Category Archives: Technology

Will the Patent Pirates finally be Plundered?

The patent pirates have been plundering for way too long. And we should all be fed up. Since SI alerted you to the problem way back in 2006, in a post on how The Software Patent Pirates will Plunder Away, inspired by a post by Dave Stephens on the now defunct Procurement Central, which evolved into “Stephen’s Business and Technology Nexus” (which, is now also defunct), not much has changed. Even though Mr. Obama declared war on the patent trolls on September 16, 2011 when he signed the Leahy-Smith America Invents Act into law, the pirates are still trolling the high seas of business in search of easy prey to pillage and loot.

To date, as covered in 2011 in SI’s post on how Patent Pirates are Still Plundering, patent trolls have cost investors over half a trillion dollars over the last 22 years (as reported in CNN Money on Sept 21, 2011). Half a Trillion Dollars. Think about that. This puts the Somali Pirates, who have figured out how to steal approximately 10 Billion a year from the shipping industry (according to the LA Times), to shame! (The patent trolls are pillaging almost 3 times as much as the Somali pirates from the safety of their penthouse suites!)

The trolls have to be stopped. They now account for approximately half of the roughly 4,000 patent cases a year in America. That’s 2,000 patent cases that are, for the most part, frivolous and unfairly extortive (as small companies cannot afford a lengthy legal battle and are forced to settle to survive). Fortunately, the Obama administration realizes that and has announced new actions and proposals for patent reform. These proposals, designed to reduce anonymity in patent litigation, improve review at the USPTO, give more protection to downstream users, and improve standards at the International Trade Commission, are definitely a step in the right direction. (SI agrees with the TLF that more is needed, but we’ll get to that later.)

Specifically, the administration is recommending the following legislation:

  • Require patentees and applicants to disclose the “Real Party-in-Interest”
  • Permit judges more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees as a sanction for abusive court filings.
  • Expand the PTO’s transitional program for covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).
  • Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use.
  • Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.
  • Use demand letter transparency to help curb abusive suits, incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.
  • Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.

In other words, the proposals are to:

  • Make it public as to who is filing a patent suit,
  • why the suit is being filed,
  • and allow judges to penalize abusive, frivolous, filers with big legal bills.

This is a good start, but it’s not enough. First of all, as per SI’s post on why we need a “loser pays” bill for patent lawsuits, the filer of the frivolous patent should be required to pay a penalty that is at least double the cost of the suit, including the defence’s legal fees, damages, and court costs. (If the penalty won’t hurt, they won’t stop.) Secondly, despite the objection of cash-flush giants like Apple and Microsoft, we have to follow the lead of the EU and New Zealand and abolish software patents. The vast majority are complete and utter bullshit. The one’s that aren’t contain specialized business methods that could be patented separately (just like you can patent unique physical inventions and processes for extracting medicinal compounds from natural plants). (And SI is happy to see that the Technology Liberation Front agrees with this proposal.) Software is just code that encodes algorithms in a machine language that is compiled into a binary instruction set that runs the program. This is essentially a complex mathematical formula, and mathematics, like laws of nature, is NOT supposed to be patentable. And since many of the trolls have armed their arsenal with software patents, this would be the best way to strike back.

For more information on the challenges of taming the trolls, you can start by reviewing the recent report on “Patent Assertion and U.S. Innovation” from the National Economic Council and the Council of Economic Advisors.

Today We Can Carry 40,000 Songs in Our Pocket

But 125 years ago you couldn’t hear a song unless you went to see a band. This is the 125th anniversary of George Edward Gouraud‘s recording of Handel‘s Israel in Egypt, which for many years was thought to be the oldest known recording of music. It is most likely the oldest recording of classical music.

The oldest known voice and music recording was 135 years and 7 days ago on June 22, 1878, made on a Thomas Edison phonograph in St. Louis, and consisting of a 23-second cornet solo of an unidentified song and a man’s voice reciting “Mary Had a Little Lamb” and “Old Mother Hubbard”. Described in this CBS News article (“oldest known voice music recording restored”), you can hear the unrestored recording, courtesy of The Creators Project.

And it was only 34 years ago on July 1, 1979 that Sony introduced the Sony Walkman TPS-L2, a 14 ounce, blue-and-silver, portable cassette player with chunky buttons, headphones and a leather case. In other words, we’ve only had recorded music for 125 years and recorded music on the go for a little over a quarter of that time, where you were limited to a cassette tape that couldn’t hold more than 20 songs. And now you can carry around a smaller iPod Classic that can hold 2000 times that. The pace of innovation over the last 75 years is absolutely astounding.

Why You Need a Master Data Strategy to Properly Do Supplier Information Management

Supplier Information Management is more than just buying a Supplier Information Management (SIM) solution and plopping it into your data centre. Much more. But yet, it seems that some people — anxious to deal with the visibility, risk management, and supplier performance issues facing them — believe that merely obtaining a SIM solution will solve their problems. A proper solution properly acquired, properly implemented, and properly used will go a long way to increasing supply chain visibility, enabling risk management and mitigation, and providing a solid foundation for supplier performance management, but the mere presence of such a solution in your supply management application suite is about as useful as a drill in the hands of a carpenter holding a nail.

You see, Supplier Information will never be restricted to the SIM system. Supplier information will always be present in the ERP system used for resource planning and manufacturing, the accounts payable system, the transactional procurement / procure-to-pay system, the sourcing suite, the contract management system, the risk management solution, the performance tracking and scorecard system, the sustainability / CSR solution, and other systems employed in your organizational back-office to manage the different supply management AND business functions. Supplier data is everywhere, and without a strategy, just shoving it into the SIM system won’t help.

In order to get a proper grip on supplier information, the organization needs a master data strategy that dictates the sub-records that define a supplier record and which system holds the master data for each sub-record. What do we mean by this? For example, the ERP may hold the core supplier identifier sub-record that defines the unique supplier number in your system, the supplier name, the supplier’s tax number, and your customer number in the eyes of the supplier and be the system of record for this information. The accounts payable system, referencing the supplier by it’s supplier number, may be the system of record for the headquarters address and payment address. The contract management system may be the system of record for the list of employees authorized to sign contracts on behalf of the supplier. The CSR system may be the system of record for the suppliers’ carbon rating, third party CSR rating, and your internal sustainability rating. And so on.

If this is the case, the SIM system, to truly be a SIM solution for your organization, needs to integrate with all of these systems and encode the proper rules to resolve data conflicts as required. Specifically, three things need to happen. First of all, whenever a system of record updates data, that data must be pulled into the system and overwrite the existing data. Secondly, anytime data is updated in the SIM system for which it is the system of record, that data must be pushed out to all systems that use it. Thirdly, and this part is sometimes overlooked, whenever data is updated in a system of record, the data not only needs to be pulled into the SIM system, but it then needs to be pushed out to any system that also uses that data. The SIM solution is the centre of a hub-and-spoke data architecture — all updates flow in, and all updates flow out.

This can only be properly accomplished with an appropriate Master Data Strategy. Don’t overlook it. Otherwise your SIM solution will turn out to be a Stuck In Muck solution. An SI is not kidding about this.

How Do You Find an Innovative New Vendor? (Repost)

Last summer, Brian Sommer over on ZDNet ran a great post on how to easily identify the up and coming innovative vendors in the space. All you have to do is look at who the big established players are trash talking! After all, if the company isn’t innovative, they have nothing to fear from the competitor, and will say something like “yes they also have a solution suite that could potentially help you, but” … “they are missing these key features that we have found to be instrumental to customer success” or “we have done more implementations in your space” or “we have a more mature professional services organization” or “we fit better with the platforms and processes that you have in place” or “we are more committed to customer success” or “we have won more awards proving the maturity of our solution” and just shrug them off. But if the company is innovative and poses a real threat, they will try to trash-talk it out of your candidate pool. And they will use predictable language like “what they are offering is a cool feature, not an application” or “they’re inconsequential” or “their solution is immature and / or will never catch on“. These phrases are your first clue that this is a vendor you should be looking at. It might not be mature enough to meet all of your needs today, but maybe if you can bolt on the innovative new features they are offing to your existing ERP, you can, with a little elbow grease, extract more value and, as the company grows, be the first to take advantage of their new features and applications as an early adopter preferred customer.

And not only did Brian do a great job of pointing this out, he also created a great table that summarizes all of the common phrases an established, fairly un-innovative, company will use to trash talk an innovative startup in its infancy, a rapidly growing new competitor, and an upstart that’s all grown up now. And then, to complete the picture, he also points out what they say when the decide to acquire the grown up upstart because it has a more innovative solution.

Click on the image to be taken to the full table, and click this link to read Brian’s full post on the Software Smack Talk Playbook. It’s awesome.

The Complete Software Smack Talk Playbook

Who Is Your Vendor Really Working For?

SI has done a lot of posts on how to identify the right e-Sourcing/e-Procurement/e-Supply Chain vendor, over the years, but one question that is often overlooked, or left unstated, is “who is your vendor really working for“. You might expect, based upon their marketing and their business, that they are working for their customers who are paying them, but is this always the case?

To answer this question, we need to go back to the basics of how businesses are structured and funded.

A business is either public or private. A public business is funded entirely by revenue and has its performance judged by Shareholders and Wall Street. A private business is eventually funded by revenue but initially funded either by founders, third-party angels and/or VCs, or a private equity group. There are other business structures and funding arrangements, but these are the most common in our space. Let’s consider each of these.

Public

A public company will make an effort to work for you, but only so far as it does not hurt their Wall Street rating and does not cause the Shareholders to ask questions. They live and die by the stock price, so if the stock price falls, they will typically have to react by way of layoffs to meet whatever earnings number Wall Street has dictated, and probably layoff your account manager and the developer who was committed to your upgrades in the process. They work for you only so far as it doesn’t hurt them in the eyes of Wall Street which typically does not have the long term view you need as a Supply Manager. And while you’ll never get fired for buying from a big public company, you won’t be important to them, unless you’re a Fortune 100 and bringing them > 10% of their business. (And even then, you’re only important until they land someone bigger.)

Private – Angel & VC

Like a public company, a private company controlled by third party investors will make an effort to work for you, but only so far as it meets the objectives of the Angel and/or Venture Capitalists who are driving the board towards whatever vision for the company they believe will make them the most amount of money in the shortest time possible. And since Angels and Venture Capitalists are ultimately only concerned with the balance of their bank account, that vision will be whatever is sexy and likely to support a quick initial public offering (so they can get their return). If that means getting as many new customers in a year as possible to allow for a quick public exit, then all of the money and efforts will be directed towards sales and marketing and customer support and incremental product development and improvement will be an afterthought, if it is even given a thought at all!

Private – Founder Funded

A private company controlled by a founder, or a small group of founders, will be focussed on the objectives of the founder(s). If the goal of the founder(s) is to make money and grow the business organically, the company will have a razor-sharp focus on meeting each and every customer need that the customer is willing to pay for. If the focus of the founder(s) is to get Angel & VC funding as part of an ultimate goal to get the company to an initial public offering, because the founder(s) are vain and more concerned with public image and sex factor than quiet success, the company will work for you only so far as the founders feel it won’t make the company less attractive to the Angels & VCs that can help to take them public.

Private – Private Equity Group

A private company controlled by a private equity group will be razor-sharp focussed on the needs of the customer. Private Equity Groups exist to make money — and while they may sometimes take a company public, this is not their ultimate goal. They take a company public only when the opportunity is right and they’ve reached the point where they believe they can’t make more money growing the company organically over the long term. Generally speaking, private companies controlled by private equity groups will be boring as hell compared to the sexy companies driven by venture capitalists, but they will be the only companies that make you feel like you are the center of the business world, because, in the end, they need your money to pay the bills and keep the lights on. It’s their model, and the one model where you are always the center of attention.

So don’t forget to ask yourself “who is this vendor really working for” before signing on the dotted line. They won’t tell you (the truth), but if you look at their ownership structure (and the frequency of their press releases), you can figure it out.

As a final note, if you are still seeking spherical supply solutions (Part I, Part II, and Part III), you should take another look at the EU Supply Management software providers. Not only do they have more experience in international implementations, but most of their companies are controlled by private equity groups where as most of the North American companies are either funded by Angels and VCs or part of big public companies.