Open Innovation and Business Models

Two recent activities got me thinking on this topic. Trying to compile a Music CD for my kids Birthday party, I was amazed by the number of online options I had for doing this. There was something for every budget and sophistication needed. While the content distributors (be it iTunes, Amazon…) are doing a good job for consumers, how much of this revenue does actually go to the content creators (ie Artists in this case)?  Attending a customer session on Business challenges (of a large industrial manufacturing firm), the biggest challenge for them was to transform themselves from a Product company into a Solutions provider company that works together with business network. What is common in both cases is that disruption is taking place in production and consumption processes and the need to adapt to the changing business models.

Historically ‘Middle man’ have always made a lot of money (be it in Agriculture, Industrial products, Services…) selling in the ‘mass market’ but for the established ‘branded’ business firms.  In the emerging lean (onDemand) world that aims to reduce waste and product ‘just in time’ what the consumer wants the traditional role of ‘middle man’ and ‘branded companies’ is also changing. While the IT companies (Google, Amazon Apple…) try to establish themselves as the new ‘middle man’ (ie media companies & retailers in this case) their disruptive effect is sending ripples in the traditional companies. While ‘Marketing revenue’ is driven by ‘eye balls’ this is increasingly driven by the new media (be it twitter, blogs, social networks, iTunes…).  So where does this leave the content producers for this ‘new media’?  While the problem of finding ‘fair content monetization’ models is far from solved, at least the content producers have a ‘global market’ at their disposal with ‘reduced barriers to entry’.

While the Companies in the Western world find it difficult to compete with emerging economies (read ‘China price’) the options for them to compete are by moving up the value chain by becoming ‘Solutions providers’ working with their ‘Business Networks’ to create innovative products that add value for the ‘whole problem domain / Customer need’. To achieve this they need to open up their processes/data to the ecosystem. It is in this context that ‘open data’ and ‘open innovation’ have a whole new meaning for the business models.  How can the companies ensure that they can make enough money in the new business model? The recent attention Cloud / SaaS offerings are receiving are interesting to note in this regard. While the new ‘IT models’ promise just this, they are still in early stages to deliver ’sustainable’ business value. ‘IBM’ for one has been pioneering this ‘open innovation’ driven business model with its contributions to different Open Source projects.

How can this be applied to other industries? While the different industries increasingly engage in online marketplaces (be it consumer, supplier,…), to ensure true ‘business network’ driven transformation more deeper changes are needed. How ‘open/transparent’ can the companies be to share data internally and externally? How can you design processes that can work across company borders (does your IT systems allow that? how about the management? legal requirements? How will the costs/profits be distributed and managed…). The ’smart’ companies try to address these issues and try to become ‘leaner’. The need for ‘open innovation’ is understood but the road to get there (i.e. business model to follow) is work in progress. Having an ‘open data’ policy is the first step to getting there.

So where does it leave our ‘content creators’? While the new business model aims to reduce waste (lot of it is in distribution anyway!), true creative work can only benefit from reduced barrier to entry and increased collaboration assuming it’s using the right ‘middle man’. Off course the ‘global competition’ can work both ways )

First impressions and Thoughts on 12sprints.com

Having got a Christmas gift of Developer access to the sandbox system of 12psrints.com, I did a test drive of it and am pleasantly surprised by what it offers. I would like to share my related findings and thoughts on this blog.

What did I do with it?

I played around with its REST based API for Method invocation (in JAVA, Flex and using CURL). It was amazingly easy to add content (Activities/items) using the API’s. While it supports adding different types of content, adding Table type items would be of particular interest to applications. It will be surprisingly easy for example to create Decision Activity, based on data available contextual inside (SAP!) Applications, by using the REST API’s. If you have read the book “Driven to Perform”, you will find many examples on how such collaboration can help business.

I tried to use the Custom Business Method development feature (in Flex). It was relatively easy to expose my custom Flash application as a business method and then embed it in any activity as needed. I must admit I did not understand what the container was doing with it but it least did what I wanted )

Other features that impressed me were the easy with which documents (tried with PDF) could be added from local file system including import of Excel files which can be straight away used to create charts.

What would I like to try out with it?

· “Contextual integration” in SAP UI’s (ABAP/JAVA webdynrpo, Flex, BSP…) using REST API’s

· Expose SAP UI’s as custom Business methods (ABAP Webdynrpo flashislands?)

· Voice apps integration. You can check here for some motivation

· Integration with BusinessObjexts Explorer and other BusinessObjects OnDemand products

· Integration with other social networks/communities (including SDN, Twitter, Linkedin..)

· Google Wave and Google docs integration

What can be better or what I did not understand?

While I liked the coordinating and Decision making related features, I must admit I did not understand the analysis related features. In particular how it can consume external content. I assume its work in progress, it’s still Beta release after all!. While there have already been critical reviews on it by experts on business use cases for it, as an optimist I would prefer to see what others are doing here. What can really help would be public (cloud) access to SAP data. It’s here I think the SAP Enterprise Service workplace can really help. While I continue playing around with my Christmas gift, hopefully have managed to make enough people envious and wanting to have this gift.

Social Media and Productivity

There is a lot of media coverage these days about ‘Social Media’. In this blog I would like to share my views on Social Media and its implications for (personal) productivity. 

Some recent reading that got me thinking in this direction is a blog entry on the same topic on Oreilly Radar and a SDN blog on Social BPM. Before getting into the details having a common understanding on what social media means can he found here from Wikipedia. As ‘Mass Media’ and ‘Communication’ make the transition from being traditional monopoly (walled garden) Industries into being a more open ‘Social Media’ driven ones, powered by the Collective Intelligence of the masses collaborating using the Internet, the changes can be felt in all Industry verticals.  The Business model transformation effect of Social media usage has been well established starting from success of Open source software to increasing adoption of network driven ‘Open innovation’ culture across Industries.

Given that the Individual and Enterprise participation in Social Media is a prerequisite, how can we do this in a productive manner? To be more precise who should contribute, how much, how and who is going to measure the value of the contribution?  For example – Not sure how important/useful it is to frequently update status on ‘what are you doing?’ . While increasingly Enterprises formulate rules for engagement with social media, it would to an extent give a new definition to the ’social’ aspect of the interaction. Given that there are a lot more ‘consumers’ of social media than ‘producers’, the drivers for contribution to social media need to be better understand. Given most people have a day job to do and a family life after, the consumption driven social media is probably not too surprising.  While IT innovations (read mobile devices, broadband networks…) are making it increasingly easy to contribute to social media, the trend is probably being more driven by the younger generation (who are natural users of social networking sites).

Given the ‘information overload’ we are already under data from additional social media channels (blogs, twitter, waves,..) only makes the ‘productivity’ problem more worse (for producers and consumers). While the extent of social media activism depends on ’social’ inclinations of individuals, provision of tools for ’smart’ social media consumption can definitely help. As a regular user of ‘Bloglines blog reader’ and ‘Windows Live Writer’, can only wish for more such tools to enable productive usage of social media. While the natural human interaction with social media (embedded in the context of human interaction) needs a lot more innovation we see some already being built into the tools (ex: retweets). While developments in areas of ‘Text analytics’ and ‘Event Stream Processing’  promise huge productivity enhancements for social media consumption, I personally think the production process still lags in productivity.

With increasingly more data being accessible by public API’s every day, we will see a lot more collaborative use of it using social media. Hence it’s a good time to think of how we can ’sustainable’ be part of the social media driven innovation ecosystem.

Next generation real time system design

Having recently read a research paper and attended a related session on how “In-Memory column Database” can revolutionize Enterprise application development (the paper is a must read for anyone in Application development domain), I would like to share my views on it.  

By challenging the need for having different data models for transactional and analytical applications (i.e. OLTP & OLAP) and offering a new data modeling paradigm which would better leverage the emerging hardware trends (ie multi-core processors and huge main memory availability) provides insights into how next generation application infrastructure can look like. The paper proposes to organize data in columns and use column based operations then the traditional row based storage and operations for data manipulation, as this would better use the hardware capabilities and meet the application requirements. While ‘Storage’ is considered as the bottleneck in the current infrastructure it will be interesting to see how it can be better leveraged as is done with processors and main memory. Products such as ‘hp oracle exadata storage server’ may be showing the way to go here.

If one looks under the covers for most leading SaaS applications (be it social networking sites as Facebook, CRM applications like Salesforce or auctions from E-bay, MapReduce app from Google), their “secret sauce” is the data modelling that would allow them to scale at huge work loads (Internet scale) with low TCO. While lot of research work is happening in design of Very large databases, its interesting to note that domain specific custom solutions are being developed by the industry (the proposal in this paper is one of them!) to address specific use cases.

While its clear a new data model abstraction will be needed to design next generation real time systems, the jury is still out there of how “parallel computing”  can sufficiently address non functional requirements such a Development productivity, Reliability, Availability and Extensibility. What is clear is that the whole software infrastructure stack (Operating system, databases and application servers) needs to be redesigned. Apple has shown with iPhone what is possible when the whole stack is redesigned, we can expect similar domain specific innovations on the server side as well. The consolidation we are seeing in the IT industry are a part of this evolving next generation IT stack landscape. While its difficult to predict which vendors will actually survive the transition, for the end-users we can only see benefits from next generation real time systems.

Learning Insights

I would like to share my attempts in understanding the learning process and the shifts happening in it due to technology changes. Understanding ‘implicit learning’ (or ‘learning by heart’ as I would like to call) and ‘explicit learning’ is key to this. As I watch my 1 year old son it amazes me how he picks up new things (be it by observing us or while playing…) without being ‘explicitly’ taught new things.  Off course we need to teach him some things ‘explicitly’ (such as how to name things…) using books (TV, Computer…) and real world physical objects. It would be fair to say a degree of both forms of learning is needed.

A important aspect of learning is the ability to differentiate and integrate things. To continue the analogy of a child, at first anything round is a ‘ball’ for him, but with time he learns to differentiate between  a ‘Football’, ‘Basketball’… Just as we gain more ‘domain expertise’ in a specific field our ability to identify the subtle differences in the topic takes our learning to new heights. The ability to integrate things is the complementary skill for the learning process.  Just as a child learns that not only different things can have the same name but the same thing can also have different names (for example in different languages) marks a key milestone in learning process. If we think of it, the ability to differentiate and integrate is the basis of most computing algorithms.

A context or ’situations’ that a child/student is put into greatly influence his subject knowledge. Just as a initial ’software system model’ needs to refined with new data to fine tune/optimize the model, the learning process needs to systematically improve the learning experience. How can such a systematic learning process look like? This is area with lot o history and current research activity. Right from the ancient ‘Gurukul’ approach to learning to the modern virtual games oriented learning (ex Nintendo DS style) approach, learning process has seen lot of changes. While the tools to enable the learning process have evolved over times, the importance of learning only has only increased over times.  With the current emphasis on ’smart learning’ assuming that most basic tasks will be automated (just like calculators made it memorising multiplication tables less important), identifying the right ‘domain areas’ for learning ‘differentiation’ and ‘integration’ skills are needed.

In the current times of ‘constant change’ life long learning is projected as ‘the virtue’ to have for all. In this context it’s important to understand the learning process and hopefully this article helps in this regard.