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PDF Editor FAQ

What should I know to become a CIO?

You'll find a variety of opinions on this question. This is due, in part, to the changing nature of the role, and in part to the fact that different organizations have differing expectations of a CIO.In general, companies define business strategy, and an IT strategy should be created in order to define how the company intends to wield technology to meet business strategy. It used to be common for CIO's to report to CFO's or COO's, but there's an increasing trend to recognize CIO's as peers to other C-level officers, reporting alongside CFO's, COO's and others to the CEO. This allows the CIO to function as a true partner in the definition and execution of the company's strategy.Although some will disagree, having spent decades in business and IT, in virtually every IT role from architect and developer through CTO and CIO, I feel strongly that the best CIO's tend to have a strong technology background. They also need a solid business and management background. Like other line managers, CIO's typically manage very large budgets and organizations, and must be able to manage investment strategically. There are numerous decisions to be made about operations, infrastructure, outsourcing vs. insourcing, cloud vs premises based architecture, creating a shared services capability, portfolio and project management, enterprise architecture (a huge topic in itself), information security and compliance, data and information strategy, IT service management (ITSM), numerous frameworks and methodologies, and much more. CIO's must understand all of this - and much more - in order to either manage a lot of this directly, or confidently hire and manage executives to run each of these areas. The less of this detail the CIO understands, the greater the risk of having delegated to a subordinate who simply gets it wrong, leaving the CIO to find out only when there's a major catastrophe.As well as managing technology resources, modern CIOs must think like business executives. CIOs need to be able to think of the true business benefit that accrues to IT expenditure. CIOs function as partners to the business, and recognize that they only succeed if the Business is satisfied that IT is serving them effectively.CIOs also typically take on an organization that's in need of improvement. They need to be able to think in terms of assessment, cost effective remediation that can be justified to the business, planning and execution of a remediation strategy that may take anywhere from months to years, all the while keeping the perspective that IT exists in most enterprises only in order to serve the business - a service mentality is a prerequisite for success in the role. CIOs "sell" the value of their operation to the powers that be and to their "customers" in the business. They must be excellent communicators, bridging the gap between technology and business value, acronyms and plain business language. They must be "salespeople" to the extent that they must sell the organization on the best approaches, and then make good on the promises.All in all, a good CIO is a good business executive who also has a deep understanding of technology and how to wield it in order to help the organization realize its IT and Business strategic objectives.

Why hasn't Zoom been legally cloned and beaten, like by Big Tech?

This question falls into an area of business called business strategy, about which many books have been written. The core question is what competitive advantages does Zoom have that the competitors do not. A competitive advantage is a reason why the product is better than its peers, or is cheaper than its peers (marginal cost, which is the incremental cost of the last sale), or it is chosen ahead of its peers. Having any one of these advantages means that you win, long term.Different practitioners of business strategy have different terminology; I like the terminology from Hamilton Helmer in his book 7 Powers: The Foundations of Business Strategy, which defines the 7 powers as follows, illustrated by my assessment of Zoom’s competitive advantages in each area.Economy of scale: this is especially important for software, where the marginal cost is near zero, but the total cost for the development is spread across however many sales you can make. This is where Big Tech usually wins. Zoom doesn’t win through economy of scale, because there is room for many scaled players in this space.Network effects: the value of the product to me is bigger as more people own it. The classic example is the telephone network: the first telephone is of zero value, because the owner has no-one to call! It builds some value when the second owner gets one, but really doesn’t start to have high value until there are millions of users (when a new subscriber finds all his contacts on the network too). The network effect is generally unsurmountable to a competitor trying to introduce a new telephone network. Zoom has a weak network effect, since Zoom is more interesting to me if all my contacts have it. It’s weak, since (unlike a classic telephone) it’s nearly free to me to have Zoom, Meet, Webex, Teams, and every different platform. The only cost is a cost of usability and confusion. I wouldn’t credit network effect as much of a driver of Zoom success.Counterpositioning: the idea of positioning a product as not the competition, and in a way that the competition can’t emulate without walking away from their major customers. Zoom was counterpositioned against Cisco by eschewing the expensive on-premises hardware (high per-seat cost and sales price) with a cheap endpoint (free software, builtin laptop cameras), and an inexpensive monthly service. The incumbents (there were many) selling high priced hardware couldn’t walk away from that revenue stream, and Zoom gradually eat their share from underneath. This is the essence of “disruptive innovation” - another great topic in business strategy. However, Meet and Teams also have cloud subscription solutions, so counterpositioning doesn’t explain why Zoom stays powerful over those competitors.Switching costs: Once Zoom has become established, for Meet to displace it, it must persuade Zoom users to switch. If there is little advantage, most users won’t pay the financial or cognitive cost of switching. You have probably griped about switching some service provider for nominal reasons because of the high cost of retooling your mind to learn a new thing. That’s switching cost. Zoom has some switching cost, because it was early. The switching cost associated with displacing Zoom as a provider to an enterprise shouldn’t be underestimated. I have all my conference rooms set up, my staff trained, my budget set, my calendars set for the next 6 months…. Admittedly, there are shops with no organization wide set up yet, and competitors have room to grow there. But I suspect that while only a single digit percentage of conference and huddle rooms are set up for conferencing, the large majority of SMBs (small and medium businesses) have committed to a video conference solution, and for many of them it’s Zoom, and it will take a lot to displace Zoom as they grow from 5% of rooms last year (2019) to 100% of home offices (2020), to 100% of conference and huddle rooms (when COVID is over).Branding: I think it’s incredibly powerful that Zoom has become the generic word for video conference. To me, Branding is one of the strongest competitive advantages that Zoom has going. If you are a CIO outfitting your team, Zoom is the first thing you think of. You have to have a reason to pick one of the competitors, and Zoom is good enough technically, cheap enough, and easy to use that none of the competitors easily gets into the consideration set. Meet wins for many GSuite shops, because of its cost and integration; Teams wins for the MS shops for the same reason. But for most everyone else, Zoom is the obvious choice. Webex gets in only if there’s an irrational mandate around security and Zoom’s perceived failings in that dimension. Now to be fair, Brand is inherently a weak power - it’s relatively easy to unseat a Brand or create a new one. I think brand is an important power in the beginning of an S-curve, where we are now in 2020, but yields to network cost, switching cost, cornered resources, and process power over time. Conversely there is brand tension between Google and Meet - and Google is better known. But Google stands for search, not for video conferencing. I’m not sure what Teams stands for, but it isn’t top of my mind when I think I’ll Zoom this group together. Oops, I did it again (Zoom as a generic).Cornered Resource. This power calls out the secret sauce, whether technical know-how, exclusive access to something or some partner, or some regulation or restriction that is unavailable to the competition. Zoom has a bunch of technical know-how on how to make video conferencing work well, and how to make an easy-to-use UX. It is better than the competition, in the same way that Google Search beat out Yahoo and Bing - through technical sophistication that is hard to match. It also has deep relationships with vendors of cameras and phones, and with third party vendors acting as a channel selling into SMBs. These advantages matter a lot. On the other hand, Meet benefits from tight integration with GSuite - particularly the calendar, mail, and docs tools. And Teams has identical benefits from Office365. Those integration advantages are not open to Zoom, and are an “unfair” competition in the technical sense that Google may be leveraging a monopoly or huge market share in one business to compete unfairly in an adjacent business. That is a long topic for antitrust experts to debate (which they will), but any competitor has to realize that they win on other dimensions, or go home — because antitrust never saves the challenger (Netscape, anyone? Microsoft / Internet Explorer got hammered, but too late to matter).Process Power, finally, is the way in which a business operates. If Netflix’ culture gives it an advantage over competitors, that’s process power. Cisco’s process of acquiring young businesses and integrating them quickly to get a head start, that’s process power. You don’t get good at acquiring and integrating without doing it a lot. Competitors can’t easily beat them at their game. I’m not sure there’s much process power at work in Zoom vs. Meet vs. Teams. Webex is probably too long ago to sustain any benefit from being a 2007 Cisco acquisition.It is worth noting that these advantages are not static. What matters is “a route to sustained power over time” which leverages different advantages at different times against different players as the landscape evolves.In summary, I think Zoom is the market leader through early Counterpositioning against classic video conference equipment vendors, then through Network effect (I get Zoom because you invited me to a Zoom, and now I invite my colleagues to my next discussion…), through Switching cost from being there first and competitors having a hard time displacing them, through Branding, by having the right name standing for the right thing at the right time, and through technical know-how in how to run a better service in ways that matter to the decision maker. Over time, the technical know-how will diminish in importance, but the switching cost will increase, as they become more entrenched in businesses. I don’t think they lose the game until a fundamental environmental shift comes along with the same magnitude as the arrival of the Internet and the cloud!

Why did Salesforce.com succeed?

I've had the privilege of working at Salesforce, as well as being a close follower of the company since its very beginning. Here are a few factors I would credit for the company's success:Marc Benioff. The man. He is the company's #1 marketing asset. His iconic personality allowed the company to seem larger than it was, even in early days, and to some extent, still today.Marc's bold vision, combined with a near term sense of what's possible. In the early days the company had some net promoters who didn't really understand the vision, and wanted them to offer a hybrid, cloud or on-premise product. Marc was steadfast in his position that the cloud would become a false cloud if a hybrid were on offer alongside.Architecture. Parker Harris, Jim Cavalieri and others whose task it was to make a multi-tenant product possible, we far-sighted in their quest to build trust, high availability, and ease of use. But they also deserve credit for their ability to create product that small business could adopt but that is also viable for very large companies. This would turn out to be extremely valuable for their growth.Sales genius. While SFDC was an engineering marvel back in 2000-01, the main attraction was the sales team at Salesforce. They began inventing the smartest, most effective methods to grow quickly each quarter, without damaging their long term image. This involved heavy lead generation process, with immediate hits on al web visitors and content downloads, and a hard close process that didn't always win, but always left an indelible memory of that sales cycle. Often they made an entry in a key account without the CIO's knowledge, by a rogue exec who was fed up with old school IT.First class execution, across the board. Now 18,000 employees, you may wonder are all of them high calibre people? Probably, with few exceptions. When I worked there I deeply appreciated being surrounded by very talented, highly effective people. Unlike some 'braintrust' companies, talent alone wasn't real currency: you needed to be very smart, calm, confident, and you had to deliver 100% on everything you had committed to. Dropping the ball was not OK. This element served the company very well, as they listened to customers and promptly served up the goodies most frequently requested.Customer culture. Unlike "big software", Salesforce encouraged salespeople to mix customers, prospects, employees and partners in all manner of events and community activities. This was a game changer in the early 2000's. It gave all people a voice, where before it was global SI's in elite restaurants talking with C level execs, to the exclusion of everyone else. Suddenly, a lowly administrator was able to present their achievements at Dreamforce to a room full of executives and prospects. This created a new kind of net promoter, previously unheard of in enterprise tech industry.Long term vision. You can be sure that while quarterly goals are always paramount to all C level execs at Salesforce, some of them are also busy dreaming up ideas that won't see daylight till 2-3 years out.Smart acquisitions. John Somorjai heads up a very effective think tank that buys promising companies offering solutions in strategic spaces.1-1-1 Foundation. Giving back is extremely important to Marc, and he's done well making sure it permeates the company's fabric. Without this, corporate greed and ego-posturing can overshadow everything. There is still some of this, but 1-1-1 helps balance to ensure the company has some soul.Some of these qualities may have eroded slightly as the company has grown, but the DNA has likely stayed strong even at nearly 20K employees and $7Bn revenues. Is it a fun place to work? Not always. People can be a little serious, and often harsh with each other. There's also a tangible air of fear in the corridors, which probably stunts some people's more daring, creative side. All in all, an amazing company - learned more there than anywhere else.I then decided I could contribute more to the SaaS ecosystem from the outside than as an employee.

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