Nokia burning lessons for enterprise vendors

What lessons are there to learn for enterprise vendors from the Nokia burning story? Plenty. Here's how.
Written by Dennis Howlett, Contributor

The 'Nokia burning' memo doing the rounds got me thinking about enterprise ecosystems. Are there lessons to be learned in what Stephen Elop, CEO Nokia has to say? I think there are and while enterprise vendors remain tightlipped I am confident that at least some of them must have read this and pooped their pants. Here are some examples:

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

Most enterprise vendors have small teams engaged in bleeding edge work. Some of it is mind bogglingly brilliant. 98% of it never sees the light of day. Bits and pieces get showcased and just as quickly sunsetted. Board decisions about 'bang per buck' dominate in a world where anything with less than three noughts behind the dollar sign is considered inconsequential. Have these people not heard about Twitter? Facebook? Or the myriad of free services where monetization comes in different ways?

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, "the time that it takes us to polish a PowerPoint presentation." They are fast, they are cheap, and they are challenging us.

When I survey the SaaS/cloud market I am constantly amazed at the rate at which updates - by which I mean VALUABLE and USEFUL updates are brought to market. It is almost always the small players catering to the SME market that are doing this. They're cleaning up at the expense of the incumbents. The incumbents look ponderous and bemused.

And the truly perplexing aspect is that we're not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

Back to the dollar sign problem and all too common.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.

There is a piece of me that has been scratching my head as to why Salesforce.com acquired Heroku. This single statement puts it all into perspective. Now - those vendors who DO have ecosystems might sit there and feel smug. Nokia has one after all. As does SAP, IBM, Oracle and many others. But are they working? Some better than others but the real litmus test comes in where they are located, the value they bring and the extent to which they are open to the outside.

On Tuesday, Standard & Poor's informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody's took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

There is a reason why these and BTL pages provide what might seem dull commentary on financial results. It is by peering into what a company reports that you start to see trends. When the credit agencies sit up and take notice then you know there is an issue.

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.

This is a complex one. Some companies have a culture of collaboration. But that sometimes leads to calcification where vital decisions get missed, delayed or simply put to one side. It translates into huge and un-necessary cost. I know for instance that if I am dealing with certain companies I need to add a cost premium simply to take care of the crap I will inevitably end up shovelling out the way to reach the intended target goal. They respond with a shrug and the 'big co' syndrome play. I don't buy that. Why? Accountability is a very big issue. We live in a blame culture. The sooner vendors recognise that we all fail somewhere along the line and that forgiveness is a valuable commodity then the more likely we'll see genuine good come out of R&D.

And finally....

Nokia, our platform is burning.

I suspect that some vendors don't see the smoke signals, content instead to look at their cash pile and think: it will never happen to us. Wrong. It is happening.

What do you think? Are we at an inflection point where the old gives way to the new? Can the old transform itself or is a slow and painful death the inevitable consequence of growing into a large megalith? Talkback in comments.

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