WACC'99 Comments

Gregory Alan Bolcer (gbolcer@endeavors.org)
Sun, 28 Feb 1999 12:07:13 -0800

Professor Malone,
I really enjoyed your keynote speech at WACC'99. I met one
of your research associates (Quimby) at the 1995 DARPA workshop
on process technology, and the process handbook ideas have been
a guiding research light in my project here at UCI under the direction
of Dick Taylor. A friend of mine is the new media director over at the Atlantic
Monthly, we have been engaged in an ongoing discussion on the nature of business
and virtual enterprises every since the Drucker article came out.

It was a pleasure to see your interests, importances, and conclusions
typical parallel our own experiences. However, I wanted to make one
comment concerning mergers and acquisitions. I was able to attend
a 'tech coast' corporate investment and strategic alliance workshop
the other week in Costa Mesa. When companies buy other companies,
it's not to cash in on the economies of scale of the industrial age,
but to gain access to much needed human resources and innovative resources.
Large corporations typically have a shared corporate umbrella, but the
overall company is near meaningless. The assessment of the corporate
investors I spoke with in software, telecom, and Internet industry say
that they just need semi technical warm bodies to keep it alive, but each
of the divisions are semi-autonomous. Bringing them into a corporate
structure forces them to share a common corporate 'patriotism'.

I was happy to see you mention Linux on your slides. Our experiences
are with the Apache HTTP server. One of the Apache co-founders
is across the hallway. Linux has about 30% of the Server OS market, Apache
serves 56% of all the pages on the WWW. It's been cited by Jobs, Gates,
drove Barksdale's decision to open source the Netscape browser and Gerstner's decision
to scrap their own HTTP server and integrate Apache into their e-commerce lineup.
Apache is also a virtual enterprise in itself. Our group tried to distill
how exactly the Web would need to change to better support virtual working
groups based on our Apache experiences. If you haven't read it already,
you might be interested as it parallels your own experiences and conclusions.

I was also very interested in your film industry comments. I have been working
on the Endeavors project at UCI for several years now. Our approach
is very similar, however, the driving motivation has been a 'marketplace'
approach to processes, ftp://liege.ics.uci.edu/pub/arcadia/c2/C2-ICSE17-SAWS.ps.Z,
although I'd be hard pressed to enumerate the significant differences from
the process handbook other than we want to ensure that the end-users
also have the ability to read, write, reuse, compose, trade, execute, etc. the
processes. The Endeavors group (my research project) have been speaking with
Sony Pictures Imageworks for the past year or two. As you know, the
film industry, particular the digital film creation sub-industry fits into
your e-lance concept. Intra-division companies are set up on a project-by-
project basis. We studied how SPI accomplished this for Godzilla, City of Angels,
Mortal Kombat, Contact, Anaconda, Starship Troopers, etc. Each of these
virtual corporations have fixed time, fixed resources, multitude of skill sets,
talents, terminology. What it boils down to is that the digital film creation
industry is extremely cooperative, extremely dynamic, extremely high paying.
Personnel flow through was rampant with people changing affiliations almost
on a week-by-week basis. The picture industries attempted to control this
with year-by-year contracts, but the price of signing a year-by-year contract
meant that they had to pay more, up to $200k per talented individual (one of
my friends at SPI has academy awards and others have been nominated multiple
times allowing them to command their own salaries).

In addition to this, the industry went through busy and dry periods where
they had to hire hundreds of artists, modelers, programmers, computer graphics
supervisors, gophers, technicians, etc. for a busy job and then lay them all off after
a couple of months because the budget didn't allow them to keep them all. Imagine the
decades long business cycle of traditional companies like IBM or AT&T condensed into a
of several months. The equilibrium of all these effects has turned out to
be the following: companies are now cooperating on an unprecedented scale
in the digital film industry across organizational boundaries. Projects,
that once the bid has been cemented, are outsourced based on their ability
or inability to complete them on fixed time and price. Competitors on a bid,
after that one instant of a decision, are now crucial collaborators. Winning
100% of a bid and outsourcing 40% of it is the same as losing the bid and
winning 60% of the outsourced project. Thin in essence has stopped the
personnel churning. This again, parallels your corporate structure comments
on the corporate structure for Topsy Tail and Nokia's American division.

If you want to look at the future of business, I think that the transition and
equilibrium of the digital film creation industry shows the path the
industries on the whole are on. Finally, if you are interested, we tried to
collect up the requirements of process, workflow, groupware, and agent based
systems to address communication and coordination problems based on our experiences.
This paper will appear in the Journal of Software Process Improvement and Practice
at some point when I finish all my edits, but I'd be very interested in any
comments your or your associates might have on the paper.


My last day at UCI was Friday, I am in the process of starting my own company
working on cross organizational workflow processes for various mobile platforms
and vertical markets. I am in the middle of trying to negotiate licensing my
own research from the university, landing funding, etc. We have several very
interested VCs and CIs and customers, so it's going to be a fun and frantic next
couple of months, but you can send any comments to the address CC'd at the top of
this mail.



p.s Friday, Feb., 26th Wall Street Journal has an interesting article titled:
"A New Model for the Nature of Business: It's Alive!". Petzinger makes the
argument that we are transitioning to a natural over mechanical model of business,
excerpted from "The New Pioneers". Interesting stuff.