SaaS

Software in an Age of "AND" not "OR"

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A look at the most dynamic companies in the business world today — Google, GE, BASF — and reveals a common denominator: none are specialists. All excel in a variety of fields and combine this expertise to innovate new market opportunities and a competitive advantage.

IT and innovation expert Vinnie Mirchandani explores the advantages of these companies in his new book, The New Polymath. The good news? He says all software companies have an opportunity to become Polymaths — or to become valued partners to these leading organizations.

SandHill.com recently caught up with Mirchandani to discuss the themes of the book and his advice for software companies on how to be a part of the Polymath phenomenon.

SandHill.com: Briefly describe what a “New Polymath” is in today’s business world.

Vinnie Mirchandani: A “polymath” is the Greek word for a Renaissance person – someone like Leonardo DaVinci, Ben Franklin or Issac Newton, for example. These men were artists, inventors, writers. Each one excelled in 10 – 15 areas.

A New Polymath is a company that brings together multiple technologies into its products. These companies are comfortable with a variety of disciplines including info tech, clean tech, bio tech, health tech. In the info tech realm, Salesforce.com is a good example. The company has brought together software, hosting, application management, upgrades and more under one umbrella.

The fundamental philosophy that describes Polymath companies is “and not or. ” Every case study in the book is about companies that have excelled at

X “and” X “and ” X

— not X “or ” X “or ” X — and leveraged these combinations into new opportunities.

In the services space, Cognizant’s talent base was primarily in the United States and India; but instead of looking at India or another destination, the company now runs centers in India and Philippines and Hungary and Phoenix and Argentina and elsewhere. They can deliver sophisticated services like clinical tests of the H1N1 flu vaccine with a “follow the sun,” 24 x7 capability.

SandHill.com: What are the software industry trends that are driving the need for a Polymath approach?

Vinnie Mirchandani: Many major IT vendors are well down the path to becoming Polymaths. Look at IBM. Two decades ago, the company moved beyond its hardware heritage and began moving into software, services, leasing — a variety of areas that deliver new value to its clients. HP did the same thing in a different way. This year, Oracle acquired Sun and bought its entry into the hardware market. Microsoft has invested billions in cloud data centers for Azure. Every SaaS company offers much more than software. Like Salesforce.com, they deliver hosting, data center, storage — all the functions needed to satisfy a specific business need.

The fact is that, increasingly, pure-play software companies are an aberration. Of course, the question is, “Will Microsoft be good at running data centers? Do they have the operational discipline to deliver to demanding SLAs? Will Oracle succeed at managing Sun?” We don’t know yet. It has taken players like NetSuite and Amazon years of hard knocks to get where they are today.

SandHill.com: Can any company become a Polymath organization?

Vinnie Mirchandani: These days, society and business are fairly oriented toward businesses becoming specialists — “monomaths.” Setting out to be a Polymath can be a tough sell. Venture capitalists (VCs) advise their portfolio companies to focus. They don’t want their startups to attempt eight different disciplines because the founders cannot do them all well. It can create a scatterbrained organization.

But to answer your question, yes — it is possible to transform a company or executive into a Polymath. Interestingly, one of the successful transformational examples I use in the book is that of a VC firm itself: Kleiner Perkins.

Their bread-and-butter was traditionally in info tech including blockbuster investments like Google and Netscape. The firm began to fund clean tech plays in 2003. Today, the partners have 50 cleantech companies in their stable, covering a vast array of emerging markets including solar films, fuel cells and electric vehicles. Partner Ray Lane came to Kleiner Perkins fter his days as COO at Oracle. From a background of databases and revenue recognition models, he can now talk methane and selenium and effortlessly compare the ethanol yield from sugar cane in Brazil to that of corn from Iowa.

Lane is a classic example of a Polymath leader — one who can make the successful transition from one discipline into a whole new set of disciplines. Bill Joy, a Kleiner Perkins partner who co-founded Sun, is another example of someone who began by writing Berkeley UNIX system and now focuses on investments that will decelerate climate change. The ability to make such a transition is impressive.

SandHill.com: What business benefits do Polymath companies receive?

Vinnie Mirchandani: The obvious benefit is business success — be it in the form of revenue growth, new lines of business, geographical expansion, innovative products, long-term viability or other positive competitive advantages.

Intangibly, once you become a Polymath, history is generous to you. To begin with, Polymath companies are considered smart, which impacts a corporate image significantly.

Google typifies a Polymath organization. It’s a search company, but when you look inside its labs, they’re researching all kinds of different things — flu trends analysis, astronomy, renewable energy and more. Many of Google’s disparate initiatives are not yet generating revenue, but their reputation for innovation is benefitting the company in other ways — not the least of which is recruiting. Google attracts high-caliber candidates in an amazing variety of disciplines.

SandHill.com: What strategies can software companies use to evolve into Polymaths? Is such a transformation even possible?

Vinnie Mirchandani: There is no reason why software companies cannot transform themselves into Polymaths. I can immediately think of three ways.

1. The first way is to think big: Move beyond software. Software executives tend to be extremely silo-ed. They have trouble thinking outside of their category.

This pigeonholed perspective is what opened the door for Marc Benioff 10 years ago. Back then, the average software company was just a software company. He looked at IBM and its ability to do software, hosting, upgrades, application management, etc. and said, “I’m going to do all that.” He was so far ahead of his time that it had to hit the mainstream before Benioff could get the credit he deserved as a Polymath. (By the way, he graciously agreed to write the foreword to my book.)

Software CEOs need to define their goals much bigger than they have in the past. I use the phrase “grand challenge” quite a bit because I find that is what inspires the biggest solutions out there. Do software companies need to reverse engineer the human brain? No. But too often, vendors are too focused on the release of Version 11, when the delta between 10 and 11 is so small as to be inconsequential.

2. A second way software vendors can become Polymaths is by targeting verticals opportunities. Many of these areas are “green fields” in which traditional software companies haven’t made an impact.

If you talk to most software executives, they will tell you that vertical markets aren’t individually big enough to go after. It is more lucrative to go after horizontal applications that can be used by the vast majority of customers. The trouble is that Polymaths don’t need to wait for software vendors to fill their needs — they can write the code themselves. If software companies don’t evolve, they risk being commoditized into the horizontal applications space — and few people consider such applications to be value-added for the business.

Consider Hospira. The company is solving one of health care’s biggest challenges: Medication error. Rather than making an incremental improvement to its infusion pumps, Hospira developed Symbiq — an infusion pump system. It references drug libraries, patient records, and ID scanners for patients, nurses and drugs before it will allow a drug infusion to begin. It has a display panel that nurses can read from a distance and several auditory alarms.

All of these scanners, signals, and database matches require software. Could a software company have developed that product? Of course. But it comes from a company that was spun out of a pharmaceutical company, Abbott Labs. Other Polymath companies use software as part of their solutions – but only a small part. For example, GE’s Net Zero Home project aims to develop a home that produces as much energy as it uses by 2015. By bringing solar panels, wind turbines and smart appliances to the home, its occupants would pay no utility bills.

In the GE Net Zero Home, software controls all the devices, optimizes efficiencies and integrates with the utility company’s smart grid. Traditional software vendors would not typically give serious consideration to opportunities in which the software plays only an integration or management roles – but they need to start thinking that way.

Software companies need to be worried that “user” companies are learning to be technology vendors. Hospira used to sell pumps, now they sell systems. The fact is that there is an impressive amount of software innovation happening in these Polymath organizations.

3. The third way software companies can succeed in the era of Polymaths is to partner with one. Take autos. There is a ton of software involved in modern cars – tens millions of lines of software code. Many of the car companies wrote it on their own, but Ford worked with Microsoft on Sync for hands-free calling, navigation and other applications

Software vendors should be reaching out to Polymaths and saying, “I can do the software piece and do it better” — and then delivering on that promise.

Too often, the Valley and the software industry just don’t reach out. In that case, the Polymaths will innovate on their own.

To find out more, read “The New Polymath: Profiles in Compound Technology Innovations.” 

Vinnie Mirchandani has been called “The King of Wow” for his keen eye for technology-enabled innovation. His blog, “New Florence. New Renaissance.,” has cataloged 2,500 posts of innovative products, projects and people in work, life and play. He has presented at a number of innovation and technology events. His last book, “The New Polymath” (Wiley), was widely praised as an “innovation firehose.” He is president of Deal Architect Inc., a technology advisory firm that helps clients take advantage of disruptive trends like cloud computing before they go mainstream. Between this firm and his previous role at Gartner, he has helped clients evaluate and negotiate over $10 billion in technology contracts. He spent his early career as a global consultant at Price Waterhouse.

 

 

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