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The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
The Global Startup Kim Polese
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The Global Startup Kim Polese

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  • You’ve heard a lot about Web 2.0 over the last couple of days. Today I want to talk about an area we haven’t really touched on yet at this conference -- what happens when web 2.0 meets Enterprise IT.
  • The relationship between vendors and customers is being turned upside down. Across the landscape, there’s a movement. Something very big is happening in procurement. The power balance is shifting. Whole countries are throwing out MSFT. Regions of countries – schools, counties, municipalities -- all over the world are aggressively adopting open source as POLICY. Who would have thought government would decree open source? Governments usually decree policies about roads, schools, taxes…. But OSS? This is procurement speaking. Taking the lead on deploying OSS in a serious way. Clearly marketplace adopting OSS in a major way. What’s going on here?
  • In other words, the Ecosytem - What kind of market is one in which everyone participates, lots of commodities, very fluid.? Answer: a Mature one. We’re arrived at a point at Web 2.0 for software, in the enterprise where, thanks to the natives, people who’ve given us all these great stuff, plus the vendors, who’ve contriubted as well, plus the users, …. Have generated lots of commodities. We can tell the software business is maturing because there are lots of commodities. Conventional wisdom is that Commodities are Bad. That it’s a fate to be feared. But the fact is customers love commodities. Commodiites are Good Things. We borrow our language from the construction industry (platforms, architects ,builders, developers ….). Construction is a mature and thriving industry that is full of commodities. So back to that first slide .. when the customers throw the tea in the harbor, that’s because they’ve got commodities.
  • Let’s give credit where due. Top down worked for a long time. JD Rockefeller, Andrew Carnegie, Henry Ford, JP Morgan… Succeeded because in the industrial age, what worked best was top down control. If you wanted to succeed in the marketplace, you need centralized communication and control. All the arteries of communcation were from top down. When innovation happened, it was driven by companies, productized and sent out to customers. The company knew best. The company was a powerful thing, and in essence, had an ego of its own. And rightly so. All of the industrial age achievements were made by companies that dominated their markets and controlled their categories. .
  • Similarly, in the software industry, top down control was also natural in its time. Today we look at all these companies and say “these are silos” but this was the best most efficient approach for the time. Programs were smaller. A mainframe program would fit onto a pocket USB drive today. Interoperability wasn’t important because applications were single-purpose, self-contained on stand-alone isolated systems Worked just fine for a long time.
  • And then, the Net came along. We all know that the Net has “changed everything” – and made enormous impact on commerce, communication, entertainment, advertising.”. But what it provided was a new habitat for software. Outside all these monoliths. Suddenly there was a massively distributed, friction-free collaborative environment for developers. No longer were developers confined to the silos of their proprietary applications and platforms. Zero threshold to get in touch or distribute software.
  • And the result was that the ecosystem within a few short years filled up with software. More than Linux. Everythings going open source. (85,000 open source projects today) OS, App servers, Web servers, Databases, portals, collaboration software – e.g. Apache TomCat, Gnome, MySQL…. And countless more OSS components are contributed every week.
  • What makes him so effective? What is it that lets him do as much as he can do? What has changed about the world that allows him to do these thing New Rules: NEA. Nobody owns it, Everybody can use it, and most important, Anybody can improve it. That last point is what’s most interesting. …everyone is able to contribute to the habitat itself.
  • Not too long ago, who would have thought that a bunch of programmers and hackers spread all over the world, with no centralized control, contributing to the same code base … would lead to better quality software rather than a big mess? Real news about OSS is not that its FREE -- its that its BETTER.
  • Came out of KP. Ray and Murugan had the same idea at at the same time. Ray from the CIO/operations perspective, Murugan form the engineering perspective. Murugan was getting tired seeing software ending up as shelfware, expensive ,,, felt that software design was broken, software was overengineered, not meeting customer need.. Also knew that many companies were wasting resources on the same repetitive tasks of integrating software components, whether proprietary or open source. Ray was looking at the OSS world. Talking to CIOs, Fortune 50 companies. Understands their priorities - of lowering cost of infrastructure., and ensuring quality. Realized that the software industry was going through a profound transformation and OSS was at the heart of it. Didn’t want to be another compnent vendor. More interesting, high impact problem: moving up the stack. Sweetspot = automating the assembly of components into stacks, and providing services and support. True software as a service.
  • We’ve seen this in history, repeated as industries moved to assembly and distribution. As industries mature, and core components proliferate, innovatino moves to the next layer up: assembly, process automation.. What kind of company does this for software?
  • Upside = Commodities. But now, how to manage the abundance. One of the customers we spoke to… This unleashing of creativity, this flood of innovation, resulted in 10s of thousands of OSS components resulted. Enormous amounts of software. Lots of lots of components, many variants of the same thing. World filled with new software. Back to the IT guy, multiply what he’s doing with what all the other IT guys are doing to solve their poroblem – figure out what works with what -- you’ve got a pretty big problem on your hands. How to cope with the commodities? Productivity issue. New complexities lead to new costs. Problem == opportunity!
  • Upside = Commodities. But now, how to manage the abundance. One of the customers we spoke to… This unleashing of creativity, this flood of innovation, resulted in 10s of thousands of OSS components resulted. Enormous amounts of software. Lots of lots of components, many variants of the same thing. World filled with new software. Back to the IT guy, multiply what he’s doing with what all the other IT guys are doing to solve their poroblem – figure out what works with what -- you’ve got a pretty big problem on your hands. How to cope with the commodities? Productivity issue. New complexities lead to new costs. Problem == opportunity!
  • Transcript

    • 1. The Global Startup Kim Polese CEO, SpikeSource
    • 2. Strange things are happening in IT <ul><li>Brazil throws out Microsoft. </li></ul><ul><li>So do regions of Spain, Germany, Belgium. </li></ul><ul><li>China does its own Linux distro. </li></ul><ul><li>Customers want out of big vendor agreements. </li></ul><ul><li>U.S. DoD pushes for open source procurements </li></ul>
    • 3. … And in the Global Economy <ul><li>Companies Outsourcing Core Functions </li></ul><ul><li>product development, manufacturing, distribution, support </li></ul><ul><li>Countries Competing via Talent Arbitrage </li></ul><ul><li>India, China, Eastern Europe, Brazil … </li></ul><ul><li>The Virtual Company Now Becoming the Norm </li></ul>
    • 4. There’s a term for a market ecology like this one <ul><li>Mature. </li></ul><ul><li>Filled with commodities. </li></ul><ul><li>Yesterday, in physical goods . </li></ul><ul><li>Today, in the form of software , and skills . </li></ul>
    • 5. What’s Changed: the Demand side is Supplying itself. <ul><li>This is much more than a shift in the balance of power. </li></ul><ul><li>It’s how power now belongs to everybody. </li></ul>
    • 6. The big market power is now in The Long Tail. <ul><li>With software, and skills, most solutions no longer come from big vendors. </li></ul><ul><li>They don’t even come from the usual suspects. </li></ul>
    • 7. As Tom Friedman says, it’s a flat new world . <ul><li>“ Globalization 1.0” empowered countries (1492-1800). </li></ul><ul><li>“ Globalization 2.0” empowered companies (1800-2000). </li></ul><ul><li>“ Globalization 3.0” empowers individuals and small groups (2000-now). </li></ul><ul><li>We’re shrinking the world and empowering individuals . </li></ul>
    • 8. Credit where due: Top-down worked for a long time <ul><li>Power was concentrated at the top </li></ul><ul><li>Communications flowed from the top-down </li></ul><ul><li>So did ideas, strategies, products </li></ul><ul><li>It worked through the entire Industrial Age </li></ul>
    • 9. Top-down software, and business, was natural in its time <ul><li>Monolithic vendors made monolithic systems </li></ul><ul><li>The world was smaller, simpler </li></ul><ul><li>Data was concentrated, isolated </li></ul><ul><li>Systems, and Companies were vertically integrated </li></ul>
    • 10. But then the Net came along <ul><li>A whole new software and business habitat. </li></ul><ul><li>End-to-end communications. </li></ul><ul><li>Zero-friction sharing and collaboration . </li></ul>
    • 11. Soon the ecosystem filled with a whole new breed of software, and new pockets of expertise Testing Technical Support Q/A Wireless Chip Design JIT Manufacturing HR Admin Call Centers Knowledge Outsourcing Legal Expertise
    • 12. … And New Ways of Doing Business <ul><li>Core vs. Context </li></ul>Seamless Communication Interfaces Hubs of Excellence
    • 13. The Net and Open Source were both built on principles that forever changed “business as usual” <ul><li>Nobody owns it </li></ul><ul><li>Everybody can use it </li></ul><ul><li>Anybody can improve it </li></ul>
    • 14. Open Source is a Global Phenomenon *Source: Linux Counter Open Source Project – 145,313 self-profiled Linux users http://counter.li.org/reports/ ** Source: Infonomics 2002 FLOSS Survey of Developers http://www.infonomics.nl/FLOSS/report/Final4.htm Countries that have OSS Preference Policies Bahrain, Belgium, China and Hong Kong, Costa Rica, France, Germany, Iceland, Israel, Italy, Malaysia, Poland, Portugal, Philippines and South Africa. Legislation pending: Argentina, Brazil, Bulgaria, Chile, Colombia, France, Italy and Peru. Linux Usage*
    • 15. An interesting thing happens when anybody can improve software <ul><li>It gets better . Naturally. </li></ul><ul><li>Debugging by over 800,000 developers all over the world. </li></ul><ul><li>Improvements from anywhere, in minutes instead of years . </li></ul>
    • 16. Open source products are naturally open to working with other open source products. <ul><li>They’re all modular. Like 2 x 4s and roof shingles. </li></ul><ul><li>Yet each product grows out of its own development community. </li></ul><ul><li>And it’s not the job of each community to make sure its products work with the products of every other community. </li></ul><ul><li>Which means… </li></ul>
    • 17. You don’t always know what works with what. <ul><li>When one version of one product changes, what happens to all the dependencies? </li></ul><ul><li>Does one dependent app get hosed by a patch that fixes another dependent app? </li></ul><ul><li>DIY testing is an open source tradition. </li></ul><ul><li>But in large IT shops, it can get mighty time-consuming. </li></ul>X ? ? ? ? X
    • 18. CIOs: I need to “just get open source products to work together.” <ul><li>“ We save 30% in vendor cost and waste 20% in component testing.” </li></ul><ul><li>Dependency issues multiply with every addition, every change. </li></ul><ul><li>Startups can’t afford the overhead. </li></ul><ul><li>Fortune 50 companies don’t want the expense of having teams of people coping , rather than producing . </li></ul>
    • 19. That’s why Ray Lane and Murugan Pal founded SpikeSource <ul><li>SpikeSource: Tested, Certified Open Source Software </li></ul><ul><li>Founded by Murugan Pal and Ray Lane in Spring 2003 </li></ul><ul><li>18+ months of development to create a fully-automated test bed for open source component interoperability testing </li></ul><ul><li>Commercial Launch in April 2005 </li></ul><ul><li>Global Startup from Day One </li></ul>
    • 20. SpikeSource Making Open Source Safe for the Enterprise ™ Supports the Components Required for Your Application SpikeSource Core Stacks Include: 63 Components 6 Platforms 6 Languages SpikeSource offers the most comprehensive and automated solution for testing , integrating , certifying, updating , and supporting open source software. Addresses the Complete Support Lifecycle Fully-Automated Test Bed Provides: 22,000 tests nightly across 272 parameters 189 configuration files Increase Productivity Comprehensive open source information services Custom or 7 pre-configured LAMP/J stacks Network / client installation in 15 minutes Decrease Cost &amp; Risk Track and manage open source assets Updates:12 hour patch to test to deploy 24 hour cost-effective, flexible support options
    • 21. Why Go Global from Day One ? <ul><ul><li>Cost Management </li></ul></ul><ul><ul><ul><li>Cost reduction on average 1/3 to 1/10 th </li></ul></ul></ul><ul><ul><li>Global Time Zone Support Coverage </li></ul></ul><ul><ul><ul><li>24 X 7 development schedule key for competitive parity </li></ul></ul></ul><ul><ul><li>Skills utilization </li></ul></ul><ul><ul><ul><li>“ Hubs of excellence” integrated together by global economy and IT </li></ul></ul></ul><ul><li>Selling into Local Markets </li></ul><ul><li>New billion-dollar market opportunities opening up … </li></ul>
    • 22. SpikeSource Offshoring – Selection Process <ul><li>Feb 2004: Extensive RFP Process </li></ul><ul><li>Deliverable Requirements </li></ul><ul><li>Creative Thinking </li></ul><ul><li>Key Criteria: </li></ul><ul><li>People Quality </li></ul><ul><li>Executive Vision for Open Source </li></ul><ul><li>Customer References </li></ul><ul><li>Decision: Cognizant </li></ul><ul><li>CEO Mandate for Open Source Leadership </li></ul><ul><li>Proactive Advisor to Customers for cost savings </li></ul><ul><li>High rate of customer satisfaction </li></ul>
    • 23. Results: Early Success <ul><li>Our internal engineering operations replicated within six days </li></ul><ul><li>Delivered three releases in one year </li></ul><ul><li>Several projects initiated completely by Cognizant team </li></ul><ul><li>Together, we are offering compelling cost savings to customers </li></ul><ul><li>60+ engineers are becoming experts in open source and SpikeSource tools </li></ul>
    • 24. Challenges in Going Global <ul><li>Distributed Management Team </li></ul><ul><li>Requires flexible, loosely coupled management approaches </li></ul><ul><li>Must help your business partners to hone their skills and capabilities </li></ul><ul><li>Identifying skills, enabling infrastructure </li></ul><ul><li>And, Differentiation must come from new places </li></ul><ul><li>Your competitors have access to the same global resources that you do – differentiation must come from How vs What you do </li></ul>
    • 25. When commodity components become cheap and abundant, innovation moves to process automation <ul><li>Optimizing every step in the supply chain becomes the competitive differentiator. </li></ul><ul><li>Going Global is Key. </li></ul>
    • 26. Like open source, 21 st century companies will be designed to be inherently modular <ul><li>Innovative </li></ul><ul><li>Specialized </li></ul><ul><li>Loosely Coupled </li></ul><ul><li>Optimized for Partnering </li></ul>
    • 27. Process automation + modularity enables speed to market <ul><li>In ONE Year: </li></ul><ul><li>Linux-based email firm grew to 60 customers, providing an alternative to Exchange </li></ul><ul><li>“ OVERNIGHT” </li></ul><ul><li>One India-based testing company grew to $30M in revenue </li></ul><ul><li>ONE College Student </li></ul><ul><li>Led development of the first development of a Tamil version of Mozilla . . . </li></ul><ul><li>. . . There are over 80 million Tamil-speaking potential customers! </li></ul>
    • 28. Taking advantage of commodities is the biggest opportunity <ul><li>— for everybody who wants to be a natural resource… </li></ul><ul><li>Or to build a business on them. </li></ul><ul><li>So: where’s this all headed? </li></ul>
    • 29. No application, or business is beyond commoditization. Portals Jetspeed Axis Struts J2EE &amp; Web Services Apps ERP, Transactional Apps Lucene eXist OpenLDAP Open Source Adoption Application Complexity File Servers Mail Servers Self Service Apps CRM, Collab Commerce Linux Apache Tomcat JBOSS PgSQL MySQL ALL Catalogs and Websites SOA Features OS Web Server App Server Database Stack Data Center Management
    • 30. Building an Open Company Leveraging the “Three O’s” <ul><li>Offshoring </li></ul>Outsourcing Open Sourcing
    • 31. All of which means we’ll need to adapt to life in a world exploding with new opportunities
    • 32. &nbsp;

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