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Why Are You Here?

By John | February 11, 2008

In 1987, I took my first crack at starting my own business. At the time, I lived in northern Virginia and had completed my apprenticeship with some local software startups. I was lucky enough to meet an excellent mentor named Ray Padron, who helped me create a business plan and do the VC snake dance.

Around that time, northern Virginia was a hot spot for technology. A number of small software companies some soon-to-be giants like AOL, Sprint, and Cable and Wireless populated the area, which also had a fairly mature investment community. I was able to get my startup, “Chain BrIdge Systems,”accepted in the George Mason Business Incubator program. Ray and I did the VC snake dance for about a year, during which I gained an early distaste for VC’s. I learned, however, a lot of life lessons from those meetings, the most important of which was the “Why are you here?” lesson. The “Why are you here” lesson is as follows: whenever you are giving a presentation, teaching a lesson, or pitching an idea, you should be able to answer this question at anytime during the presentation. In a VC meeting, you might be asked this question even before you sit down (and, if you are asked it at the end of the presentation , you are most likely not going to get any money).

I think about that question a lot while I ponder the state of the enterprise systems management (ESM) software industry. I wonder what most companies would say if they were asked in a five-minute spot, “Why are you here? Why do your employees turn on the office lights on Monday mornings? Quick, you have five seconds to live: what business are you in? ” I wonder if most would answer, “the software business.” In 1960, Theodore Levitt wrote an essay called “Marketing Myopia” that addresses the short sightedness of different industries that failed to understand changes in their industry. Levitt uses as two examples the railroad industry and Hollywood. Hollywood was almost destroyed by the advent of television because Hollywood thought that it was in the movie business and not in the entertainment business. The railroad business thought that it was in the railroad business and not in the transportation business. In both cases, each industry revealed its myopic management, which missed the fact that its customers, not its products, where driving the change. One of my favorite visionary business stories is an unlikely hero, Darwin E. Smith, a former CEO of Kimberly-Clark. Smith was named the CEO of Kimberly-Clark in 1971. At the time, most would have said that Kimberly-Clark was in the paper business and not in the consumer products business. In fact, Wall Street wanted his head when he made the decision to close down the paper mill at the company’s namesake, Kimberly, Wisconsin. Smith moved the company into new customer facing products, and today Huggies generate over $1.5 billion in annual revenue.

What industry does the ESM software industry think that it’s in? Everybody talks the talk about services, but are they in the software business or are they in the services business? I recently had a conversation with a large service provider, who told me of a newly released service that was offered to a customer. When I asked about the name of the release, I was told that it doesn’t have a name. The service provider joked that it was just calling the new release the “March 2008 release.” HP, IBM, and BMC–what are the names of of your next releases? Also, I am not sure our new friends in the ESM OSS space Zenoss, Hyperic, and Groudwork are immune to the same myopia. The open source companies, although very agile, seem to look more like software companies than services companies. I am interested in your thoughts.

Topics: OSS, bmc, bsm, esm, groundwork, hyperic, ibm, open source, opensource, tivoli, zenoss | 2 Comments »

2 Responses to “Why Are You Here?”

  1. Cloud Computing and the Enterprise | John M Willis ESM Blog Says:
    February 13th, 2008 at 7:02 am

    [...] based computing will offer.  Banks, insurance, health-care companies can not afford to have market myopia.  There are companies that don’t exist yet, that are younger, faster, and global just around [...]

  2. February 2008 - Review Post | John M Willis ESM Blog Says:
    March 4th, 2008 at 6:22 pm

    [...] Why Are You Here? [...]