8 Technology Investments to Help Small & Medium Sized Businesses Dominate the Recession

When the economy takes a turn for the worse most business try and make swift budget cuts to give themselves a better financial runway. Usually these cuts impact Marketing and IT with great severity, when ideally these are the two areas you should be at the very least maintaining budgets. With that in mind over the next couple weeks we will be highlighting 8 areas where you can make relatively minor investments in technology to help your business Small or Medium sized business dominate in the recession by doing more with less to gain competitive advantages.

The 8 Technology areas that we will be highlighting:

1. Communications
2. Data Deduplication
3. Cloud Computing
4. Learning how to use the tech that you already have
5. Electronic Document Storage
6. Virtualization
7. Hardware Upgrades
8. Going Mobile

Why Sun Should Have Followed Apple’s Path

These days you don’t read or hear too much about companies deploying Sun Servers or workstations, you don’t read about the great advances in the Sparc Architecture, and you don’t read about how Solaris is powering the newest supercomputer. All of the things are what you would have routinely heard about ten years ago and through end of the dot com boom. Back then Sun was the platform of choice for enterprise computing and powering the latest web startups. Many a dotcom blew their VC funds on top of the line Sun servers to power their new next greatest thing. However, Sun has languished in light of cheap, but powerful, x86 and x64 hardware running Linux, which has virtually eliminated any advantages that Sun once had with their Sparc Servers and Workstations.

With their advantages dwindling Sun decided that they should jump on the mainstream bandwagon, by saying that they support Linux, building x64 servers, Open Sourcing Solaris, and buying MySQL. However all of these efforts seemed to be half-hearted measures to allow them to say they were doing these things, to get people in the door to talk to them about their Sparc closed source Solaris systems. They went so far as to start selling x64 workstations that ran, *GASP*, Windows.

Had Sun really supported these efforts they would have stopped selling a commercial version of Solaris and embraced a highly optimized, user friendly, custom version of Linux as their OS of choice that could run on any device they made. Furthermore, they would have limited their Sparc SKUs to the extremely high-end systems with everything else running x64. Finally, they would have embraced the consumer with gateway products to build their brand and suck new customers in, while building a hedge against market fluctuations. Does this strategy sound familiar? It should, its exactly what Apple did to not only maintain relevancy, but steal significant market share from Dell, HP, IBM, and Microsoft.

In Many ways Sun could have been bigger than Apple because they already had enterprise products, they just needed a consumer strategy, which albeit is much more difficult to create than an enterprise strategy. They could have accomplished this through an acquisition several years ago of a company like Suse, HTC, Creative Labs, or Macromedia. Anyone of these companies or any number of others could have vaulted Sun into the consumer space or have given them the tools to build really innovative consumer and enterprise level products.

Cisco, another dotcom high-flyer saw the writing on the wall about a dwindling enterprise market. This prompted them to make some strategic acquisitions to enter the consumer and small business space with Linksys and WebEx, among others. While not exactly the same, since Cisco does not make Workstations or Servers (at least until this week they did not), it is similar, they continued to serve their core market while bolstering their consumer offerings as a hedge against the separate market fluctuations.

But alas, they did not and in today’s news is that Sun is in talks to be acquired by IBM for nearly $7 Billion. However, I do not view this as bad news for either company because there are great synergies in products between the two companies. It is also not too late for IBM to still embrace a consumer strategy and get back into the workstation and laptop market that they should have never left.

Your Big IT Vendor Does Not Understand Your Business

Recently I have come to the conclusion that Big IT Services, Software, & hardware vendors do not understand small-medium sized companies. Most IT vendors seem to fall into one of two categories, the first is Big Enterprise Vendors that think you are or want you to be larger than you are, and fast. The second type is the Small Time Vendors that do not understand what business goals are and how they impact IT, and are quite fine fixing your desktop computer when it breaks, which is fine for the very small company, but they do not scale well. Rarely have I seen a company that can fit comfortably in the middle.

You may be asking yourself, “What constitutes a Big IT Vendor?” These are the companies that you would expect that make hardware or software such as Cisco, HP, and EMC. Big IT Vendors are also the “Value Added Resellers” such as Insight and CDW, as well as your local/regional “Enterprise Consultants/Vendors” that resell hardware & software, in addition to offering consulting services.

Next, you may be asking yourself  “What constitutes a small-medium sized organization?” This one is a little harder to pin down, as it is not always dependent on a headcount of staff. I know of several smaller companies that have only a few employees but require networks and systems on par with companies that have 60 employees, due to the nature of their businesses. In general I would say these are your non-tech based companies that have less than 150 employees, but more than 15. Most companies in this category are happy with their infrastructure as it stands, no matter how broken and inefficient it is, because they do not know any better. They do not have IT Goals, they usually have a loose idea of what they want or where they would like to be, but those ideas are always at the mercy of what else is going on in the organization.

Most Big IT Vendors are fundamentally sales organizations, or at least the departments that you will get to interface with. This is true even with companies that “make” hardware and software, you usually only get to deal with the sales dept. rarely get to talk to anyone that is technical in nature, or if they are they are a Sales Engineer. A Sales Engineer is essentially a sales person that has a better understanding of the technology, but is still fundamentally a sales person. This is bad because sales people are typically paid on commission, so they are usually more interested in pushing units than finding the best solution for your company.

Without sounding like Jeff Foxworthy, you can tell that you are dealing with a Big IT Vendor that does not understand small-medium sized businesses when you starting hearing them say things like:

• What is your annual IT budget? – What they are really asking is “how much money can I try and get from your company?” This is a way for sales people to size your organization up. Again this is something that most small-medium sized companies do not have formally established (but arguably should).

• What is your budget for this project? – This is essentially the same as the previous one. Most small-medium companies would answer this with “what is it going to cost us? If we like the number that is our budget”

• What projects are you working on that we may be able to assist with? – This is question that goes along with the IT Goals question; rarely does an organization in this category take on large long-term projects. Projects that would normally be considered a large undertaking for bigger companies, such as deploying a new IP Phone system or Exchange Server, are fairly short-term projects simply due to the size of the organization.

• We will get a quote put together for this. – This one is a pet peeve of mine. If these companies would just publish a standard price list and not sell their products as a million different components there would be no need for formal quotes. Personally, I am fine working with rough ballpark numbers until I am ready to commit to buying the products. This is a classic way for Sales people to maintain contact with you to try and push you into committing to buy the product or service.

Furthermore Big IT Vendors tend to push Microsoft & Cisco, with some RedHat or Novell Linux peppered in, centric solutions.  They believe that everyone needs a SAN, a web filtering system, a full Unified Communications Solution, and they look at you funny when you say you allow your users to use *GASP* Macs.
These Big IT Vendors have their place in the world, which is servicing large Enterprises. However, with the economy in the toilet shareholders pushing for ever larger market share these vendors have no choice but to try and convince small-medium sized companies that they need to have the latest and greatest enterprise-level technology to make their business run more efficiently. The fact is that most small-medium sized companies do not need an excessively complex IT Infrastructure to run their business, the need a simple, stable, inexpensive environment.

Unfortunately, without Big IT Vendors, that leaves many smaller companies to deal with the small-time IT Vendors previously mentioned, which is often not a better situation.

UPDATE: Microsoft to Get Yahoo Afterall?

In an earlier post I talked about a new Yahoo/Microsoft/3rd party deal rumor. Well, it is looking like it may just be that, a rumor. According to Bloomberg, an unidentified Microsoft spokesperson is denying the rumor. We will have to wait to see if this is a real denial or a fake denial.

Easy come, easy go.

UPDATE: Google May Jump Ship On Yahoo Ad Deal. Good For Them.

It looks like Google finally did bailout of their proposed Ad Deal with Yahoo in an effort to avoid a long legal battle with the DOJ, which was ready file suit to block the deal. I had advocated this in a recent post. This was the right thing to do on Google’s part, and they were right to delay the deal until the DOJ had time to review it. One would think this would cause Yahoo stock to tank, but it appears that their is also renewed hope of a Microsoft deal causing the stock to rise. While I was at one time opposed to a deal with Microsoft, my opinion is now changed, I think they should do it.

Google May Jump Ship On Yahoo Ad Deal. Good For Them.

It is being reported today that Google may bailout of it’s proposed partnership with Yahoo on Ad serving. The deal was announced in June as a way to provide Yahoo a lifeline and cover with it’s shareholders during the Microsoft hostile takeover fiasco. However, thanks to intense lobbying from Microsoft and complaints by advertisers that they “may see” higher ad costs as a result, so the DoJ is looking into it for antitrust violations, and it appears Google is having second thoughts.

Frankly, I do not blame them. I would scrap it too. They did this to assist a fellow company in need to escape from being absorbed into the abyss that is Microsoft. While I am sure they may have squeaked out a tidy profit from the deal, I have a hard time beleiving that this was their ultimate goal. With the added presure and scrutiny from the press and governement, not to mention the legal costs, I am sure whatever profits and goodwill they had hoped for have all but evaporated. Another cause maybe the potential for a tie up between Yahoo and AOL. Any potential deal with AOL could change the dynamic of the deal with Google, as AOL has its own competing ad serving platform.

Regardless of what happens, I am still glad that the deal occured in the first place, as it seemed to be a nail in the coffin of the Microsoft bid. My only request is that Yahoo now do something with the lifeline it was given, such as buying AOL and integrating their already disparate other web properties. I think that this is something that AOL can help them with as they have long been the master of creating well integrated content and properties.

Goodbye Zima…

MolsonCoors announced today that it was discontinuing the Zima brand due to poor sales. While I have never been a fan of the malt liquor beverage, it does hold a special place in the history of the Internet. How does Zima have anything to do with the Internet you may ask. Zima was the first known consumer product to feature its website address on the packaging.

This was a turning point for the fledging web in 1994 to have a major (or semi-major) brand consumer product advertise their online presence directly on their product, thus beginning the commercialization of the Internet to drive consumer product sales.

My question is would the Web have stayed a just Fad (as it was considered to be at the time) if something like this would have never happened? Would the Internet as we know it today be different or exist at all if no had thought to use it as a marketing tool?

Phoenix Startup Weekend

This weekend the Phoenix Startup Weekend got underway, and at least for me it has been somewhat of a whirlwind. First, let me say what a GREAT JOB Gregg Drennan, Justin Crossman, Derek Neighbors, Sean Tierney, Steven Shaffer, Brian Shaler, the folks from Gangplank, and all of the others have done with this event. I was blown away by the level of commitment and organization that they brought to this event.

Last night there were many great ideas and some not-so-great ideas present, but in the end it was eventually whittled down to the following seven ideas.

• Doggie Slobber – Matches you with compatible dogs
• Twitter Rater – Tells you if a keyword is viewed positively or negatively
• Data / IP Escrow – Holds your code ’til you get paid
• GPS Inventory – Realtime tracking of trucks and what they have in them
• SaaS Backup – A way to pull all your data from hosted services (Flickr, Basecamp)
• Alt Reality Game – You play it… it plays back
• Diet Management tool

Personally, I proposed the Alternative Reality Game (ala “Majestic” and “The Game“). However, my spin on this genre of game is that instead of building the actual game you build a platform that could be used to allow others to develop a game of this kind on their own for others to play. Additionally, we would take advantage of the the modern mediums available to us, specifically social media to maximize the game players’ entrenchment in the game. We attracted a significant number of people to our project and ultimately became a team.

If I were going to provide some feedback for the next Startup Weekend, whether it was held in Phoenix or elsewhere, it would be to provide a little more guidance to the teams. For example, each team should be provided goals for the weekend, have to have the minimum and maximum amounts of certain positions, such as programmers and project managers. For example since our team was fairly large we ended up being about 50% programmers and 48% project managers, with not knowing what we were expected to produce, other than “a prototype marketable product”, we have run into some problems. Our programmers were experienced in different programming languages and methodologies, which has lead to some problems. The project managers, myself included, all had differing opinions or visions for what we were going to accomplish in the weekend and ultimately where the product should go and how it should function. I think that both of these issues could have been overcome if we would not have had so many developers or project managers, or had a better idea of the scope of what was expected. I suppose that this could also be attributed to the fact that our idea was not the traditional website based product that other teams were building.

The other idea that seems to alienate Network Admin-type people, is the fact that for the most part there is very little in the way of provisioning of infrastructure. With the JumpBox’s in place there was very little to do to provision the back end tech, which is a testament to their technology, but it left some folks that were not Developers, project managers, or designers in the lurch, unsure what they were doing with their 52 hours over the course of the weekend.

Regardless of what (or if any at all) of the ideas become a real-life startup company the experience has been a good one. While I would argue that the weekend is not 100% like the experience of being involved in a true startup because of the fact that you do not get to choose your resources & people, but must proceed with what is on hand, and those that stick around for the whole weekend. In a real startup you would have more ability to choose who you are working with and platforms you were working with, rather than being at the mercy of what people know, and what they are comfortable with.

“Operation Sell Out!”

There is an interesting article on MSNBC about a new phone from Sprint. The phone is essentially an iPhone knock-off. It copies heavily from the iPhone in functionality and design. Sprint is trying to creatively use social media to promote the phone online by offering customers $20 to make videos for YouTube which feature the phone, and are offering a $10,000 grand prize for the best video. The best part of the whole scheme is what Sprint is calling the whole pitch, “Operation Sell Out!”. It just goes to show you what the telcos think of their customers, as they turn them into sheep, but I guess the people that are posting the videos are just naive, dumb, or greedy.

Let Yahoo be Yahoo

Since Jerry Yang and the rest of the Yahoo board rejected the unsolicited Microsoft buyout offer the news has been dominated by talk of Carl Ichan, shareholder lawsuits, poison-pills, etc. all complaining that the company is not acting in the best interest of the shareholders. These people need to get over it, and let Yahoo be Yahoo.

Seriously, what are they complaining about?!? Yahoo is a profitable company. Yahoo was stable until Microsoft came along and made the offer in the first place. Yahoo would have continued to be stable afterwards if it was not for these same shareholders. By publicly complaining, filing lawsuits, trying to oust the board and Yang, they have nothing but destabilize the company, and drive share prices down. As a result there has been a mass exodus of executives and other staff, further destabilizing the company.

What the shareholders, and even Microsoft, do not get is that companies like Yahoo are not like other companies that can be bought, sold, and integrated. They are an innovative company that had bad leadership for so long under Terry Semel that they are just starting to turn around and get back on their feet.

Also, they belong to the Internet community at large as much as they belong to the shareholders.  For the first generation of Internet users Yahoo was their starting point for all things on the Internet, and have a connection to the company that is of greater value than any share price. So let Yahoo be Yahoo.