen to the ones that said that their solutions could be managed by the same people that manage other things and that integration was already done. I would listen extra carefully when someone offered me a service instead! Services are often quick to set up and it is easy to cacluate ROI.

If I were a CIO I would of course hire consultants and I would hang up to the ones that said that they could take care of everything! Nobody can do everything!

Instead I would listen extra carefully to the ones that said that they were true specialists with a proven track record of success in my vertical.

Of course I would love the ones that were not only true specialists in one area but that also could lead me to other similar specialists in other areas! Specialist companies working together is the song I would love to hear if I were CIO!

Regards, Per