Salesforce army claims another scalp as CEO of SAP resigns

February 7th, 2010 — Mark Littlewood

Leo Apotheker, CEO of SAP has resigned with immediate effect according to a company statement on Sunday evening. SAP has just failed to come to terms with the new (to them) concept of SaaS. Apotheker became CEO after the company abandoned a joint leadership structure at the beginning of  last year.

“The new setup of the SAP Executive Board will allow SAP to better align product innovation with customer needs. The new leadership team will continue to drive forward SAP’s strategy and focus on profitable growth, and will deliver its innovations in 2010 to expand SAP’s leadership of the business software market,” SAP Company Statement

The company will now have two co-CEOs Jim Hagemann Snabe and Bill McDermott, both SAP veterans.

The main problem for SAP is it just hasn’t been able to react to the rise of organisations like Salesforce who have increasingly been targeting their customer base. It is a highly political organisation and has had no clear leadership for years. Salesforce and others by contrast have far stronger leadership that have managed to focus their organisations around beating other organisations – SAP included. SAP’s new return to a multi-headed leadership structure is almost guaranteed to ensure that  its inexorable decline will continue.

GSK to shut Harlow facility, formerly UK HQ of Smith Kline Beecham

February 5th, 2010 — Mark Littlewood

Rumour: We are getting reports that GSK, following their announcement reported in the FT on 31st January of a likely 3,000 job cuts globally, are to close their Harlow branch, formerly the Smith Kline Beecham flagship facility, with the likely loss of 2,000 jobs. Workers at the facility were told they would be made redundant on Thursday.

A reminder, if one were needed that, the employees of the junior partner in any ‘merger’ rarely enjoy long term job security. GSK was formed out of the takeover/merger of GlaxoWellcome plc and SmithKline Beecham plc in 2000. Like most pharmaceutical companies, it is reducing its headcount in western markets and focusing on growth in emerging markets.

GSK - GlaxoSmithKline

The official (and unofficial) Sun CEO resignation haikus

February 4th, 2010 — Mark Littlewood

Jonathan Schwartz signed off from Sun with a nicely self induglent Twitter message in the form of a haiku.

“Financial crisis/Stalled too many customers/CEO no more”

@openjonathan

I think I prefer the unofficial version doing the rounds:

“A thing of beauty/trampled by a philistine/he blames all but self”

Sunset haiku

History is written by the victors.

Jay-Z, Giocametti, 4 Yorkshiremen & Rory Sutherland. The price & process of creating intangible value

February 4th, 2010 — Mark Littlewood

Two extraordinary stories from the world of culture today highlight how much money can be made from nothing.

A life size Alberto Giocametti was sold by Sotheby’s for a world record price of just over £65 million.  L’Homme Qui Marche I was estimated at about £12 million but furious bidding pushed the price to the record level after just 8 minutes.

Alberto Giacometti, L'Homme Qui Marche

Meanwhile rapper Jay-Z (Shawn Carter) is suing Highland Capital Management over their handling of a $52 million loan for a hotel development in Manhattan. More from Wall Street Journal.

Some rappers have long been recognised, quite rightly, as some of the most successful entrepreneurs on the planet but £65 million for a sculpture made out of bronze really made me think about how you can create value from nothing.

Melanie Clore from Sotheby’s said, “We are thrilled to have sold these great works this evening and that they have been recognised for the masterpieces that they are.

“The competition which generated these exceptional results demonstrates the continued quest for quality that compels today’s collectors.”

Both stories rather destroy the  popular notion of artists struggling in their garrets, suffering for their art, to buy enough paint to complete their magnum opus. These are clearly exceptions although it is not impossible to imagine some of the Young British Artists sitting together in the St Martin’s Lane Hotel talking like this:

Every entrepreneur sets out on a process of creating value from nothing. Art seems to epitomise the process in a very interesting way. Rory Sutherland’s talk at TED Global in Oxford last year gives the best explanation I have seen of how it is done. I was lucky enough to see it live. Funny and profound. Well worth a watch, especially if you have ever wondered whether intangible value, intellectual property, brands and trademarks are really adding true value to a product or service.

On another track, £65 million is the sort of exit that most European VCs would kill for these days – can you imagine the pitch…?

Enjoy.

,

$3 billion online book piracy dwarfed by $1 trillion cost of offline pirates

January 29th, 2010 — Mark Littlewood

I love the smell of satire in the morning.

Image via Wikipedia

A lovely post on the cost to the publishing industry of offline piracy from the Go to Hellman blog.

“Apparently, over 2 billion books were “loaned” last year by a cabal of organizations found in nearly every American city and town. Using the same advanced projective mathematics used in the study cited by Publishers Weekly, Go to Hellman has computed that publishers could be losing sales opportunities totaling over $100 Billion per year, losses which extend back to at least the year 2000. These lost sales dwarf the online piracy reported yesterday, and indeed, even the global book publishing business itself.”

Leadership and leaving a legacy Part 2. Jonathan Schwartz says goodbye Sun

January 27th, 2010 — Mark Littlewood

Stylish too.

And Sun CEO Jonathan Schwartz’s all hands memo.

Looks like both he and Scott McNealy wanted to leave their mark in different ways. (See Scott McNealy’s note here). I like the hidden message (in red).

“Believe it or not, it’s been more than nine months since Oracle first announced their intent to acquire Sun in April, 2009. And the ‘interim’ period has been tough on everyone – on our employees, and our partners and customers. Thankfully, that interim period is coming to an end, with regulatory approval from the European Union issued today, and only a few hurdles remaining – before Oracle formally expands beyond software to become the world’s most important systems company.

Even though we’re not quite across the finish line, I wanted to leave you with a few final thoughts.

All in all, it’s been an honor and privilege to work together. In my more than twenty years in the industry, the last thirteen at Sun, I’ve had a chance to work with and around an enormous diversity of companies, from every sector you can imagine. I can say with conviction that Sun’s people have always stood apart as the brightest, most passionate, and most inspiring. I’ve never had a bad day in my thirteen years for one very basic reason–I’ve always been surrounded by the best and brightest individuals I’ve ever come across. That’s been an honor and privilege, for which I’m enormously thankful.

Technology from Sun, alongside our employees and partners, have changed the world. We’ve opened markets, elections and economies. We’ve helped build the world’s most important and valuable businesses. We’ve played a key role in discovering new drugs, in bringing education and healthcare to those in need, and supplying the world with an incredible spectrum of entertainment, from smartphones to social networking. I doubt any company has had such a significant influence over the way we see or experience the world. I once told Scott McNealy he was the Henry Ford of the technology industry, making remarkable innovations accessible to anyone, and creating an immense number of jobs around the globe for those that made use of them. I can’t begin to tell you how proud I am of my association with that cause and the people behind it, and the value we created for ourselves and those that exploited our innovations.

I also know we’ve had more than our share of very tough challenges. Amidst the toughest market and customer situations imaginable, I’m proud we’ve always acted with integrity, with a sense for what’s right, and not simply what’s expedient. Over the years, I’ve heard time and again, from those inside and outside the company, “I like and I trust Sun.”

Building that good will is something to which you’ve all contributed. And you have every right to be very proud of it.

Make no mistake, it’s been an enormous asset.

So, to the sales and SE teams across the world who continually give their all to bring the numbers home–thank you for the trust you’ve built with customers, and the results you’ve delivered. I hope you’re prepared to have the wind at your back, you deserve it.

To the service professionals who every day build, maintain and run the world’s most important data centers–thank you for your excellence and discipline, 24/7.

To the professionals who run the functions and processes that are the company’s spinal column – thank you, we’d be paralyzed without you.

And lastly – to the engineers and marketers who’ve fostered a perpetual belief that innovation creates its own opportunity – thank you. You’re right. Innovation does create its own opportunity. Like Oracle, we’re an engineering company in our heart and soul, our potential together is limitless.

Now many of you know that I came to Sun when a company I helped to found was acquired in 1996. I’ve also led, and been a part of many, many acquisitions at Sun, both large and small. From those experiences, I’ve learned one very clear lesson – the single most important driver of a successful acquisition are the people involved – and how committed they are to the new owner’s mission.

And the most effective mechanism I’ve seen for driving that commitment begins with a simple, but emotionally difficult step.

Upon change in control, every employee needs to emotionally resign from Sun. Go home, light a candle, and let go of the expectations and assumptions that defined Sun as a workplace. Honor and remember them, but let them go.

For those that ultimately won’t become a part of Oracle, this will be the first step in a new adventure. Sun has a tremendous reputation across the planet, well beyond Silicon Valley. It’s a great brand to have on your resume. We’re known as self-starters, capable of ethically managing through complexity and change, for delivering when called upon, and for inventing and building the future. With the world economy stabilizing, I’m very confident you’ll land on your feet. You’re a talented, tenacious group, and there’s always opportunity for great people.

For those that have roles at Oracle, may you start with a clean slate, ready to take on the myriad opportunities ahead. With the same passion and tenacity for Oracle’s success that you’ve had for Sun’s, and a renewed sense of energy around executing on a far broader mission. There is no doubt in my mind you, and Oracle, will be remarkably successful, beyond the market’s wildest expectations. But it’s important you come to work thinking, “Sun is a brand, Oracle’s my company.” Don’t look for ways to preserve or dwell in “how we used to do things.” Look for ways to help customers, grow the market, and improve Oracle’s performance.

Sun is a brand, Oracle is your company.

And to that end, with nine months of getting to know them, I’ve found Oracle to be truly remarkable, led by remarkable people. From Larry on down, they understand the enormity of the opportunity before them, and they’re more than prepared to execute on it – across the board. I’ve seen their commitment and focus, now they need yours. I’m confident you’ll give it the 10,000% effort it deserves – and we’ll all see the end result.

So thank you, again, for the privilege and honor of working together. The internet’s made the world a far smaller place – so I’m sure we’ll be bumping into one another.

Go Oracle!

Jonathan”

,

You can follow me on Twitter if you like that sort of thing. @marklittlewood

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Leadership and leaving a legacy Part 1. Scott McNealy says goodbye Sun

January 27th, 2010 — Mark Littlewood

Stylish.

There is no question that Sun made some mistakes along the way but anyone that can build a business that turns over $200 billion revenue in its 28 year life has achieved extraordinary things. Scott McNealy was one of the greatest characters in the technology industry and as I have blogged before, I think entrepreneurial businesses need more strong characters. They get things done, they create value (and sometimes destroy it), but they also make life more entertaining.

As Sun’s takeover by Oracle is rubber stamped by the EU – probably the one organisation in Europe that even Silicon Valley can afford to ignore – I was quite moved by this all hands note from co-founder Scott McNealy. There could be some slight evidence that he has a bit of an ego there but if I had been at Sun, this would have made me proud.

Compare with Jonathan Schwartz’s all hands note sent out last week – the professional CEO’s message.

“Subject: Thanks for a great 28 years
Date: Tue, 26 Jan 2010
From: Scott McNealy
To: [all Sun employees]

Gang,

When I interviewed many of you for employment at Sun over the years, one commitment often made was that things will change above, below, and around you faster than any place you have ever been. Looks like this was one area we exceeded plan for 28 years. While it was never the primary vision to be acquired by Oracle, it was always an interesting option. And this huge event is upon us now. Let’s all embrace it with all of the enthusiasm and class and talent that we have to offer.

This combination has the potential to put Sun, its people, and its technology at the center of yet another industry and game-changing inflection point. The opportunity is well-documented and articulated by Larry and the Oracle folks. Not much I can add on this score. This is a very powerful merger. And way better than some of the alternatives we were facing.

So what do I say to all of you, now this is happening?

It turns out that one simple message to the large and diverse Sun community is actually quite hard to craft. Even for a big mouth who is always ready with a clever quip. The community includes our resellers and customers, our current and former employees, their friends and families who supported our employees on their mission to change the industry, our investors, our supply and service partners, students and educators, and even our competitors with whom we often collaborated.

But let me try. Though nothing I could write comes close to matching the unbelievably strong and positive emotions I have for you all. See, I never was able to master dispassion. I truly loved starting, running, and living Sun. And the last four years have not been without serious withdrawal. And the EU approval rocked me more than it should have.

So, to be honest, this is not a note this founder wants to write. Sun, in my mind, should have been the great and surviving consolidator. But I love the market economy and capitalism more than I love my company.

And I sure “hope” America regains its love affair with capitalism. And except for the auto industry, financial industry, health care, and some other places (I digress), the invisible hand is doing its thing quite efficiently. So I am more than willing to accept this outcome.

And my hat is off to one of the greatest capitalists I have ever met, Larry Ellison. He will do well with the assets that Sun brings to Oracle.

What we did right and wrong at Sun over the years might make for interesting reading. However, I am not a book writer. I am a husband, father of four, and a builder and leader of people who want to make a difference.

But spare me a bit of nostalgia. Not of the mistakes we made, and lord knows I made a ton. But of the things we did right and well.

First and foremost, Sun innovated like crazy. We took it to the limit (see Eagles). And though we did not monetize our inventions as well as we could have, few companies have the track record in R&D that we had over the last 28 years. This made working at Sun really cool. Thanks to all of you inventors and risk takers who changed how we live.

Sun cared about its customers. Even more than we cared about our own company at times. We looked at our customer’s mission as more important than ours. Maybe we should have asked for more revenue in return, but our employees were always ready to help first. I love this about Sun, which I guess makes me a good capitalist, if not a great capitalist.

Sun did not cheat, lie, or break the rule of law or decency. While we enjoyed breaking the rules of conventional wisdom and archaic business practice, and for sure loved to win in the market, we did so with a solid reputation for integrity. Nearly three decades of competing without a notable incident of our folks going off course morally or legally. Not all executives and big companies are bad. Really. There are good companies out there. Special thanks to all of my employees for this. I never had to hide the newspaper in shame from my children.

Sun was a financial success. We paid billions in taxes, salaries, purchases, leases, training, and even lawyers and accountants for devastatingly cumbersome SOX and legal compliance (oops, more classic digression). Long-term and smart investors made billions in SUNW. And our customers generated revenue and savings using our equipment in countless ways. Many employees started families, bought homes, and put them through school while working at Sun. Our revenues over 28 years exceeded $200B. Few companies make it to the F200. We did. Nice.

Sun employees had way more fun than any other company. By far. From our dress code (”You must!”) to beer busts to our April Fools’ pranks to SunRise to our quiet enjoyment at night of a long, hard, well-done day of work, no company enjoyed “work” more than Sun. Thanks to all of our employees past and present for making Sun such a blast.

I could go on for a long time reminiscing about the good and great stuff we did at Sun, but just allow me one last one. We shared. Not the greatest attribute for a capitalist. But one I could not change and was not willing to change about Sun while I was in charge. We shared in the success of Sun with our resellers. With our employees through stock options, SunShare, beer busts, and the like (for as long as Congress would allow) and through our efforts to keep as many of them on board for as long as possible during the inevitable down cycles. With our partners through the Java Community Process, through our open-source collaborations, and licensing strategies. With our customers through our commitments to low barriers to exit. Sun was never just about us. It was about we. And that may be a bit of the reason we are where we are today.

But I have few regrets (see Sinatra’s “My Way”) and will always look back at Sun and its gang with only pride. Enormous pride. You are the best this industry ever had, though few outside of Sun recognized it.

And what we are about will live on in Sparc, Solaris, Java, our products, and our spirit. Well past everyone’s recollections of what we did together. I will never forget, though.

Oracle is getting a crown jewel of the technology industry. They will do great things with Sun. Do your best to support them, and keep the Sun spirit alive and well in the industry. Our children will be better for it.

Thanks for the off-the-charts support to everyone who ever carried a Sun badge, used our products, or helped our company through the years.

And thanks to my wonderful wife, Susan, who gave this desperado (see Eagles) a chance to choose the Queen of Hearts before it was too late.

Someday, hopefully, you will all get to see or meet her and my other life’s works named Maverick, Dakota, Colt, and Scout. If you do, perhaps you will understand why I stepped back from the CEO role four years ago. And why I feel like the luckiest guy in the whole world.

My best to all of you, and remember:

Kick butt and have fun!

Scott”

,

You can follow me on Twitter if you like that sort of thing. @marklittlewood

Jim McCormick, ADE651. How can someone profit by causing death & misery?

January 22nd, 2010 — Mark Littlewood

Watching Newsnight this evening it seems that Jim McCormick, the ‘inventor’ of the ADE 651 is finally being exposed in the mainstream press. (Private Eye have of course been on the case for a long time). The device is basically a divining rod dressed up with a whizzy name. Watch this to see the magic detection card being taken apart by an electronics expert to reveal that it is in fact a cheap anti-shop lifting device.

Jim McCormick, entrepreneur & fraudster

Jim is the sole shareholder of ATSC Exports Ltd and ATSC UK Ltd. They sell what they call an explosives detector that sells for about $40,000. Allegedly over £80 million of them have been sold in Iraq alone. Trouble is, they are absolutely and utterly useless. Jim claims that his magic machine can detect explosives in ideal conditions up to 1km away.

In a country like Iraq, desperate for anything that can help limit the bloodshed and bombings that are an everyday occurrence, it is not hard to see why people would be prepared to invest in anything that could help. The government has just banned the export of these devices to some countries on the grounds that they could put the lives of UK forces at risk, but they are still able to export to other countries.

It is impossible for me to understand how someone could sell such a device and profit from the misery of others, when by doing so he is almost certainly causing the deaths of people who are given a false sense of safety.

About as close to being downright evil as I think you could get.

You can follow me on Twitter if you like that sort of thing. @marklittlewood

Venture Capital numbers Q4 2009. US recovery continues. Europe – not so much.

January 20th, 2010 — Mark Littlewood

Update: To download this data in a spreadsheet, go here: BLN Charts and CalibreOne Index numbers 2004-2009

The latest venture investment numbers from the Calibre One hit the wires and there is some GOOD NEWS!

• More deals were done across US and Europe in Q4 2009 than in any quarter since the index started in Q1 2004. A total of 560 deals.
• The US investment recovery continues and Q4 2009 ranked 7th out of 24 previous quarters in terms of dollars invested. ($3,396 million). The second chart here illustrates quite clearly how extraordinarily quickly the venture tap (that would be the venture faucet in the US) was turned off in 2008. It has already increased by about 300% on Q4 2008.

Elsewhere, the news is less good.

• Europe is seemingly struggling to join in with the US recovery. Investment into France and UK companies is still at  less than half the level it was at the beginning of 2008.
• Only Benelux bucked the trend with the best ever quarter’s investment. (But it is a small market so cannot be considered statistically significant.

I have take the CalibreOne data provided in this report and added it into their historical data to provide a view of longer term trends. The report lists all of the companies that have been counted in the data. Note that this records announced deals and is not intended to be an exhaustive analysis. It does not claim to be infallible and it does not correct previous quarters as more information comes to light. It does however provide a good bellweather for the industry overall.

Combined levels back to pre-bust levels.

VC Investment US & Europe Q4 2009

Those crazy Americans just couldn’t help overreacting to Sequoia’s RIP Good Times memo…

Number of venture deals, US & Europe Q4 2009

More deals for similar total money means less cash per comany…

VC Investment Europe by country Q4 2009

Overall, across the whole of Europe, venture investment levels were ’steady’.

VC Investment UK & France Q4 2009

But UK and France, historically the core engine of European venture investment, has slipped back.

Andrew Banks, CalibreOne Partner in London said, “In EMEA the level of activity experienced in Q3 2009 was sustained in Q4 2009, despite the average investment value decreasing. However, the reality is that more early stage and growth businesses have secured funding than at the start of 2009. This indicates a positive upward trend for both investors and entrepreneurs in the region and is matched by a strong sentiment in the market that the bottom has been passed and a track back to growth has begun.”

To view our report on the previous quarter’s numbers, go here.

To download the data in a spreadsheet, go here: BLN Charts and CalibreOne Index numbers 2004-2009