Hardball :: Manifesto

Continuing from the Harvard Business Review article, HARDBALL, authors Stalk and Lanchenauer write their manifesto, declaring fundamental behaviors and strategies, for winning in the game of hardball. Companies, like Novell, must relearn the fundamental behaviors of winning:

1. Focus relentlessly on competitive advantage.
2. Strive for "extreme" competitive advantage.
3. Avoid attacking directly.
4. Exploit people's will to win.
5. Know the caution zone.

This sounds more like the recipe for waging guerilla warfare and insurgency, but when you think about both Microsoft's dominance over the software industry, and Red Hat's emergence as real threat to the establishment of powerhouse companies in the OS & middleware market. They both focus relentlessly on competitive advantage, incentivise their employee's, their partners, and their customers. Google is waging this very battle with Microsoft over control of the internet, and what's at stake? The winner will be the world's content provider! And maybe this will be the Coke and Pepsi matchup that never dies, but single percentage points of marketshare equals billions of dollars either gained or lost.

So what of Novell, its controversial exit from NetWare, and it's push towards Linux and Open Source solutions; are they relearning the fundamental behaviors of winning? After loosing for so many years, it can become habitual, and learning to win is critical. But, a turn around company like Novell, must also instill a culture of Hardball in every employee. I don't know if Novell is pursuing such an endeavors.

I believe over the next year three very important opportunities lie in front of Novell:

1. The launch and impact of SLES 10 and SLED 10 as Linux leader upon customers and partners.
2. Developing a migration tool for NetWare applications and services to OES (Open Enterprise Server) for the thousands of Novell's ready army, who won't let go of NetWare.
3. How effectively does Novell pursues and leverages partnerships with Middleware vendors-- Oracle, BEA, IBM, SUN and others-- to squeeze Red Hat into a two dimensional product offering.
4. I know many at Novell would disagree with me by saying that OEM and Channel development, or the Product Business Units are the most important priorities for Novell. However, SLE 10 launch should be directly aimed at Channel and OEM partners to sell to their customers, and the PBU is just house cleaning, and should be done in step with the three goals in lead.

SLE 10 launch has six months before Red Hat's next enterprise release diminishes its attention, but a real migration tool for NetWare users will prolong SLE's market impact, and then the real battle begins. As middleware companies turn to do battle with each other and Red Hat the choice of Linux distro should be SLE 10. With Red Hat backed into a corner the attention turns to Microsoft and their OS/Middleware marketshare, and how will they compete with a feature rich, lower priced and secure Linux OS in SLE 10.

The next 12 to 18 months will determine much for the future of Novell in the Linux and OS markets.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.

Novell, Where's the chin-music?

George Stalk, Jr and Rob Lachenauer published, what I consider the most profound and applicable to Novell's current situation, an article in the Harvard Business Journal titled "HARD BALL: FIVE KILLER STRATEGIES FOR TROUNCING THE COMPETITION. Oh, I know you are cringing at such a brazen title, and think what kind of ENRON wing-nut advice are you going to blog about now?

Put it this way, if your manager has given a presentation on, that rife for excuses and a losing attitude, book "Who moved my cheese?" than you need to read this article! Or, if you are sitting around crying "unfair" and "anti-competitive" while your competitor is kicking you ass all the way to the bank; I suggest you read-on.

HardBall, as defined by the authors, is playing within the rules of the game, but it is throwing that 100 mph fast ball high and inside to your competitor who's crowding the plate. That's the chin-music! He'll think twice before he crowds that plate again, and you know this! Again I ask; Novell, where's the chin-music?

RedHat acquired Jboss, which moves them up the solution stack, and gives them a more complete offering for customers (Does this sound like Windows and IE, not much difference, it builds upon an existing solution, and you think Redhat will include it free in their solution? Yip, count on-it!). I don't believe RedHat's acquisition of Jboss was chin-music for Novell, but it did whiz by Microsoft because Balmer started talking aggressively about "software as a service", which happens to be the open source business model (I don't believe MSFT will ever go open source, but they will encroach on our sales methodologies).

"Hardball players pursue with a single-minded focus competitive advantage and the benefits it offers-leading market share, great margins, rapid growth, and all the intangibles of being in command. They pick their shots, seek out competition's encounters, set the pace of innovation, test the edges of the possible. They play to win. And they do."

Novell should throw two very fast and very flagrant balls to both Redhat and Microsoft. With relentless effort they should pursue exclusive partnerships with IBM, BEA, Oracle (maybe Sun?), and anyone else who plays in the middleware market. That fastball translates to, development collaboration, joint marketing and sales, channel growth, and a very public, front and center, kiss from these partners. A kiss, so discomforting that it makes RedHat and Microsoft employees diversify their portfolio's: the symbol is NOVL, if you were wondering.

Take some time to think about this, and I will post some more thoughts about playing hardball in the next few days.

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer.

Note to journalists and other readers: Unless you receive express written permission to the contrary from the author of the content of this blog/website, reproduction or quotation of any statements appearing on this blog/website is not authorized.

Making Perfect Sense!

So what's next for Red Hat? An article appearing in InfoWorld last month suggests the next step for Red Hat is to acquire a company with either, a database or an IDE development tool, to push further up their IT solution stack, and penetrate further into enterprises who are looking to implement SOA (Service Oriented Architecture).

Does it make sense to buy a database? Ummm, probably not at this point, but if they lost traction and relationship status with the likes of IBM and Oracle you could see such a move. But an IDE development tool might be more likely. Genuitec and its MyEclipse now becomes a real possibility for Red Hat, though SOA is non-language specific, this is a great move to support developers on the back end of the stack.

Like the Jboss acquisition, going after Genuitec, would put a possible strain on Red Hat's relationship with IBM. It will be interesting to see what happens towards the end of summer or fall of this year.

the problem for redhat :: the opportunity for novell

i was sitting in a team meeting with many of the individuals, who facilitate in one way or another --technical or business-- all the relationships novell has with our technology partners, when someone passed the news that redhat was acquiring jboss. i don't think it made many of us think twice, and it became business as usual. i might be blowing this out of proportion, but this was a significant move for both redhat and novell for the following reasons:

1) redhat has realized that linux revenue and sales has, for the most part, hit its stride in growth--and i will pull the market data for upcoming linux sales--; therefore, realized they need to move up further in the stack to generate street expected revenue. jboss presented the natural progression for their business, and i agree!

2) but on the other hand working for novell this should present a formidable opportunity. i believe novell is building technologies around the solution stack with its significant security and resource management portfolio, and should not feel threatened because it has a near non existent play in middleware, rather, take this opportunity to shore up partnerships that redhat has now chosen to compete with head on; including IBM's Websphere, BEA's Weblogic, Oracle's Fusion and others.

i believe redhat has had such an advantage over novell b/c their linux relationships w/ the previously mentioned companies has helped them seed the market, thus, building greater market share (sam will explain in a later post why market share is so critical when dealing w/ a commodity like linux)and dominated Suse in the market. this is novell's opportunity to take over these relationship, and play hardball with redhat and microsoft.

suring up relationships would include 1) development and support cycles are now Suse first before redhat, 2) YES certify middleware applications on SLES (Suse Linux Enterprise Software), 3) define significant and mutual routes to market w/ SLES as the OS of choice, 4) joint marketing and training programs.

obviously, these are my personal thoughts, and are not the thoughts of my employer. i don't have significant power in my position as an employee to make such relationship or business decisions, but this doesn't lessen how i feel about this opportunity, and hopefully someone will make this happen.

First Entry

this is the first entry for tech-cahoots, a blog dedicated to the discussion of IT partnerships. with the emergence of the linux and opensource movement the industry leaders are acquiring new companies, and building new partnerships that will change the current landscape.

much of this blog has been spurred by the recent acquisition of jboss by the linux leader red hat, which has caught the eye of many in the industry for the following reasons:

1. they are moving up the solution stack by offering an OS and an application server/middleware.
2. almost half of jboss's deployments have been on windows.
3. red hat is now competing head-to-head w/ other giants in the middleware market that includes the likes of oracle, msft, ibm, bea and sap.

red hat stock has grown 12% since the acquisition announcement, despite the early negative effects of oracle's CEO larry ellison's comments about wiping red hat off the market by either buying novell or creating/cloning their own linux distro.

so what is the right move for oracle? what's the right move for novell? the following discusion tries to offer possible insight to what should happen next.

Oracle Seeing Red Hat
Oracle Cheif Opens Door to Buying Novell