Outsourcing: Raju Reddy, Chairman And CEO Of Sierra Atlantic (Part 3)

By guest author Tony Scott

Technology-Enabled Services versus Products

Tony: So that brings up a question, because there is obviously a big difference between doing a pure services play, doing a technology-enabled services play, and being a technology product company. How do you manage that within your organization? Each of those requires different kinds of skill sets, different kinds of talent, and different approaches to the market. With this new product you are talking about, have you thought about truly fully productizing it as a stand-alone solution that you go to market with?

Raju: What’s happening in the enterprise software market and in the overall software industry, is that the line is starting to get blurred. Of course, there’s this whole idea of software as a service, right? The line between what is a pure license software play versus a service-enabled software play is becoming blurred.  In some ways, I think the landscape is changing irrespective of what service companies like us should be doing. So, my sense is that a significant component of any overall solution will come from delivering software as a service and not just purely as a license.

Tony: Right.

Raju: But could our new banking product and other products we’ve created out of our IP become a completely independent software company?  That’s absolutely conceivable.  If you look at our history over the past fifteen years, there was a proof point of that early on. Right before or at the moment when we raised venture money, we had built an object middleware layer called Object Gateway that we spun off as an independent company funded by Mayfield. It was eventually bought out by Cognos, and it became a component of Cognos’s main BI query tool.

So, yes, it’s conceivable, but I am not starting out of the gate with that as my objective. I am just saying there is a real business problem to be solved in the industry. We will approach the idea of software as a service through IP partly because that’s the best way to address a customer problem and partly because that’s the best way for us to differentiate ourselves from companies such as TCS, Infosys, or Accenture that obviously also have a lot of these banks as their accounts.

My footprint in these large banks is probably going to be a very small component of the overall services play, but it could be large enough for a company of our size. If we end up doing $10 million of business a year, that may not be so big for an IBM or an Accenture, but for Sierra Atlantic it can be a sizable amount.  Again, this goes back to our trying to be the best-in-class services company, back to Geoffrey Moore’s “Crossing the Chasm.” Every market has its gorillas and then its monkeys that get nothing but the peanuts, so we are trying to be the equivalent of the chimpanzees [laughs].

This segment is part 3 in the series : Outsourcing: Raju Reddy, Chairman And CEO Of Sierra Atlantic
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