Sunday, February 19, 2017

Advice on strategy: How do I price a SaaS product when there's no competitive product but demand exists?

Here is a recent query from an online forum, and my response:

How do I price a SaaS product when there's no competitive product but demand exists?

We have built a product which already got traction. Microsoft is using it on pilot basis and loving it Now a big corporate (USD 110 B) wants it and having several test runs and has finally reached price discussion phase. We didn’t plan SaaS but that’s the way forward so any suggestion on pricing it?

Response:

This is a great dilemma for a startup or small business to have. So, let us begin with a few facts and make a few assumptions
  • Demand for the solution exists
    • The product/solution is being used by Microsoft (a marquee client to have)
    • A $110 bn big-corp wants it after test-runs
  • You are making the assumption that there is “no competitive product,” which may be true.
    • However, you need to research further if an alternative solution or workaround exists in the market (e.g current ways of working may include manual effort, which your solution automates).
Suggestions on the way forward
  1. Estimate the “value” of your product to the end-user/client organization. e.g
    1. What would it cost for them to build and support the product
    2. Estimate the cost of manual workaround/alternative?
  2. Use the estimate against your internal cost benchmark (what did it cost for you to build and market the product?).
    1. Add an estimate of your annual cost of maintenance and support.
    2. Aad a reasonable margin on top of your costs.
  3. Other factors
    1. Does this product give a the end-client a competitive advantage or productivity gains?
    2. What is your current strategy: using the marquee clients as “case studies” to go after other clients, or use them as a cash-cow to generate ROI?
    3. Are you willing to walk-away if negotiation fails?
Use data from 1. 2. and 3. to plan your strategy and begin negotiations.



Saturday, February 11, 2017

Infosys, dust off the slogan “Powered by Intellect, Driven by Values”?

Years ago when I worked for the software services giant, Infosys, the corporate tagline was “Powered by Intellect, Driven by Values.” It perhaps symbolized the quintessential Indian middle-class values of service and sharing, values that prompted the founders to share the wealth they created by giving away stock options, grants and ESOPS to hundreds of early employees. This story was the stuff of corporate legends in the nineties through 2000s.
The founders took turns running the business, and had an astute sense of the market and a handle on public relations, at least in India. Of course, the company was a media darling and could do no wrong. Occasional incidents involving employees or its executives – like the Phaneesh Murthy scandal or investigation over H1 Visa-fraud – were shrugged off as one-off.
The co-founder-CEOs, vested with millions in stock grants and options, had little need or interest in begrudging “pay and bonus” of a fellow co-founder. They didn’t feel the need to voice their opinion in public, especially since they also enjoyed a seat at the board. This was also a time of tremendous growth at the company. The founders and employees who joined early were happy: their stocks and options were rising with the tide of offshoring.  
As a former-employee continuing to hold a percentage of his net-worth in the company’s stock, I try to stay updated on the news about the company: Infosys continues to be in my list of RSS reader searches that I periodically browse. Fast forward to present day Infosys where there seems to be a nexus of forces at play.
  • The pace of growth in the business of offshoring has slowed down considerably. The industry is bracing for headwinds in key markets - thanks to Mr. Trump in North America and Ms Theresa May in Europe – and clients of offshoring services are taking a wait-and-watch when it comes to big technology investments. The stock market is beginning to discount the valuations of Indian software service firms.
  • The board-of-directors of the company now consists primarily of non-founders. (ref: Infosys) The venerable Narayana Murthy stepped down as Chairman of the board in 2015, though his opinions continue to be quoted as gospel by the media. After all, the “promoter & promoter Group” still hold about 12.75% of the total number of shares which gives them a significant voice. (ref: Infosys holdings)
  • A couple of years ago, the board selected Vishal Sikka as the first outsider CEO to lead the company. After Mr. Sikka took charge, there was a large-scale churn of senior executives.
The latest series of headlines seem to be centered on “governance” of the company, primarily on the multi-million-dollar compensation being offered to the CEO, and a large exit package for its former CFO. (ref: NDTV summary) The jury is still out on Mr. Sikka’s scorecard and performance during the past couple of years. By many accounts, the company hasn’t done much worse (or better) than peers in the business of offshoring IT Services.
In a public company, small shareholders like me are generally inclined to trust the checks and balances in the system. And that the board of directors elected by the majority of us are executing on their fiduciary duty. This goes to the heart of corporate governance.
As a passive stakeholder, I left shaking my head over this “controversy” surrounding the company, wondering if this is a case of a storm in a teacup orchestrated by the media-and its founders founder (ref Prabal Roy’s writeup ). Or if the smoke blowing out of Electronics City is an indicator of a major fire. Either way, it is perhaps time for Infosys’ board to dust off the slogan “Powered by Intellect, Driven by Values,” and focus on re-communicating its values.

Thursday, February 9, 2017

Q&A: How would you explain the H1B visa to a 10 year old?


An interesting question from an online forum


How would you explain the H1B visa to a 10 year old?Both old and new ones.

Think of it this way: THE Beyonce concert is coming to town and tickets are hard to come by. The tickets are expensive and available to a select few people (or people who know someone who know someone).

Then: You begged-borrowed really hard to get a couple of tickets for you and your 10-year-old.
Googled image
Now: A few days before the much awaited concert, the hard-nosed organizer decides that only those above 16 are going to be allowed in. He doesn’t clarify what happens to existing ticket holders, leaving a trail of heartbroken 10-year-olds and their dads and moms.



You might also be interested in my earlier reflection on the questions appearing in online forums “What effect will the H1B Visa Reform Bill have on existing H1B holders drawing salary of less than 100K P.A.?" (link)  

Tuesday, February 7, 2017

Scam Alert: H1-B, L1 visa Consultants on the prowl

I am not actively job-hunting; and even if I were, I don’t need an “H1-B” work visa. Even a cursory look at my LinkedIn profile should provide the sufficient details about me; and the fact that I happen to be an Indian-American with OCI should be obvious.

Then why do I continue to get emails like the following?
Dear Mohan, 
XXX SOFTWARE Information Technology Private Limited, is looking to hire IT Professionals on multiple technologies from INDIA to work onsite for various clients (USA employers), We are managing for our clients across USA, Our clients are experiencing tremendous growth and looking for experienced, intelligent, energetic, and self-motivated team members for full-time consulting roles.
ALL VISA TYPES FRESH H1B AND H1B TRANSFER (EXPERIENCED CONSULTANTS IN INDIA / USA) , OPT TO H1B , H4 TO H1B , L1 TO H1B, H1B TO H1B TRANSFER ARE WELCOME TO APPLY.
H1B SPONSORSHIP / TRANSFER ALONG WITH GREEN CARD PROCESSING FOR QUALIFIED CANDIDATES.
(Note: Each employer has own policies on H1B Visa Sponsorship and Green Card. Please feel free to discuss more about this with us)
We are seeking outstanding and bright candidates to work ONSITE at our client location in USA. We are looking for top notch candidates in the following areas.
Android / iOS, BigData (Hadoop) …. Web UI developers
Qualification: Minimum Bachelors / Masters in Computer Science or other related field required.
Job Location : USA (H1B Will Be Sponsored)
Salary : DOE
Candidates with previous US experience will be preferred.
Thanks,
YYYY - H1B Team
XXXX Software Information Technology Private Limited
Email ID: YYYY@XXX.com
The scammers probably aren’t targeting me, but rather the general cadre of IS/IT workers who are continually reading news on H1 updates.

This email made me reflect on the recent news and the questions appearing in online forums “What effect will the H1B Visa Reform Bill have on existing H1B holders drawing salary of less than 100K P.A.?" (link) 

Let us dissect the scam mail and understand if there are any lessons here:


  • The mails are open-ended. The scammers keep the skill requirements open ended and mention the A-Z of technologies from Android to Web development and everything in between 
  • There are contradictions in statements in the text. For example, look at the following two statements

- (H1B Will Be Sponsored)
- (Note: Each employer has own policies on H1B Visa Sponsorship and Green Card. Please feel free to discuss more about this with us)

  • The mails are timed to coincide with news or other major happenings -for instance, the recently introduced bill that aims to reform H1, L1 and work visas “HIGH-SKILLED INTEGRITY AND FAIRNESS ACT OF 2017 (link)” or timed  with news about “H-1B Fiscal Year (FY) 2017 Cap Season (USCIS link)”  
  •  The emails target a broad category and hope a few take the bite   “ALL VISA TYPES FRESH H1B AND H1B TRANSFER (EXPERIENCED CONSULTANTS IN INDIA / USA) , OPT TO H1B , H4 TO H1B , L1 TO H1B, H1B TO H1B TRANSFER ARE WELCOME TO APPLY.

The mails come out at a time when employees, even at reputable consulting firms like Infosys, Wipro, TCS, Accenture, IBM and other firms in India and in the US are feeling vulnerable. Most of the top-20 employers requesting H1 visas in the past year have been consulting firms (link to 2016 applicant list)

The Trump administration has already started with Executive Actions to address immigration issues. Lawmakers in the U.S. have promised to take up the issue of work visas H1B, L1 visa at the earliest. A bill - “HIGH-SKILLED INTEGRITY AND FAIRNESS ACT OF 2017 (link)”– has already been tabled in the US congress and will be debated and reviewed soon.

The proposed bill aims to increase the minimum wage limit for H1 visa holders from 65,000 to greater than $130,000. This provision is being watched closely by employers including consulting firms. Smaller firms are going to be especially vulnerable since their margins are going to be squeezed if they have to pay employees at least $130,000 !

Are there any lessons here? Foreign students in the U.S. and those already employed gainfully should plan to wait-and-watch till the dust settles on immigration reforms. One should be especially cautious while dealing with smaller consultants and software services firms.

As the adage goes: caveat emptor, buyer beware! 

(Reposted from //yourstory.com)

Wednesday, February 1, 2017

What effect will the H1B Visa Reform Bill have on existing H1B holders drawing salary of less than 100K P.A.?


Question from an online forum: What effect will the H1B Visa Reform Bill have on existing H1B holders drawing salary of less than 100K P.A.?

If this ISSA Bill becomes the Law, what will happen to the workers with a salary less than 100K annually? Is there any explicit provision to deport such people or they would not get affected?


My two cents on the topic and also reading through the draft of the bill. The rationale for Immigration reform and “HIGH-SKILLED INTEGRITY AND FAIRNESS ACT OF 2017” is certainly a valid one! Let us go by what we read in the text of the proposed bill (and not speculation in the media).
Let us look at the key provisions listed in the proposed bill:

SECTION 2. NUMERICAL LIMITATION TO ANY SINGLE FOREIGN STATE . Eliminates the “per country” cap for employment-based immigrant visas so that all workers are treated fairly.
  • Great news for Indians and Chinese who currently have to wait for number of years for their Green Card (immigrant visa) applications to be approved!
SECTION. 3. STRENGTHENING INTEGRITY IN THE H-1B PROGRAM BY REFORMING THE EXEMPT H-1B DEFINITION - Re-sets the current dependent wage exemption level of $60,000 which was established in 1998 and has since remained unchanged. Per the Department of Labor May 2015 Occupational Employment and Wages (the most recent data available), the new annual wage exemption level would be greater than $130,000 (http://www.bls.gov/oes/current/oes150000.htm).
  • Great news for Individuals in the long term: Folks on H1 Visas drawing less than $130K will get a raise if their employer needs them to remain in the US.
  • Those who are not eligible for a raise may find it hard to remain in the US on H1 Visas (survival of the fittest)
SECTION 4. TRANSPARENCY FOR AND PROHIBITING PENALTIES AGAINST FOREIGN HIGHSKILLED WORKERS. Protects H-1B workers by prohibiting liquidated damages for H-1B workers who cease employment prior to a date agreed to by the nonimmigrant and the employer.
  • Great news for Individuals in the long term: Removes the burden of “contracts” that some folks on H1 have to sign with employers
SECTION 5. REFORMING THE PREVAILING WAGE SYSTEM TO PROTECT AMERICAN WORKERS · Increases prevailing wage requirements to protect U.S. workers by replacing the current 4-level wage calculation with a new, more balanced 3-level wage formula.
and
SECTION 6-10
Good for employees if implemented with the right intent
———————————————- Bottomline ——————————————
In the short term : There will be ambiguity, new visas applications may be delayed and renewal of visas might be denied or delayed.
In long term: All workers - Americans and foreign workers (including Indians and Chinese visa aspirants) - will benefit. Employees who get sponsored for H1 and L1 Visas will get a much better salary and benefits!
Note: I have taken the viewpoint of “what’s in it for non-immigrant workers.” … I will continue to explore the topic from the perspective of employers (American and Foreign)

Saturday, January 28, 2017

Q&A on Enterprise Architecture and IT careers

Here are a couple of recent question from an online forum that I answered:  

What is enterprise system? What are the differences between digital platform and it?


Let us start with Enterprise system - Wikipedia
“Enterprise systems (ES) are large-scale application software packages that support business processes, information flows, reporting, and data analytics in complex organizations.”
The term Enterprise Systems generally refers to an application platform used across the enterprise. Examples would include systems serving the needs of ERP, Manufacturing and Supply chain, HR, Finance etc used across an organization or by multiple business unites
Wikipedia - Digital platform Integrated Digital Platforms is a generalized term for multimedia platforms that perform various business functions. An example of such a function is collecting and analyzing marketing trends and patterns
Back to your question: What are the differences between digital platform and ES? The differences are subtle, and would vary from one organization to the next. One can argue that all ES are also “digital platforms” However, most business users would think of ES as “internal corporate systems” while “digital platforms” could also be external facing.
ps: check out my Pulse post on the topic of Digital Strategy execution and the Executive update on Cutter (if you have access to it)



How many years a software engineer can survive in IT industry in India?

As for now I haven’t seen any retired software engineers in India. So, I was just thinking, like other jobs(Banking sector, Lecturers, teachers) can a Software Engineer survive in IT industry till his retirement age.


Years ago I worked with Stephen Butler, one of the smartest Software Engineers I have known. He was about 61 or 62 when I met him.
He was the kind of hands-on guy who thrived on challenges like de-compiling complex and obscure code. In my engagement, he was tasked with decompiling an old Forte 4GL application used to run a retailer’s payment engine. He was happy being a hands-on software engineer, happy to learn new languages and platforms while continuing to be updated on newer techniques.
Stephen was also a proud guy. A new new grandfather, proud as hell to be living in a nice single-family home in the Bay Area that he had paid off in three decades spent there.
I got a call from Stephen’s wife one day informing me that he had died. He was 64, and his wife said he died the way he would have wanted to - a sudden cardiac arrest while at his home-office debugging some code!
His LinkedIn profile continues to live in perpetuity.
Have I seen any 50 or 60 year old Software Engineers in India? No.
Does it mean a Software Engineer cannot survive in the same role till s/he decides to retire? One can probably survive if one wanted to, but most opt to follow the Dilbert Principle of being promoted to their level of incompetence.

Tuesday, January 24, 2017

Recent Q&A on Enterprise Architecture: Are you in favor of enterprise integration applications or for building stuff yourself?

A recent question from an online forum:

"Are you in favor of enterprise integration applications or for building stuff yourself such as by creating micro-services, batch programs, etc.?


This is a question for those people who have been responsible for some measure of time for the selection of an enterprise integration strategy for their employers or clients.
In integrating the many programs that a business enterprise owns, have you found Enterprise Integration Applications such as Windows Workflow Foundation (WWF), BizTalk, NServiceBus, etc. more useful? In that, have you had success with them and found that running them provides for a smooth integration experience?
Or have you discovered that building stuff by hand such as by creating micro-services and simple programs that run on a schedule is a more useful strategy that has given you a more smooth integration experience?
Also, what has been your personal preference? What are you personally inclined to? This may or may not tally with your actual experience.
For instance, I am a developer at heart and I love writing bespoke integration software because it gives me complete control and is not really as much of a maintenance nightmare as the enterprise software vendor would have you believe. I also think Enterprise Integration software creates more problems that it solves, needs a lot of investment in training and comes with a strings attached (consulting and support agreements) clause. And writing lightweight bespoke micro-services that communicate using JSON over HTTP is so much easier and more manageable. When something goes wrong, you know exactly where to look. Likewise, when something needs to change, you know exactly what little piece needs changing. If you've written your services nicely by layering your tiers and separating your concerns, and calling out your contracts into a sharable assembly, this approach is so much better. If you need security, add OAuth. If you need reliable transport, use a message queue.
But whatever my personal inclination be, and while I consider it an important factor in making a decision, I'd still weigh in the actual experience as just an important ingredient.
What has been your experience with either of the two approaches?

My response follows



I read through the comments posted by Sathyaish Chakravarthy who makes interesting points, taking a hands-on developer/engineer perspective.
I will answer this from an Enterprise Architect’s viewpoint, taking into consideration robust, salable integration requirements at large organizations.
So, what goes into selecting solutions (including integration solutions) ? Among the considerations include:
  • Alignment with Architecture principles - “Buy before Build” and “reuse existing solutions” are popular principles.
    • Building on the comment from Sathyaish - have you found Enterprise Integration Applications such as Windows Workflow Foundation (WWF), BizTalk, NServiceBus, etc. more useful?
    • Assuming the organization has licenses and support for the solution and it meets the integration requirement, the Application (like BizTalk) would be preferred
  • Supportability and maintainability - Never underestimate this, especially in large organizations where people move and transition all the time (or work is sourced to contractors and vendors).
    • A custom built solution, however great, isn’t going to be as maintainable over time. This is especially true once the original developer transitions out (or is promoted to a “Manager”)
    • A commercial product (or open source framework) if maintained and upgraded regularly is going to be more supportable.
This response assumes the Non Functional Requirements (NFRs) like performance, salability etc are similar in both cases.