Please read this article before reading my comments
http://money.cnn.com/2007/04/25/news/companies/pluggedin_taylor_deadbrands.fortune/index.htm?postversion=2007042613
This article is suggesting that GM has to shutdown brands - Buick, Pontiac, Hummer, GMC and SAAB. Any joker can say that. What should GM do to move the buyers of these "shutdown recommended" brands over to the remaining brands? That is the real question any productive article needs to answer if they are truly interested in the wellness of American manufacturing or know anything about running a profitable enterprise. These types of nonsensical, fill-the-page articles that do not give any insight into really anything bothers me. Especially coming from a senior writer in a magazine ironically called Fortune is very unfortunate.
Here are the 2006 US sales numbers for the brands that the article suggests that GM discontinue
Buick Sales Volume - 240,657
Pontic Sales Volume - 410,229
Hummer Sales Volume - 71,524
GMC Sales Volume - 481,222
Saab Sales Volume - 36,349
Let's see. Adding Buick, Pontiac, Hummer and GMC we are talking about 1,203,632 vehicles. Let's say we shut this down, how many jobs are affected? How much does the overall American economy lose? How much does the GM shareholders lose? What the author is suggesting is that GM reduce its total American sales by over 29% (total GM sales is 4,124,645).
I have just two questions to you Alex Taylor III - Are you STUPID? Who made you a senior writer at Fortune?
If the buying public did not like the choices offered by GMC, Pontiac, Buick they would not be buying 1.2 Million of them. What GM needs to do is not shutdown brands, but have lesser number of dedicated production bases for a particular model. What they need is more flexible manufacturing bases (where by more than one brand and type of vehicle can be manufactured in the same assembly line based on market needs so that idling and related costs are reduced). Then of course what they need - and are lately improving quite a bit - is better visual design and more importantly better execution (quality of materials, panel gaps, fit and finish, things that you do not see but feel like the thud that the door makes, the feel and sound of the indicator stalks etc.). They also need to better differentiate between their brands - end-to-end. They are doing this in pockets, but not end-to-end. An example would be - You cannot have showrooms selling GMC Acadia (btw, who the hell came up with that name?) and Buick Enclave being sold next to each other and serviced by the same dealership.
SAAB is a different story altogether. It is easy to misunderstand SAAB, especially by an American journalist who does not even understand American Brands or the people - 1.2M of them that buy them. SAAB is s a quirky Swedish brand that was sterilized by GM. There is a template for how to make SAAB successful and that was written by a company called Volvo. Just let SAAB be SAAB and it will grow. It needs money, just like how Ford pumped money into Volvo before it became what it is today. SAAB does not need a re-badged Chevy SUV - no matter what the interior, where the ignition key goes and grille looks like. I'm sure Lutz has learned his lesson. He is smart and I'm sure would not make that mistake again. If anyone wants to know how to do Badge engineering they need not look further than Ford. They have made their share of mistakes, but how many can say that Mazda 3, Volvo S40, Ford focus share the same platform. There may be other cars that share it too, but, that is the whole point, you just do not know.
So please stop writing such idiotic stories just to fill pages. Fortune - you too Brutus?
Thursday, April 26, 2007
Monday, April 2, 2007
Linux is not an Operating System
Linux is the new UNIX and the new VHS. Let me explain.
How did UNIX become the "cool" and enterprise standard operating system?. It was free and had, for lack of a better term, geeky credentials (Berkeley, Bell Labs etc.). When the university and the technical literati trickled down to enterprises, their operating system of choice - UNIX - spead its wings and became the standard for running business critical applications.
A similar, but a slightly different adoption behavior dictated the standard for recorded multimedia, i.e. Betamax vs. VHS. VHS became popular because of two reasons - its longer recording time and simpler mechanism (rewind/fast forward mechanisms) leading to wider adoption by the adult entertainment and home recording. This adoption was inspite of what is generally regarded as betamax's better quality and hence its reversal of roles in the professional industry where Betacam is a clear winner against competing VHS formats.
The above two examples from history tell us that two things are important for a product to be successful. Adoption cycle origination points, and how well the product resolves the issue/problem it addresses.
UNIX was always free. One can download a version from many university sources making it an open source operating system. It is still one of the most fully developed and mature operating systems. It is so good that most large enterprises of the world use it to run important applications. It is so good that many computer companies - SUN Microsystems, Hewlett Packard, IBM and a few other second tier players started to make their own versions of it and make money from it. And that is the problem with it.
Linux is free. Fairly easy to use for those that would attempt to use something like an Operating System. Has enough geeky credentials. So why is it the new UNIX?
Humanity, at least a section of it, many times for very valid reasons I must add, has problems with people or organizations profiting using their hardships. There are ample examples - Microsoft (at least until Bill started to spread his wealth), Rockefeller, the Colonial British etc. Here we have large companies making hordes of money using a free operating system called UNIX. This has to be put in check and here comes Linux.
With exactly the same adoption cycle originations as UNIX, i.e. enough geeky credentials, universities, free and making the usability a bit easier (than unix), Linux is a movement and not a workload or operating system to make money for large corporations. So please do not address it such. You merely join this movement with the right intentions. If not, it is only a matter of time before we have another operating system. So, like VHS, Linux solves the problem - large companies making money out of public property is not good - it is trying to address quite well. UNIX like Betacam will continue to serve the professional i.e. Enterprise application markets quite well.... Until of course DNIX (ala DVD) appears.
How did UNIX become the "cool" and enterprise standard operating system?. It was free and had, for lack of a better term, geeky credentials (Berkeley, Bell Labs etc.). When the university and the technical literati trickled down to enterprises, their operating system of choice - UNIX - spead its wings and became the standard for running business critical applications.
A similar, but a slightly different adoption behavior dictated the standard for recorded multimedia, i.e. Betamax vs. VHS. VHS became popular because of two reasons - its longer recording time and simpler mechanism (rewind/fast forward mechanisms) leading to wider adoption by the adult entertainment and home recording. This adoption was inspite of what is generally regarded as betamax's better quality and hence its reversal of roles in the professional industry where Betacam is a clear winner against competing VHS formats.
The above two examples from history tell us that two things are important for a product to be successful. Adoption cycle origination points, and how well the product resolves the issue/problem it addresses.
UNIX was always free. One can download a version from many university sources making it an open source operating system. It is still one of the most fully developed and mature operating systems. It is so good that most large enterprises of the world use it to run important applications. It is so good that many computer companies - SUN Microsystems, Hewlett Packard, IBM and a few other second tier players started to make their own versions of it and make money from it. And that is the problem with it.
Linux is free. Fairly easy to use for those that would attempt to use something like an Operating System. Has enough geeky credentials. So why is it the new UNIX?
Humanity, at least a section of it, many times for very valid reasons I must add, has problems with people or organizations profiting using their hardships. There are ample examples - Microsoft (at least until Bill started to spread his wealth), Rockefeller, the Colonial British etc. Here we have large companies making hordes of money using a free operating system called UNIX. This has to be put in check and here comes Linux.
With exactly the same adoption cycle originations as UNIX, i.e. enough geeky credentials, universities, free and making the usability a bit easier (than unix), Linux is a movement and not a workload or operating system to make money for large corporations. So please do not address it such. You merely join this movement with the right intentions. If not, it is only a matter of time before we have another operating system. So, like VHS, Linux solves the problem - large companies making money out of public property is not good - it is trying to address quite well. UNIX like Betacam will continue to serve the professional i.e. Enterprise application markets quite well.... Until of course DNIX (ala DVD) appears.
Friday, March 9, 2007
SaaS or SALSA?
SaaS or SALSA?
I think the IT industry, more than most other industries, may be with the exception of Wall st., is FAD driven. Take a look at SaaS. According to analysts (I do not consider myself to be one) this is the best thing to happen since sliced bread. It has the following benefits
1. Reduces Time to Market
2. A snap to Deploy
3. No Infrastructure to Manage
4. No License to Manage
5. Pay-as-you-go subscription model
6. Why pay for all the custom features when you do not really use it e.g. SAP
Sounds great so far. So whats the problem here?
Lets start with why anyone uses software or IT to start with. I think, there are two reasons:
1. It is the cost of doing business, the price of entry if I may
2. It is used for gaining business advantage
Let's say SaaS is adopted as widely as predicted, i.e. every mom-and-pop has CRM and whatever else that is available, that would be like everyone in business using Word, Excel and Email. It just becomes the cost of doing business. You cannot use hand-written notes or slow mail anymore. Historically same things happened with the Typewriter, the Electronic typewriter, the Fax machine, Photocopier etc. SaaS is no different. So what?
No Doubt SaaS offers the above stated benefits, but, there are certain issues that could inhibit its adoption beyond a certain segment. So what is the inhibiting factor? It is not customization or performance or accessibility or scalability.
Let me put it another way. Think of SaaS as a being equivalent to a Power plant. Instead of all of us running our own generators, we get electricity from a centrally located power plant. We have created a Grid based distribution system to increase the reliability. In spite of all this we have blackouts. Then, I'm sorry to say this, power plants become terrorist targets. If we all had our own power plants i.e. little generators this would not be an issue, but we loose efficiency.
So what do we do? We use Generators or Flashlights as backups to the Power grid. Depending on the criticality of the application i.e. if it is a surgical facility in a hospital or if it is a data center running mission critical applications we have UPS systems. So what is the relation to SaaS and what does that have to do with SALSA?
SALSA is an acronym that I just created. Just like that! Software As a Local Service Appliance. There are two purposes or implementation possibilities for this concept. It is easier to explain and understand this using an example. So here it is:
1. Salesforce.com application as an Appliance i.e. Salesforce SALSA
2. Salesforce.com Appliance backup to Salesforce.com SaaS i.e. Salesforce SaaS with SALSA high availability or Salesforce.com CONDOM (Common Domain - suggesting that it is one application but with local availability protection)
Why would you do this beyond the above stated reasons i.e. UPS backup, Local Power Generator analogy.
As good as oats is for ones health, we need to package it, add sugar and honey and make it enticing for people to consume, hence we have Cheerios. The benefits of a concept/product alone is not enough. Packaging brings wider acceptance and adoption i.e. revenue and profitability. In the case of SaaS there are corporate cultural barriers to cross. Many Medium and Large Enterprises care about control and data security. If data is not in their own sight or under their clear oversight they are not going to want to implement it. Then there is the issue of backup, restore-on-demand, storage, regulatory requirements, compliance, audit etc. to deal with. Saas may provide all this, but can do it only as much as a Powergrid provides electricity. If we trust a decades old technology like Power Transmission to that extent (Blackouts sure do not make it any easier to trust), there is no way Large and Medium enterprises are going to trust SaaS. SALSA just makes this easier.
The data replication technology is mature enough to support the CONDOM implementation suggested above, if needed. This makes the process of continual update of the software easier. If it is just a plain SALSA implementation, upgrades need to be worked out. The good thing is, if someone does not want to upgrade, they do not have to, making the adoption easier. In the end what is important are the benefits of SaaS as mentioned at the beginning, not where the software physically resides. People buy a product for its benefits. We use public transportation for its benefits, but still like to own a car, unless you are poor or just do not have the need for it (Just like the current SaaS adopters and that is the point)!.
Why not?
I think the IT industry, more than most other industries, may be with the exception of Wall st., is FAD driven. Take a look at SaaS. According to analysts (I do not consider myself to be one) this is the best thing to happen since sliced bread. It has the following benefits
1. Reduces Time to Market
2. A snap to Deploy
3. No Infrastructure to Manage
4. No License to Manage
5. Pay-as-you-go subscription model
6. Why pay for all the custom features when you do not really use it e.g. SAP
Sounds great so far. So whats the problem here?
Lets start with why anyone uses software or IT to start with. I think, there are two reasons:
1. It is the cost of doing business, the price of entry if I may
2. It is used for gaining business advantage
Let's say SaaS is adopted as widely as predicted, i.e. every mom-and-pop has CRM and whatever else that is available, that would be like everyone in business using Word, Excel and Email. It just becomes the cost of doing business. You cannot use hand-written notes or slow mail anymore. Historically same things happened with the Typewriter, the Electronic typewriter, the Fax machine, Photocopier etc. SaaS is no different. So what?
No Doubt SaaS offers the above stated benefits, but, there are certain issues that could inhibit its adoption beyond a certain segment. So what is the inhibiting factor? It is not customization or performance or accessibility or scalability.
Let me put it another way. Think of SaaS as a being equivalent to a Power plant. Instead of all of us running our own generators, we get electricity from a centrally located power plant. We have created a Grid based distribution system to increase the reliability. In spite of all this we have blackouts. Then, I'm sorry to say this, power plants become terrorist targets. If we all had our own power plants i.e. little generators this would not be an issue, but we loose efficiency.
So what do we do? We use Generators or Flashlights as backups to the Power grid. Depending on the criticality of the application i.e. if it is a surgical facility in a hospital or if it is a data center running mission critical applications we have UPS systems. So what is the relation to SaaS and what does that have to do with SALSA?
SALSA is an acronym that I just created. Just like that! Software As a Local Service Appliance. There are two purposes or implementation possibilities for this concept. It is easier to explain and understand this using an example. So here it is:
1. Salesforce.com application as an Appliance i.e. Salesforce SALSA
2. Salesforce.com Appliance backup to Salesforce.com SaaS i.e. Salesforce SaaS with SALSA high availability or Salesforce.com CONDOM (Common Domain - suggesting that it is one application but with local availability protection)
Why would you do this beyond the above stated reasons i.e. UPS backup, Local Power Generator analogy.
As good as oats is for ones health, we need to package it, add sugar and honey and make it enticing for people to consume, hence we have Cheerios. The benefits of a concept/product alone is not enough. Packaging brings wider acceptance and adoption i.e. revenue and profitability. In the case of SaaS there are corporate cultural barriers to cross. Many Medium and Large Enterprises care about control and data security. If data is not in their own sight or under their clear oversight they are not going to want to implement it. Then there is the issue of backup, restore-on-demand, storage, regulatory requirements, compliance, audit etc. to deal with. Saas may provide all this, but can do it only as much as a Powergrid provides electricity. If we trust a decades old technology like Power Transmission to that extent (Blackouts sure do not make it any easier to trust), there is no way Large and Medium enterprises are going to trust SaaS. SALSA just makes this easier.
The data replication technology is mature enough to support the CONDOM implementation suggested above, if needed. This makes the process of continual update of the software easier. If it is just a plain SALSA implementation, upgrades need to be worked out. The good thing is, if someone does not want to upgrade, they do not have to, making the adoption easier. In the end what is important are the benefits of SaaS as mentioned at the beginning, not where the software physically resides. People buy a product for its benefits. We use public transportation for its benefits, but still like to own a car, unless you are poor or just do not have the need for it (Just like the current SaaS adopters and that is the point)!.
Why not?
Tuesday, March 6, 2007
Horizontal or Vertical? Its Neither. I'm just tired of it.
If there is one thing that history has taught us, it is, things are never just one way or the other. It is always a combination of this and that. Take cars for example, you can either have a true sports car like Lotus, Ariel Atom, Zonda, some Porsche's or a excellent luxury car like Bentley, Rolls-Royce or even Maybach. Your choices are pretty limited at the extremes.
Then there is the vast middle from Acura to VW. This is where the money is made. So what does all this mean to being Horizontal or Vertical?
In the world of computer hardware, there are two camps - the infinitely horizontally scalable camp and the bigger is better camp. Many online companies like MSN, Yahoo, Google etc. built their computing capacity using what are known as commodity servers - 1000's of them. Meanwhile the large businesses have few very big boxes, traditionally called the Mainframe.
These two approaches seem like extremes. i.e. similar to the cars example. There is not much money to be made at either ends, in comparison to what can be made in the middle. In addition, the pendulum swings from one to the other depending on the 5-year period you pick to argue in the last 20 years.
Horizontally scalable systems started because of a need - a need to create a large computing environment for the least amount of money. Over a period of time, one is going to realize that this is like transporting goods with a bunch of minivans hitched together and from a management and flexibility perspective its a nightmare to navigate. Especially when once faces hardware obsolescence.
Vertically scalable systems on the other-hand started by someone - usually a large corp - wanting to gain a business advantage over competition. Money was no object then. It is like a Freight Train with a lot of lugging capacity but can go only on rails and not as flexible.
But what most companies need are pick-up trucks. So there is not much to gain financially in a trail of minivans or Trains on tracks. But we sure need them both for specific purposes. Moreover, over a period of time, the Minivan trail is going to realize that it is much cheaper and lot efficient to run trains for certain purposes.
So high-end hardware manufacturers like HP, IBM and SUN should not change their strategies a whole lot like for e.g. what SUN is currently doing. That would just cannibalize their own future at the expense of some short-term gain. This makes them lose focus. Get them into unfamiliar territory and make them struggle. So please define your competence and try to make the best of it. That is how you outshine and outlast others.
Companies like Verari and Rackable come and go. They may even make a quick buck in the process. Their business models are not sustainable in the long run. Currently the pendulum is swinging towards the horizontally scalable end of the spectrum. It sure will swing back - give it 3 to 5 years. Quick money is made by keeping the markets volatile, not focusing on the long term. I'll be around and hopefully make an update to this article - one way or the other. Why not?
Then there is the vast middle from Acura to VW. This is where the money is made. So what does all this mean to being Horizontal or Vertical?
In the world of computer hardware, there are two camps - the infinitely horizontally scalable camp and the bigger is better camp. Many online companies like MSN, Yahoo, Google etc. built their computing capacity using what are known as commodity servers - 1000's of them. Meanwhile the large businesses have few very big boxes, traditionally called the Mainframe.
These two approaches seem like extremes. i.e. similar to the cars example. There is not much money to be made at either ends, in comparison to what can be made in the middle. In addition, the pendulum swings from one to the other depending on the 5-year period you pick to argue in the last 20 years.
Horizontally scalable systems started because of a need - a need to create a large computing environment for the least amount of money. Over a period of time, one is going to realize that this is like transporting goods with a bunch of minivans hitched together and from a management and flexibility perspective its a nightmare to navigate. Especially when once faces hardware obsolescence.
Vertically scalable systems on the other-hand started by someone - usually a large corp - wanting to gain a business advantage over competition. Money was no object then. It is like a Freight Train with a lot of lugging capacity but can go only on rails and not as flexible.
But what most companies need are pick-up trucks. So there is not much to gain financially in a trail of minivans or Trains on tracks. But we sure need them both for specific purposes. Moreover, over a period of time, the Minivan trail is going to realize that it is much cheaper and lot efficient to run trains for certain purposes.
So high-end hardware manufacturers like HP, IBM and SUN should not change their strategies a whole lot like for e.g. what SUN is currently doing. That would just cannibalize their own future at the expense of some short-term gain. This makes them lose focus. Get them into unfamiliar territory and make them struggle. So please define your competence and try to make the best of it. That is how you outshine and outlast others.
Companies like Verari and Rackable come and go. They may even make a quick buck in the process. Their business models are not sustainable in the long run. Currently the pendulum is swinging towards the horizontally scalable end of the spectrum. It sure will swing back - give it 3 to 5 years. Quick money is made by keeping the markets volatile, not focusing on the long term. I'll be around and hopefully make an update to this article - one way or the other. Why not?
Friday, March 2, 2007
Why Google invests Billions in building Data Centers?
Where would Google go next? and Why?
Google's CEO comes from a company where he worked on the vision - The Network is the Computer. Now he has the money to prove it. So what does this mean? Let me start by talking about Google's investments in the past few years.
Google has been investing in large data centers around the world. It has been investing $1B a year by conservative estimates on building these data centers. As far as it is publicly known it is not buying hardware from any of the major vendors -i.e. SUN, HP, IBM, DELL. There are reports that Google is making its own motherboards and servers through contract manufacturers in China/Taiwan. With that type of a cost structure, $1B would buy a lot of computing power that can only be compared to what NASA and Pentagon has. Why would anyone spend all this money in building massive data centers that is geographically diverse? Its not all certainly for making its search better or to get more advertisement dollars. It does those just fine with what it already has.
Now let us look at what Google has in "Beta" --> http://www.google.com/intl/en/options/. What is the underlying theme of all that is available? Put together What are they capable of doing? Case in point - Information access on demand - Search and gain access to Video (Google Video, YouTube), Library of information, Research papers, patents, maps, shop (froogle), mail, productivity software (spreadsheet, document editor, calendar), Comment on (blogger), Chat with (talk), Organize (Groups), Interpret (Translate). And have access to all of this from anywhere in the world as wireless technology becomes more accessible, which it is. What more could anyone want on a day-to-day basis to keep themselves busy/entertained/be productive? Do all this faster? That's why there is Google Web Accelerator! But there is something missing. What is the connection between these seemingly diverse applications, build-up of computing capacity, Google's vision of "do no evil" and Schmidt's "The Network is the computer"?
Well if you can do everything that a computer does from anywhere in the world through a wireless network connection and a very simple and affordable Google "device" - would that mesh well with everything in the previous paragraph? It is easy to phantom that the productivity of the entire human race would increase over a period of time? I think so. Not just that, Google can leverage all of this and sell us more through targeted advertising which they are already very good at!
So, to truly realize this "The Network is the Computer" vision along with "Do no Evil" (by providing affordable access to productivity tools to the masses) and expand on what they are already good at (search, advertising) you need computing power. If a billion people need to run spreadsheet, document editor, video streaming etc, you need to be near them to serve the request made to that application over a wireless network. For this you need to invest many billions in geographically diverse and redundant data centers.
Get ready to truly elevate the productivity of human race. What Microsoft did to a niche, Google, I think, wants to do to the human race.
Google's CEO comes from a company where he worked on the vision - The Network is the Computer. Now he has the money to prove it. So what does this mean? Let me start by talking about Google's investments in the past few years.
Google has been investing in large data centers around the world. It has been investing $1B a year by conservative estimates on building these data centers. As far as it is publicly known it is not buying hardware from any of the major vendors -i.e. SUN, HP, IBM, DELL. There are reports that Google is making its own motherboards and servers through contract manufacturers in China/Taiwan. With that type of a cost structure, $1B would buy a lot of computing power that can only be compared to what NASA and Pentagon has. Why would anyone spend all this money in building massive data centers that is geographically diverse? Its not all certainly for making its search better or to get more advertisement dollars. It does those just fine with what it already has.
Now let us look at what Google has in "Beta" --> http://www.google.com/intl/en/options/. What is the underlying theme of all that is available? Put together What are they capable of doing? Case in point - Information access on demand - Search and gain access to Video (Google Video, YouTube), Library of information, Research papers, patents, maps, shop (froogle), mail, productivity software (spreadsheet, document editor, calendar), Comment on (blogger), Chat with (talk), Organize (Groups), Interpret (Translate). And have access to all of this from anywhere in the world as wireless technology becomes more accessible, which it is. What more could anyone want on a day-to-day basis to keep themselves busy/entertained/be productive? Do all this faster? That's why there is Google Web Accelerator! But there is something missing. What is the connection between these seemingly diverse applications, build-up of computing capacity, Google's vision of "do no evil" and Schmidt's "The Network is the computer"?
Well if you can do everything that a computer does from anywhere in the world through a wireless network connection and a very simple and affordable Google "device" - would that mesh well with everything in the previous paragraph? It is easy to phantom that the productivity of the entire human race would increase over a period of time? I think so. Not just that, Google can leverage all of this and sell us more through targeted advertising which they are already very good at!
So, to truly realize this "The Network is the Computer" vision along with "Do no Evil" (by providing affordable access to productivity tools to the masses) and expand on what they are already good at (search, advertising) you need computing power. If a billion people need to run spreadsheet, document editor, video streaming etc, you need to be near them to serve the request made to that application over a wireless network. For this you need to invest many billions in geographically diverse and redundant data centers.
Get ready to truly elevate the productivity of human race. What Microsoft did to a niche, Google, I think, wants to do to the human race.
Wednesday, February 28, 2007
GM and Chrysler
If GM acquires Chrysler, here is what they are likely to do post acquisition.
Its very easy for anyone to say why this will not work. GM is struggling currently and has struggled in the last 20 years to create significant differentiation between its brands in terms of offerings (product, packaging, warranty, price, end-to-end brand experience, communication). The oft used term badge engineering comes to mind. They would badge-engineer the hell out of the brands and in the process kill them just like what they did to Oldsmobile and in the process of with SAAB.
If this is not what they would do, I would like to know other alternatives along with why GM put to death the Oldsmobile brand just when it received a full line of good vehicles.
I think GM will buy Chrysler for one simple reason that I have not heard anyone mention. That reason is legacy creation. Now that Mr. Wagoner has endured the worst days that GM has seen and things are starting to look up, he is likely more emboldened. With this new found confidence that the Board has in him and knowing that Toyota is likely to pass GM as the largest automaker under his watch, he would not want history to mention him as the guy who let Toyota overtake GM after being the #1 auto manufacturer for 76 years.
Acquiring Chrysler would raise the lead over Toyota overnight. More importantly, in his mind, it would raise Mr. Wagoner's Legacy to the level of Sloan and the possibility that he would be mentioned as the person that saved the US auto manufacturing industry. He would be peerless - Dieter Zetsche, Carlos Ghosn etc. can not come close to his legacy.
Of course there is ample Historical evidence suggesting that the minute someone thinks about creating a legacy that is the beginning of their end. I hope I'm wrong and that if GM acquires Chrysler, it will be for reasons other than Mr. Wagoner wanting to create a legacy.
If it does acquire, here is what I think they need to do.
Engines - Follow Nissan's Strategy - small 4 - cyl, large 4 cyl, med v6, large v6, large v8, x-large v8. Diesel and Petrol versions as appropriate.
Platform - Follow Toyota's Strategy (not Honda's)
Just remember, we did not move from horses to automobiles. there was horse drawn carriages in-between. Hence we need Hybrids, before we move to full-spec alternative fuel economy. Create a separate mid-size Hybrid vehicle (car and cross over) under Buick and Saturn brands.
Why not do this?
Of course I understand the structural issues. They exist no matter what happens and needs to be dealt with either by GM or by someone else. Who would Ron Gettlefinger rather deal with? GM, the Chinese or Canadians?
- Align Jeep with Hummer
- Align Dodge Trucks with GM trucks division and the rest with Chevy
- Align Chrysler brand with Buick
Its very easy for anyone to say why this will not work. GM is struggling currently and has struggled in the last 20 years to create significant differentiation between its brands in terms of offerings (product, packaging, warranty, price, end-to-end brand experience, communication). The oft used term badge engineering comes to mind. They would badge-engineer the hell out of the brands and in the process kill them just like what they did to Oldsmobile and in the process of with SAAB.
If this is not what they would do, I would like to know other alternatives along with why GM put to death the Oldsmobile brand just when it received a full line of good vehicles.
I think GM will buy Chrysler for one simple reason that I have not heard anyone mention. That reason is legacy creation. Now that Mr. Wagoner has endured the worst days that GM has seen and things are starting to look up, he is likely more emboldened. With this new found confidence that the Board has in him and knowing that Toyota is likely to pass GM as the largest automaker under his watch, he would not want history to mention him as the guy who let Toyota overtake GM after being the #1 auto manufacturer for 76 years.
Acquiring Chrysler would raise the lead over Toyota overnight. More importantly, in his mind, it would raise Mr. Wagoner's Legacy to the level of Sloan and the possibility that he would be mentioned as the person that saved the US auto manufacturing industry. He would be peerless - Dieter Zetsche, Carlos Ghosn etc. can not come close to his legacy.
Of course there is ample Historical evidence suggesting that the minute someone thinks about creating a legacy that is the beginning of their end. I hope I'm wrong and that if GM acquires Chrysler, it will be for reasons other than Mr. Wagoner wanting to create a legacy.
If it does acquire, here is what I think they need to do.
- Integrate Chrysler's R&D into GM's and centralize platform development.
- Continue to keep the Dodge and Chrysler brands separate and not align with any existing brand
- Continue to position Dodge as the niche "Bold" brand with "Bold" design
- Create Chrysler as a bridge brand between Chevy and Buick
- Chevy - every man's accessible full line brand - the quintessential no-nonsense, fairly bland but functional mostly front-wheel drive American brand i.e. the American version of Toyota. 14K - 27K for cars. 18 - 31K for SUV's/minivans. Trucks - as is today.
- Dodge - bold design but affordable full line brand. 1-1.5 K premium over equivalent Chevy. One chooses Chevy or Dodge based only on the int/ext design. Mechanicals are identical.
- Pontiac - bold design but limited line and rear wheel drive only. Affordable BMW's. No Trucks, SUV or Minivan. Cross overs and cars only. 24 - 35K.
- Saturn - sharp design, sharp execution, minivans and re badged Opel cars and cross overs (i.e. continue on the current path without wavering). Import fighter with Honda Dynamic characteristics but much better dealership experience. 18 - 32K.
- Chrysler - Affordable Lexus. Match Lexus offerings - i.e. few front and few rear/all wheel drive cars and cross overs. mid to large in size. 24 - 35K
- Buick - Entry level luxury, bland design, good execution, good customer service. Positioned above Saturn and Chrysler but below Cadillac. Age target is 40+, high income. Front wheel drivers or awd only. Mid size to Large cars and small, mid-size cross overs. This is the differentiator/bridge brand that does not exist today from any manufacturer. price range - 27 - 40K
- Cadillac - rear wheel drive and awd only. Full line Luxury - Think Audi from a benchmark perspective. Cadillac should be edgier Audi's. Quit pretending Mercedes or BMW. 27 - 62K. Don't bother trying to sell anything at higher prices for 2 model cycles. Just don't call it a luxury car, prove it. American market will respond. Its not prejudiced like Europe.
- Jeep - Keep it relevant
- Hummer - whatever!
- GMC - Luxury versions of high margin Chevy's with a 2.5 - 4K premium over Chevy.
- SAAB - Sell it back to the Swedes.
- Vauxhall - Sell it to the highest bidder.
- Holden - Leave the Aussie's alone. They are doing fine.
Engines - Follow Nissan's Strategy - small 4 - cyl, large 4 cyl, med v6, large v6, large v8, x-large v8. Diesel and Petrol versions as appropriate.
Platform - Follow Toyota's Strategy (not Honda's)
Just remember, we did not move from horses to automobiles. there was horse drawn carriages in-between. Hence we need Hybrids, before we move to full-spec alternative fuel economy. Create a separate mid-size Hybrid vehicle (car and cross over) under Buick and Saturn brands.
Why not do this?
Of course I understand the structural issues. They exist no matter what happens and needs to be dealt with either by GM or by someone else. Who would Ron Gettlefinger rather deal with? GM, the Chinese or Canadians?
Thursday, February 22, 2007
Google Productivity Appliance
There was an interesting news bit today about Google battling Microsoft head on --> http://money.cnn.com/2007/02/21/magazines/fortune/lashinsky_pluggedin_google.fortune/index.htm?postversion=2007022209
I do not understand how the author of this article fails to talk about or even speculate what Google's next move is. It is very possibly a Google Productivity Appliance. Just like a Google search appliance for enterprises where an enterprise buys this black box and hooks it up to their network. This appliance then crawls and discovers all the content it comes across in the enterprise intranet and indexes it, just like Google.com does the entire internet.
Once an enterprise buys this productivity appliance and hooks it to their intranet, then everyone can access word processing, spreadsheet, email, calendar and other productivity software just by clicking on a link in the corporate portal as if the application is available on their hard drive. This way it provides the security, backup etc that an enterprise needs along with providing software as a service to the enterprise. You can even chargeback the various departments in the enterprise based on usage or other metrics. If the author had speculated this then it does justice to the title. Why not?
I do not understand how the author of this article fails to talk about or even speculate what Google's next move is. It is very possibly a Google Productivity Appliance. Just like a Google search appliance for enterprises where an enterprise buys this black box and hooks it up to their network. This appliance then crawls and discovers all the content it comes across in the enterprise intranet and indexes it, just like Google.com does the entire internet.
Once an enterprise buys this productivity appliance and hooks it to their intranet, then everyone can access word processing, spreadsheet, email, calendar and other productivity software just by clicking on a link in the corporate portal as if the application is available on their hard drive. This way it provides the security, backup etc that an enterprise needs along with providing software as a service to the enterprise. You can even chargeback the various departments in the enterprise based on usage or other metrics. If the author had speculated this then it does justice to the title. Why not?
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