April 3rd, 2009
Guest post: Google in talks to buy Twitter (hope) in the shadow of IBM buying Sun (fear)
This guest post is from Miko Matsumura, VP and deputy CTO, Software AG
The triumph of hope over fear?
Eric Schmidt has had quite an amazing ride since becomingCTO of Sun Microsystems. So has @Ev, Evan Williams who launched the blogging phenomenon with Blogger.com (sold to Google) and is in “late stage” talks to sell Twitter.com to Google (again!).
Looks like Google is rising while Sun is sinking…
Is Sun a Fail Whale?
Now it is rumored that the 1,500 layoffs announced by Sun Microsystems recently were part and parcel of the negotiations with IBM. Also rumored is a late-stage price cut for Sun, another unilateral and somewhat draconian measure.
If IBM is taking an old-school consolidation approach with Sun and is already beginning a slash-and burn process, that should significantly impact Sun employees. This violent and disruptive strategy is often times unnecessary and more detrimental to the long-term viability of a company. Often, the hangover from massive consolidation is mass layoffs.
I believe there is a better way. Software AG merged webMethods and became a billion dollar software company without major layoffs and turned in a 31% increase in revenue at the same time lowering costs. I’ll be the first to admit that the enemy of IT is cost (and it’s cousin complexity). How do you fight this enemy without crippling an organizations ability to grow? The first step is to know your enemy.
Big mergers create complexity
One of the great victims of the huge economic disaster is trust. We must shift from blind faith and cronyism to rebuild trust through continuous verification. One of the extreme difficulties of scale as seen in the Bernie Madoff case is that if it’s sufficiently large, it can be made so complex that nobody can understand it. This kind of “too complex to understand” is the cousin of “too big to fail.” We have to go back to “trust, but verify.”
What we can learn from Google
Google has the benefit of a radically successful and profitable core business…so making significant leaps of faith such as Twitter are not unusual.
But even Google has been making small (around 200 person) cuts in their teams in sales and marketing areas.
Accountable, iterative, tactical cuts
Gaining operational visibility and making rational, tactical cuts, you can create a transformational impact but in a non-violent way. Observe the gardener pruning a tree. She is constantly cutting the tree, yes, but the goal is to encourage growth.
Trust but verify
Today’s organizations have poor visibility into their operations. They depend on quarterly historical results to make crude decisions about which groups stay and which ones are cut. What’s needed is a scientific, measurable, accountable way to see what is happening across silos and in near-real time. There’s an old carpenter’s saying “measure twice, cut once.” This is because measuring is less expensive and easier to “do over” than cutting.
Nonviolence requires respect
Nonviolence is stronger than violence. But nonviolence is also harder. It requires you to respect your enemy (cost and complexity).
We are seeing a significant uptake in our operational measurement products (real time business intelligence and decision support) and feel that the visibility afforded by such products can help businesses reduce costs, but without damaging their potential for growth.
But make no mistake, nonviolence is not “squishy.” The costs will come out of the system. But without the haphazard economic violence we are seeing today. Don’t cut people wholesale, we will need them to rebuild our economy.
My 2 cents,
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
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