Month: January 2005 (Page 2 of 10)

Microsoft provided an analyst briefing on Thursday January 27th titled “Creating Business Value through Collaboration.” Personally, I was struck by the presence of a clear strategy for infrastructure dominance (in the sense of OS, server and core technologies such as email, search, etc.) as well as the absence of the same for solution-specific or industry-specific dominance in the market for content technologies. I think the resulting messages — ranging from the clear to the hinted — were intentional, further demonstrating the company’s ability to boldly state “where it wants to go today” without necessarily divulging the types of technology providers it intends to run over in the process.
In terms of collaboration from a generic perspective, the Microsoft “information worker” strategy has been evident since at least 2001. At that time I wrote “Each [product] provides just enough collaborative technology to hover in and around the realm of markets such as knowledge management, document management, portals, and virtual project management” in a discussion on SharePoint, Exchange and Mobile Information Servers in relationship to the significance of .NET and the acquisition of CM vendor NCompass, Inc. (InfoTrends/CAP Ventures, Inc. Analysis, 05/03/01) It was clear that Microsoft encouraged speculation on how the aquisition could change the content techology landscape. As a result, most analysts predicted an impending “market shakeup” due to the entrance of platform players such as Microsoft and IBM into specialized areas such as CM, DM, and portals.
Looking back from early 2005, I would not describe Microsoft inroads to content technology markets as “earth-shattering” or “competition-crushing”, but I would describe the marketing and technology development progress as calculated, consistent, broad, and more recently, deep. In 2003, Microsoft executives such as Jeff Raikes and Steve Ballmer discussed aspects of the information worker vision in detail through public “Executive E-mails”. Touching on issues such as content authoring, publishing, rights management, collaboration, and compliance, the Microsoft roadmap included highways such as Live Communications Server, Exchange Server, Project Server, Sharepoint Services and Rights Management Services with interconnected avenues such as LiveMeeting, OneNote, Office 2003, and InfoPath. According to Raikes, the vision — branded “Office System” — represented the company’s transition from a client applications provider (read: desktop/workgroup market for content technologies) to a client, server and services provider (read: enterprise market for content solutions.)
Thursday’s collaboration briefing was a solid message about the technology areas in which Microsoft feels “comfortable”, and in the words of the presenter, “areas in which we consider ourselves best of breed.” (Kurt DelBene, Corporate VP, Microsoft Office Servers Group) Considering that the primary flavor of the presentation stressed providing software and services as platforms for partner-driven solution development, it was interesting to note when “best of breed” was mentioned in the same breadth as “out of the box capabilities.” IOW, the ability of Microsoft to continue directly competing against ECM, DM, WCM, and portal vendors should clearly not be underestimated.

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Every few months my wife and I have a party. Apart from the goodness of
seeing friends, it also forces us to get the house cleaned up. A good thing all
around.

It is in this same spirit that Stephen Ashton, director of Global IT business management
at the investment bank Dresdner Kleinwort Wasserstein says that Sarbanes-Oxley
is good for IT.  (See the article, "Sarbanes-Oxley
‘Good for IT‘", by Andrew Donahue published yesterday by ZDNet
UK.)  Despite having 10% to 15% of the banks total headcount currently
committed to compliance ( !! ), Ashton feels that the gain is greater
than the pain. “We have just completed a data center review. The thing that came out of it was that we have
tons of information but very little knowledge. There is a lot of partial and inaccurate data in our
systems."  Ashton also talked of now having to invest in bringing
together disconnected "silos" of information that had just developed
over time, without planning.  Dresdner Kleinwort Wasserstein is now
investing in cataloging and integrating this information to make it useful.

We don’t really decide to have parties to get the house cleaned up.  But
it is a nice side-effect.  Are readers finding good side-effects of
Sarbanes-Oxley compliance?

According to an article in Monday’s Financial Times, China
Construction Bank, one of China’s "Big Four" state lenders, is
considering shelving its plans for listing its shares on the New York Stock
Exchange.  Presumably, the reason for skipping the NYSE listing is the
expense and trouble of compliance with Sarbanes-Oxley.

There could also be another side to the story, according to the FT
article. It is also possible that Sarbanes-Oxley would shed light in dark
corners that the bank might like to keep dark. Other Chinese banks have had
large amounts of assets tied up in non-performing loans and have run into
obvious problems with corporate governance.  For example, according to the FT
article, "Chinese media reported on Monday that two officials at Bank of China – another Big Four lender which is planning a $3-$4bn international IPO – had fled the country following the disappearance of up to Rmb1bn ($121m)." 
Yep, looks like an internal control problem to me.

So, maybe the problem with Sarbanes-Oxley is that it might do what we would
expect it to do — protect investors.

Anyway … China isn’t the only place outside the US to have trouble with
Sarbanes-Oxley.  According to a Tuesday Financial Times article, SEC
Chairman William Donaldson gave a speech that day at the London School of
Economics in which expressed willingness to try to find ways to ease the burden
of filing requirements for foreign companies.  Under current rules, foreign
filers must meet Section 404 requirements for reports filed after July 15 of
this year.

To me, this ties back into the thinking expressed in yesterday’s post on
"Bad
News or Benefit."  It seems likely that the details of SOX
compliance will get tinkered with over the next year or so as the SEC works to
find the balance between the cost of the regulations and the benefits that they
deliver.  If a company approaches Sarbanes-Oxley strictly from the
standpoint of meeting compliance requirements, these changes will be
frustrating, adding to the cost of compliance. 

On the other hand, if a company takes a broader view–moving beyond mere
compliance–and approaches internal control as part of a plan to improve
performance and governance–then the potential changes in deadlines and
modifications of requirements are just noise of on the side of the arena–the
goals and direction of the bigger game are not changed.