Good article by John Reynolds on the age-old question:  is Programming Hard?  We’ve often argued that BPM suites make implementing processes easier by giving the business and technical participants in process implementation a common language for discussing the process.  It doesn’t mean that BPMN is ideal for either party, it just means that it helps bridge the gap in communications between them.

Another key concept is to understand the fundamental entities that the process is interacting with, and to model their lifecycles and attributes, from a business perspective. Modeling both can lead to a fuller understanding of the process problem.

John sums up the point pretty well:

That’s the key to making “business” programming easier… Build more tools that help programmers and their clients “make their maps” and build more software engines that “follow those maps”.  This isn’t a new idea – software modeling tools have been around for decades, but they’ve often lost their way and focused on modeling the software engineering aspects rather than the business requirement aspects of the problem.

That’s the key – because these tools have to be built by software engineers, they often turn introspective and lose sight of the end goal of being more inclusive – because by facilitating communication and consensus on requirements, we’re facilitating “easier” software development…

The news this morning in Austin (besides the chill wind blowing here today) is that BMC just bought local startup Phurnace.  Additional coverage from Austin Startup and Redmonk.    There are a few friends and former colleagues over there, and I wish them well at the new firm!  There have been a flurry of IPOs and (mostly) acquisitions in Austin lately, which will hopefully presage a new round of interesting startups growing up in our town.

I’ve been reading the latest flurry of iPhone / NexusOne articles and blog posts making the rounds, and I just can’t resist commenting.  Walt Mossberg gives both products a thumbs up, and Michael Arrington says the Nexus One is better than the iPhone (um. okay).  But, once again, all too many analysts and pundits are trying to compare what’s happening now to what happened with the Mac and the PC back in the 80′s/90′s… essentially comparing Apple to, well, Apple.  And comparing Google to Microsoft.  There are some valid similarities.

But they’re missing a few key things that make this round different.  In particular, those who want Google to come out on top cite Bill Gurley’s article on the subject. Gurley, first of all, paints Apple as dependent on receiving a share of the subscription revenue of the Telecom partners – but this was, to my knowledge, only true of the exclusive partners – e.g. AT&T.  Second, I believe when Apple renewed its contract with AT&T and revised the pricing to the consumer downward dramatically, that it gave up that subscription revenue in exchange for a lower consumer price.

Gurley goes on to make much of the difference in price point.  But, as Arrington states:

The Nexus One is available “in large quantities” starting today at Google.com/phone. An unlocked GSM version of the phone that will work in most countries is $529.

Google is also offering a subsidized version of the phone – also unlocked – through T-Mobile for $179. The service plan offered by Google is 500 minutes/unlimited SMS/unlimited data for $80/month. T-Mobile’s termination fee is $200, and some users might be tempted to buy the T-Mobile version and terminate immediately, paying just $379 for the unlocked phone. Google says that users terminating too soon will be charged the full price of the phone, however. But even the T-Mobile version of the phone can be used overseas on trips by slipping in a different SIM.

So… how was that cheaper than an iPhone exactly?  Oh. It wasn’t.  You can pick up a 3G iPhone for $99, with 8Gb of memory, rather than the anemic 190MB or so of app memory standard for the Nexus One.  After all, the whole point of these things is to run Apps right?

Gurley pushes the point that cheaper to carriers will matter!  But doesn’t explain how, exactly, that ends up being the case (except, possibly, with respect to Verizon):

The Android strategy results in phones at much lower prices with much more diversity which will hit a broader set of demographics. Apple can and will quintuple its current market share and still have a small portion of the overall cell phone market.

But unless the carriers start paying me to take phones, I’m not sure that the prices don’t get appreciably close to zero and therefore not matter to me or anyone else.  The real cost will end up being in the telecom services.

Mr. Gurley is also overlooking a more obvious analogy to the phone market: the mp3 player market.  And the reason to look at it?  Volume.  Apple is the biggest or one of the biggest buyers of the memory that goes into these devices, in the form factors required.  Apple’s sheer volume of orders allows it to pull off a rare double-whammy against the competition:

1. Buy vast quantities of memory at guaranteed prices, often much lower than competitors can get, and with supply guaranteed or prioritized over other buyers.
2. Actually drive UP the cost of these same components for competitors by buying so much capacity that the spot market is left with too little supply – causing painful price spikes for other buyers (Apple’s competitors).

The memory purchasing advantage is significant.  And Apple gets to consolidate its purchasing power across iPod, iPod Touch, and all three iPhone versions.  Certain economies of scale are not about software cost, and this time around Apple is the one with the economies of scale in hardware – and this advantage is one that even phone manufacturers with much larger marketshare (e.g. Nokia) don’t share – because they don’t buy such massive quantities of flash memory.

Also, like the mp3 market before iPod, the mobile phone business is a big, existing business with high unit volumes.  Many industry analysts assume that Apple cannot win a majority of share in a market because someone (Microsoft or Google) will offer an OS that will take away the mass market by being cheaper.  But what Apple understands is that below a certain price, cheaper just means “less good”, not “better”.  Apple’s profit share of the PC business far outstrips its unit share.  Its profit share of the mobile business even more dramatically outstrips its unit share.

While I think part of Gurley’s analysis is dead on:

Users won’t switch in mass from the iPhone to the Android. It’s the other 3.95 billion cell phone users that are highly likely to consider Android a step up from their current feature phone.

However, his assumption that android customers will be price sensitive and Apple customers price insensitive, seems off-base to me.  Can Apple drop the price from $99 to $10?  Sure it can. Because that is just the subsidized price from the wireless provider.  If Apple asks for less money from the carrier, that can be passed on in the form of a lower up front payment. Gurley states: “Some will argue that the best product will win the market and that Apple will still dominate the smartphone market. The history of the personal computer market is no omen for this thesis. “  Well true enough, but then again the mp3 market is an omen in support of this thesis.  I’m not sure why the mp3 market isn’t relevant to Gurley’s analysis.

Time will tell – and if Google’s Android produces better phones (and ecosystem) than Apple’s iPhone and Appstore ecosystem, then everyone will clearly be better off for it – and if they don’t achieve this high bar, they’ll still have raised the bar for anyone who doesn’t want to buy an iPhone but still wants a smart phone (as Mossberg states, the Blackberry UI is looking more and more antiquated by the day).  I just think the pundits and analysts are underestimating the benefits of scale that Apple currently has – much larger benefits than you would think with only “one phone” on the market…

After writing this, I found a few other posts that are more aligned with my way of thinking.  One, by none other than Henry Blodget which makes the point (quite rightly) that actually Google is not now in the phone business.  This is the HTC Nexus One, on the T-mobile network.  Google actually just set up a storefront.  And wrote Android.  And probably provided technical advice (much as it did for Droid). Its a pretty compelling argument.  However, the new Android-based phones *are* increased competition for the smartphone category (including the iPhone).  I just think it really puts more pressure on the Blackberries and feature-phones than it does on the iPhone.  I also think everyone is underestimating the lock-in value of having an iPhone – if I switch phones I have to buy new apps… different apps maybe… and maybe I’m happy with the App ecosystem I’ve got!

And then Dan Frommer argues that the customers service for the Google Phone won’t be what we’re used to if you buy from their online store, because you’ll have HTC, Tmobile, and Google to deal with, depending on your issue.  Google doesn’t own the customer relationship… Nothing insurmountable, but it may lead to bad press down the road as people run into inevitable service problems.  These problems happen in the Apple/iPhone world too -but Apple is in a better position to fix them and protect the brand.

Finally, Pogue of the NYT hits on a few sour notes, starting with the smaller selection of apps (about 1/10 of what is available on the iPhone – this is such a strange mirror image of the old Windows vs. Mac debate… ):

Worse, even if you find a lot of good ones, you might not have anywhere to install them… the Nexus allots only [190 megabytes of storage space] for downloaded apps.

The Nexus also does not come with any iTunes-style companion software…

There’s no physical ringer on-off switch…

Sadly, the Nexus One also lacks a multi-touch screen like the iPhone’s….

Finally, the Nexus just doesn’t attain the iPhone’s fit and finish.

Note the storage space (my emphasis) – my nearly 2 year old iPhone 3G has 8Gb of storage space for apps… about 40x as much… Of course, as the Insider points out, his take on the business model is even more scathing. Read the Insider article or the NY Times original for more…

Of course, for the “drank the Google Phone” kool-aide crowd there is this piece by Brian Sheehan arguing that Google will own mobile.  It isn’t a bad piece of writing – I just don’t agree that Google and Apple will forgo giving the iPhone most of the same integration advantages.  I do think that Google is enough of a “swing for the fences” company to do audacious things like buying fiber optic cable (oh wait, they’ve already done that)… So maybe they really will get into telecom.  We’ll see.

On the other end of the spectrum, Stewart Alsop crushes the Droid in his review.  It isn’t Nexus One but one could assume that Nexus One would have to be a big software improvement to make Stewart happy…

Thanks for the shout-out, ebizQ although I could have found a more colorful quote to represent my posts – definitely some good discussion on these boards last year. Here’s a link to their pick for top quotes.

Stanford has offered to reduce the regular registration price to the early bird price- $100 for a two-day BPM Conference on the beautiful Stanford campus. Can’t ask for a better bargain.

Still a few days left to register…

Gartner Group’s Michele Cantara just published its list of “Who’s Who” in BPM Consulting and System Integration on December 14th, 2009.  17 Companies are covered, and BP3 is on the list.  Michele gives an overview of the BPM Services landscape, and rightly points out:

While many consultants and system integrators offer some form of business consulting or process optimization services, they may not have the capabilities appropriate for business process management. This report profiles the BPM consulting capabilities of 17 external service providers.  – from the abstract

The price is $995 for the report by itself, but if you have a Gartner subscription you may have ready access to it.  BPM consulting is defined as a special case of Business Operations Improvement (BOI) consulting, which is process improvement tied to downstream technology change.  Gartner plots the vendors on the “Gartner Consulting Continuum”, and then provides a synopsis of each vendor, including BP3.

It’s an honor to be included in the list, and to be able to get the word out about what we’re up to – and to get heard above the noise is even more gratifying.  It’s a small world in this particular space – we know some of the other companies on and off of this list, and we’ve had opportunity to work together to deliver solutions for customers. We just don’t believe that this is a zero-sum game, because successful BPM projects are growing the pie faster than any one service provider can accommodate, and because it takes a variety of skills to make these projects successful.

While Gartner points out that our size might limit our ability to handle large scale BPM and transformation initiatives, it turns out we’re in the middle of just such an initiative right now – leading a joint team of BP3, Lombardi/IBM, TCS, and customer personnel, more than 150 people in all.  We like to think we have impact larger than our size would indicate: the point is not so much whether all arms and legs are provided by BP3 (which wouldn’t make sense in almost any case as you want to have a variety of specialists and disciplines) -the point is where the leadership and experience base is coming from.

That leadership and experience is where we can help, and it is more specific to our value proposition, whether you’re deploying Teamworks or doing an assessment of your processes and opportunities for the first time. We’re going to continue building the most experienced, highly skilled BPM team in the business, and stay focused on our core value proposition.  Stay tuned!

A research paper was recently published, which purports to research improving the traversal of large hierarchical process repositories.  After a good introduction and background to the topic, the authors quickly jump to IDS Scheer and IBM’s Websphere as examples of BPM tools.  And next, the authors jump to the conclusion that 3D modeling will solve the problem of complex modeling in BPM.

However, the evidence presented is incredibly unconvincing.  3D modeling may hold some promise for BPM, but the examples presented don’t look more understandable to me – they look less understandable. It seems like, conceptually, 3D might take advantage of our innate spatial relationship capabilities and render complex things more understandable… but that isn’t what comes across from the examples in this paper.

Much more powerful than “3D” is the concept of containment, and representing containment. Containment is a form of abstraction that allows me to talk about the behavior of a black box, but then shine a light inside the black box and you can see additional details at a finer granularity, only if and when you choose to.  Containment is the key abstraction needed for understanding large models, and 3D just looks like a fun science project by comparison.  Abstraction by containment is a big part of how we process geography, maps, and directions… and process flows are a geography (road / map) of sorts.

Meanwhile, we’ll have to keep waiting for the silver bullet for making large complex models more understandable or accessible!

The first day (or two) of 2010.  While some say that this marks the beginning of the Second Decade of BPM, others are proclaiming the Death of BPM.  For those of us at BP3, we remain optimistic about this “second decade” of BPM, and we’re optimistic about what BPM can do for companies across a broad spectrum of sizes and industries, as you can see from our blog and our comments on other blogs and sites.

2009 was a tough year for the economy, and for many of our friends and colleagues across a number of industries.  We entered 2009 with a lot of uncertainty, but also with some very good customer relationships, and some very good opportunities in front of us. And finally, we can see real signs in the statistics that our economy is mending slowly.

I’m happy to say that despite these challenges 2009 was our best year yet – growing by 60% and adding a couple of skilled and dedicated members to our staff in the process. 2009 was full of interesting announcements in BPM – not least of which was IBM’s acquisition of Lombardi in December.

We had some great customer successes in 2009 and forged some new relationships that we’re really excited about continuing in 2010.  And we’ve assembled a team we’re very proud of, and grateful for.

We also placed in Gartner’s “Who’s Who in BPM Services” report,  which reinforces our hard work and thought leadership in the BPM space and puts us on a short list of services providers.  More to come on this announcement in another blog entry.

And we stayed so busy in 2009 we barely had time to come up for air.

As happy as we are with how 2009 turned out, we’re looking forward to 2010 even more:

• We have bpmCamp at Stanford to look forward to – a chance to reconnect with colleagues who implement BPM solutions for all kinds of different processes.
• We have some really interesting ideas to pursue this year in terms of running large BPM programs, and managing key concepts for BPM initiatives.
• We’re looking to grow our business again in 2010.  Although growth in and of itself is not necessarily the goal, we see opportunities to grow in a healthy, organic way based on the business opportunities for 2010 – and we can still see a real shortage of BPM skills and experience in the market place.  BP3 is going go to be a go-to vendor to get both – and we’re going to be a great place to work if you have both skills and experience.
• We’re moving our HQ to new offices in Austin in 2010.  It will be a better working environment and a place we’ll be proud to call home, while still respecting our lean cost structure.

Of course, mostly we’re hoping to do well by our customers in 2010, and in so doing, do well by our team.  Happy New Year to all of you!  May 2010 bring in the next decade with health, happiness, and success.