Vlad Mazek – Vladville Blog

Chronic Payment Latency Syndrome, or CPLS, is the modern version of “check is in the mail” and is something your A/R can share with you along with many funny stories. Things like:

My card was lost/stolen 2 weeks ago, Amex is shipping me a new one.

My card has expired, I am waiting for a new one.

Please try it again, I am not sure why it would have failed the past two weeks that I haven’t been paying the bill.

These excuses used to be tied to deadbeats exclusively, but the new world of credit is making us all look like criminals while banks slash their credit lines, credit cards bring down the limits and credit commerce comes to a grind. We have heard some real horror stories from some of the more established companies we deal with and the world of “corporate credit card” is slowly coming to an end.

You still have bills to pay though!

So here is a little tip.

Figure out which bills are fixed or relatively close to reoccuring. Your cable, Internet, power, rent, cell phones, wireless cards, parking, insurance, etc. Budget it.

Obtain a secured / prepaid card. You can get them from Visa, you can get them from Amex. Some will even let you earn miles. Most have a service charge, $2/month.

Now, here is the trick. You can control your credit and spending and vendors by having a card for each, or card for each industry. This way your overall credit line does not get impacted, nor does your staff have to rush to find a new card when your “business owner” card gets lost, stolen, compromised, cut down.

Banks are all too happy to issue these cards because they are backed by cash and refueled each month.

Why bother?

It takes infinitely less time and hassle to proactively manage your credit and your spending, than shifting your spending from card A to card B, risking service interruptions, disconnections and reconnection fees after the fact.

Let’s face it, this is ugly, but it’s the economy we are in. Everyone is trying to control their risk and their spending, and you should too.

I really enjoy reading biased H1-B articles that pin the unemployment market against the evil corporations that need highly skilled workers. You can read one here, published on Friday. One notable quote jumps out:

Businesses like Google (GOOG), Intel (INTC), Microsoft (MSFT) and Cisco (CSCO), on the other hand, want them to stay, and stay permanently.

Furthermore:

Employee unions and some politicians will say bon-voyage. They’ll argue that for each foreign-born worker hired in the U.S., a local worker loses a job. It’s an argument that plays well in the current recession as millions of jobs evaporate.

This zero-sum black-or-white game is a great way to keep people from seeing what this is really about: voluntary slavery.

Yes, I know people are as afraid of that word as they are of topics touching abortion or religious choice, but when people are down they need someone to blame for it.

It’s not that corporations value H1-B because they are smarter or more qualified – they aren’t. They value them because they are voluntarily tied to the employer/sponsor and have everything to gain by staying with the employer and making them succeed. By comparison, Americans are free to demand raises, benefits, equity and more or they will go elsewhere.

The state of complacency and entitlement are ruining the American enterprise. It’s not India or China. Believe me, they are far, far, far, far, far, far, far, far more abusive of their natives and you can see evidence of it every day in your inbox. For every discussion I have with Vijay about India being a nation of highly skilled, professional individuals that are trained and competent I have at least 100-200 SPAM messages trying to sell me Indian programmer by the pound. I am not saying that to be disrespectful, that is exactly what I am being offered by hundreds of Indian and Chinese outsourcing companies – I can buy them by the hour, by the day, or I can scale them variably depending on the hour and load or upgrade them by competency. Imagine driving a truck full of computers to the Home Depot parking lot with a power generator and having them reload Windows all day long on broken computers. That is the harsh, ugly reality – on a global scale.

Yet, what it all comes down to is motivation. I have plenty of people on my staff that work crazy hours, that pull double shifts, that produce and handle stuff that nobody asked them to do. On the other end, I have a lot of people that start work at 9:01 and end work at 5:31 – their output sucks, their attitude is bad, they complain all the time – because their concern is not the benefit of the company and all it’s employees – they are most upset about THEIR comfort zone because it’s all about them.

By throwing away H1-B folks who we have cultivated to be competitive hard workers we empower the climate of complacency and entitlement and reduce competition. I have no problem with India and China getting skilled workers.

Our problem isn’t that we aren’t smart.

Our problem is that we just don’t give a ****.

My last post titled Game Over raised some eyebrows. I got a ton of very interesting feedback from all over the spectrum (as far as I can match you to your revenue/company size within OWN via SM).

The responses fall into several categories:

1. There is no future in commodity services because there is always someone that will be cheaper than you.
2. There is no future in IT consulting and VAR/MSP business because it’s highly standardized and it will be owned by Dell/OnForce.
3. There is a lot of money to be made in the IT consulting space because we are trusted advisors and our clients were already disappointed by the big guys.*
4. There is a future with the MSP model being used to support and grow a custom solution / development business.
5. Your usual SPF references to trusted advisor, outsourced CIO/CTO, ethical IT consultant, etc that don’t deserve a mention.

Out of the five, I think I only take exception to #3 because as history shows us, ambitiously incompetent companies rarely find themselves in the gutter. It’s the edge cases that think they are better than everyone and that the market is right that end up with a closed sign. Which I was hoping to address in the Game Over post.

I think the world is done with edge-case scenario. Things are moving mainstream very quickly and the “IT as a Service” is no longer a viable business model. Look at the carnage in our markets, who is left standing in SMB? Guys that don’t mind making $35,000 – $50,000 a year picking up hours here and there because they are completely unemployable and MSPs that are trimming costs while establishing an SLA for a company that’s used to crashing and burning often.

That’s great, we’re all kicking ass now and taking money to the bank.

Some of us are wise enough to take some money out of IT completely and take advantage of some new opportunities that we find ourselves in right now as the economy is in the tank.

However – if you are to continue to pursue an IT business or a career – you have a decision to make.

How are you going to compete with the big boys? I’m not is not an answer. They will outmarket you and eventually lock you out.

Do you have a solution comparable to Gmail/Live.com/BOPS that is flying under your flag and isn’t directly competing for your client? I don’t care is not an answer because the overall market does – and it’s a trend that is going to continue.

Do you have supplementing/complementing business lines? I don’t need to is not an answer because with the level of uncertainty we have with the direction the market is going, the rapid changes in remote access, mobility, SaaS, portals and more you can’t afford to be on the wrong side.

You can gamble.

Or you can be smart.

It’s the second quarter of the year, time to write one serious post without the Vladville act. I’ve decided to make this once-a-quarter event as to not distract the audience withe unfortunate reality (but tremendous opportunity) we find ourselves in.

I don’t have to tell you, you already know it – servers aren’t selling. Projects took over but that is slowing down. Even the almighty Microsoft and Google are slashing jobs, not to be outdone by every other industry other than my friends in Van Nuys and mail-us-your-gold shops. It’s a good time to be a repo man. It’s a bad time to be in anything expensive.

Now, knock on wood, things are still growing in the IT space. Unfortunately, the growth is coming on the back of things that are not scalable (projects) and on top of the minimalist solutions that do not have a high profit margin or high service footprint. The longer this goes on, the less likely we are to ever sell premium solutions because as the story goes… “it’s good enough and it’s 1/10th the price, so you go ahead and sell me on it.”

But this is not about the doom and gloom.

Let’s face it, if you’ve made it this far, you’re doing something right.

Whether you’ll be in that group six months out remains to be seen though.

That goes for everyone, OWN as well.

Yesterday I had a relatively painful conversation with a guy that got laid off at Microsoft. Here is the comment:

“ouch.  the only way to survive in this economy is to sell cheap sh*t that will break, but people can still afford.  I love hearing sales called on the floor – “product x is down y%!”.  maybe they didn’t get the memo.  in the meantime, people get the boot”

The premiums and luxuries in the technology are rapidly being slaughtered in the back yard. Gmail is replacing Exchange. Linux is replacing everything on the cheap side and that turns out to be the only thing that will sell.

Like it or not, the whole world of “outsourced CIO” is rapidly sunsetting. We first saw this as your lowest of the low, unemployed IT consultants, SPF and riffraff disappeared almost as quickly as they appeared. Now legitimate companies are having their credit lines slashed, losing good people and being forced to downsize and cut services.

What is replacing them? Why DIY of course.

You don’t need a CIO to setup Gmail.

You don’t need a CIO to order a laptop from Dell. (you apparently only need to wait 6-8 weeks)

You don’t need a CIO to purchase or install Quickbooks – I know firsthand, Intuit will do everything they can to get you going.

So….

Here comes a big question….

That will determine whether you survive or not….

Where is your version of the Gmail, Netbook or Do-anything-to-deploy-a-service that can’t be replaced by a guy down the street?

Trick question, there is no such thing.

Most people will even ignore the temptation to participate in the commodity market. I can’t blame them, if you only have short term focus and don’t care about trends or building careers for people, it doesn’t matter. Hit it while you can, stash the cash and move on.

However, the danger we face right now is rapid growth of our little company in a rapidly shrinking market. And once we lose those customers to Gmail, they are not going to come back. At least not in the volumes needed to grow a serious business.

And forgive me, but I’m an entrepreneur, not a priest. I don’t need to help people see the light, accept Exchange as their voice and so on and so forth. I want a huge market, a niche product and have people line up to give me money. It’s worked for 12+ years 😉

Now, show me the money..

One thing that most of OWN (well, all of OWN except me and the people I can reach out to smack) has been doing for the past 6-8 months has been the development and launch of a low cost all inclusive service.

Why? Well, it turns out when you remove all support, all enterprise, all redundancy and all the effort that is put into running a global enterprise network, you can create a crappy local one for a fraction of the cost. I’m a little angry that it can operate at a higher profit margin than OWN, but that’s just personal 😉

So we’re branching out and providing an answer… because, honestly… I don’t know who wins here. Cheap/free and massive or expensive and exclusive. There will be a market for both, but I am not willing to pick sides. I’m just in it for the money and service.

One warning I have for everyone is that if you pick one, and pick poorly – you are finished. I personally have little faith in the expensive and personal because it’s not like the cheap solutions are out to screw their clients – and as they improve it gets harder and harder to justify the more expensive alternative. And when it gets to the point that the next viable alternative is just a few dollars a month, switching from one to another is no longer very compelling.

Just economics and business realities.

I’ve blogged repeatedly about some mistakes we’ve made during the growth surge that has not yet showed any sign of slowing down. Initially, we focused on just keeping things going and fixing things as they broke. Then we fixed things, but new problems came up when folks stopped watching. Eventually, we had to overhaul how we do things and enforce process control at every step.

Say hello to Monkey Enforcer:

This new feature in Shockey Monkey goes a few steps past the requirements set out by our SAS70 Type II audit. Specifically, it forces people to keep their records up to date. If things like addresses, contacts, phone numbers or credit cards are missing, invalid, expired or soon to expire – the system will force the user to update them.

Extending that to the phone support, surveys and process controls – It will be easier to check identity of callers, match up surveys to support requests and engineers, track activities.

So what kind of a problem does this address, other than piss off the deadbeats and people that put in fake credit card numbers? Well, a few:

1. It makes sure that there is a financial agreement in place before any service, complimentary or billable, is rendered.
2. It makes sure that all contact information is up to date.
3. It makes sure that all the financial information is up to date, so it puts the burden of managing credit card expirations and modifications where it belongs – the cardholder.
4. It secures access across all fronts – no email forges, no VoIP tricks, no support unless you can validate your phone password.
5. Surveys tied in with tickets and crumbing..

That last one is pretty important to me because it gives me full audit control over eeeeverything. This is critical. Most of the time when I do get negative feedback I get it over something I am not able to back up with the information in my portal. In those cases, the customer is always right because I really have no concrete data to present…. till now 😉

Looking forward to the business life with a whole lot less mistakes. And yes, this is in SM3.