Gary Barnett's Blog

Richard Holway posted this morning about Kashflow (a small but growing UK-based software company that offers accounting software via software as a service).

In Richard’s post he mentions that it seems that Michael Jackson (former Chairman of Sage) had made an offer for the Kashflow business of £1m, which was rejected by Kashflow’s founder Duane Jackson.

According to Richard, Jackson made the offer with a view to using the Kashflow product to act as the “heart” of a new SaaS venture he was planning.

Well done Duane for saying no to the £1m for 100%… If I were him I wouldn’t give the company up at this point in time, but I’d be very keen to find a way to sell Michael Jackson some kind of stake since he’d made a very city-friendly supporter and has a wealth of experience that money cannot buy.

I’m only posting this, because it reminded me of a conversation I’ve had several times with Holway – I’ve always been critical of what I perceive to be a deep lack of innovation at Sage, and have given Richard a hard time in the past over his positive opinion of the company. Richard only needs to point to the company’s long-term financial performance to justify his view of course, but I believe that Sage will be dead in 5 years unless it can develop a completely new platform around SaaS – which is something you don’t do by buying lots of companies and cobbling them together.

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Last week, we ran a two day conference on Green IT, to take a look at the agenda look here

A great mix of attendees and speakers – including a number of analysts from other firms, Rakesh Kumar and Nino Moscardini from Gartner, Martin Hingley from IDC and Andy Lawrence from the 451. This has prompted a couple of questions from attendees – “Why allow other analysts to muscle in on your action?”. The simple answer to this is, because they’re smart, they’ve got something valuable and important to say, and the Bathwick group is absolutely committed to working and collaborating with other smart analysts. It doesn’t need to be “formal”, it doesn’t need to be an “alliance” – Let’s get on and do stuff.

And Reuters ran a piece on the event -> here

One of the many reasons I promote homeworking for certain types of job (it isn’t suited to “any job” by any means) is that it improves your carbon footprint.

I was challenged on this by a client recently, who asked “what about the additional heating of your home?”

So I did a bit of analysis (it being wot I do..) This is a superficial analysis – just looking at the commute and the additional home heating. I’ll do a more detailed model for all costs (electricity to run your home computer etc – although many of these are offset by the fact that you’d be running a computer if you were in the office anyway).

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IBM has today announced that it will establish the first Cloud Computing centre for software companies in China, at the new Wuxi Tai Hu New Town Science and Education Industrial Park in Wuxi, China.

The initiative is the result of an agreement between IBM and Wuxi Tai Lake Industry Investment and Development Company Limited.

“The announcement states;

IBM will work with Wuxi Tai Lake Industry Investment and Development Company Limited; the Wuxi municipal government; and its business partners to build the China Cloud Computing Center, which will be a shared facility providing each software company in the park with its own virtualized computing resource. For example, a company will be able to use the allocated resource for designing, developing and testing its software products. Such virtual environments can replace the traditional data center model, in which each company owns and manages its own hardware and software.

While this is one of many announcements that IBM has made with respect to its investment, and business interests, in China (And you can expect to see LOTS of announcements from IBM concerning projects that it is kicking off in the BRIC (Brazil, Russia, India, China) countries, as well as in other emerging economies like Vietnam, and continental Africa over the coming 12 months) – I think it’s important because it highlights a number of things that western companies, and indeed western governments, seem to completely misunderstand.
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EMI is in the papers this week – Numerous pop stars are voicing their concerns over the changes that are planned by EMI’s new owners (the PE firm Terra Firma). Robbie Williams is on “strike” – refusing to deliver his latest album, and a number of the company’s other “big acts” are threatening to revolt.

I’ve a personal interest in the recording industry, as I (myself!) have a small connection with it – I was an executive producer on, and investor in, the debut album by Clear (a band whose lead singer was one of my oldest friends; a Mr Neil – you hum it I’ll sing it – Ward-Dutton). Alas, the debut album was also the last album – though not for want of talent or effort.

The EMI revolt has been triggered by the wholesale changes that Guy Hands (CEO of Terra Firma) has set out to make – notably a reduction in headcount of 2000, and a stated intention to drastically reduce the advances payed to artists (Robbie Williams reportedly negotiated an £80 million advance from EMI in 2002).

Hands is taking some flak from the “Artistes” at EMI, and there have been a few slightly snide remarks about his lack of experience in the Music industry. One side-comment that has caused some amusement is the smirking notion that the £200,000 that EMI spends each year on “fruit and flowers” for its HQ isn’t really for fruit or flowers… (wink wink).

But given the way in which the Music industry has responded to the changes brought about by technology over the past decade, perhaps it’s time for a new-comer (especially one who has a track record as a hard-headed businessman) to take over the reins.

Or… maybe Hands has gone a step too far? Is there any hope for EMI in a changed world?

Like many, I think that the music industry is in crisis. It’s in crisis because its forgotten a couple of the key rules in business -

1. Don’t expect to make profits if you don’t add value
2. Don’t expect to add value if you don’t know what your value proposition is

This post is going to take a look at “value add” in the context of the music industry – in a way that, I hope, will go some way to explaining the extent of the crisis that it faces.
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