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Changing of the guard

It’s a fascinating time in the technology industry right now.  We are seeing major shifts in vendors. This is a time when strategy and execution matters.  The Internet is an accelerator which magnifies success and failures.

This week at the D8 conference in California we’ve seen some simply amazing performances by CEO’s on stage.  And by amazing I mean good and bad.

First up was Steve Jobs.  This year Apple has begun to alienate many people with it’s closed ecosystem, tight control and censorship of the app store, and treatment of the lost iPhone.  Yet Steve was completely lucid, humble and impressive during his interviews. And the iPad has smacked it out of the park with 2m sales in 60 days. Here is Steve on Flash …

I used to develop on Hypercard.  It was revolutionary technology at the time. The next big technology game changer for me was Microsoft Access – but that was some years ago.

So I’ve been a big fan of Microsoft for many, many years and we’ve done well as a Microsoft Partner. In contrast to Steve Jobs, Steve Balmer from Microsoft made little sense.   Even worse you can see Ray Ozzie grimacing next to him.  When Ray finally gets a chance to speak he is impressive. He gets it.

Their analysis of Google’s dual OS strategy is hypocritical and simply FUD.  Android is the same model as Windows and the iPhone – where apps are installed, but still  a great web experience.  Chrome OS is a bet on the cloud.  Having both is clever and very coherent to me.

Worse, Balmer is now taking more responsibility. Balmer has been around for a long time and has now become a caricature for all that is wrong with Microsoft. Balmer simply has to go. Microsoft needs Ray Ozzie to take his turn. Ray is far more like-able and has a better handle on the big technology trends that Microsoft needs to be over.

The other fascinating exchange was Mark Zuckerberg from Facebook.  In an ice cold room he melted into a sea of sweat.  This is watch through your fingers material. You think think it can’t get any worse and then we find there is a secret Illuminati style motif inside his sweatshirt. You can’t make this stuff up …

Zuckerberg shows a complete lack of judgement for the event at a critical time for Facebook.  Predictably the call: OPEN LETTER TO MARK ZUCKERBERG: STEP DOWN.

Contrast the AT&T old world CEO with Jobs: AT&T warns customer that emailing the CEO will result in a cease and desist letter

These example are very relevant to what we’re seeing at Xero.  In our space we are seeing a similar vendor shift. It’s now been almost 18 months since Sage pulled down Sage Live and MYOB Live Accounts appears to have been delayed for the fourth time even through they press launched last month.

Early feedback is too little too late.

In our industry therefore we are already seeing this vendor shift. The leaders of the last generation have not been able to develop a strategy for dealing with the next generation. Even though they are huge, have lots of resources and brand – their old business model inhibits strategy and their legacy issues inhibit execution. It’s hard to think of examples of companies that are successfully transitioning from the desktop world to cloud world. Apple being the notable exception.

That’s what makes this space so exciting.  As the Internet magnifies failure and success – if you can get it right with strategy and execution there has never been a more exciting time in tech.  We have a lot to do but trying very, very hard.

 

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7 comments

Ben Kepes
5 June 2010 #

Rod – I too was wowed by Jobs and winced at Ballmer’s and Zuck’s performances, but as you say yourself (at least when talking about FB and MS), this is an issue of sub-optimal leadership rather than one of a vendor shift. MS under Ozzie could be a real force in a cloud world, Facebook under someone else would have a consistent voice and not be buffeted left, right and center by one controversy after another.

Extending this to the accounting space and saying an analogous vendor shift is occurring is a strong call. Sage, as you point out, seems utterly rudderless right now – I’ve talked to them and they seem to be drifting, but in the same way that a new CEO could turn MS around, perhaps the traditional vendors could also innovate given the freedom and resources to do so. And if they do – we’ll see a delivery shift, not necessarily a vendor one.

Yes, I’ll agree there is a move to SaaS/cloud occurring – but it needs to be seen in perspective – Sage, Intuit and MYOB have, between them, multi million customer counts – all the SaaS vendors in the world put together are unlikely to be even 1% of that at this stage…

But yeah, vive la revolution and let’s enjoy what this cloudy world will bring…

Glen Barnes
5 June 2010 #

It was interesting to see the Xero presence at the Bizzone Small Business Expo. Xero didn’t have a stand but quite a few accounting companies were pushing Xero heavily with banners, etc. The interesting thing was no one was really pushing MYOB at all.

Rod Drury
5 June 2010 #

Hi Glen. Pleased you noticed. Our channel strategy is really kicking in. We believe it’s better and more scalable to support our partners and have them present Xero than for us to do it ourselves directly.

It’s a big step from our first Bizzone a couple of years ago and we were all very proud to see so many partners excited about Xero.

Rod

Ben Kepes
5 June 2010 #

@Glen – yeah, totally agree, Xero has a bunch of passionate influencers in the accounting space who are doing really good things for them. It’s nice seeing the excitement and passion that is emanating within the ecosystem…

Brad Halcrow
7 June 2010 #

One minute I was inspired, the next; downright awkward. Squeemish even.

Miki Szikszai
11 June 2010 #

Jobs was a complete case study on boiling down what you do to a few key principles and sticking to them, in particular his thoughts on technology choices.

Not sure if Zuck should go for that performance, he could sure do with some help though. The key issue with both MS and FB is that turning them around (love to have 500m customers just between you and me) takes a very very major intervention. Needs to be a super strong leader with a forceful personality.

Jason M Blumer
11 June 2010 #

Can’t wait to support Xero here in the states. We’ll fly the flag, Rod! Looking forward to the US version.

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