Convergys Technology
What Does a Technology
Company Look Like?
(A look at Microsoft
and Digital aka DEC)
Gordon Bell
Microsoft Bay Area Center Research
Three parts
• Observations on high tech organization cultures based
on my experience at Digital aka DEC, Microsoft, and
various high tech startups
– Is it scalable?
– Built productively on appropriate technology?
– Increase your platform & Technology Balance Sheet?
• Where will technology e.g for Telepresence and
Convergys be in a decade? (Recall 1993.)
• What can you do to exploit the options that technology
provides to generate new business?
Microsoft Secrets
Cusumano and Selby
1.
7.
Organizing and managing the company
– Find smart people who know technology & business
Hiring pool, interviews, turn-over…
Managing creative people and technical skills
– Small teams, overlapping functional specialists
Compete with products and standards NOT brand Bodies!
– Pioneer and orchestrate mass markets… try many
Defining products and development processes
– Focus creativity on evolution and fixing resources
Develop and ship products
– Do it in parallel, synchronize and stabilize
Build a learning organization
– Improve through continuous self-critiquing, feedback,
and sharing
Attack the future… be or be in, the mainstream
8.
Be first, be lucky, grow rapidly, maintain high, motivational stock price
2.
3.
4.
5.
6.
Microsoft
• Product and process. Architecture for // development
• HBR Article: Architecture, interfaces, int/ext developers
– Growing, increasingly valuable platform
• Small teams, interconnect with sync
• One development site w/ research. Large capital expenditures.
• Common language. Common development environment.
…whole company tests (we eat our own dog food)
• No single point of developer failure
• Managers who create technology, make technical decisions
• Quick decision making re. business etc. issues
• Feedback from users…e.g. Do you want to send this to MS?
• Learn from the past…v3 is great
• Try things, don’t give up… be prepared to fail vod, webtv, …
• An understanding and appreciation for the individual… stock
• Research!
DEC Cultural Beliefs (Ed Schein ms.)
unconscious, shared, tacit assumptions
1. “Rational & Active Problem Solving”
2. Giving People Freedom Will Make Them Responsible
3. Responsibility means Being on Top of One’s Job, and
owning one’s own Problems. (He who plans, does.)
4. “Truth through Conflict” and “Buy-In”
5. Internal Competition and “Let the Market Decide”
6. Management by Passion, but Work should be Fun and
Enjoyable. Benign Manipulation or Controlled Chaos
7. Perpetual Learning
8. Loyalty and Life Time Employment
9. Moral commitment to customers
Digital-gb 1
• Great responsibility, freedom, and trust in the individual.
– “Do the right thing.” Open door-email. Scalability is a
problem.
– Paternalistic organization.
• “He who proposes, does.” Very little was top-down
– Product managers are part of the product (conflict at
low level)
– Small, responsible teams. Make their own schedules.
– CDC: Cray left, machines obsolete, ETA had no legacy,
Price (CE0) thought top decides, bottom executes
• Conflict is good. Came from starting from M.I.T. Data
decides
• OK to have competing and overlapping
technology/projects/products, but know when to cut them!
When DEC started down, it had almost 10 platforms
Digital gb-2
• Focus on Customer. Let them decide the strategy.
• Profit is essential …all products were measured
• “Either make the standard or follow it, if you fail to
make the standard you get to do it twice.” IBM PC
versus 3
• “Make what you can sell, not what you can buy.”
Therefore: sell everything you make.” semi
• Wilkes: “Stay in the mainstream”… SOS, ECL
• Beware of complex structures. Buyer-seller
relationships versus matrix
VAX
Planning
Model
Gordon Bell’s 1975 VAX Planning Model...
I Didn’t Believe It!
System Price = 5 x 3 x .04 x memory size/ 1.26
(t-1972)
K$
100,000.K$
10,000.K$



5x: Memory is
20% of cost
3x: DEC markup
.04x: $ per byte
Didn’t believe:
the projection
$500 machine
Couldn’t
comprehend
implications
1,000.K$
100.K$
10.K$
1.K$
0.1K$
0.01K$
1960
16 KB
1970
1980
64 KB
256 KB
1990
1 MB
2000
8 MB
Why did Digital fail
• The top 3-5 execs didn’t understand computing
– Moore’s Law, Standards and their effect
– Platforms and their support
– Levels of integration, make-buy, and ISVs
– Competitor metrics: simply got “out of control”
• Destroyed their marketing organization, requiring a
complex matrixed organization, but lacking ISVs
• Didn’t exploit: printing (e.g. HP), networking (e.g.
Cisco), the Web, and UNIX
• Did: ECL mainframe, non-compatible PC, too many
platforms, semi-fabs…
Problems
in decision
making
NOD: No
Output
Division
The Technology Balance Sheet
Eng. Specs:
Plan with:
User view (e.g., data sheets,
Schedule of
manuals) and Features, Functions,
Milestones
&
Benefit (FFB)
Quality Design
Eng. view (e.g., product structure,
Methods/Processes Resources
how to design)
External (industry),
internal, & other standards
Manufacturing Specs.
(i.e. How to
Produce Product)
Indigenous (i.e., skills,tools,
& technical know how)
& exogenous technology
base (e.g., patents)
Chief Technical Officer
(Eng. VP)
Operational Management
(ability to fulfil plansspecs, resources, schedule)
Technology
Future -Financeability
Team, Product Architect,
Engineering Culture
Technology Advisory Board
$s
(Cash / Budget)
Goodness
No challenge, decade outlook.
Industry’s evolutionary path…
¿Que sera sera
Grand
Challengeland
Death and
Doldrums
2000
Time
2013
Gordon Moore projects another decade.
Disks are on the same rate of change…and are important
Communications prices and capabilities are wild cards!
Gordon's wag at Convergys critical technologies
• Software choices e.g. web services, programming
environments to create a growing, high productivity
platform
• Very large disks and distributed databases
• More pixels – screens ~ productivity
• Telepresence technologies for greater coupling,
less travel…
• Newer platforms in addition to wireless.
Why not provide health care call centers?
More tech
• DSL wired, 3-4G/802.11j nets (>10 Mbps) access
• RAM is about 150$/GB (!)
– though 8GB is 3.4K so that is 400$/GB
– 64 bit addressing at the desktop
• Disk is 1$/GB IDE and 3.5$/GB for SCSI.
• 2K/month for 1.5 Mbps or . 12.5K/mo for 45 Mbps
• Personal authentication to access anything of
value
Telepresence
… being there while being here,
at another time, and
with time scaling
• Telepresentations
• Telemeetings and telecollaboration
• The “work”
Growth through acquisitions?
Build them yourself?
• Pro’s: poor IPO market provides many
opportunities.
• Con’s: integration is difficult…
• Research or at least strong Advanced
Development is essential
• Look at the possibilities of internal ventures
Information Technology represents the largest investing category
Source: www.velocityholdings.com
Venture Capital vs.
Corporate Ventures …
Venture goals
Measures of
success
Competition
Resources
Structure
Staffing
VC
Independent
Profits, ROE,
IPO/Acquisition
External
Scarce, but
entrepreneurial
Simple,
stand alone
CEO + small,
dedicated team
CV
Set by parent
Image, ego, revenue,
market share
Internal & external
Plentiful, but
bureaucratic
Complex,
ties to corporation
Large teams, matrix,
fractional bodies!
Can you buck the high failure
rate for internal ventures?
–Lack of agility versus startups
–Strategic soothsaying versus plain old work
–No link to future viability of firm and
lack of value proposition… is it essential?
–Lack of responsibility: anyone in charge?
Everyone is in charge
–Resources: lack of committed integer people!
–Resources: no entrepreneurs
–Appropriate risk-reward structure
–Bureaucratic rigor vs survive and thrive
–Corporate interop aka interfaces to organization, culture,
processes, etc.
The End