Google Chrome--a Strategic Platform or just another Browser?

Google's new Chrome Browser came out a few weeks ago to quite a bit of attention. It's big news 1) because it's from Google and 2) it brings back memories of the "browser wars", and seems like it could potentially signal the next big battleground in the intense rivalry between Google and Microsoft.

I've downloaded Chrome and played with it a bit, but this isn't intended to be a technical review of Chrome's merits. It seems reasonably snappy, and has Google's typical minimalist design philosophy, including a single box for multiple functions (search, address bar, etc.). Your personal preferences will decide whether you like that or not. It has some nice features such as tabbed browsing, which theoretically should prevent one bad browser window from crashing all open browser windows--much like when Windows became multi-threaded. Nice stuff, but doesn't really fundamentally change the browser game. But technically it's still a beta anyway (of course just about everything is with Google), and it will evolve over time--so it's not really time to judge it from a technical perspective anyway.

What I want to do is to examine Chrome as a strategic move by Google with respect to the software and online worlds--what does it really mean, where will it take the market, and what are its chances for success?

Let's take a look at some of the potential ways that Chrome could affect the marketplace:

A Better Browser
Of course, PR propaganda always will say that this is the "real" reason for bringing out a new product such as this. When I was at HP we used to call this "making a contribution to the market". Google in particular often gets sanctimonious about this type of thing, with all their "do no evil" and saving the world stuff. Does the world really need another, better browser? Not sure. Firefox and Safari, to name two, are already probably technically superior to IE, and while they've made some inroads in the marketplace, they still trail Microsoft by a wide margin. But history tells us that competition is a good thing, and a step forward on major platform like a browser can certainly be thought of as a gateway to allow software innovation to develop faster. Having a company like Google enter the fray should increase rate of innovation that's possible in the online market.

An Application Development Platform
This is the position that many pundits suspect may be the major impact of Google's move. In their introduction, Google talked quite a bit about "remaking" the browser for Web 3.0, if you will. And a fresh approach does make sense, given that Internet Explorer was conceived long before serious online applications were envisioned for the Web. With SaaS and Web 2-3-4.0 currently all the rage, having a browser platform designed from the bottom up to accommodate online software applications should be a good thing. If it's all it's cracked up to be, this could conceivably be a game-changer and a real threat to Microsoft. The key here is how much of the talk about re-architecting the Browser is real, and how much is hype. This will become more apparent over time as Chrome is further developed, and application developers take a look to see if there truly are features they can take advantage of to build better online apps for users.

An Additional Way To Track User Behavior
This is one of the more cynical viewpoints as to the major motivation behind Google's introduction of Chrome. The thinking is that this is one more insidious move by Google to "big brother" your online activity. It's no secret that Google uses web activity data they collect by various means (such as Google Analytics) to fine-tune their advertising business. Certainly owning browser could be seen as the "holy grail" towards creating a complete characterization of online activity. What else might they use this data for, in addition to fine tuning their advertising platform? That's the question and concern.

A Way To Drive More Search Traffic And Adwords Revenue
Along the same lines as the bullet point directly above, owning the browser could be seen as the ultimate in terms of driving web traffic toward Google's Adwords online advertising. The first thing you see upon downloading Chrome is the opportunity to switch to Google as your default search engine. How much will they do in this regard, either subtly or in a straightforward manner? As stated above, at a minimum, it gives them the opportunity to make Google the default search engine, which is critical to their base business. Only time will tell how much of a factor this is in Google's Chrome strategy.


A "Real" Competitor Aimed At Microsoft IE To Make Them Defend Their Turf
Of all the bullet points I'm raising, this is the one I'm most sure of. Google and Microsoft are locked in one of those classic death matches for online software supremacy, and don't miss an opportunity to tweak their arch-rival and make them sweat a bit. Going back to the application development argument above, there is a feeling that Chrome could serve as the basis for a suite of online Google apps to threaten obsolescence for Microsoft's desktop software business. I don't doubt that Google may try to do this. But even if from a technical and marketing perspective Chrome is only a modest success, it almost certainly will get Microsoft's attention and cause them to expend resources and management attention on browser technology, to an extent they may not have preferred.


SUMMARY
Chrome is intriguing, but it's too early to tell for sure what the major reason is for this Google initiative. They may not even know for sure themselves at this point. But the product, and more importantly the move itself, will likely make Microsoft react. The ensuing competition should be all good for the user and developer communities, as long as it doesn't take us toward another tiresome and market-paralyzing "platform API" war. I'll be following the future development of Chrome closely to see where it takes us--how about you?

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

Strategies for a Technology Market Slowdown

Is the world economy slowing down? What are the implications for technology companies?

Recently, technology stocks (along with the stock market in general) have tanked. There is a credit crunch that shows no signs of abating, and inflation is rearing its ugly head, with the continual climb in the prices of oil and other natural resources--commodities which touch every aspect of the world economy. Is the economy headed for a severe downturn--taking technology businesses down the drain with it?

I hardly think so, but we have had a very long running economic expansion, that eventually will reverse by the universal law of "what goes up, must come down". Economies are cyclical by nature, so a downturn has to happen eventually. And tech stocks are usually affected more severely than average in an economic downturn, which affects technology industry investment and ultimately tech growth rates.

So what should you do if you're the CEO of a software or hardware tech business?

Be Prudent, But Don't Panic
Now's certainly not the time to stick you head in the sand, and hope the economy doesn't get any worse. It almost certainly will; but more importantly, how will it affect your company? That's what you need to ponder. Is your product a "must have" or a "very nice to have"? Obviously the "nice-to-haves" will have a tougher time in a declining economy, and should plan accordingly. So take the time to analyze you situation, and make a forecast for your own business, based up the unique circumstances of your market and company. Remember, hope is not a strategy.

Look For Opportunities to Outflank Weaker Competitors
For strong players, declining economies can be a great time to pick up market share from weaker competitors. If you have the resources and can do it safely, now might be the time to run a promotion, or selectively increase your marketing. It's counter-intuitive to most managers' instincts. But weakening the competition during a downturn can lead to stronger growth when things turn back upward.

Slow Near-Term Expense Growth, But Don't Compromise Long-Term Initiatives
In most cases, companies will want to carefully monitor, and possibly cut back on their spending. You want to make sure that you don't put your company in jeopardy, by have expenses out of sync with flat or declining revenues. But try your best to keep intact the initiatives that are critical to long-term growth. You must continue to think long-term as well as short term, assuming you don't get in a situation where your survival is at stake. Cut back on advertising and office space if you're seeing a slowdown--but make sure you don't cut the product development project which will lead to growth 18 months hence. These can be tough decisions, but they really separate the long-term successful CEOs from the flash-in-the-pans. Almost anyone can manage when times are good.

Limit The Growth Of Your Staff
While prudent spending can be wise during a downturn, aggressively increasing the size of you staff usually isn't. There are always exceptions, of course, but adding too much staff can really bloat your fixed cost structure, in a manner that limits your management flexibility. Unfortunately, many companies are often most aggressively adding staff at the end of a growth cycle--just in time for the downturn. If this leads to layoffs, it can have a devastating effect on your company's morale.

Although layoffs are sometimes necessary, they are always painful and hurtful to the company culture--unless the company culture is already of the "Attila the Hun", cutthroat variety. The founders of one of my former employers, Bill Hewlett and David Packard, ran HP for many years with a rule of thumb that limited staff increases to 25% of revenue growth. This helped them avoid the natural inclination to hire someone new every time a new task was identified. I believe was an important factor in many years of smooth growth--without layoffs. This particular metric might not be right for your company, but something similar could prove to be a useful damper on excessive hiring.

Make Sure That You Have Money For A Rainy Day
While it's no time to panic, it IS time to make sure that you have the financial resources necessary to comfortably cruise through a downturn. VCs and Private Equity firms have been flush with cash; if you are close to a deal to bring in outside investment capital--don't wait--so it now. Availability of funds and terms will only get worse, as the stock market heads down and the credit crunch continues. Also, make sure that you have available the largest line of credit possible with your bank. It may cost you an extra few thousand dollars a year, but its excellent insurance, if you are surprised on the downside. If you're in startup mode and financing yourself on credit cards and home equity lines--maximize your future access to these as well! Whatever your sources of funds, make sure now that you're financially well prepared for whatever the future holds.

Be Poised For The Next Upturn, Whenever It Happens
I mentioned earlier that you should try your best to keep long-term initiatives alive. In that same vein, your thought processes should CONSTANTLY be focused on the next upturn, in all of your decision-making. Again, this assumes that your survival isn't in question. For example, while massive hiring isn't usually wise during a downturn, you want to always be open to unique opportunities that may not come along often. Say there is a talented executive available, only because of the downturn. If you can safely afford him or her, snap them up now, before a competitor grabs them. Downturns often present opportunities to improve your business when the next growth cycle occurs. But you need to be "looking ahead" and making good decisions now, to take full advantage of the upturn when it finally does.

Summary
Once again, now is not the time to panic. But it is an important time to plan. Anyone that can predict what will happen with an economy should go to the nearest casino--no need to waste your time with a software or technology company! So I suggest that it might be wise to do a "best-most likely--worst" 2 year forecast now, and try to plan as best you can for the two extreme cases. Post a comment and let me know your thoughts on how the economy and the tech industry will fare in the coming months.

Phil Morettini
PJM Consulting
www.pjmconsult.com

The Future of Wireless Communications

Land Lines are going away, right? Everyone says so. We hire young women, generally in their twenties, to help take care of my son. I can't remember the last time one of their phones had an Area Code associated with the place they are currently living.

That's because they don't use landlines--many people in their twenties and thirties move around a lot, and rely strictly on a cell phone as their sole or primary telephone. If they have a couple of roommates, occasionally they will also have a landline. But the number usually isn't given out, and doesn't appear to be used much.

So does this mean that we are rapidly heading toward the wireless society that pundits have been predicting for a number of years? Or is wireless growth slowing and about to settle into mature market mode, with modest incremental growth in the future? There are a number of factors on both sides of this discussion--let's explore a few.

Factors Pointing Towards Acceleration Of Wireless

Mobility
Society is becoming more and more mobile as time goes on, and everyone is getting used to being able to do things on the go, that used to be done only at home or the office. This trend appears to be one that will only continue--and is a positive thing to most people's thinking. I do think there may be a bit of a backlash in this area--"too much of a good thing"--I'll address this later on.

New Services
The addition of many new services should drive users to utilize wireless as an increasingly greater percentage of their total computing/communications device usage. Trends such as the merging of consumer cameras and music into smartphones create the types of new services that are driving increased wireless usage in the near term. Location-based services could provide another nice pop in growth, if they ever do reach their potential (and they've been "coming" for quite a while). I would note that I don't consider these trends the type of major innovations that will cause a fundamental, "step-function" like shift and a major positive effect on wireless usage. I view these new applications as incremental, something to continue the modest growth we are currently seeing in the wireless market--in the western world, at least. Outside of the developed world, of course, there is some phenomenal growth occurring. In terms of market development, I view rapid wireless growth in developing countries as a "catch up" phenomena.

Cost
This is a bit of a two edged sword. Like any other technology-driven market, the cost of electronics and services are being continually driven down, especially as wireless has scaled into a mass market, with corresponding economies of scale. Up to this point, at least, there has been sufficient competition to drive down the price of services from the wireless carriers. There seems to be some flattening of this price deflation in the US recently, however. On the other hand, as new services have been introduced, the "total bill" that consumers end up paying for ALL of their technology services (wireless, TV, Internet Access, etc.) has been going up. There will be a point where consumers say "enough is enough"; the total tech entertainment and communications bill simply can't rise forever.

Technology Innovation and Competition
I do believe that technological innovations, market scale, and competition will all play a factor in continuing to bring down overall costs in the long run. New technologies such as WIMAX, networked WiFi and in-home pico cell towers will provide technological alternatives for consumers, and therefore increased indirect competition. And there are certainly many exciting developments in research labs which we haven't even heard of yet, that will lead to increased innovation and continuing industry growth. I really believe that the technological aspect of wireless is still in its infancy, and will be the major factor that leads to long growth in wireless markets.


Factors Pointing Towards Slowing Of Wireless


QOS
The biggest issue, in my opinion, that will limit the future growth of wireless, is the lack of sufficient Quality-of-Service. Current cell phone service in the US sucks. There's no other way of putting it. Depending upon your carrier in a given metro area, service can still be spotty, with persistent dropped calls--even after all of these years, and the fact that cell phones are a ubiquitous mass market item. I still have 3 landlines in my house, two for business usage. I sure don't want to talk to a new client on a cell phone connection--if I can help it. I know many business people that don't feel this way, and use their cell phone exclusively--my opinion is hardly universal. But I don't really understand it. Especially inside, in homes and offices, you just can't trust that the call quality to be anywhere near what is demanded by an important business call. Some of this is based upon real issues--mountains in the way of radio waves, etc. But much of the problem is simply the wireless carriers jamming too many calls into too little spectrum, for cost reasons. I'm quite surprised that no one has yet come up with a "business quality" wireless service, which guarantees a higher level of call quality--much like a business or first class airline seat.

Complexity
As new features and services get added, even if they are welcomed, user interfaces and experiences almost always get more complex--at least initially. Complexity is the enemy of mass acceptance. So vendors need to be careful about adding new bells, whistles and new revenue-generating services faster than the market can become comfortable with them

Size
The size of devices, dictated by the need for mobility, works directly against a premium user experience for many functions. The new iPhone is a major step forward, for example, and sets a new standard for browsing the Internet on a truly portable device. Yet anyone that would rather surf the net on an iPhone, rather than any real computer, would have to be classified as insane. As more compelling online services are developed specifically for mobile devices, this may become less of an issue. But the size constraints required to make a good mobile device work against wireless devices for many current applications. Here is where I believe that truly breakthrough technologies--things like speech recognition, holographic displays and virtual keyboards--are needed to make a real dent in this issue.

User experience controlled by Telcos
The wireless carriers have held a stranglehold on the user experience thus far in the life of cell service. Because of this, you have large, conservative telephone companies basically deciding on what users want and should have, in an otherwise technology-driven space. Most of their decisions are driven by their own short term revenue concerns, with little vision on what can grow the market exponentially in the long run. At the most basic level, you can't even take your cell phone and use it on a new carrier network. A few major technology vendors are pushing to open things up, such as Apple and the open browsing experience with the iPhone, and Google's recent attempts to make new wireless spectrum open. But the wireless telcos still have a stranglehold on the market and will keep things as proprietary as possible for as long as possible. They're terrified a being left as just commodity bandwidth providers, like their wired counterparts were in the dialup Internet market. No one on the carrier side wants to see THAT happen again. Because of this, innovation in user experience will continue to be stunted.

It's Just "Too Much"
As I mentioned earlier in this article, we're all becoming instantly accessible no matter where we are. I am an early adopter of many types of gadgets--a real tech guy. I am also an email junkie. I always expected that I'd be one of the first users of a smartphone that provided the proper balance between a cell phone and a computer/data communications device. Certainly these devices have been refined, and exist today. But by the time it happened, I decided that I really didn't need to be quite that accessible. I'm not an emergency room doctor, nor a high level commodities trader that needs instant access to everything. It's rare that I'm not in front of a computer to get email access within a couple of hours. And I can always be reached with a regular call on my cell phone, office phone, or home phone. Do I really need a device that provides instant email, instant messaging and cell phone access? With the convenience of that device comes the penalty of never having a moment's peace that is totally within your control. It's my opinion that as modern life has accelerated to warp speed on a normal basis, more and more folks are going to be rejecting the notion that 24/7, instant access is a necessity--let alone a convenience.

Summary
It is always difficult to forecast how such a huge, important market will develop over time. In many ways wireless communications has already commoditized, and in other ways one can hypothesize that these technologies are in their infancy. If they are truly n their infancy--then forecasting the future is a dangerous game. My own feeling is that we are at a very early stage--a plateau of sorts, which appears much like the steady-state commoditization of mature markets. But I expect that there will be a number of disruptive technological changes coming, separated by a period of years where the negative factors slow growth, over the next couple of decades. Wireless communications will hit plateaus where it appears the market has matured and growth has slowed. Then a breakthrough new technology will appear, changing the game and re-igniting robust growth. What will those technological innovations be--holograms, speech recognition, or large increases in data throughput capacity in the wireless spectrum? That's where the guessing game begins. How do you see this market? What breakthroughs do you see in the coming years? Post a comment and enrich our discussion on this interesting topic.

Phil Morettini
PJM Consulting
www.pjmconsult.com

Business Models in the SMB Market

The SMB market is typically a very popular topic for hardware and software companies. Every one wants to sell to the Enterprise market; as a result, competition is fierce and standards are very high. If you get to the Enterprise market early, with an innovation that creates a new category, you can find success if you are truly making a contribution to the market. But late entries into a market segment, as well as early stage companies competing with larger, established companies, often have a very tough go of it. In these situations, attention often turns to the Small and Medium-Size Business, or SMB, market.

And why not? At first blush, the SMB market appears to be huge, as well as underserved. It looks like a perfect haven for an early stage or turnaround company with a solid product, but not quite enough differentiation, brand name, or marketing muscle to push out the big boys in the Enterprise space. So the decision is made to focus on SMBs.


What's Wrong With This Decision?

There is nothing wrong with this decision, per se--if it's done with eyes open, for the right reasons. But too often, it is done to run away from a problem (the inability to penetrate enterprises), rather than run to a great opportunity. A lot of times, companies see the SMB market as easier turf; simply a larger, less competitive market than the Enterprise market. Major problems can result from this type of mentality, and I see it quite often in my consulting practice. Companies that enter the SMB market from this perspective usually aren't fully prepared to do what it takes to be successful, in what is a very different type of market than they may be familiar with. So where are the land mines in the SMB marketplace?


What's Not Obvious in Marketing to SMBs

The first thing to consider is that customer needs are often quite different. A lot of this depends upon what technology and market segment you are in, and whether your product is aimed more at the "S" (small) segment, or the "M" (medium) segment of the SMB space. For example, if you are selling a single user productivity tool which is useful staff accountants, you may not see much difference. If on the other hand you are marketing a company wide, networked application of some complexity, the differences may be huge. Like everything in technology marketing--the devil's in the details. Every situation needs to be evaluated closely, and treated differently on its individual merits. The most important thing is TO NOT ASSUME THAT THINGS ARE THE SAME BETWEEN SMBs AND ENTERPRISES IN YOUR CATEGORY. Do the work, evaluate the situation--don't assume. Assumptions, without verification, are what get you burned in this transition. Below is a list of some of the major differences in the SMB market:

IT Departments are small and less of a factor--if they exist at all.--In Enterprises you may be dealing with persnickety CIOs that want thing just so. In SMBs, if there is a CIO at all, he will be looking for an off the shelf SOLUTION that will "just get the job done". Or you may end up struggling to figure out how you can sell your complex solution, to a company that has NO IT DEPARTMENT AT ALL.

There is less money to spend--It's harder to make money with big ticket hardware and software, let alone customization and expensive services. Your products better have value - and margin - right out of the box.

Ease-of-use is even more critical--There probably is no training department or other corporate staff, and people are busier overall. If they can't figure out how to use it quickly, you're going to have a hard time selling it.

There is much less time available to purchase products--Even the sales process may be compressed, in terms of how much time the prospect spends reviewing your marketing literature, or talking to your sales people. The actual TIME ELAPSED during the sales cycle could be EVEN LONGER due to lack of time available to the prospect, but the INTENSITY of the purchasing engagement is often much less.

How Do You Need To Structure Your Business Model Differently?

Lower prices-- They just can't, and won't pay the same prices that you can get in the Enterprise space, in most cases. So you'd better come into this segment with a price and value proposition that makes sense to these price-sensitive customers.

Marketing vs. sales--The SMB market is more marketing intensive, with respect to marketing/sales ratios, than the Enterprise market. There are many more customers; the average sale amount is much lower, and much less face time available for direct sales. While in many respects Enterprises are the most demanding customers in the world, you've got to be a better marketer to succeed in the SMB space than you need to in the Enterprise world.

Low cost sales force-- With much lower average sales amounts, and much less time available on the customer side, it is usually impractical to have a large, high-cost field sales force. Inside sales forces are the general rule in this market. If you have a product that demands customization and hands-on support, VARs are a good adjunct to consider. The more they are taking orders generated from marketing, and the less they are cold calling prospects, the better.

Better usability and reliability-- You'll need many more units being sold to get to the same level of Enterprise revenue, across a much larger customer base, with much less (if any) maintenance revenue to fund a large support staff. Your product better work when it's installed and better be very easy to use over time. Unless you have a highly customizable solution and are using VARs as a channel, SaaS is a great platform for delivering software to this market.

Little or No IT support--The good news is that there is no prickly IT committee or staff that you have to "go through" to sell to the real users. The bad news is that if even the littlest thing goes wrong, there's no one internally at the customer to pick up the slack--you're going to hear about it directly from the user--over an over again.

Summary

The SMB market is actually a simplistic catch-all phrase for a large, heterogeneous group of markets. But it is a useful abstraction, as a starting point for understanding how to penetrate and thrive in B2B marketing to smaller companies. I hope this short introduction is useful--feel free to pitch in and post a comment adding to this topic.

Phil Morettini
PJM Consulting
http://www.pjmconsult.com/

Organizational Structures in Software & High Tech Companies

So you've put together a hardware or software startup company. Chances are you didn't give a lot of thought to what the next step should be in organization development--you just wanted to bring in some revenue and find a way to keep the doors open. Or, maybe you gave it a great deal of thought, even before you bound your initial business plan--there are quite a few anal-retentive planning types out there--you know who you are!

I don't mean to make light of this issue; it's actually quite a serious one. Let's look at a few of the questions to consider when deciding how to organize your company, as well as a few options.

IMPORTANT QUESTIONS TO PONDER

What are the strengths, weaknesses, and operating styles of the principals? I believe that this is a critical question to ponder, if one wants to organize the company successfully. One of my great examples is HP. Bill Hewlett and Dave Packard instituted a decentralized structure almost from the very beginning of Hewlett-Packard. They were careful to keep the units small, by breaking them up as they grew. In my opinion, this was one of the great drivers of HP's success, and worked well because it suited their personalities, as well as the folks that they hired. They believed in "Management by Walking Around", but also believed in motivating high performance by allowing their employees to use all of their talents, without unnecessary constraints. It seems simple, butit is often hard for managers (especially hands-on, entrepreneurial types) to give their employees enough rope and space to excel. I believe that this hands-off, decentralized approach only worked well because this style fit with Bill and Dave's personalities.

What are the key personality traits of your employees and target hires? Similar to the question about the principal's above, the organizational style needs to fit with the "personality" of your company, the culture. If you have a lot of type "A", self-motivated people with strong leadership skills, a decentralized org chart may fit better than a hierarchical, centralized approach.

Are there disparate technologies within the company? This is a big driver in deciding how to organize. If you have several different technologies, how do they fit together technically--if at all? Do they fit together from a market perspective? If there is a lot of synergy or need to coordinate between technologies/products, a centralized, hierarchical approach may work best. The less "fit" that there is between your core technologies or products, the more inclination I would have to organize using a decentralized, business unit approach. This assumes that the resources are available for a decentralized organization. But if resources are so scarce that you can't decentralize properly, does it make sense to try to be successful with multiple disparate products/technologies anyway?

Now let's take a look at some common ways to organize.

ORGANIZATIONAL OPTIONS

Hierarchical/Functional/Centralized - the classic organizational style of traditional businesses. The strength of this type of organization is that it is easier to optimize each function, as there are more resources available within each function in a centralized approach. This can enable a more sophisticated approach to best practices. On the downside, my first job was with a Big 3 Automotive manufacturer, which was VERY hierarchical and centralized. The company was SO hierarchical that it paralyzed the organization to a huge degree; trying to get even the simplest, small thing done had to go many levels up. It was like trying to turn a battleship on a dime, and really painful. I'm not a big fan of this style for larger organizations, but for smaller, single-market or single product companies, it generally is optimal.

Decentralized/Business Units - This is the polar opposite of the traditional hierarchical organization. It's my preference for growing companies who are starting to "spreading their wings" beyond their initial market or technology focus, as well as for larger companies. It's strength lies in the ability to keep lines of communications short, keeping personnel close to the marketplace, and motivate self-starters by providing more positions of broad responsibility. For medium-sized companies, the danger lies in decentralizing before there is really critical mass to run separate business units, which comes with some added costs due to duplication of functions. One good way to mitigate this is to centralize and share as many of the non-product specific functions as possible, such as finance, HR, quality control, etc. The key functions that absolutely need to reside in the business units are usually marketing, product development, possibly manufacturing (for hardware companies) and occasionally sales.

Product-Centric or Market-Centric- This is a variation that can be combined with either of the two major organizational structures above. For example, within your marketing department, there could be people assigned as product managers, or as market managers. Sometimes a hybrid approach is used, where there are product managers for unreleased products, and market managers for currently-marketed products.

Matrix - This organization style is "overlaid" on top of a more typical organizational structure, such as the types discussed above. The main idea is to set up "dotted line" teams, responsibilities and reporting structures that are desirable, but fall outside of the normal way a team is constituted within the main structure in use. For example, in a hierarchical organization, you might set up a matrixed, cross-functional team to put focus on the launch of an important new business initiative. This may give the new initiative more emphasis than it normally would get, given its modest contribution to the overall business at that point. If used properly, matrix management techniques can be a great way to dampen the negatives that are inevitable in any rigid organizational structure. It must be used with caution, however. If used too frequently, or without endowing the "head" of the matrix with real power to accomplish the desired goals, matrix organizations can quickly become ineffective and politically driven entities--and the butt of jokes around the water cooler.

This is just a quick take on a very complex topic. There are many different ways to organize a software or technology company for success--too many to discuss here. And we just touched on a few of the issues to consider. Hopefully this short article will stimulate some thinking on this topic, to avoid organizational structure which often form haphazardly as companies are started and grown. Post a comment if you have a take of your own.

Phil Morettini

PJM Consulting

www.pjmconsult.com