Software maintenance: what have you done for users lately?

9 04 2009

I have several friends on both the vendor and customer side of the enterprise software fence.  The vendors always rely on a blend of license revenue and maintenance fees to pay the bills.  Sure, they do some service (consulting, installation, etc.), but the ratio of license revenue to maintenance revenue is the yardstick by which the health of a software vendor is measured.

In today’s economic times, I’ve heard many of their customers talk about going on a “maintenance holiday” (a “version staycation”?) in order to cut costs.  After all, many software applications and infrastructures that are in place today aren’t going to get upgraded in the coming 12, 24, or 36 months unless there is a mission-critical feature added or addressed in a vendor’s product.

To prevent this, some vendors have put in place a measure of protection.  Sometimes these show up as maintenance-lapse penalties which are more of the “stick” side of the balanced “carrot and stick” equation.  This usually results in user grumbling.

A user-mandated, semi-collaborative approach comes from SAP’s base.  In response to its users, SAP has created a practice to measure the value of their maintenance contract with customers in order to justify the expense.  It will be interesting to see how that story develops.

But there may be a more proactive way to go.

Vendor revitalization strategy: remain relevant

As the SAP example suggests, the rules are changing in more places that just the economy these days.  We’ve watched the government provide stimulus packages to revitalize the economy, but for most of us, the benefits will be fairly intangible.  I believe vendors have the ability to make a tangible difference to their users by creating a stimulus package of their own.

Vendors should adopt the three R’s: be responsive, relevant, and required for success.

Clearly the best way to do this, if you’re a vendor, is release something so compelling that customers will flock to it.  But not all vendors have the next-generation iPhone or Palm Pre up their sleeve.

Another approach is to adjust licensing policies to encourage wider adoption of a product or further “adhesion” to the platform. Continued customer reliance on a software platform is like an insurance policy against being “ripped and replaced” (a disruptive act for everyone), or “congestive software failure” (where your product just atrophies in place and is consumed by something else).

You can see evidence of this from Microsoft as they court developers away from the LAMP stack (open source tools).  Over the past few years, they have released very capable, free editions of Visual Studio, SQL Server, and a mashup tool (Popfly) for free.  Most recently they have released SharePoint Designer for free in concert with their open sourced ASP.NET MVC Framework.  This is all to stimulate their developer base and get people in the community to use their tools to make new components like Silverlight into compelling offerings.

Create a hero, be a hero

Out there in user land, the prospects are bleak.  Layoffs and belt tightening may also mean that a vendor’s champions inside a company will disappear.  Once that happens, the vendor’s product could “go legacy” and be the next target for consolidation and “standardization” (i.e., migrate to your competitor’s product).

Vendors should realize that any team leader within a customer worth their salt will be in a protectionary mode.  It’s a fight for survival.  They will be trying to demonstrate the value of their team to avoid being part of the next wave of cost-cutting measures.

So, vendors, listen up: if users can find a way to replace or prevent the acquisition of a vendor’s software product in exchange for saving their team from layoffs, you can bet that software licenses and maintenance fees will be the first to fall.  I’ll post on that later.

This is why I’m calling on vendors to invest in becoming the ally of their customers and users.

The buyer persona of a company isn’t enough to address. Vendors that want their maintenance fees paid or their software upgrades installed must take an active role in making their users succeed as well.  Keep those users as your champions and your software will remain relevant.

Vendor stimulus packages

Vendors have ultimate flexibility in this situation.  By working out creative licensing terms or enabling a feature that the customer or user has been trying to justify purchasing, vendors can maintain an active, positive presence at a customer and become part of their economic success story.

Another approach is the help users use your existing product for something that is new and valuable to them.  I don’t mean go build it for them, but pony up the training, webinars, or prescriptive whitepapers and architectures to help their teams build the thing that will be valuable enough to save their jobs AND assure your place in their hearts (and wallets).

It could be true that there are some vendors that are “too entrenched to fail.” But, user and buyer morale is still important to maintain lest that software product become “too entrenched to upgrade.” 

Look for competitive vendors to examine fallow customer bases and create programs to migrate customers away from existing platforms.  In some cases, software that’s difficult to upgrade represents an equal opportunity for replacement to a user.  If a responsive vendor courts a customer and portrays equal or greater value plus a “low switching cost” to the customer, some established players may not be so established anymore.

Economic necessity is the mother of user innovation.  We will see creative uses of products that become “good enough” to replace or postpone purpose-built products.  Let’s talk about that in another post later on.

For now, be responsive, relevant, and required in your customers’ recovery plan.





The Usable Smart Grid

8 04 2009

Thanks to a media blitz, my mom now asks me what the heck a “Smart Grid” is.  It’s good question.  Obviously, it is a utility’s strategy for better demand side management.  But actual utility / consumer interaction plans vary.  Some envision the “house of the future” with smart appliances, and other strategies are just “reach out and shed someone” (remote control thermostats and pool pumps).

I contend, the “smart” in “smart grid” comes from consumers.  The success and utility (pun intended) of a smart grid rests in consumer adoption and behavior change.

Obviously, the term “smart grid” is overloaded.  But let’s consider how all consumers can smarten up the grid through direct action.  That means creating a simple way for all consumers to be aware of their energy use and how changing it will positively effect their cash flow.  OK, and perhaps their environmental impact.

In the conferences and meetings I’ve attended, I have only been obliquely exposed to the vision of how the customer interacts with the household-level information (usually via a web site).  One paper that came closest to addressing this in a more ubiquitous way was from Northern Europe.  Europe’s always pushing the envelope…

Conservation: Enabling informed choices at Home Depot

Efficient products are great, but as a CEO of a northeastern US utility pointed out, there is a socioeconomic aspect to this mode of energy conservation.  By pushing rebates for “greener appliances”, they were able to help people switch their buying habits.

It’s a fair point.  When I lived in Boulder, CO last year, many people there could “afford to be green” (coincidentally where Smart Grid City is). Let’s face it, there can be a premium associated with buying environmentally better products (whether that’s good, true, or green-washing is up for debate). 

Rip and replace strategies for demand side management / energy saving are basically single-action behavior changes (replace something wasteful with something that is less-so).  The consumer behavior may not change, but at least the energy footprint is smaller.

Examples include:

  • Replacing incandescent light bulbs with CFL’s
  • Identifying and replacing appliances that use the copious amounts of energy

Obviously, even before the recession hit, springing for a new refrigerator or dishwasher wasn’t at the top of everyone’s mind.  Especially if the actual economic return on investment is fairly small (10 year payout?  Hmmm…).

Active participation presents greater opportunity

At its most basic level, the smart grid could give everyone the opportunity to use a ubiquitous component in a smarter way: the on/off switch.

Everyone can turn something on or off – no upgrades needed. The smart grid should just tell them when to do so. 

The catch is – the information has to be available to all and simple to understand.

The key to active consumer-based demand side management will be adoption and culture change of habitual or unconscious behaviors.  This is an uphill battle in any circumstance. 

Realizing the potential of peak-shifting (moving peak energy demand to off hours where cheaper and / or cleaner energy is available) in a post-smart grid world goes beyond a smart meter installation.  It’s about framing the information in a usable format for the consumer.

We built it, but nobody came…

I’ve heard more than one utility mention that they want to develop a better relationship with customers by offering them more personalized information on their own utility web site.  That’s probably going too far for the average consumer.

Today, most people interact with the power company monthly by getting a confusing billing statement, then writing them a check.  If you have e-billing set up to auto-pay, you probably never even see a bill.

So, what if the utility framed the information in an always available, intelligible, and actionable format?

For many age and socioeconomic demographics, utilities must consider something as simple as a dedicated widget (maybe it’s their smart meter, but maybe not) that helps the consumer know:

  • Should I cut back on energy use now?
  • Is my rate going to change due to use?
  • How much energy am I using right now? (this may help pinpoint energy vampires in the home)
  • What’s the current “fuel source” (e.g. wind, solar, coal, gas, hydro etc.)?
  • How much will I save if I do my laundry an hour from now?
  • How much I have saved so far by setting my thermostat to 78F instead of 75F?

That’s a lot to digest – and it’s probably more information than the current price of energy provided by the smart meter itself.  Whatever it is must be intuitive, located somewhere central in the house, and low (or zero) cost.

The “drive-by” experience

Let’s consider the “at-a-glance” use case.  If you’re carrying a basket of laundry by something with a red light on it, you might consider doing that load of laundry later.

Simply augmenting the energy meter / device with something eye-catching and visible from a distance makes it so someone can effortlessly assess whether to change the thermostat or turn on the hot tub.

An example of this I’ve seen featured a South Korean pilot project that installed a series of lights over the household’s main door.  Fewer lights on meant rates were cheap (i.e. do laundry now!).  No usage numbers or pricing, just something you can see from across the room.  However, it lacked further detail and insight.

Adoption = success

If something provides extremely high value to a user, it almost doesn’t matter how hard it is to use… it will be adopted.  But the reward of the smart grid is going to be reaped by both the utility and the consumer.  Arguably, active consumer adoption would present the utility with even more reward (and will that be passed on to the consumer?).

Using the principles of “interaction design” to make the consumer side of smart grid work in the way that actual consumers behave is something I’ve yet to see demonstrated by a utility in their discussion of smart grid.  It’s the key to making more consumers active participants in smart grid.

Relying on technologies like computers, text messages, and the Internet will limit who can participate in the smart grid.  It also assumes a high consumer interest level (which is fine if there is a huge reward).  That doesn’t mean eliminating that web portal experience though…

Having an immersive web site experience is still a must (Smart Grid City includes energy portal screens as well).  Even if a consumer never logs in, knowing this portal exists is comforting.  However, the utility will likely achieve their peak shifting goals if they make smart grid participation simple, easy to understand, and available to everyone.

To really save energy, smart grid should totally empower consumers. 
That starts at simplicity, usability, and consumer adoption.





Microgrids – an information and energy revolution

6 04 2009

One of the keynote highlights (both at the beginning and end) at this year’s OSIsoft User Conference pertained to the novel intersection of energy and information.  A similar topic addressed frequently by Daniel Yergin, chairman of Cambridge Energy Research Associates

The basic tenet is that information and brainpower will always defeat an energy crisis.  This is something I believe quite strongly, and it’s no secret that Pat Kennedy (founder of OSIsoft) thinks he’s both got the problem described, and solution nailed with OSisoft’s product.

I’m also involved in the renewable energy revolution, and the work I’m helping do in that area harnesses the power of information to transform the reliability of renewable resources… but more on that in some other post.

Pat Kennedy talked about using information to fuel a localized, business-park level energy production and distribution design called “microgrids”.  Basically, small islands of businesses (and perhaps residences) that can produce power, utilities like steam and chilled water, and can operate independent from the grid if needed.

The upshot of a microgrid is that it can lead to a better use of energy – every BTU spent in power generation is maximized because of very tight energy integration to other utilities required by process manufacturing tenants.  Fuel spent on firing a combined cycle gas turbine is then converted to heat for making steam, which is then used by other tenants in the park, which can help drive machines to do other work.

Renewable energy can also play a part in these microgrid designs.  Solar rooftops can run the street lights or anything else that can operate during the day.  The same goes for wind, though decoupling both these renewable resources from the actual electrical grid in the microgrid would help keep it stabilized.  Renewables would be focused on creating energy required to do things that don’t have a direct impact on the grid frequency, but do reduce the energy demand on the main power generation units. 

Like powering a new kind of HVAC technology…

At the end of the conference ICE Energy discussed their product that results in electrical peak load-shifting on the demand side of the energy curve.  They can diminish the cooling load required for business buildings or industrial applications by creating ice at night when energy is cheap (often renewable since wind power works best at night), and plentiful.  During the day, the ice melts, and as any good chemical engineer knows, the latent heat of the ice melting is then used to provide air conditioning.  That reduces energy demand, and therefore customer expenses during peak-use (and rate) times.

Of course, ICE Energy uses OSisoft’s PI System to help manage and instrument their machinery.  So it’s one big happy, real-time data family.  But the results are important:

By combining innovative energy consumption and production / distribution technologies and monitoring everything in a high fidelity, high speed way, it’s easy for any engineer to make a microgrid work in its most efficient way possible.  It’s like the “Prius effect”.

By scheduling the operations of the microgrid’s tenants to move their peak demand off to cheaper hours, tenants will operate in the “energy sweet spot” where their operations become both cheaper and more sustainable.

What’s the catch?

Policy.  Right now, any company that employs co-generation assets is not allowed to sell their energy out to the main grid.  They can use it on their own, but due to regulations, they are not allowed to work in the energy market at large – which could be quite profitable for a very efficient generator with spare power during peak times.

Microgrids can offer some shelter from the current policies because under the auspices of a landlord / tenant relationship, the utility provider can make the utilities they offer part of the lease agreement.  But it’s not quite as flexible as being able to plainly work as utilities do with their customers.

It’s an idea that’s catching on, and it’s all about leveraging information from both inside the business park / microgrid, and outside.  To see an example of this in practice, visit http://www.eastmanbusinesspark.com.  Eastman even offers up energy analysis optimization services to keep tenants on track with efficient energy practices.

It’s all about the data… everything must be instrumented, analyzed, and watched for ultimate efficiency gains.  And those gains could be substantial.





The OSIsoft Users Conference 2009

3 04 2009

About every year, OSIsoft holds what can only be described as a love-in for their company and customers.  It is truly amazing how their users come into a software conference with bright eyes and bushy tails, eager to learn something new and see all their friends again.

I should know, since I’ve been to these conferences for 10 years and directly participated in 13 of them (one year they did 4). So, yes, I have more of the inside track that most attendees since I used to help give their keynotes etc.

This year marked the 20th annual conference event, and it was good to see the user enthusiasm hadn’t diminished.  In fact, larger partner companies that attend are often surprised at the undeniable user excitement.  I overheard some anonymous Microsoft attendee commenting about how “your users really do love you!”

That user affection of course has grown out of producing products that solve a problem and also an image of being a “family” or the “little guy” in the market.  OSIsoft isn’t little anymore, though with over 600 people working for them, they certainly aren’t a Microsoft, SAP, IBM or any other company that a user might have to contend with.

OSIsoft does help these companies become more accessible to its users by contextualizing their products for the process industries.  I’ve been involved in many collaboration projects with Microsoft or SAP and OSIsoft that really showed off the benefits of the partnership between the larger player and OSIsoft.

Another reason for the user loyalty is that they feel well taken care of on support matters.  That means they often get through to a support engineer on the first ring, and know they’ll eventually get in contact with a very skilled individual if escalation is in order.  Users also know that if they come to the conference, they can talk directly to a developer.

So, it’s always fun to see my friends again, and rather than give a blow-by-blow account of the conference, I want to discuss some of the connections and take-aways that I observed from both sides of the fence.