Nokia’s network problems

The solution to the hard choices facing Jorma Ollila, Nokia’s CEO, is quite simple. Nokia needs to get out of the hardware production business, and fast.

It may have been true a few years ago that the complexity of the handset manufacturing process rendered the horizontal supply-chain counter-productive. Now, however, the industry has moved on to the extent that component manufacturing is a commodity business.

It is a fact of life that all Nokia’s competitors have realised. What Nokia needs to do is focus its R&D budget on the ‘nice-to-haves’ – like gaming and branding – as well as other core value-add activities that will enable it to build on its leading market position.

There is no reason why Nokia can’t continue to sell handsets whilst outsourcing production to a series of partners and specialists in this area. The answer to Jorma’s dilemma is in fact very simple. But if he doesn’t move soon, then time and market realities will surely resolve the issue for him.

Bjorn Krylander
CEO, Ubinetics

EAI has a future

Web services standards represent an evolutionary agreement on concepts that have been maturing from best practice implementations for several decades. The only revolutionary part is the wide vendor agreement on adoption that has occurred within the past two years.

Web services will clearly drive great efficiencies, but this is not where the greater challenges lie. Creating and managing flexible integrations between systems that deliver value to the enterprise is the hard work, and this requires robust application integration technology, trading partner/protocol management and business process management technology – all running securely on a scalable, reliable and distributed yet centrally managed platform.

Contrary to the position taken by some people that web services will replace EAI software, the reality is that EAI will simply continue to evolve to lower the cost of integrating both new and older systems.

Kathleen Mitchell
Senior vice president, Seebwyond

CRM’s shelf life

As you recently reported, despite the bad reputation of customer relationship management (CRM) software, we still can’t say no. Despite its perceived widespread failure, CRM is still selling. But the bubble will soon burst if companies buying and selling CRM continue to see it as a technology rather than a business strategy.

As long as CRM fails to improve the customer experience, it will be perceived to have failed – no matter how cost-effective it is or how much customer data it consolidates. To succeed long term, CRM technology must be deployed more intelligently as part of a holistic business plan. CRM needs to become a business culture, ethos and strategy. Without that shift in attitude, the technology itself has a limited shelf life.

Nigel Coopey
Director of Professional Services, Apropos

Fair licensing

There has been a lot of attention focused on Microsoft’s new licensing plans, with organisations being encouraged to sign up to the ‘Software Assurance’ programme that incurs an annual retainer. The new initiative has brought licensing back to the forefront of people’s minds. Software vendors are realising that they have more options than ever before to both guarantee that all software in use is licensed and that their customers can benefit from packages tailored to suit their needs.

Traditionally, licensed software was sold in packages. But in recent years, software distribution has changed through the Internet. The demand for flexibility for customers has brought increased challenges for software developers, which need to meet customer requirements while ensuring they receive the revenue they deserve.

Microsoft’s proposal simply seems to be responding to this. Investments made by IT managers need to be maximised, as does the per-seat licence revenue on the publisher’s side. Surely, it’s only fair that vendors get paid when their tools are used.

Graham Peat
European marketing manager, Rainbow Technologies

Web services’ next stage

The interoperation of J2EE and .Net standards may be a hot topic in the industry, but it is not the only challenge that needs to be overcome to propel web services to pervasiveness.

The next stage in the development of web services technology will see the focus shift to management, hosting and provisioning, and perhaps most importantly, access and consumption of services.

Collectively, all of these elements will have to be provided for as part of any enterprise web services platform. But no single vendor can universally address the entire requirement of any enterprise. In fact, the very attraction of web services lies in its ability to unite heterogeneous architectures.

If all goes well, questions about the interoperation of web services standards will one day be nothing more than a distant memory.

Neil Sholay
Industry marketing manager, BEA Systems

A taxing issue

I enjoyed Russell Hampshire’s article about research and development tax credits.

I could not agree more with his assertion that the IT industry should employ experienced advisers while continuing to lobby for changes in the guidelines.

Unfortunately, most accountants don’t understand software R&D even when it jumps out and bites them. Worse still, most of them run for the hills when approached by their clients to file a claim.

It is true the current scheme in the UK unfairly differentiates between keyboards and chemistry sets. The laboratory worker is preferred to the knowledge worker. But the industry knows all too well that you have to release products long before they contain every bell and whistle if you want to stay ahead of your competition. And programmers know that when something doesn’t work, the best thing to do is simply file a bug report and wait for it to be fixed in the next release.

Software houses understand this and they’re queuing up to file claims. Judging by its proactive consultation process, the Inland Revenue, the UK’s tax authority, understands this. We, as advisers to the IT industry, understand this. We’ve been called in to help on numerous occasions when clients have decided their accountants are not up to the job. Sadly, with the honourable exception of Mr Hampshire and a few scattered colleagues in his profession, it’s the accountants who are playing catch-up.

Peter Denison-Pender
Principal, Interregnum

Corrections

Three companies included in our league table of Europe’s 50 biggest software companies -European Software 50 – Infoconomist, September 2002) have asked us to correct errors relating to their entries.

The table ranked European software companies on the basis of their last full-year revenues. Beta Systems, a German vendor of data management software, points out that we used its 2000 sales figures (EU41.2 million). In 2001, the company’s sales increased 9% to EU45 million.

Sophos, a UK anti-virus software developer and one of Europe’s fastest-growing software companies, has asked to correct its profit figures for 2001 and 2002, which were converted into euros incorrectly. Thus, Sophos’ net income was EU8.3 million in 2001 and EU10.2 million in 2002.

Finally, we incorrectly referred to ILOG, a software component developer, as German. The company is, of course, French.