Per on IT!

Will Microsoft buy Yahoo's online search or not?

I guess the shareholders in Yahoo really regret that they did not accept the offer from Microsoft this Winter.

The famous Rotschild family always says that the secret to their 250 years of success has always been that they have sold too early. This is probaby the best investment advice ever! :-)

I guess the Rostchild motto is something that Mr. Jerry Yang should have known about when he stubbornly declined Microsoft's offer.

Big congratulations to Google that painted a picture about a nice collaboration that perhaps looked good on paper but was doomed from day one as the business rationale for Yahoo simply was not there and the violation to anti-monoply legislation was obvious.

By painting this picture Google made it easier for Yahoo to turn away from Microsoft and I guess the people at Google are still in laughter because they are the ones that made the greatest gain in killing the deal.

And Microsoft can now pick up the pieces of Yahoo to a fraction of the previous offer.

But does Microsoft need Yahoo? By purchasing Yahoo's online search business Microsoft will gain a nice market share and access to some nice technology and more important - access to more clever people!

There are rumours from UK's Times Online that a deal is about to happen very soon but the details are so far a little bit fluffy and some of the 'facts' that have leaked does not seem to make sense. But my bet is that some kind of deal will happen before President Obama takes office! And of course Mr. Yang will still be a wealthy man but the sense moral is that he should have listened to the Rotschilds!

I have had the pleasure to meet Mr. Ballmer on several occassions and I really love his personality, his intelligence as well as his straightforwardness.

Congratulations Steve - whatever your decision will be!

Regards, Per

Terror in Mumbai should not stop progess in India!

We have all witnessed the terrible events that took place in Mumbai (Bombay) yesterday. The attacks were clearly aiming at international visitors and landmark buildings in order to get maximum press coverage.

I had breakfast at the Taj Mahal hotel just two months ago and I guess that it could have happened during my visit as well.

India is a wonderful country full of energy and progress. There are very big challenges in spreading the wealth and 300 Million people are considered as very poor while 300 Million are poor by Western standards. But every year more and more families are improving their conditions of living and there is a fast growing middle class in India.

Democracy is strong in India and many companies in India are being run with standards second to none. I think that the management style in India is great with acountability at every level. Any day soon I expect a book about management se in India to become a worldwide bestseller.

Today the financial markets in India are closed which is very understandable. At the same time it is paramount that companies outside India keep on doing business and should not decrease their investments. Instead I encourage everyone to increase their involvment as this is a great way to send a signal that the world supports India's progress.

My heart is with my dear friends in India.

Regards, Per

Selling to the Public Sector is a great strategy also in recession times

I hear it everywhere - the Public Sector is the a great place to be if you are selling in a downturn. This Tuesday I heard it in a meeting in Paris with a very senior leader that has the overview of a very large piece of the IT industry in Europe [no names mentioned!].

I see it myself in my own organization - the Public Sector is a great place to be in!

Why?

Simply because there are so many new opportunities [demands] that has impact on IT. I am thinking about round-the-clock service to citizens that need systems that are supported 24/7 365 and I am thinking about the need in many areas to modernize infrastructure.

As the economy weakens, politicians will in some cases be willing to add FTEs in the Public Sector and in general the resources will not be cut so selling to the Public Sector is really great.

And I find that the new bread of CIOs in the Public Sector are very business minded with both a modern way of thinking and also with a savvyness that protects them from bad deals.

So let us all help the Public Sector to new heights to the benefit of both society and our own employees!

Regards, Per

Microsoft's Morro takes out the pain of anti virus

Great news today that Microsoft are setting the standard for virus protection by making Morro, the successor to Windows Live Onecare, avaialable free for everyone.

Now every Windows user will get great protection without paying any extra - and what is far more important - Morro will be a small foot print solution that will be easy to manage.

Anti virus solutions is today really a pain to manage and they drive a sizeable chunk of the IT budget.

Now we as partners, and our customers, can concentrate on other more valuable things for our when Microsoft is making anti virus part of the platform.

Regards, Per

Pricing strategy for Cloud Based offerings

You can choose between several strategies when you price your cloud based offerings.

One strategy is to charge as much as possible and get a hefty margin from every deal. That way you will get a nice return on your investment and the hours you put in for operating the solution will be worth many bucks. The downside is that you will be an easy victim when the type of service that you offer gets commoditized.

Another strategy, and the one that I favor, is to set a price that you believe will be defendable even after the competition gets stiffer. In other words – setting a competitive price that does not give you a high margin and instead aim for a volume play. This strategy is nothing about losing money – of course the margin needs to be at a comfortable level so that you can deliver a great service while also earning money.

I believe that a great SLA can be honored with both strategies and you can always offer extended SLAs with higher uptime guarantee and option for 24/7 365. The option for 24/7 365 can be in two steps – one step can be for Service Desk for only a selected few and mainly about delivering the service from the server side – the next step can be to offer 24/7 365 with Service Desk for all users in the customer’s organization.

If your offering is truly for a specific vertical, you will find that there is some extra value here that your customer wants to pay for. But don’t confuse yourself – perhaps your solution is less verticalized than you believe and when the service gets commoditized you are in danger.

Playing the volume game with great pricing, while offer great SLAs, will pave the ground for your customers wanting to take on more services from you and that will be profitable for both you and your customer. I believe that this is the way to take market share and that this will mean that your company is there for the long run instead for a quick easy bucks.

Microsoft’s philosophy has always been, and still is, to bring a reasonable price point to the marketplace and drive volumes. We all know that this has been successful so let that inspire us all.

Regards, Per

That's why Cloud Computing is so good for Multi Sourcing

We all remember that Gartner invented the term 'Multi Sourcing' a few years ago.

I have loved the concept but hated the wording - my pet has been 'Selective Sourcing' but that is only a play with words!

It really makes sense for a customer to go with a few vendors when doing outsourcing. This spreads the risk and it gives the customer the benefit of being able to use the vendors that are best in their field.

I also believe that multi sourcing brings in a healthy amount of competition and that is never a bad thing.

Cloud computing is a great opportunity for a customer to adapt Gartner's thinking around multi sourcing as it gives the customer to ability to sign agreements with many outsourcing providers that only do the part that they have a competitive edge in.

Previously many customer have had problems bringing in more outsourcing providers as the one that is already there often tries to make it difficult for a new kid on the block! :-)

With cloud computing we really tear down many of the barriers that our customers have faced and our customers will be able to bring in competition!

Great news for us that are not as big as IBM, CSC or Logica but that can compete with better SLA and much lower cost!

Regards, Per