9
NOVEMBER,
2004
Cars give Blue Titan’s direction a lift
`Packaging’ comes in many forms, of course, not least is the IBM Global
Services approach where its effectively takes over the management and running
of an entire service offering. But the more traditional approach to packaging
solutions is now being offered by Blue Titan. The company has recently appointed
ex-IBM’er, James Rose, as VP of business development. Part of his
job will be to package up complete infrastructure environments that are
suitable for a number of vertical markets – with the automotive business
being the first one.
"We have been toying with this approach in the automotive market for
some seven months, but James wasn’t available till now," said
Blue Titan Chairman and CTO, Frank Martinez. This in itself is a bit telling.
Rose is not just an IBM veteran, but also someone with a long track record
of selling into the automotive business. The key in packaging solutions
for the automotive business, as in other areas, is to find people who understand
both the needs of the marketplace and the capabilities of the technology
in meeting those needs.
The US automotive business is a big one for IT vendors – General Motors
spends some $15 billion a year on it – but it is an industry currently
being outplayed by overseas competitors, particularly in the margins it
is able to extract from every sale. "Foreign manufacturers are not
component based," said Martinez. "They buy complete drive trains
for assembly, not pistons or gearboxes." This means they have better
control of costs and don’t fall foul of every brand or model having
different components where one would serve all – such as radiator
caps.
"The target is to offer customers a build to order service," he
said, "where they will be able to fully configure the car they want
and get it within four days. Each car will essentially be a one-off."
As well as giving customers more choice, it should reduce the number of
components and increase the margins. As Martinez observed, "at present,
one warranty claim at General Motors can wipe out the profit from seven
vehicles."
This is the market type of market where a service-based infrastructure can
offer real benefits, as it will allow applications and tools to be switched
in and phased out as the service requirement demands. This is also a fundamental
that he feels the software industry has yet to learn. "Vendors still
currently design software to last forever," he said, "but now
we need to think in terms of constant change. As the non-discretionary IT
spend on maintenance and the like heads north of 80 percent, we need to
turn that needle back on manageability."
One option, he suggested, is fully bespoke software, though the cost issue
would preclude that. Another is to architect manageability into the overall
environment, which is where companies like HP’s OpenView, IBM’s
Tivoli and Sun’s N1 offerings play an important part. "But another
option," he suggested, "is to aim at a new class of software that
is built to accommodate change. The people building it will need experience
in developing very scalable middleware."
He also now sees the appearance of Business Technologists in companies where
a strategy to build service-based operations is the imperative. These are
individuals that can speak both business and technology fluently. At the
same time, he is seeing the return of dynamic languages as part of the toolset
of that trade. "Java is a static language and doing a bad job of treating
XML as a first class citizen," he observed. Better choices, he suggests,
are Python, PHP, Perl, Ruby and scripting languages generally.
One other thing that he sees Business Technologists bringing to the party
is the service and software equivalent of equity portfolio management –
IT portfolio management. Here, an equity manager will have a small majority
of assets in relatively safe stocks, and use the remaining minority for
higher risk ventures that could bring a good return. "IT portfolio
management follows the same approach," Martinez said, using this to
demonstrate the need for software to be equipped to change far faster. "The
majority of the software budget is where you’d expect it, in the likes
of Microsoft and Oracle. But those vendors are on a seven year product cycle
these days, and it is slowing down. So managers need to have 40 percent
of the budget spent on other areas that might produce a high return, but
come with a higher risk."
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