Thoughts from the trench - by Prakash Muralidharan

May 29, 2008

Nederlands/Dutch Français/French ???????/Russian Deutsch/German Italiano/Italian Português/Portuguese Español/Spanish ????????/Greek 日本語/Japanese 한국어/Korean 中文(简体)/Chinese Simplified 中文(简体)/Chinese Traditional

Revenue distribution in software services-No long tail

Filed under: Software Services, Indian Business, Book review, Strategy — Prakash Muralidharan @ 12:00 am
Chris Andersen pioneered the concept of the long tail and Wikipedia defines the same as:

The long tail is the colloquial name for a long-known feature of statistical distributions (Zipf, Power laws, Pareto distributions and/or general Lévy distributions). The feature is also known as heavy tails, power-law tails, or Pareto tails. Such distributions resemble the accompanying graph.

In these distributions a high-frequency or high-amplitude population is followed by a low-frequency or low-amplitude population which gradually "tails off." In many cases the infrequent or low-amplitude events—the long tail, represented here by the yellow portion of the graph—can cumulatively outnumber or outweigh the initial portion of the graph, such that in aggregate they comprise the majority.


I have been pondering about the possibility of an upstart services company with a new business model. As part of my analysis I have been looking into the financial statements and annual reports of companies and this is what I found from the annual report of one such company.

-The bulk of the clients are between $1 million and $ 5 million  but they contribute to less than 6% of the revenue.
-72% of the revenue comes from 28% of the clients and these are not small clients (> $10M).
-Truly large clients are not many.


Note: The data used for analysis has undergone some approximation.


Linking and Sharing

If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site (Ctrl+C to copy)
It will look like this: Revenue distribution in software services-No long tail

del.icio.us:Revenue distribution in software services-No long tail  digg:Revenue distribution in software services-No long tail  fark:Revenue distribution in software services-No long tail
Trackback

Trackback URI for this entry:

http://www.prakashonsoftware.org/blog/index.php/2008/05/29/revenue-distribution-in-software-services-no-long-tail/trackback/

May 25, 2007

Nederlands/Dutch Français/French ???????/Russian Deutsch/German Italiano/Italian Português/Portuguese Español/Spanish ????????/Greek 日本語/Japanese 한국어/Korean 中文(简体)/Chinese Simplified 中文(简体)/Chinese Traditional

From Java to Ruby: Book review -Top Insights

Filed under: Technology, Book review — Prakash Muralidharan @ 3:26 pm

Bruce Tate's book "From Java to Ruby" is one of the few books on programming languages written for the manager. It provides a strategic view of how to position Ruby within the enterprise and offers insights on helping Ruby "cross the chasm" and become a mainstream language.  

Top five messages:

Don't use a Bofors gun to kill an ant: I cannot  agree more. Plenty of people out there refuse to look beyond J2EE and .NET when it comes to web application development. Bruce argues " Don't use Java when all you want you application to do is to babysit a database". Use Java when you have complex, heavy duty entreprise computing problems to solve.


Ruby's biggest selling point is productivity: Ruby can be 5 to 10 times more productive than Java for certain types of applications.


There is more to productivity than meets the eye: Increased programmer productivity acts as a lever that brings gains in project management, faster time to market, lower usability risk (due to faster iterations) and lesser ramp up time.


Ruby is more than just a scripting language: Ruby even when combined with Rails might fall well short of a full fledged J2EE platform, but it much more than just a scripting language. Rails brings sufficient ammunition to solve enterprise integration tasks that are well out of scope of a 'scripting language'.


Politics is as important for selling as technology: Even when the 'hard numbers' business case is clearly favourable a new technology or language is likely to loose out politically. The key challenge that Ruby will need to overcome is political than technical. "Nobody got fired for buying IBM" and so the adage goes.






 


Linking and Sharing

If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site (Ctrl+C to copy)
It will look like this: From Java to Ruby: Book review -Top Insights

del.icio.us:From Java to Ruby: Book review -Top Insights  digg:From Java to Ruby: Book review -Top Insights  fark:From Java to Ruby: Book review -Top Insights
Trackback

Trackback URI for this entry:

http://www.prakashonsoftware.org/blog/index.php/2007/05/25/from-java-to-ruby-book-review-top-insights/trackback/

September 19, 2006

Nederlands/Dutch Français/French ???????/Russian Deutsch/German Italiano/Italian Português/Portuguese Español/Spanish ????????/Greek 日本語/Japanese 한국어/Korean 中文(简体)/Chinese Simplified 中文(简体)/Chinese Traditional

Lessons from Oracle

Filed under: Technology, Book review — Prakash Muralidharan @ 5:49 am


I recently read "SOFTWAR- An intimate portrait of Larry Ellison and Oracle". Mathew Symonds, the author brings to life the story behind Oracle and Ellison. Here are my top six takeaways from the Oracle success story.

Question the pundits: When Oracle started out it had very little competition. All the other efforts in the RDBMS space were theoritical in nature because the pundits believed that performance issues would prevent an RDBMS from ever being successful. 

Start with consulting: Consulting revenues funded the development of the first release of Oracle. While still a fledging company, Oracle almost closed down because they stopped doing consulting. Moral of the story: If you are bootstrapping a product company, don't ignore the steady cash flow from consulting.

When choosing a standard-Go with the tide: One reason Ingres lost out to Oracle was that Ingres adopted QUEL, a standard superior to SQL. QUEL was better, but SQL had more industry backing.

Question success, not just failure: Oracle's initial success had a lot to do with having a hyper aggressive team of "hunting" salesmen. The kind of salesmen who would do anything to meet the numbers. They kept up Ellison's vision of doubling sales every year. Year after year. But when the product matured and when customer needs changed in favor of a more service centric sales model, the hunting approach to sales became a huge liability that almost got the company closed down. Mathew Symonds mentions huge account receivables, false promises and huge discounts as some of the perils of hyper aggressive selling. Oracle had to re-orient the sales force to regain market and customer confidence.

Never mix a staff function with a line function: Contracting, legal and sales were clubbed together at one time in Oracle. A move that allowed sales to meet the obscene goal of doubling revenue every year. A move that also lower the quality of revenues and caused Oracle to make an embarassing restatement of earnings not once but thrice. A staff function, especially a controlling one should never be made to report into a line function.

Beware of the brilliant guy who cannot perform: Hiring smart guys is fine and IQ is perhaps the single biggest pre-requisite of performance. OK. OK. That's a big statement. But, atleast in an algorithm dense product engineering world IQ rules. The problem is that are some high IQ people who simply don't perform. Because of the high IQ, they get appointed to top positions and when they mess up, they can bring down a whole company. Identifying such guys is perhaps the single biggest recrutment challenge. Symonds mentions just such a man as one of the causes for Oracle's tough times in a year ninenties.


   


Linking and Sharing

If you found this page useful, consider linking to it.
Simply copy and paste the code below into your web site (Ctrl+C to copy)
It will look like this: Lessons from Oracle

del.icio.us:Lessons from Oracle  digg:Lessons from Oracle  fark:Lessons from Oracle
Trackback

Trackback URI for this entry:

http://www.prakashonsoftware.org/blog/index.php/2006/09/19/lessons-from-oracle/trackback/

Creative Commons LicenseDisclaimer : This blog site is published by and reflects the personal views of Prakash Muralidharan,in his individual capacity. It does not necessarily represent the views of any of his employers, past or present, and is not sponsored or endorsed by any of them. No representation is made about the accuracy of the information contained in this blog.