28 May 2003

Better or just different; Russian technology when it is better really is better - but that does not make it better in every sphere, or even in the spheres where it is deemed to be better. Solutions to physical technology problems that are interesting here tend to have approached long existing problems in an entirely different way from the West. Locally this is known as the Zhiguli-school of technology development. A little harsh maybe but pretty much close to the truth. (A Zhiguli is a Russian car based on a Fiat 125 that has an even worse reliability record than the original. Russian's have an initimate knwoledge of their cars in order to keep them running. Thus they have a habit of coming up with solutions born of habit that we in the West have forgotten as our lives get more comfortable.)

Russian technolgy solutions, orthe ones that work anyway, tend to approach issues in a more holistic way than their competitors in the West. They tend to understand what is required to make a complete solution and work on the many facets that could improve the end solution - rather than focusing on the one area where the most substantial gains could be found.

26 May 2003

I have been pushing the thought that cheap resources is a competitive advantage for Russia that I started to miss the point. Its been written below from time-to-time as I worry that Russian technology companies will not make it out in to the big wide world. Cheap is good, but more important is a technology that really addresses significant problem and a management team that will make it happen.


The arguments in this article succiently encapsulates the problem for the super-large IT companies; they are too large to innovate but have yet to work out (fully) how to make the most money from their brands. The Economist IT Review (week May 10-16) explains it out more eruditely than I can. This has to be an opportunity to small innovative companies with products - let HP, IBM et al sell the services and products from innovative companies through partnership, OEM and acquisition.

Their other option was to get smaller, more focused and more innovative however, that does not exactly fit the fee earners aspirations.

13 May 2003

12 May 2003

Most Tech Sectors are Joining the Service Evolution :: AO

I have been meaning to write for a while on the product / component model versus a service driven model. The blog above made me think some more about this so maybe it�s a good thing that I had not attacked the issue previously. In common with most early stage VC�s much time in evaluating a businesses prospects are spent looking at its �to market strategy� or how will it sell this great product.

My thinking evolved as we reviewed a follow-on investment in a NGIN product / component company and tried to attract other investors. To a man (strange thing about VC investing) they all wanted the Company to invest in building out its service business. The Company stood firm � said no and is bootstrapping itself to profitability. The Company�s view � correct in my view � is that in large telecom solutions the system integrators / service providers will be the big companies: IBM GS, Ericsson, Nokia etc. They are not alone in addressing services as the panacea to the capex drought. It is in the services business where the market is truly crowded � if you are in any doubt ask LogicaCMG or CGEY. Providing the components that build the systems that these service providers are going to install makes a lot more sense than competing in the service business.

I should have hit the Blog This button on an earlier announcement of funding for AePona, another in the OSA / Parlay space. It has a huge service infrastructure � 100�s of people supporting, installing and building apps for a substandard product. Its service guys are going to become disillusioned that they are competing with better technical products that are available across multiple platforms, and they will be tied to competing in tenders where there product fits � AePona neither becomes a best-of-breed integrator, nor a best-of-breed product provider. It�s pretty damn good at marketing though.

Then as I pondered whether this was a telco specific problem, a company in an entirely different space says that it will be a preferred provider because its competitors sell both sub-systems and full solutions.

In conclusion � technology companies can compete by providing better technologies. Service providers will compete by packaging those solutions and making them (very) relevant to the end user. I will stay clear of service strategies; it is too frightening to compete with IBM and HP�s service delivery arms. That leaves the investing question � is there enough left to make good returns on product / component businesses. The logical answer is yes if the entry price is right.

28 May 2003

Better or just different; Russian technology when it is better really is better - but that does not make it better in every sphere, or even in the spheres where it is deemed to be better. Solutions to physical technology problems that are interesting here tend to have approached long existing problems in an entirely different way from the West. Locally this is known as the Zhiguli-school of technology development. A little harsh maybe but pretty much close to the truth. (A Zhiguli is a Russian car based on a Fiat 125 that has an even worse reliability record than the original. Russian's have an initimate knwoledge of their cars in order to keep them running. Thus they have a habit of coming up with solutions born of habit that we in the West have forgotten as our lives get more comfortable.)

Russian technolgy solutions, orthe ones that work anyway, tend to approach issues in a more holistic way than their competitors in the West. They tend to understand what is required to make a complete solution and work on the many facets that could improve the end solution - rather than focusing on the one area where the most substantial gains could be found.

26 May 2003

I have been pushing the thought that cheap resources is a competitive advantage for Russia that I started to miss the point. Its been written below from time-to-time as I worry that Russian technology companies will not make it out in to the big wide world. Cheap is good, but more important is a technology that really addresses significant problem and a management team that will make it happen.



The arguments in this article succiently encapsulates the problem for the super-large IT companies; they are too large to innovate but have yet to work out (fully) how to make the most money from their brands. The Economist IT Review (week May 10-16) explains it out more eruditely than I can. This has to be an opportunity to small innovative companies with products - let HP, IBM et al sell the services and products from innovative companies through partnership, OEM and acquisition.

Their other option was to get smaller, more focused and more innovative however, that does not exactly fit the fee earners aspirations.

13 May 2003

12 May 2003

Most Tech Sectors are Joining the Service Evolution :: AO

I have been meaning to write for a while on the product / component model versus a service driven model. The blog above made me think some more about this so maybe it�s a good thing that I had not attacked the issue previously. In common with most early stage VC�s much time in evaluating a businesses prospects are spent looking at its �to market strategy� or how will it sell this great product.

My thinking evolved as we reviewed a follow-on investment in a NGIN product / component company and tried to attract other investors. To a man (strange thing about VC investing) they all wanted the Company to invest in building out its service business. The Company stood firm � said no and is bootstrapping itself to profitability. The Company�s view � correct in my view � is that in large telecom solutions the system integrators / service providers will be the big companies: IBM GS, Ericsson, Nokia etc. They are not alone in addressing services as the panacea to the capex drought. It is in the services business where the market is truly crowded � if you are in any doubt ask LogicaCMG or CGEY. Providing the components that build the systems that these service providers are going to install makes a lot more sense than competing in the service business.

I should have hit the Blog This button on an earlier announcement of funding for AePona, another in the OSA / Parlay space. It has a huge service infrastructure � 100�s of people supporting, installing and building apps for a substandard product. Its service guys are going to become disillusioned that they are competing with better technical products that are available across multiple platforms, and they will be tied to competing in tenders where there product fits � AePona neither becomes a best-of-breed integrator, nor a best-of-breed product provider. It�s pretty damn good at marketing though.

Then as I pondered whether this was a telco specific problem, a company in an entirely different space says that it will be a preferred provider because its competitors sell both sub-systems and full solutions.

In conclusion � technology companies can compete by providing better technologies. Service providers will compete by packaging those solutions and making them (very) relevant to the end user. I will stay clear of service strategies; it is too frightening to compete with IBM and HP�s service delivery arms. That leaves the investing question � is there enough left to make good returns on product / component businesses. The logical answer is yes if the entry price is right.