Who would have imagined Dubai would have a serious debt crisis? Of course, pundits are all over themselves declaring they knew the bubble was about to burst. Many have asked me, what’s the next bubble to burst? This reminds me of not long ago – the real estate bubble, the Madoff bubble and not too far back – the dot com bubble. Is China also a bubble?

Much of our actions – personal or business – are based on reputations. Bernie Madoff had a good reputation and friends put their money with him. Dubai had an impeccable reputation as a destination for investments and as an investor itself. Dubai Ports were actually awarded the management of six US Ports in 2006 till of course the hue and cry in US Senate and Congress got them to sell off their stake to AIG.

Reputation is a double-edged sword. Madoff earned it and Dubai earned it and they leveraged (pun intended) that to the hilt to further their business interests. But somewhere along the way, they lost it. And it had very little to do with poor luck or the misfortunes  of the global economy. It had to do with one hard fact – a leveraged model. And along the way, there was also a soft scorned fact – lost Integrity. Madoff thought he could bluff his way through a Ponzi scheme once he felt secure with his reputation; Dubai thought growth with mostly borrowed money could be everlasting once they felt the world was beholden to them for their wealth. Were they naïve? I don’t think so.

I guess it’s time to come to grips with the hard reality that success built on leveraged models is risky; and that reputation alone is not good enough. Just as size is no guarantee for survival, reputation is no guarantee for intrinsic integrity. And a highly leveraged model with scorn regard for integrity makes a strong recipe for a bubble to burst.

At Solix, we may be small but we are not leveraged. We do not operate with VC funding or with borrowed money. We hold integrity dear to our heart; it’s a non-negotiable value at Solix. The first lesson of integrity to us is we exist due to our customers and the value that we deliver to them comes first.

Last month was a milestone in Solix journey. We celebrated our 100^th customer win. We also launched the Solix Customer Advisory Board. The Board represents customers who have implemented Solix EDMS for different ERPs across different databases and for different data management functions: Database Archiving, Application Retirement, Test Data Management and Data Masking. The charter of this Board is to guide Solix through its future technology and product roadmap, feature enhancements and partner validations.

A hundred customers and two significant OEM relationships – for Database Archiving with Oracle Financial Services and Data Masking with Voltage Security –  is a strong testimony to the solid foundation of Solix EDMS technology and the confidence they all have on Solix. Over the long run, good technology and good products succeed and endure a long life; weak technologies, even if their parentage is strong, eventually die. A few of our recent successes has been through competitive switch of a product that is likely to be phased out as it does not appear to fit in with the acquirer’s product strategy roadmap. This is another truism in business history that should not be missed when doing product evaluations.

Lessons Revisited:

• Size is no guarantee for survival. Neither is a glitzy reputation guarantee for any integrity.
• Greater the leveraged model, higher is the risk of failure (or a bubble burst)!
• Weak products fail irrespective of parentage. Conversely good technology, well accepted by customers, most often outlive their creators.

Exactly a year ago, I had written on the subject of Data Security in these columns. Exactly a year ago, someone had hijacked his employer’s servers containing sensitive data; all hell broke loose, because the employer was also a government agency. Exactly a year ago, we introduced the Solix Data Privacy Pack for Oracle e-Business Suite.

Much of the vulnerability I wrote then was from Insider Threats and from Test & Development Copies – as far as database applications were concerned. Of course, there are vulnerabilities in production databases, in the application themselves, in the storage and in tapes. However keeping raw data in test & development databases is just too risky, particularly in the case of application maintenance outsourcing.

So after a year, where do we stand today on this subject?

The awareness of the problem is much stronger particularly because it is now mandated through a few regulations like PCI, HIPAA, UK Data Protection Act. It has a strong established discipline on its own right under “Application and Data Security”. It’s called “Data Masking;” and has other names like Data Privacy, Data Obfuscation, Data Sanitization….. (just as Data Archiving is sometimes also referred as Data Relocation). Over the last one year, it has got itself a strong band (although still limited in numbers) of technical gurus, advocates and customers – all the ingredients that can make a technology an application killer.

However, that’s not enough. Data breach is still happening. Sensitive data resides not just in the corporate that may have implemented different data security technologies. They also reside with their suppliers and other business partners – in their production databases, test systems and elsewhere. We therefore need a wider penetration of data security technologies.

In parallel, we have another computing trend emerging – Cloud. The principles of Cloud are too compelling to ignore. But what it lacks are few of the critical infrastructure stacks to make the Cloud safe – within the network, the applications and the data. And until the Cloud is safe, there is going to be skepticism and resistance in its adoption.

Now what if we marry Data Masking technologies with “Private Cloud,” such that we bring the simplicity of Cloud to Data Masking and bring the safety of data to a Private Cloud? After all, the raison d’etre of private cloud is security.

Solix EDMS Data Masking is now Cloud Computing ready. We expect this technology convergence to usher in a holistic, consistent and integrated masking across the supply chain through private clouds. And it will benefit in large scale adoption of both Data Security technologies and Cloud Computing – just as many collaborative technologies saw larger adoptions with emergence of Intranets and Extranets and Internet itself has evolved to Web 2.0 and beyond!

This caption coming from an archiving vendor, I would not fault the reader for thinking that this blog would again be about archiving and extolling the virtues of making production databases smaller. Yes, big (and getting bigger) production database size is not good, and one needs to archive little used historical data to make it smaller and make the business operations – not just the IT – more agile, more energy-efficient and more compliant with the need for immutable records management.

However, this will be about what I sometimes hear from customers that they feel a big vendor is always a safe bet. Having read the economist E.F. Schumacher’s 1973 seminal work, “Small is Beautiful,” I have confidently countered that; and happily, on most occasions, I have been able to convince them.

See the history and see what’s happening now. A venerable big institution like Bear Stearns went down. So did Enron. And now the two big mortgage companies are being bailed out by the US Government.

Let’s look at the Technology Industry. Once upon a time, long, long ago there used to be a very big company called DEC. Some of their products still survive, but not the company. During the best days of DEC, a small company – Oracle Corp – emerged to launch a RDBMS. Oracle later acquired DEC’s Rdb, and Rdb still survives on Oracle’s price list. Understand that in the early 1980s, Oracle – the small company then – had to fight the Goliath, DEC for RDBMS business on VAX/VMS.

And sometimes successful big companies enter a business only to get out of it later. GE, Honeywell and Xerox are good examples of this. All had at some point of time in their illustrious history been in the computer business. I daresay, only students of technology history remember this!

Having worked earlier for two organizations that were near start-ups when I had joined but became (and still are) the leaders in their field – and in parallel seeing what were then considered the Goliaths in the industry – either completely gone or struggling or out of that business, I would like to make the following observations:

• It is necessary for the small company to prosper and get bigger; there are no two questions about that. Too many small companies became history (and history does not even remember them) simply because they could not overcome the first minimum threshold of adequate customer acquisition and profitability.
• Once they acquire a certain size, it becomes necessary (but that’s not sufficient) to grow out of being just a niche player. See what happened to Netscape and Ingres.
• Perhaps the sufficient condition (unless there are serious management issues) is the fact that the big company just cannot afford to miss the technology bus. If they are late getting into that, it may be just too late to catch up. DEC missed Unix. Ultrix was just too late and not good enough.

Now coming to why GE, Honeywell and Xerox got of the computer business. It made good business sense. It was good business sense for IBM to divest its PC business. They exited in spite of the mainframe (GE/Honeywell) or Workstation (Xerox) or PC (IBM) markets being very good at that time because in this product line they were not number one or two in the industry; it was not major revenue or earnings earner; and they did not see this business as a prerequisite for success in their core areas. In fact it was the same reason why DEC gave up Rdb; the RDBMS market was very robust. But for DEC, this product line was not core to the success of their mini computer business.

So before deciding that bigger is safer, I would suggest looking at the two fundamentals of necessary (are they niche?) and sufficient (are they current on technology?) conditions of survivability of the big. And then one needs to ask if the product line is indeed strategic or even peripheral to their core business. Because, if it is not you can guarantee that sooner rather than later, it will be shed off.

It’s happening right now as we speak. In some cases, Small Is Beautiful. That’s why Schumacher’s book remains a classic even after thirty five years.