Thursday, 24 May 2007
Posted by Ed French at 13:39
Thursday, 17 May 2007
Joe McKendrick has an interesting piece about the cultural issues of implementing SOA in an enterprise- this got me thinking about successful IT projects more generally: he's based much of his commentary on a challenging article "Finding the Real Barrier to SOA Adoption" by Ronald Schmelzer.
My observation is that everyone seems to accept that enterprise implementations fail between 30% and 80% of the time. However, we've made around 20 investments in very early stage software companies and ALL OF THEM delivered the product both on time and on budget.
I don't think this is too hard to understand: these companies have some common characteristics:
- They're small teams of very very good programmers (you can hire them more easily/cheaply in the North of England!)
- They live very close to the customers
- Their motivation is very highly geared towards their customers' satisfaction
- They have brilliantly supportive investors ;-)
Finally, what I think large companies often neglect is that the "failure risk" of that small innovative vendor is strongly linked to the small vendors ability to sign up the large enterprise (on good payment terms!)
Posted by Ed French at 12:34
Wednesday, 2 May 2007
Early stage investors like backing "platform" technologies, but everyone knows these are rather rare beasts. On the other hand customers buy solutions to their problems- especially if they're looking at using a cutting edge technology. This can put an early stage technology company in a bind that's particularly frustrating for company and potential investors alike.
Without naming-names, obviously, I've seen quite a few companies who are falling into this gap. A particular example I saw a few years ago, but with huge parallels to a much more recent applicant for funding, was looking at a sensor technology. This company had a technology with a particular set of USPs which took it well beyond the existing sensors. It also had some early customers keen to use their technology. So, the company believed, we should've been keen to pursue the investment. However, the problem was that the early customers had applications which didn't really use the USPs of the sensor. Indeed the main reason that the customers were so enthusiastic was that their inventor was willing to explore doing a relatively small volume sensor with a specification a little different from the off-the-shelf sensors from the big manufacturers. In essence then, although pitching as a "platform" they were addressing early customers who were buying because of the "application engineering" they could obtain from the hungry start-up.
Still, revenue is a good thing, so surely this "application engineering" model should've made the proposition more investable not less? Well, for us at least, it wasn't that simple. The company was tooling up in terms of management, team and core-competencies to match the "applications engineering" model, and that made us at least a little nervous that they'd be able to point the company towards the platform opportunity in a reasonable timescale.
I don't think there's an easy solution to this conundrum- at least I've not come across it yet- but I still believe it is a problem worth recognising when it makes itself known.