Saturday, January 19, 2019

Building the NonStop ecosystem …

The NonStop product is alive and doing well and now attention has turned to expanding its market presence. It’s time to talk about partnerships and ecosystems …

Having returned from Sydney after spending three months “down under” the takeaways were as numerous as they were informative. The most striking thing about Sydney is that after decades of minimal investment in infrastructure suddenly the city is investing in upgrading every imaginable piece of its infrastructure. From new tunnels for freeways aimed at allowing big-rig trucks to get off arterial roads and out of site, to new traditional and light rail networks and even tunnels under the harbor (or so we were lead to believe). 

The city skyline is totally compromised with construction cranes everywhere you turn – from Sydney’s Circular Quay to Darling Harbor and Cockle Bay, it’s all go, go, go as if with a sense of urgency. Sydney has to play catch up with infrastructure to match its population growth that has seen it become a city of more than 5.5 million. To put this into context, in 1981 Sydney had a population of 3.2 million and a decade later in 1991, it had grown to just 3.6 million.  But over the next twenty five years, wham! So in a sense, having done very little investing in roads, tunnels, bridges, railways and yes, even airports (developing a second airport is finally gaining traction among politicians and investors at last) Sydney is on a building binge.

The city isn’t going alone in this project but is partnering with companies from all over the world. It’s very much a global exercise, with funding and expertise coming from every corner of the globe so much so that reading the newspapers and seeing the names of the property holders, architecture and engineering firms and construction companies, it’s an exercise in putting pins into a map of the world. It’s not without its mishaps, as new residents in the just-completed Opal Tower will tell you, but the impact from everyone “pitching in” so as to speak, is truly impressive but it is a touch overwhelming to those with a past tied to Sydney of old.

Cruising Sydney Harbor and taking in the sites of all the waterfront homes that now fetch prices of $50million and up, it’s equally as hard to take in. In my youth, there wasn’t even a significant premium to be paid to live right on the waterfront – ease of commute was still the major consideration. But no more as overseas buyers have been purchasing at auction pretty much everything that comes on the market. Imagine then my surprise to read of two recent waterfront purchases made by Australian businessmen, both of whom worked in the software industry:

“Atlassian co-founder Mike Cannon-Brookes and his wife have bought Australia’s most expensive home, the Fairwater mansion on Sydney Harbour, Business Insider can reveal.
“The price has not been disclosed, but Business Insider understands it is close to $100 million.
“$100 million. That dwarfs the previous highest price paid for an Australian property, which was $71 million for the property next door.
“That would be Fairwater’s older sister “Elaine”. Also formerly owned by a Fairfax family member, John B. Fairfax. And bought by Cannon-Brooke’s fellow Atlassian co-founder, Scott Farquhar and his wife Kim Jackson.”
[Amounts are in Australian Dollars]

Of course, there will always be one house on Sydney Harbor that will never be put up for sale – the Sydney Opera House. The picture above I snapped on our last night in Sydney, appropriately enough, one that we spent dining at the Bennelong Restaurant the shells of which are featured in this photo. But Atltassian? Mike Cannon-Brookes and Scott Farquhar? What’s going on and who are these young lads as indeed they are young?

Almost AUS$200 million paid to live side by side on Sydney Harbor in one of the most famous harbor-side residences of all time? Surely, the money didn’t come from software and especially from “enterprise software” developed in Australia? The truth is even stranger than that as VC money barely exists in this country and when the company started in 2002, they bootstrapped Altassian using their credit cards to the tune of AUS$10,000. It was only in 2010 that they finally caught the eye of US venture capitalist, Accel Partners, and raised the more meaningful sum of AUS$60million.

They now have more than 2,000 employees serving 60,000 customers (and counting). Even though they elected to restructure the business in 2014 and became
Atlassian Corporation plc of the UK, they are still very much headquartered in Sydney. Accel Partners was one of the VCs that had also invested in the Australian networking company, Systems Technology (also restructured to be headquartered in the US under the name, Netlink) where I once worked. However, I am also familiar with the early struggles of other up and coming companies like Insession (and, more recently, Infrasoft) and Software Developments International (SDI) who were all busily creating software products.

These are familiar names for many in the NonStop community as it was from these vendors that such products as the SNA_Hub, ICE, uLinga, and Net/Master appeared, some more successful than others. However, in each case, there were partnerships involved where other parties were involved in joint development pursuits as well as in sales and marketing pursuits. It was only normal to expect a small Australian software company to create relationships with others to take its products into global markets.

Of late, HPE has been placing considerable emphasis on partnerships and on the development of ecosystems in support of NonStop. RFPs have been announced and deals cut with vendors for products that help complete the overall NonStop solution set. In many ways this is not too dissimilar to what the manufacturers of robots are telling their audiences – robots aren’t replacing humans as much as they are freeing up those people to do tasks humans do better. NonStop development is building an ecosystem of partners to allow it to stay better focused on what really counts, the NonStop integrated software stack! The Operating System, the database and the TP monitor which are crucial elements within this stack and that’s where the NonStop differentiation can be seen.

By coincidence, as I was leaving Sydney for Colorado, I came across an article on Atlassian written after it had just published quarterly financial results for Q2, 2018/19:

“Atlassian has done it again: the Australia-based software vendor that is best known for its workflow and collaboration tools has posted yet another blowout quarter with a raise to its guidance targets.

“The company is also seeing tremendous success with its Atlassian Marketplace, which is a sort of Atlassian-linked app store for third-party extensions on which Atlassian collects a royalty. Many large-cap success stories in the software sector, like have widened their ecosystem and captured an entirely new revenue stream from app sales. For Atlassian, Marketplace revenue growth of 58% y/y far outstripped overall revenue growth.”

Yes, there it is – success owed to widening “their ecosystem”, capturing “an entirely new revenue stream.” Clearly, the two lads from Atlassian have done well in tapping enterprise software in a way few newcomers to the market have achieved in recent times making both of them billionaires not from half page business plans but from creating and delivering real products, and they started in 2002, no less. For the NonStop community there is a very real message here and one that cannot be ignored – NonStop is of a size that a growing ecosystem is crucial to the future of NonStop.

The NonStop vendor community has to become stronger and has to start thinking of growing inorganically – there truly isn’t enough time remaining to look for organic growth. NonStop vendors need to partner and indeed cooperate at an almost unthinkable (and unprecedented) level even to the point of merging. They need to more fully embrace the future and work with vendors already entrenched in the VMware market, for instance, even as they need to strengthen their commitments to Linux and to Hybrid IT.

Of late I have been asked numerous times about the NonStop message being too technical and not the message needed to address the real business needs of industry leaders. Approaching C-level execs with the message of NonStop being the solution without truly articulating the business needs it addresses has always been a situation where a lot of fine-tuning needs to be accomplished. However, that’s really only part of what needs addressing – simply put, we need more “feet on the ground.” And an expanded ecosystem made up of traditional and non-traditional partners has to be developed and quickly, else the voice of NonStop will remain weak.

I have always been a strong advocate for developing ecosystems. Partnering with vendors with market presence already is the simpler way to project strength in the marketplace than almost any other alternative. NonStop today is a vastly different product to what it was way back in the early 2000s but how many in IT are even aware that NonStop even exists? Fortunately, the NonStop community remains highly evangelical and there are a lot of powerful testimonials that can be given by major brand names committed to NonStop. The good news here for the NonStop community is that the promotion of NonStop isn’t starting at ground zero with nothing practical to talk about.

We may not all end up being able to buy harbor-side properties in Sydney or San Francisco, or London, or perhaps the Côte d'Azur. On the other hand, we may just be able to push the needle just a little further to where the readings show success!!! To the NonStop vendor community I say; have you talked to those NonStop vendors adjacent to you? Have you considered turning up to a major industry event? CES, perhaps? In other words, step outside your comfort zone (no pun intended)? It may just be the very thing you need as you head into 2019 as I for one know only too well, no one today in IT can do it all by themselves; you need an ecosystem!

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