Paul Wallbank – Brilliant Communications

Tag: business

  • The benefits of being public

    The benefits of being public

    Both the public cloud and a publicly listed company are good things for a business says Netsuite’s Zac Nelson.

    “Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” says Zac Nelson, the CEO of Netsuite.

    Nelson was talking to Decoding the New Economy yesterday at the annual Suiteworld conference, Netsuite’s annual gathering in San Jose.

    The CEO’s comments are in contrast to a common view that being publicly listed company distracts a company’s management from focusing on long term objectives, a sentiment Nelson rejects.

    “In terms of managing a public company I think it’s an important discipline, I think a lot of people are opposed to these SOX (Sarbanes-Oxley) rules but when I look at these rules I think they are just common sense. Are you managing your business right? You want to have control of your business so you aren’t blindsided.”

    Probably the biggest advocate of taking companies private is Michael Dell who took his eponymous business off the markets three years ago and is now looking at doing the same thing with EMC in what will be the biggest IT merger in history.

    Dell going private

    Nelson doesn’t think Dell going private was a mistake though, “I saw Larry Ellison say it was one of the greatest business moves in the history of man, I’ll agree with Larry – he’s usually right on that stuff,” he laughed.

    “The thing I see Dell doing that I understand is they are giving their smaller division more autonomy. Dell Boomi is going back to being just Boomi and Secureworks just went public. Certainly from a structural standpoint and business model innovation that makes sense and it’s what I understand.”

    As a public company, Netsuite does come under scrutiny and one of the criticisms is that it continues to post losses, something that Nelson puts down to the treatment of stock options. In the last earnings report, the company claimed capitalising stock options added $30 million in costs and not including them would see the company reporting an eight million dollar profit last quarter.

    “We’re cash flow positive, we generate over $140 million in cash,” Nelson says. “People are happy with it, we’re still investing. What we’re investing in this year is different to the past, we’re investing in services to enable our customers to invest in product.”

    Integrating the stack

    One of the advantages Nelson sees that cloud based companies like his have are integrated systems, “the client server world created this perspective that dis-integrated systems actually work – you have Windows, you have third-party apps – but what really works well are integrated systems.” he says. “Look at the most common system you guys use, called Apple, it’s an integrated end-to-end system. Same with Amazon, that’s what we’ve built.”

    “The detour we took in the client-server world is still being taken in the software world, a lot of software people believe you can compile this stuff and it will magically work. No, it doesn’t. Integrated systems work better.”

    Securing the cloud

    One area he specifically sees where cloud services have an advantage in being integrated is with security, “a problem that large enterprises have that we to some degree don’t have is we have one system, we have five data centers. You look at some of these large enterprises and some of them don’t even know where some of their data centres are. How on earth do you secure that environment? It’s not a product problem, it’s a process and IT management problem.”

    Nelson’s comments on security are a swipe at competitors like SAP and Oracle who are often criticised for having disparate systems.

    With Suiteworld moving to Las Vegas next year, it will be interesting to see who’s taking bets against cloud services like Netsuite. Certainly with salesmen like Zac Nelson, they’re able to tell a good story. The key though is to show some profits in the longer run.

    Paul travelled to Suiteworld in San Jose as a guest of Netsuite.

     

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  • Equity crowdfunding arrives late to the party

    Equity crowdfunding arrives late to the party

    Equity crowdsourcing comes late to the Silicon Valley party but could it help the capital starved small business sector?

    As of today, equity crowdfunding is now legal in the United States.

    The interesting thing is it appears Silicon Valley is shifting away from the VC model that this initiative was intended to promote among smaller investors.

    Whether equity crowdfunding can be applied to ventures outside the tech startup industry remains to be seen, it may be in a world where banks have stepped away from their traditional role of providing capital to business that this is the way for proprietors to raise essential funds.

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  • Rethinking economics in the face of demographics

    Rethinking economics in the face of demographics

    The Western World’s demographic chickens come home to roost. Investor John Mauldin shows nine charts that illustrate the low growth dilemma facing central banks.
    For governments to stimulate economies, they are going to have to find a way to increase productivity and the spending power of populations. The current remedy of pumping cheap money into the economy isn’t enough to do this.
    One concerning message for the tech sector in these figures is that simply boosting productivity will not be enough to boost the economy. In fact widespread automation of existing jobs may make the problem exponentially worse.
    The statistic that indicates younger workers are dropping out of the workforce to look after older relatives should be particularly worrying for economists and a warning to politicians that thirty years of the neo-Liberal model espousing smaller governments and reduced public services now threatens to change the political dynamic – something that the rise of Donald Trump is also a symptom of.
    For policymakers, the question is how to employ people in jobs that give them enough income to support their families without ringing up huge debts.
    Interestingly, much of the current tech mania is based upon the same credit based consumerism that’s driven the last thirty years of western economic growth. Apps like Uber, AirBnB and the countless delivery apps are good examples of businesses based on happy consumers jamming more on their credit cards.
    The era of 1980s thinking is over, we’re going to have to rethink what policies encourage employment and wealth creation along with seriously considering what capitalism is going to look like in the mid-21st Century.

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  • Do it now

    Do it now

    I’ve spent much of today, interviewing Australian tech company founders on why they moved to San Francisco for a project I’m doing.

    One question I’m asking is what advice they would give others planning a similar move.

    Every response so far has been, “do it now. Don’t wait.”

    So what are you waiting to do?

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  • Confidence and open communications

    Confidence and open communications

    One of the big technology industry stories currently is the merger of Dell and data storage giant EMC, which at seventy billion dollars will be the biggest merger in the tech industry’s history.

    With fifty thousand employees managing such a change presents a challenge for EMC’s managers and something noticeable attending the company’s EMC World conference in Las Vegas this week is how upbeat almost all the staffers about the impending merger.

    In an interview with David Goulden, the CEO of EMC’s Infrastructure division, which is the company’s core business, I asked him how they were keeping staff morale up in the face of changes that will almost certainly cost jobs.

    “Change creates uncertainty,” says Goulden. “One thing I’ve learned from this is you cannot over-communicate and that’s true internally and it’s true with our customers. We’ve put an incredible amount of effort in communications so our teams are engaged to go and speak to their customers.”

    As change is now a constant in all industries Goulden’s lesson should be noted by all managers and business leaders – clear, honest and open communications with employees and customers is essential in keeping the trust of the markets and workforce.

    The old model of restricting information and hoping no-one finds out is increasingly harder to sustain and from a business point of view unprofitable in the medium term as well.

    Paul travelled to Las Vegas as a guest of EMC and Netsuite.

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