HP: Business or B-School

October 7, 2014

Venerable Hewlett Packard may be a bellwether for other established high technology companies trapped in a time warp. Some hardware and services are enterprise centric. Other hardare and services are consumer centric.. Why not create two companies and double the fun?

The Bloomberg article “HP Split Is Latest Chapter in Whitman’s Change-Filled Career” does a good job of summarizing HP management flip flops. First, it is PCs and enterprise. Then it is to be split up. No, no. HP will not sell its PC and printer business. Oh, oh, wait. Now HP management will create two companies. Wow.

The write up states:

Whitman will lead Hewlett-Packard Enterprise, a business focused on corporate hardware and services, while Dion Weisler, the vice president in charge of Hewlett-Packard’s personal-computer and printer operations, will become CEO of that business. Whitman has been introducing new products and today she expanded a job-cut program to more than 55,000 jobs to trim costs. Hewlett-Packard, based in Palo Alto, California, has fallen behind in mobile computing at a time when consumers have migrated to smartphones and tablets, and last year lost its place as the largest maker of PCs to Lenovo Group Ltd. The split represents a reversal for Whitman, who ruled out a spinoff of the company’s PC division months after replacing Leo Apotheker, who had floated that possibility earlier that year. Whitman has since reiterated Hewlett-Packard’s commitment to the PC business on numerous occasions.

HP seems to be emulating IBM. Another parallel with IBM is HP’s expectations for content processing revenue. IBM has targeted $10 billion as Watson’s goal. HP wants Autonomy to pump billions into the HP coffers. HP and IBM have more confidence in content processing’s ability to generate substantial revenue than I do.

I  look forward with interest to the unfolding of the two different B school approaches. I am not sure that Yahoo’s or HP’s will work. For me, the question becomes, “Which iconic high technology company has to flounder for a solution to revenue challenges?”

And, “What is Plan B for these over stressed giants?”

Stephen E Arnold, October 7, 2014

Management for the Young at Heart

October 5, 2014

With so many search and content processing vendors struggling to meet licensees’ expectations, management insights are needed. When failed webmasters, frustrated academics, or art history majors morph into search experts, poobahs, and wizards—checklists are essential.

I want to point you to this list of items to embrace, particularly if you are young at heart, absent a successful management track record, or someone looking for a shortcut to the affection of your employees.

Navigate to “44 Engineering Management Lessons.” A lesson in this context is more like a statement or exhortation delivered with vocal tones both dulcet and soft.

Here are three “lessons”. I will leave the other 41 to your own study:

No. 5 “Provide administrative support. Schedule issues, coordinate releases, and make sure the bureaucratic machine keeps ticking.

No 12 Don’t make decisions unless you have to. Whenever possible, allow the team explore ideas and make decisions on its own

No. 38 Occasionally someone will push too far. When they do, you have to show a rough edge or you’ll lose authority with your team.

There you go.

Next time stakeholders demand a return on their investment in your search or content processing company, use these tips. If you are “teaching” people about search, integrate these ideas into your lecture.

You cannot lose, at least in the experience of the author of the management lessons, er, big list of statements.

Stephen E Arnold, October 5, 2014

Will Yahoo Oust Its Xoogler?

October 3, 2014

I read “Yahoo Turns to Ad Agencies Amid Calls for Change – Report.” On the surface, Yahoo wants to hire a pod of pros to brush up the Yahoo brand. What ever happened to the Yahooo! crafted by that fellow from Big Bear. I liked that yodel.

But tucked into the wordage was this passage:

Alternative Investment Management & Research, in a letter that said Mayer should consider selling at least a large chunk of Yahoo to Japan-based telecommunications company SoftBank — and allowing that firm’s CEO, Masayoshi Son, to run Yahoo.

That old Google magic does not seem have much of an impact on Alternative Investment Management & Research.

Would Masayoshi Son do a better job with Yahoo?

My hunch is that this type of thought plus others are zipping around the Yahooligan stakeholders. Why not hook up with Xoogler run America Online. That outfit still derives a chunk of its revenues from dial up modems. Do two Xooglers a Warren Buffet make?

Stephen E Arnold, October 4, 2014

Google, Security, Privacy: Cognitive Dissonance?

October 3, 2014

Remember the caveat? Google obtained a “promise” from Stanford to use Google money for anything—except privacy research. See “Stanford Promises Not to Use Google Money for Privacy Research.”

I read “Google: Tim Cook Is Wrong about Us.” Fascinating. Mr. Schmidt is the individual who served on the Apple board at roughly the same time Google was plotting its mobile phone play. Mr. Schmidt left the board, presumably aware of some of the idiosyncrasies of Apple and maybe—just maybe—some tiny insight into the Apple technical capability.

Google is better at encryption and secrecy than Apple. Okay.

So in the “Wrong” article, I read:

Apple got it wrong — Google is the safest place on the Web, the search giant’s chairman says. “We have always been the leader in security and encryption,” Eric Schmidt told CNNMoney. “Our systems are far more secure and encrypted than anyone else, including Apple. They’re catching up, which is great.”

Then I read what seems to be a fairly interesting statement from the “real” journalists at Money/CNN:

But Google doesn’t exactly have a perfect privacy record. Its effort in 2012 to set a single privacy policy for all Google accounts across its multiple services was extremely controversial, with detractors saying Google was trying to make it easier to track its customers’ behavior and sell that information to advertisers. Google also paid a record $22.5 million fine to the FTC for getting around Apple’s no-cookie policy on the Safari browser, and Google was caught purposefully snooping on people’s Internet sessions while driving by with its Street View cars.

I suffered through the blather of Psychology 101. I remember a lecture about cognitive dissonance. Later, when I was required to participate in some government training, I learned about methods of dissimulation.

This statement jarred me and seems to be disconnected from the sort of “is” that President Clinton struggled to define.

In short, is this an extract from a psychiatrist case notes?

Stephen E Arnold, October 3, 2014

Short Honk: The Effects of Power? Hardly Worth Worrying About

October 2, 2014

I read “Power Can Corrupt Even the Honest.” I am not sure if this is an objective scientific report or write up that says, “Hey, everybody’s doing it.” Judge for yourself.

I know that Elsevier is a purveyor of some expensive publications. The company also has an online autoclave in LexisNexis. I ran across one law librarian who told me that some law firms were reluctant to pump big bucks into Lexis queries. Sour grapes? Silliness? I don’t know.

What’s interesting is that the write up states:

After completing psychometric tests to measure various individual differences, including honesty, participants played the ‘dictator game’ where they were given complete control over deciding pay-outs to themselves and their followers. The leaders had the choice of making prosocial or antisocial decisions, the latter of which resulted in reduced total pay-outs to the group but increased the leader’s own earnings.
The findings showed that those who measured as less honest exhibited more corrupt behaviour, at least initially; however, over time, even those who initially scored high on honesty were not shielded from the corruptive effects of power.

I think I understand. To have real fun just become real powerful like a real professional publisher. Seems obvious to me, but I am not a real researcher. I do have enough common sense to come in out of the rain. Honest.

Stephen E Arnold, October 2, 2014

Quote to Note: No Delegation Considered

October 2, 2014

I read “Before the Startup.” The genesis of this write up was a lecture for Stanford’s “so you want to be a millionaire” class. Here’s the “official” link.

I have no view of the overall lecture. However, I did note one Google centric quotation. I found it interesting and its suggests the importance of a “key man” even when a company grows to $70 billion and has 50,000 of the world’s smartest people on the payroll. Here it is:

Larry Page may seem to have an enviable life, but there are aspects of it that are unenviable. Basically at 25 he started running as fast as he could and it must seem to him that he hasn’t stopped to catch his breath since. Every day new shit happens in the Google empire that only the CEO can deal with, and he, as CEO, has to deal with it. If he goes on vacation for even a week, a whole week’s backlog of shit accumulates. And he has to bear this uncomplainingly, partly because as the company’s daddy he can never show fear or weakness, and partly because billionaires get less than zero sympathy if they talk about having difficult lives. Which has the strange side effect that the difficulty of being a successful startup founder is concealed from almost everyone except those who’ve done it.

Does this reveal a successful start up wizard’s attitude toward “management”? What about delegation? What about developing a functional command and control system? About whom do we learn from this snippet?

Stephen E Arnold, October 2, 2014

Psychopaths in Training: Successful MBAs, Lawyers, and Accountants

October 1, 2014

I read “The Unexpected Consequences of Success.” For some reason, my Overflight system is gathering ever increasing numbers of management silliness. If management worked, would not PIMCO avail itself of the methods and demonstrate that it could retain staff, generate returns of little interest to the SEC, and stop institutional investors from withdrawing a few dollars here and there?

The write up states:

People often prepare for failure, but rarely prepare for what they will do when they succeed. Even when we consciously want to be successful, enjoying that success can be a challenge.

In the 1980s, one of the challenges Booz, Allen & Hamilton faced was that some senior people dumped their wives and formed a relationship with their assistants. The rationalization I heard was that the assistants “knew” what the senior Booz person was going through and could, therefore, be a better partner. I am not sure how the firm worked this out, nor do I care.

Other management challenges exist. I spent several hours with a CEO of a Silicon Valley company who was coming unglued before my eyes. In addition to the long, unkempt hair, the person had embraced various New Age concepts. The person ignored email and allowed the usually chaotic programmers to behave more like a crowd in Henderson, Missouri.

With a matter of weeks, the company had become the subject of a vicious analysis in a zippy San Francisco blog. As far as I know, the individual is now either surfing or working at an organic farm.

When I sent a copy of an article titled “Research shows there could be increased numbers of psychopaths in high levels of business,” the recipient (an investment banker) replied, “Yikes, Wall Street stress?” Nope, psychopathic behavior.

According the the HBR, at least the success part of the job can be handled with several easy-to-implement tips:

  • Don’t do victory laps. I think this means buy a LaFerrari and drive it to lunch when you fire people.
  • Focus on the value you bring, not on winning per se. Nope, the winning is evident when the Charlie Sheen type winner get a bonus.
  • Stay in the  here and now. I think this means do not become psychotic, dependent on banned substances, or a modern version of Julius Caesar.
  • Reach higher. I think this means, “Be more like Alexander.” That worked out well for him at least for three decades.

I am not sure how these pronouncements will help out the dozens upon dozens of search and content processing companies thrashing around for money. But it is good to know that there are four tips to ensure that old MBA trajectory of success.

Stephen E Arnold, October 1, 2014

Palantir: Now an Enterprise App Developer

September 30, 2014

I read “Hush Hush Data Firm Palantir Snags ICE Case Tracking Deal.” Palantir may be moving from supporting intelligence agencies to the market sector dominated by government contractors like SRA, Booz Allen Hamilton, and CACI.

The article states:

Immigration and Customs Enforcement has awarded secretive data-mining firm Palantir a $42 million contract to redo the investigation agency’s failed case filing system.

The challenge will be to make a case management system work in a manner that satisfies the statement of work. Other case management efforts have crashed and burned.

Palantir appears to be working with a tough mandate: On time and on budget delivery. As you may know, the notion of on time and on budget is only valid until the first scope change rolls down the timeline.

Are flaws in case management systems unusual. Nah. The article reveals:

The Justice Department inspector general last week released a report on the FBI’s new case management system, Sentinel, assailing its searching and indexing features for slowing the investigations of special agents and the productivity levels of evidence technicians.

Why are case management systems problematic? I can identify a number of reasons, but it will be more entertaining if I wait for news about the Palantir project’s path.

Stephen E Arnold, October 17, 2014

Internet Business: Slightly Different Points of View

September 29, 2014

First, navigate to “Another Top Investor Sounds the Alarm: When the Market Turns, a Bunch of Startups Are Going to Vaporize.” No big surprise here. The main idea is, in my opinion:

Over the past few years, it’s been relatively easy for startups to raise money from venture capitalists. In some cases, they’re raising hundreds of millions of dollars to keep their companies afloat. But behind the scenes, they’re plowing through that money either on marketing, overhead, or some other expense, which results in high burn rates. These bloated companies are using their millions to hide serious flaws in their business models.

At some point, those who provide the bucks to the venture firms will want a return. Many of the Fancy Dan outfits are not among the world’s most liquid operations. To raise cash, MBAs and accountants can cook up some quite remarkable solutions. The actions cascade down the line and end up pushing technology companies like those that pitch wild and crazy content technology into an Iron Maiden. This is essentially a casket with spikes protruding into the box and spikes pointing into the box on its lid.

Ta da.

The individual is placed into the Iron Maiden and the door is shut. Ouch.

Now navigate to either the Google book itself or the concepts Web site at http://bit.ly/1mr9OvS. Eric Schmidt argues that businesses should be like Google. You know the moon shots, trying stuff and failing fast (I am not sure how fast Google has failed at social networking, but I don’t want to be argumentative), and value numbers/data over any humanoid subjectivity.

For many search and content processing companies, the senior managers have been failing for years in some cases. I want to make a list of would be start ups and then provide their date of inception. Heck, why embarrass outfits like Attivio, Coveo, Digital Reasoning, Lucid Imagination (now Lucid Works to which I am tempted to add “Really? but I will not.”), and quite a few others.

The point is that we have two somewhat conflicting interpretations of the present business climate. The tweets that inspired the Business Insider write up are taking a hard look at what happens when the money goes away. No money means that affected firms first people, raise prices, and pivot along with a half dozen or so MBA maneuvers before shutting the doors as Convera, Delphes, did Entopia. A few lucky outfits will sell out like Endeca, Exalead, and iPhrase. A few will struggle along sort of open and sort of closed like a number of French search and content processing firms.

On one hand, these outfits are toast if more money is not “found.” On the other hand, forget money. In Google’s world view, these companies need to be more like Google or out Google Google.

The reality is that the contraction of search and content processing has already begun. Some outfits are going to have to find a way to deliver a solution that solves an actual problem and generates sustainable revenue. Companies in this spot include IBM with its Watson project, Hewlett Packard with its Autonomy IDOL technology, and Palantir, a billion dollar baby of considerable note.

My view is that the doom and gloom expressed in the Business Insider write up is more likely to occur than a Google style entity arising from the Google Moon shot and allied suggestions. I am not sure the Google recommendations apply to Google. A company that is 15 years old and has one revenue stream may be a success that fulfills Steve Ballmer’s one trick pony observation.

For search and content processing vendors, there is no easy way out unless money remains plentiful and Google’s advice actually works for an information retrieval company.

Stephen E Arnold, September 29, 2014

Lucid Works: Pando Daily Sets the Record Straight

September 23, 2014

On LinkedIn I learned about this Pando Daily write up: “How Disgruntled Ex-Employees and Bad Reporting Hung LucidWorks Out to Dry.” I noted the Venture Beat analysis of Lucid Works in my post on September 6, 2014. My focus was the wild and crazy information from an “expert” about various factoids. You can read my reaction to the “Trouble at LucidWorks” story here.

The Pando Daily story comes at the issue in a different way. I was delighted to see that Pando found the “expert’s” comments a bit wobbly. There was an interesting run down about Lucid Works that seems to have come from a different point of view. In a way, the two stories—Venture Beat’s and Pando Daily’s—are a bit like the he said, she said information provided to police investigating a married couple’s disturbing the peace incident. I am no cop, so I can’t figure out who is correct and who is incorrect.

Pando takes this tack:

More accurately: It’s [Lucid Works] a startup, and this shit is hard.

I understand that search is hard, but is an eight year old company a start up? That time span baffled me. Coveo asserts that it too is a start up. Other search vendors dating from the implosion of the Big Five in 2006 also use the start up moniker.

the article points out that there are happy employees and positive investors. More money is likely to be needed. Pando Daily quotes a backer as saying:

We won’t start looking for an expansion round until early next year.

ElasticSearch has amassed about $90 million in funding. So LucidWorks may be thinking it needs the same scale of investment to take wing.

With regard to management, Pando Daily reports that the new top dog is the type of CEO who can deliver revenues. The new president—Will Smith—is described in this context:

On this point, VentureBeat seems oddly hung up on the idea that Hayes is a first-time CEO, perhaps failing to realize that Silicon Valley was (and continues to be) literally built on the success of first-time CEOs. Not to over egg the point, but Mark Zuckerberg and Steve Jobs were first-time CEOs.

Pando Daily added:

As an early member of the Splunk team, Hayes is certainly more qualified for this job than 99 percent of the candidates out there, and more importantly, given that he didn’t found the company, he appears excited about the category.

Pando Daily reminded me that good start ups fire people. I understand the difference between the Silicon Valley approach to management and that practiced at Halliburton and Booz, Allen & Hamilton where I worked for many years. The idea of stability is not always congruent with the needs of a fast moving, pivoting technology company.

Pando Daily also takes issue with Venture Beat’s report that Lucid Works fumbled deals with some real big companies. Pando Daily asserted:

These accounts may or may not have any basis in reality, but they hardly indicate a failing company. The very nature of sales and business development is that deals fall apart all the time. Sometimes those are big deals, sometimes not. The facts are that LucidWorks counts Apple, Sears, Verizon, ADP, Raytheon, Zappos, Qualcomm, Ford, eHarmony, Cisco, and others among current customers.

My reaction to this is okay, but won’t naming these firms give ElasticSearch and other firms a target at which to shoot. Some content processing vendors like Palantir and Recorded Future don’t provide too much information about their customers.

On the all important revenue front, Pando Daily quoted the new top dog at Lucid Works as saying:

“$12 million in services revenue isn’t worth shit,” Hayes says. “But $12 million in product sales on subscription? That’s a $100 million business.”

I agree. Unless the subscriber terminates the subscription. As the competition among content processing vendors heats up, some firms will be quite aggressive in their attempts to take away business. Amazon, for example, seems to be struggling with search, but it could get its act together and offer both a good enough solution at very competitive prices. Amazon is not the only sharp toothed outfit in the pond.

Pando Daily tracked down its own search wizard. That poobah said:

Not everyone agrees that enterprise search is quite this sexy. One enterprise analyst, speaking to Pando on the condition of anonymity, describes it as “not that big of an end market.” But at the same time, it’s one that’s still out there for the taking. “There isn’t really a single company or set of companies that have dominant products in the space,” this analyst says. Google and Microsoft have entered the market (the latter via acquisition) with low-cost offerings that would seem to make the competitive environment more challenging for LucidWorks and other upstarts. But according to the company’s supporters, these products are targeting different, less big data-centric applications and are thus not a valid comparison.

If you have ever listened to opposing expert witnesses in a legal dispute, the same factoid gets very different treatment by each expert. That’s what makes subjective expertise difficult to interpret. My view is that enterprise search is struggling for credibility. Some of the value for information retrieval has been exhausted by vendors now out of business. These include Convera, Delphes, Entopia, Siderean, and others. Some credibility has been eroded as a result of the Fast Search & Transfer matter. The CEO was hit with a jail term and a ban on working in search for a couple of years. Then there is the on going dispute between Hewlett Packard and Autonomy. IDOL is an aging technology like Endeca. But the mud slinging about search and content processing does not improve the image of those working in this sector.

Consequently information retrieval companies are working overtime to explain their solutions in terms that do not invoke memories of Convera or Fast Search. Palantir is a data mining company. Record Future does predictive analytics. Coveo is eDiscovery and customer support. Search vendors are using a wide range of jargon to describe findability. Lucid Works is brave in using enterprise search with a dash of Big Data in its marketing.

Pando Daily said:

Journalism is tough, particularly in the technology sector. Reporters in this industry asked to cover complex and rapidly evolving companies that often take on hordes of venture cash and set outrageous performance expectations. Unseemly as it may be, stories of failure and calamity make for good scoops, and in these cases ex-employees and competitors often make the best sources. Unfortunately, they also can be the most biased sources and are often are in the best position to credibly lead a journalist astray. LucidWorks certainly has its warts and its scars. But that doesn’t make it trouble, that only makes it a startup.

One question remains: When does a company cease to be a start up and start to be a viable company? Is it one years, four years, or eight years? I just don’t know, but I think that companies that have been in business for almost a decade may not be start ups. Management with a start up mentality may not want to face the cold realities expected of established, stable firms. With Lucid’s technology originating with a community, management may be the issue to watch at Lucid Works. Good management can produce revenue, happy employees, and contented customers. Its absence is often evidenced by a lack of harmony.

Stephen E Arnold, September 23, 2014

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