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Monday, May 31, 2004The jobless recovery and offshore outsourcing by Michael corbettThat companies are offshoring work at a growing rate is certainly true. That offshore outsourcing, which began decades ago in manufacturing, is now expanding to include some of the most highly skilled jobs we have is also true. And that these jobs are gone and will never come back may be true, too.However, that the causes are misguidedness, short-sightedness or even evil business leaders is not true. And that the solution is to stop the practice is even less true.It's hard to watch in the US, images of highly paid executives getting taken away in handcuffs and not feel betrayed. But to extrapolate from that and elevate offshoring to the level of treason is wrong. Yes, offshoring does involve taking advantage of "cheap foreign labor." But let's be fair. Americans love cheap. Wal-Mart Stores, the largest U.S. company, is famous for its low prices. Customers love Wal-Mart. That Wal-Mart is, all on its own, one of China's top trading partners doesn't slow down the American appetite for what the mega-retailer does or how it does it. Does this make Wal-Mart bad? Of course not. In fact, Wal-Mart just topped Fortune's list of America's most-admired companies. As consumers, we demand the lowest possible price and the highest possible quality. If an American company can't deliver it--sorry; we'll buy from whoever can, American or not.The simple truth is that offshoring is not the result of a few Benedict Arnolds. It's a result of the relentless pressure on businesses to take advantage of every opportunity available to them to reduce costs, increase quality and add to profits.Stopping offshoring--or imposing a moratorium, as some have suggested--would simply put U.S. companies at the mercy of their foreign competitors |Sunday, May 30, 2004A compelling case for globalisation byJagdish BhagwatiIn his latest book,"In defense of globalisation", taking the long view, he maintains that globalization is transforming the world’s economic and social structure for the better.Bhagwati defines globalization as the “integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short-term capital flows, international flows of workers and humanity generally, and flows of technology.”He discusses globalization’s cultural and technological aspects, which critics contend are turning the planet into a homogenized “McWorld,” but focuses on the free trade and employment objectives of economic globalization and the politically charged arenas where all these contending forces come into play.Perhaps the most salient point of Bhagwati’s observations is that globalization must be understood in terms of “the rules of the game.” Corporations invest funds or build factories in countries in the hope of bettering their competitive advantage. But in doing so, these companies are often subject to manipulation by political leaders who have varying agendas. Some may welcome investment but discourage imports while others favor the free trade orientation which Bhagwati maintains is the best course. Each country has unique circumstances, and multinational corporations must adapt to them.Bhagwati argues convincingly that removal of trade barriers will promote greater levels of economic growth. This will trigger a rise in the income, consumption level and living standards of poor nations willing to take the risk of lowering tariffs, engaging in export driven commerce and cooperating with multinationals. For Bhagwati, economic globalization is an “active, pull-up strategy” rather than an example of the notorious “trickle down” theory from the 1980’s.| Dubai -Arabia's field of dreams via EconomistOne of the world's most successful business ventures is a small city state that learned lessons from Singapore and Hong Kong.Dubai has been wisely using its oil and gas income over the years to invest in a different sort of future, replacing hydrocarbons with people as it has expanded to be the tourism and business hub of a region where 1.5 billion people are within two hours' flying time.Thirty years ago there was nothing in Dubai but a creek, a sheikh's palace and a dodgy reputation as the smuggling capital of the Arabian Gulf. The traditional Arab dhows remain, and there were recent echoes of its smuggling past when it emerged, amid rumours of terrorist money-laundering, that much of Pakistan's illegal trade in nuclear materials passed through Dubai.But in most other respects, the sheikhdom has been magnificently transformed, and is now a beacon for legitimate, non-oil business in the Arab world—where shining examples of capitalism are rare indeed. Dubai is run like a family business by a benign autocrat, Crown Prince Sheikh Muhammad bin Rashid al-Maktoum, whose interventions in the economy have judiciously sought to work with market forces, not against them.Today Dubai boasts 272 hotels with 30,000 rooms, 30 shopping malls and almost 5m foreign visitors a year. Its airport's capacity is being tripled to 60m passengers a year. In the desert, Dubailand is being built—a $19-billion theme park twice the size of Disneyworld in Florida.As the city-state built huge tax-free shopping malls and launched sporting events, notably the Desert Classic golf tournament and the Dubai World Cup horse race, so it became a holiday destination, offering attractions such as desert safaris and dhow cruises. | Britons More Than Double Online Spending -StudyBritons have more than doubled the amount of money they spend online over the past year as ever more people do routine tasks like grocery shopping and paying bills over the Internet.Credit card provider Visa said in a study released on Friday that its UK cardholders spent over 2.4 billion pounds ($4.4 billion) on the Internet in the first quarter of 2004, up 123 percent from the same period last year.One of the biggest winners was the food and drink industry, where sales more than trebled because of a "massive rise" in people doing their supermarket shopping online, Visa said. Sales of books and music also surged, up 116 percent in the quarter.Holidays were a popular item to book online, with travel and tourism sales up 159 percent over the same period. UK online industry, always considered a leader is further getting stronger with increased volume of business. |Saturday, May 29, 2004eBay executive gives us the inside scoop on eBay's businessAmazing details about eBay, these detail confirm that eBay is the dominant commerce site in the online world1) $70 to $80 billion runs through the eBay platform (yes, he called eBay a "platform") every quarter.2) Every hour eBay registers 3000 to 4000 new users.3) This year they are expecting somewhere around $3.5 billion in revenues. That's above expectations. 4) Every day about a terabyte of data courses through eBay's data centers (most of the machines running eBay are running Windows, he told me. The back end they use is running on Sun Microsystems computers). He says eBay's use of Windows shows that Microsoft's stuff is good enough for high-transaction, high-load computing.5) Last year 10,000 customers showed up for the first "eBay Live" conference. This year's event is expected to see even more people.6) They have about 5000 employees right now and are hiring about 1000 new employees this year (and he says they can't find enough great employees to hire).7) eBay's founder, Pierre Omidyar, started eBay because he wanted a way to sell and buy Pez dispensers and there wasn't a good way to do that on the Internet before. By the way, Pierre is a blogger.8) eBay has a high degree of customer lockin. How? Well, for one, many of their customers are getting rich. Second, the more you buy and sell on eBay, the better your ratings, and those aren't transferable to other auction systems.| Rational exuberance, innovation and growthBweek has published excerpts from a brilliant book, called Rational Exuberance : Silencing the Enemies of Growth and Why the Future Is Better Than You Think and it talks about how risk taking and exuberant growth from innovation helps expand the economy and help so many people increase their standard of living. Considering the focus these days on people who seem more worried about how growth can destroy their jobs, this optimisam and logic is a refreshing change.Mike Mandell is Chief Economist at BusinessWeek, responsible for formulating BusinessWeek's coverage of economic policyThe difference between exuberant and cautious growth is not simply that one is faster than the other. Exuberant growth transforms the entire economy. In terms of the critical economic variables -- wages, jobs, international competitiveness -- the evidence is compelling that innovation-driven economies come out way ahead. Technological change also brings an excitement and wonder to our daily lives. The ability to travel to distant places, to communicate instantly with people in other parts of the country, to have online access to a vast array of information -- all of these capabilities open up new possibilities that capture our attention. In the absence of change, economies are not just slow-growing, they are boring and ultimately failures. The central theme of the book is -There are three main pathways through which innovation drives growth: the "ramp-up," the "spin-off," and the "free lunch."Ramp-up: When the innovation first hits the market, and the demand grows very rapidly, there's typically a lot of investment in the new industry and new products. This can give a very big onetime pop to growth. That's what happened in the 1990s, when the advent of the Internet helped propel an enormous amount of investment in information technology and telecom companies and products.Spin-off: As the innovation takes hold, it transforms other parts of the economy. In some cases -- such as information technology and electricity -- the effect is to increase the productivity of other industries. But that's not necessarily the only big impact. The automobile, for example, opened up new possibilities for spatial arrangements of work and living, creating the modern suburbs, and transforming the housing market.Free lunch: Economists like to quote an old saying: "There's no such thing as a free lunch." The idea is that you usually only get what you pay for. In particular, future growth must be paid for by deferring current consumption, and putting it into savings and investment. But big technological breakthroughs violate the free lunch principle, giving a boost to growth and living standards that goes far beyond any added investment. |A richer future to India via MckinseyquarterlyMckinsey consultants analyse the growth India has made and identifies areas that India should focus on to sustain the image of surging economy. Some of the numbers identified herein like available workforce waiting to be employed and the new stream of workforce that is expected to join, their expectations and impact on economy is indeed significant. The article also talks about what India can learn form the perceived(!) success of software industry and how these learnings can be expected to get extended to other industries Some key thoughts include, India as a good destination for investment, India better placed than china in automotive components industry, Indian tradeshare atleast seven/eight times smaller than that of china or brazil, Labor productivity, at mere 5 percent of US levels.consumer electronics goods made in India still can’t compete internationally,high trade barriers are the key impediments to cross - the plate of issues to be cleared quickly is full for the new government and for governments to come for several years The article concludes, by saying that Some Indian policy makers might argue that the reforms proposed here would undermine long-held social objectives, such as creating employment. But the evidence shows that regulations on foreign investment, foreign trade, and labor have actually slowed economic growth and lowered the standard of living. A decade ago, India’s per capita income was nearly the same as China’s; today, China’s is almost twice as high.India’s economy has made real progress, but further liberalization will be needed to sustain its growth. The country now has 40 million people looking for work, and an additional 35 million will join the labor force over the next three years. Creating jobs for all these Indians will require more dynamic and competitive industries across the economy. Opening up to foreign competition, not hiding from it, is the answer |Electricity, Gas -- and Computing via BweekEnginering giant Fluor uses "utility computing" for a leaner and more flexible operation, paying only for the tech resources it needs.Over the last three years, Fluor Corp has wrung waste from its information-technology budget like water from a wet sponge.The company is reaping the dividends of its decision to bet on a new trend called utility computing. Instead of buying its own hardware and software, it purchases just what it needs and no more from suppliers such as IBM and Cisco.While such outsourcing arrangements have been around since the '80s, utility computing is something new. Fluor has a contract with minimal fixed costs. It pays for what it needs the way it pays for water, electricity, gas, and other utilities. About 25% of its IT costs are fixed, down from 95% a few years ago.Utility computing is starting to take off. The market is expected to triple over the next three years, to $25 billion, up from $8.6 billion in 2003, according to Gartner Group. Market penetration will rise to 30% of companies, up from 15% now, the research and consulting outfit saysSaving money isn't the only benefit of utility computing. It also lays a foundation for more efficient business operations. Fluor recently established a data center in Chile to serve pharmaceutical and oil-refining clients. Suppliers IBM and Cisco set up the center in 70 hours, a process that would have taken three months if Fluor had bought all the equipment and done the installation itself. That sort of speed gives Fluor an edge in the market, improving its ability to respond to opportunities. Within 18 months tech outfits will start selling something that IBM refers to as grid computing. That will allow big companies such as Fluor to share, select, and aggregate dispersed clusters of computing resources, boosting efficiency and lowering costs even more.| They're Web sites anyone can edit -- and they could transform Corporate America via BweekOn the site, a free online encyclopedia called Wikipedia, thousands of volunteers had written a breathtaking 500,000 articles in 50 languages since 2001 -- all thanks to the defining feature of wikis. To contribute, all they had to do to was click on an "edit this page" button and start typing.To capitalize on the opportunity, startups such as Socialtext Inc. are selling wiki software. Ultimately, though, it's likely that wikis will be pulled into collaboration software such as IBM's (IBM ) Lotus Workplace. Like open-source software, wikis may make their biggest mark less as a business than as a potent force for change -- in this case, in the way people work. Wikis may find their way into more public use |Internet usage in Asia leapfrogsInternet use, particularly in China but across the rest of Asia as well, is exploding, making it geographically the world's largest market, altering consumer spending patterns and perhaps even the Internet's dominant language In just two more years, 250 million Chinese are expected to be accessing the Internet. In South Korea, nearly 59 percent of the population is to be using the Internet by the end of this year.The online gaming market totaled US$533 million in subscription fees in 2002, with Korea and Taiwan constituting two of the world's largest markets. Koreans are a unique population when it comes to online gaming. They lead the world in that pastime, with 54 percent of the market, followed by Taiwan at 26 percent.Incredibly, only two percent of Singapore Internet users trade stocks and mutual funds online. In Taiwan, it's 5 percent and in Australia, 9 percent. That is in stark contrast to the US where routine business dealings are increasingly being transacted on the Internet. Even in South Korea, where online games are a major diversion, only 7 percent of the PC users employ the Internet for online purchases.Particular attention is paid by the report to eight "core" economies - Australia, China, Hong Kong, India, Japan, Singapore, South Korea and Taiwan. The Asia-Pacific region is home to more than half the world's population - 3.56 billion people. But China by itself, the researchers conclude, with 1.3 billion people "could be the world's largest Internet market in just a few years". A big revolution is happening in the world of internet revolution where ASIA is catching up very fast with the US.| Where Have All The Users Gone? via BrainstormGlobal web usage is outstripping US web usage - several web metrics point to this.I would think that ASIA has caught on internet revolution very well -Parts of Asia is doing even better than US -Particularly Korea in terms of online retailing - Asia has a lot of new users to internet crowd - coupled with the fact, Asia speaks more than 50 different languages and that many different primary sites in respective language. But US dominance, lead in usage of internet for business needs is unlikely to be challenged for several years to come. |Another review on Nicholas Carr's book - Does IT matter by Chad DickersonA good counterview to Nicholas Carr's core ideas centered on commodisation of components and systems |Search business turns seriousAlthough the web has given the person in the street access to more information than ever before and Google has made it easy to search through that vast pile to find what you want, typically business users need even more.For some people, particularly in business, Google and other net search engines are just not good enough,making search service providers like Factiva popular.In its pre-Factiva incarnation, it was used by librarians and other information professionals whose job it was to find and supply facts to other people.Factiva brings together information from more than 9,000 sources including newspapers, newswires, transcripts of news programmes from the BBC and other broadcasters, plus historical stock market data.It is a program for desktop machines that lets customers search for information among this pool of sources.The growth of the web as a vast corpus of data threw that role into question."In 2000 and 2001 so many times we had customers saying to us that most of this is available for free on the web," said Ms Hart, Head of Factiva.But, she said, 60% of what Factiva offers is not online for free.And, said Ms Hart, even if all the sources were available online she is sure that Factiva would still have a role to play.The reason for this is because, as Google and others are starting to realise, the sheer number of results a search system can serve up are not enough."When you do a search you're not interested in quantity," said Ms Hart, "you want relevant research and quick access to relevant results.""| Friday, May 28, 2004Alfred Chuang of BEA on BEA's futureIn less than 10 years, BEA Systems became a billion-dollar company.The Java software maker saw explosive growth during the Internet boom of the late 1990s by supplying the back-end application server software to run Web applications. Company CEO and founder Alfred Chuang wants that growth to continue. His goal is to make BEA a $3 billion company within the next five years.BEA's strategy has been to widen its product line around a suite of server products and to popularize cutting-edge software like its WebLogic Workshop Java development tool. In its latest "Liquid Computing" vision, BEA's sales prospects depend largely on the adoption of a modern, more modular design approach called services-oriented architecture. Alfred Chuang says,Innovation has two parts. One is making the technology itself, and the other is taking it to the market.From our perspective, we're still at a size at which we can build something new, like (mobile-technology initiative) Alchemy and get it to market. Large companies can't do that. Their sales process is too complicated, and updating their legacy is too hard. I think we're still at the size where we can innovate and get it to market very quickly". | Audience, Structure and Authority in the Weblog Community via OverstatedCameron Marlow of MIT media laboratory has compiled a paper analysing two different metrics for measuring authority within weblogs - Blogrolls and Permalinks The paper has compiled the top 20 for each measure. One observation is that many of the top ranked sites are community weblogs (e.g. Slashdot or Memepool). These sites play the important role of hubs, maintaining ties to more weblogs than a single person would be able to. They allow information to diffuse quickly between distant parts of the network of readership.| Take Your True Self to Work Day via FCCompartmentalizing your life can be more than unproductive -- it can be unhealthy. Consider bringing your whole self to your work and move beyond work-life balance.When I go to work, it's as if I leave my true self locked in the car. I go up in the elevator and emerge as Work Self. If I leave in time, I can get back to the car and reclaim my true self. But if I'm too late, by the time I get there, my true self is just out cold." That's how a salesman I hired described his life in corporate America. He had to be two different people. Work didn't want his true self, but he fought hard to keep it alive. Sometimes he succeeded, sometimes he didn't. A person compartmentalising life,has a work self and what he thinks of as his true self, carefully locked away from each other. This kind of compartmentalization is sometimes called splitting by psychologists, and it has a bad reputation. Once you split off a part of yourself, what's left rules without checks or balances. It can come as no real surprise that when one investigates the lives of many criminals -- white-collar criminals and war criminals alike -- the integration of their work and home lives is strikingly absent. The problem with compartmentalization, it turns out, is that it offers its proponents the opportunity to lie. It helps good people to do bad things.compartmentalization is a characteristic, even a requirement, of so many corporate cultures. What else are corporate fetishes like 24-hour deal negotiations, all-night coding, and corporate retreats if not training for leaving your real self at home? Punishing schedules, endless travel, and repeated relocations are designed to teach you tolerance for leaving your private values in the car. In cultures like these, it can come as no surprise when executives lose their sense of right and wrong; they were trained to lock it away long ago.If we take our whole selves to work, we can transform the culture and sustain ourselves. Think about this the next time you go to the work. When you leave your home or lock and park your car, what are you leaving behind? Take your whole self to work tomorrow and watch what happens. |Four Steps to Corporate Resilience via SBStrategic planning in four areas helps established companies stay competitive.It’s fashionable to argue that corporate failure, decay, even death, are natural and essential to keeping an economy adaptable and healthy. Those who endorse this view believe hostile takeovers help cleanse industries, because weak and uncreative companies are subsumed. Similarly, advocates of “creative destruction” say the demise of struggling companies liberates financial and human capital for more productive uses. In the end, say the corporate undertakers, there is always a stronger and better company to supplant the one that dies.It is never easy for big, mature companies to execute dramatic strategic or operational change, but no matter its age or size, any company can build the capability to continuously renew itself. We at the Woodside Institute suggest four steps that help pave the way.The first is rethinking the underlying principles on which management is founded. Consider the argument of Max Weber, the German sociologist, that those with the most relevant expertise in a given situation or strategy should take the lead in decision making. That principle is why most companies have marketing departments to make marketing decisions, sales teams to control sales campaigns, and so on. Yet recent research suggests that cross-functional decision making gets better results. Managing a resilient corporation requires a greater willingness to access information from multiple sources for richer content, and to avoid guidance by those with a vested interest in the status quo.The second step is generating a portfolio of strategic options. Resilient companies don’t just develop a portfolio of product innovations; they build a portfolio of experimental strategies, often mining ideas from all parts of the company. To be resilient, a company should earmark some portion of its capital expenditures — 30 percent or so — to test new strategies and radically innovate aspects of its business model, such as pricing or industry alliances. The transformation can be profound, involving, say, a shift from selling high-margin products to selling services, or involving customers in strategic planning.The third step is careful examination of resource allocation. Most companies create budgets based on the legacy principle: If you have been successful, you deserve funds in the future. The resilient solution is to use market-based mechanisms to manage resources so that funding of known opportunities is balanced by an appetite for new ventures.Finally, resilience is likely to get a boost from more effective corporate governance that not only provides better safeguards against wrongdoing, but also improves leadership. Directors, feeling the heat from shareholder activists, litigators, and regulators, will have to make sure that management has a plan for the future that doesn’t just relive the past, and provides the right resources to promote resilience.| Thursday, May 27, 2004Can Nokia Get The Wow Back? via BweekNokia the Uncool. Who could have imagined it would come to this? Yet something has suddenly gone awry for the Finnish mobile giant. After a blowout fourth quarter, when Nokia sold a record 55 million handsets, it looked to be on track for another solid year in 2004. Then came Apr. 6. That's when Nokia shocked investors by disclosing that instead of 3% to 7% revenue growth in the first quarter, its top line would shrink by 2%. Although unit sales had soared 19% year-on-year, they lagged bigger growth for the industry as a whole, meaning Nokia lost five points of market share -- dropping below 30% for the first time since 2001.To turn profits around, it's making cooler phones, cutting prices, and moving into new businesses Does this signal the end of Nokia's remarkable reign atop the mobile world? Not so fast. With its unequaled brand recognition and distribution channels, analysts say, Nokia will be able to maintain market share above 30% for the foreseeable future. Unparalleled purchasing power and manufacturing prowess still let it churn out phones more efficiently than even rock-bottom Asian makers. And the company's huge resources, including a $13.6 billion cash horde and $4.4 billion in annual research and development spending, keep Nokia far from the brink. Analysts figure its revenues will be flat to down this year, at about $35 billion. But by 2006 they should rebound to $41 billion as handset sales top 225 million units. "This is not the fall of Nokia," says Bengt Nordström, CEO of Stockholm mobile consultancy Northstream.Still, there are troubling signs that Nokia is off its game. Failing to jump sooner into clamshell phones, which could make up nearly 40% of the industry's sales this year, was a major oversight. At the least, it suggests the Finns may have lost their renowned feel for consumer taste. What's more, despite a recent push, Nokia still has only about 13% market share in phones using the CDMA standard, which account for one-fifth of the total market. Even Nokia's brand -- sixth in the world last year according to consultancy Interbrand Corp. (OMC ) -- is showing signs of slipping in consumer surveys.Counting Nokia out would be a big mistake. But the Finns need buzz again -- and that's the hardest thing of all to recapture.| Digital Darwinism & Samsung's online strategy via FCPeter Weedfald, senior vice president of strategic marketing and new media for Samsung Electronics America Inc says,"We have moved from being a time-to-market company to a time-to-volume business. Our pecuniary opportunities lay in 30-60 days of shelf space. I look at more than 300 business plans a year. It's a blinding blur. So what do we do? Our key disciplines are very simple. One, our manufacturing prowess. Two, Samsung has been the driver of digital convergence for the last five or six years.We look at three worlds for everybody. You have a business world, a mobile world, and a home world". From our perspective there are only three businesses left on this planet. One business is the content business. Another business is the pipe business.We're going to move into the perfect information economy. What do we do when someone goes into Best Buy with Wi-Fi, compares products on Buy.com and Dell.com while they're there? That?s a disruptive technology. Thank God there's a lot of people in denial. What are we going to do about? If technology is important, how can we express that our technology is better?onventional marketing is so dead it's frightening. We need to look at it differently. People don't buy TVs and cell phones, they buy a dream. They buy a consumer or business dream. We need to overhaul our entire Internet strategy. You can't do that in a vacuum. The only way to drive value on the Internet is through CRM. CRM is not customer relationship management. That's a software package. CRM stands for "Customers really matter."We have moved from being a time-to-market company to a time-to-volume business. Our pecuniary opportunities lay in 30-60 days of shelf space. I look at more than 300 business plans a year. It's a blinding blur. So what do we do? Our key disciplines are very simple. One, our manufacturing prowess. Two, Samsung has been the driver of digital convergence for the last five or six years.| Firms Can Benefit From Tough Times Says Chambers via Stanford KnowledgebaseCompanies win or lose the battle for market share during the tough times, not the boom periods, says Cisco Systems CEO John Chambers.Successful leaders must build change into their organizations, be extremely attentive to market transitions, and react quickly, he said.Cisco, a world leader in networking for the Internet, has increased its productivity 18 percent in the past six months. But things have not always been this good. The 2001 crisis struck Cisco so hard that in 45 days it went from 70 percent growth to minus 30 percent.As soon as Cisco executives realized that the crisis Chambers described as "a hundred-year flood" would last for a long period, they designed a strategy to lower expenses, focus on future opportunities, and increase productivity, and implemented it in 51 days. Then, Chambers and his team "got ready for the upturn" that brought them back to normal profitability in only nine months.The Cisco experience shows that it is not during the good times that companies lose or gain market share but during the tougher times, Chambers said. That is why a leader has to be so attentive to market transitions. How does he do it? Mostly, by listening. "If you ask people what are they going to do, they will tell you." And what the executives of big and small companies around the world have been telling Chambers in the past year is that "confidence is starting to build." Chambers adds, "The number one ingredient of successful leadership is the quality of the team you build."| The Wired 40, companies driving the global economy - Elite list from WiredThey are masters of innovation, technology, and strategic vision - 40 companies driving the global economy. Wired says,"These 40 leaders have demonstrated an uncommon mastery of technology, innovation, globalism, networked communication, and strategic vision - skills essential to thriving in the information age".Ten companies were ejected from the Wired 40 this year. Their sin? Failure to meet the global economy's incessant demand for innovation Key highlights in this years list include,With the economy finally perking up, newcomers are running the show: Three of the top five companies in this year's Wired 40, our annual list of enterprises leading the charge toward a connected global economy, were founded in the past decade. One-third are less than 20 years old. Google, Amazon, Cisco, Nokia, Infosys, IBM, Intel, Fedex are among the chosen in the list. |Wednesday, May 26, 2004Broadband goal eludes Europe via IHTEurope set an ambitious 10-year goal for itself at the European Council in Lisbon in March 2000: to become "the most competitive and dynamic knowledge-based economy in the world." A key component was broadband services, the always-on fast Internet access needed to link Europe's businesses, schools, government services and hospitals.Four years later, the Lisbon goal appears "unachievable," said Ewan Sutherland, executive director of the International Telecommunications Users Group, a nonprofit association that tracks telecom services and costs for big business customers."If you employ enough statisticians, you can paint a positive picture, but the sad reality is we are not ahead of Asia and we are not ahead of the United States," said Sutherland. "The overall picture, I am sorry to say, is gloomy."Compared with other developed regions of the world, Europeans are stuck in the slowest lane of the information superhighway and are paying the biggest tolls. North America and parts of Asia have introduced higher-speed, cheaper services at a faster rate.And despite European Commission claims that the gap is narrowing, the differences are actually widening, say some industry observers.Broadband isn't just about having Web pages that load on a personal computer quickly. Because the speed is much faster than connections via dial-up modems, broadband makes commercial transactions, file transfers, and sound- and video-playing nearly instantaneous. That has broad repercussions for those doing business and providing social and information services on the Internet.The other big difference in Europe is the speed of the connection. "Broadband" itself has no defined speed, but is generally assumed to be faster than 256 kilobits per second. In Japan, telecom carriers have improved their networks up to a speed of 46 megabits per second - almost 200 times what is considered the minimum speed. A quick asessment of the progress made thus far indicate that "The next generation of services and the new business activities will be developed in Asia, rather than in Europe" |Fail to heed the cheap revolution and it will kill you via ForbesThe Cheap Revolution is with us and will not go away. It is the primary source of confusion in the stock markets and economies during these turbulent 2000s, though it shouldn't be.Try selling a server for $30,000 at a time when Dell sells a pair for $5,000 and you're toast. Ask Sun Microsystems about it. Sun has suffered declining revenue for 12 consecutive quarters.there's a good chance these nervous folks work for companies like Sun or are themselves poorly positioned for the future. Thirty million American jobs could disappear over the next ten years. A few million will be offshored to cheap countries. Greater millions will vanish into software--"exported to the land of productivity," as U.S. Chamber of Commerce head Tom Donohue recently told me. One must have faith, of course. History says better and more creative jobs will follow. They always have and always will. Most of the new jobs will be found at younger companies like Google that are positioned on the right side of the Cheap Revolution divide.The Cheap Revolution has boosted manufacturing productivity, remade the IT business and is bringing merry creative destruction to telecom. It has yet to touch some industries, notably education and health care. Therein lies opportunity. |Tuesday, May 25, 2004Business schools losing lustre? via EconomistNo form of education is more commercialised than management education. But are business schools teaching the right things?Applications to business schools are down this year—at least in America, where management education was born and where business schools still award about 85% of the world's business degrees.But business schools face more competition, and more criticism of the quality of their work, than they have ever done before. In time, that may lead to fundamental changes in the structure of the business-school market, and perhaps in what schools teach and how they teach itHowever, business schools now find themselves criticised from several (sometimes conflicting) directions: for paying too much attention to the return on their students' investment, for example, and yet for not giving value for money; for being too academic, and for being too concerned with teaching basic practical skills.The most commercially wounding criticisms are those that appear to contradict the claim that an MBA enhances career prospects. There was uproar when, two years ago, Mr Pfeffer and Christina Fong argued in Academy of Management Learning and Education that there was little evidence that getting an MBA had much effect on a graduate's salary or career. “Usually it just makes you a couple of years older than non-MBA peers,” one source told them.Of course, business schools may be important mainly as a screening mechanism—their basic skill may be choosing students, not teaching them. Once in, and the vast bill paid, few are ever thrown out for failing their exams even though, as Mr Pfeffer and Ms Fong mischievously point out, they are much more likely to cheat than students in other disciplines.A different complaint is that business schools fail to teach their students the right things. The strongest advocate of this view is Henry Mintzberg, a professor at Canada's McGill University. In “Managers Not MBAs”, a new book, he argues that conventional MBA courses offer “specialised training in the functions of business, not general educating in the practice of management”. Their students are often too young and inexperienced to learn skills that, in any case, are often easier to acquire in the workplace than sitting in a classroom. “Conventional MBA programmes train the wrong people in the wrong ways with the wrong consequences,” he complains. They ignore the extent to which management is a craft, requiring zest and intuition rather than merely an ability to analyse data and invent strategies.A rather different complaint is that business schools are increasingly pulled in two directions. They want to teach students practical relevant skills. They want their research to come up with important, novel findings. But the gap between teaching and research grows ever wider. The relevance of Business schools has come to direct questioning at a time when the information economy is exploding and international trade is improving and several non US companies are beginning to show sustained success in the global arena.| Dell Vs HP - Bweek perspectiveBusinessweek provides its perspective about the emerging Dell Vs HP competition in the printer space This article analyses the effect of competition between these companies from an investor perspective. |The Distributor vs. the Innovator - Dell Vs HP via NYTimesThe confrontation between Hewlett-Packard and Dell is more than a particularly lively bout of competition in the $106 billion-a-year printing industry. It is a clash - and an intriguing test case - of two different models of innovation and corporate strategy.With its engineering roots and its corporate tagline "HP Invent," Hewlett-Packard is committed to spending heavily on research and then funneling that home-grown technology into new products. Those products, in turn, must be able to command profits high enough to keep financing the corporate invention machine. Hewlett-Packard's printing business is a showcase of success for internal innovation. Dell, by contrast, is pursuing a "virtual" research-and-development model. It does some engineering development work itself, but that typically amounts to tweaking an existing product. Dell's main role is to scour the world for technology, fine-tune the products of corporate partners, wring costs from the supply chain and sell products directly to customersThere is plenty of technology being developed by companies around the globe, Dell executives insist, but the technology often lacks an efficient path to the marketplace. And as it gets bigger and bigger, Dell is becoming the Wal-Mart of high technology, a marketer so powerful it can set product standards for its suppliers.Today, Dell is an upstart in computer printing compared with Hewlett-Packard. Dell sold an estimated 1.5 million printers in its first nine months in the business last year. This year, analysts estimate that Dell will sell 4 million printers or more. Its revenues from printers and ink cartridges have already blown past the $1 billion-a-year threshold, the fastest takeoff ever for Dell in a new product category.Yet the printing group at Hewlett-Packard reported nearly $23 billion in revenue last year. It sold 43.6 million printers.A central issue for Dell in printing is how easily it can get its hands on technology that is comparable or nearly comparable to Hewlett-Packard's. Dell says there is plenty of powerful printing technology out there, and that its goal is to work with suppliers and use its efficient distribution system to lower the cost of printer cartridges.Over time, Dell contends it can drive down the cost of printing by 25 percent to 35 percent a page.A better business model,Mr.Dell explains, will beat a better technology, and he insists the odds are on his side in the printing business over the long run."The days of engineering-led technology companies are coming to an end," Mr. Dell declared.For her part, Ms. Fiorina will take that bet. "We're the biggest,'' she said. "We're the best, and we're getting better in a growing market."| IBM getting even with Microsoft via ForbesLinux represents the biggest threat to Microsoft has ever faced. No wonder IBM is spending billions to promote it. Dozen IBM consultants has been toiling in the data centers and computer rooms of the Munich city government--free of charge, helping customer migrate from windows to Linux, IBM is investing in Linux software distribution companies,more than 12,000 IBMers today devote at least part of their time to Linux,in developing nations IBM has opened 20 Linux training centers,It conducts Linux feasibility studies for customers and even helps software makers rewrite their programs to run on Linux.IBM has a broader agenda--undermining Bill Gates' company. Here lies the next big battle in tech, pitting two erstwhile allies against each other in a fight to rule the computer industry in the years ahead. As big corporate customers seek to lash together worldwide networks and imbue them with more online commerce, a new $21 billion market for Web-linked software has emerged.Microsoft wants to dominate this business and make it a Windows world. IBM has embraced Linux and in doing so has stoked the biggest threat ever to confront the Microsoft monopoly. While IBM's products run on Windows, it wants its customers to see how nicely they would run on Linux as well, using the free operating system as a lure. "Like getting free bread in a restaurant," says Irving Wladawsky-Berger, vice president of technology and strategy at IBM and a pivotal proselytizer of Linux inside the company. Ultimately, customers may not need Windows at all.IBM's embrace of Linux attacks Microsoft at its very foundation. Windows provides 40% of sales and 65% of operating income for the software powerhouse.IBM Global Services trained 3,000 people in Linux and launched a practice to help customers migrate to Linux. IBM also began using Linux in its own data centers. Linux now powers more than 3,400 servers inside IBM, including machines that run IBM's state-of-the-art 300-millimeter semiconductor factory in East Fishkill, N.Y. Now IBM is considering erasing Windows from its desktops and moving them to Linux, too.IBM has been helping companies move their applications to Linux. Software maker PeopleSoft rewrote 170 applications to run on Linux and bundles them with IBM software and hardware--after receiving assistance from IBM. Consulting firm Sapient accepted marketing dollars and discounted machines from IBM to rewrite a set of its applications for Linux and sell them on IBM servers.IBM says the Linux crusade is boosting business. Last year IBM's Linux-related revenues grew 50% to more than $2 billion. Even IBM's supposedly moribund mainframe hardware business grew 7% to just over $3 billion, thanks to Linux, which shipped on 20% of the mainframe horsepower IBM delivered last year. Some others have different viewpoint about these developments. Wladawsky-Berger is betting that IBM can make money selling software and hardware around those free layers."More money will be made in services and less in acquiring the software itself," he says. "Make no mistake: This is a business." Could Linux shift the balance of power in the computer industry to IBM's favor? Wladawsky-Berger suggests Microsoft has made a blunder by fighting Linux instead of embracing it. "For five or ten years Microsoft will continue to do very well," he says. "But perhaps they will become more of a legacy business, like our mainframes." | Going Public Without Profits or a Product? Yes, in 2004 via NYTimesNanosys Inc., a company in Palo Alto, Calif., filed a public offering statement hoping to raise up to $115 million. Unlike Google Inc., its Silicon Valley neighbor that is also going public, Nanosys has no profits and no products to sell, and its filing statement said it would not market any products before 2006.Nanosys has more than 200 patents and patent applications as well as product development ventures with big companies like Intel and DuPont. The company, founded in 2001, has ties to some of the world's leading nanotech researchers, and promotes its technology as a building block for products as diverse as solar energy panels, electronic displays and memory chipsStill, a hot reception for the Nanosys public offering is likely to lift all companies in nanotechnology. Companies selling themselves could probably seek a higher price and those raising money from venture capitalists may be able to command better terms. And if the dot-com era is any guide, success of Nanosys will accelerate the trend of companies sticking the "nano" prefix in their names or associating themselves with the field in advertising.some experts like Vinod Khosla, a partner at the venture capital firm Kleiner Perkins Caufield & Byers, have been arguing that such a correction is overdue because too many venture capitalists have been piling into the field of Nanotechnology. It is a strange world indeed - while there are a lot of expectations in terms of advances by using nanotechnology, the funding of such firms is still ridden with doubts and difficulties. |Microsoft mellows via BweekFor most of its 29 years, Microsoft (MSFT ) has burnished its reputation as a bully in the marketplace and a pitbull in the courts. But in the last two years, its courtroom image has begun to mellow. The company has aggressively sought to settle pending litigation, shelling out more than $5 billion in the process.Microsoft General Counsel Bradford L. Smith says, "We're no longer a startup industry, just as we're no longer a startup company. Software has become part of the critical infrastructure of society. It's a natural part of the evolution that as you get to this point, the dynamics change. It's natural, it's inevitable, that governments are going to have more questions, there's going to be more scrutiny. There's going to be a need to work more collaboratively with people in government.I also think that as an industry gets to this point in its life, there's a greater need to work across the industry. Partnerships play a bigger role in the life of every company".He also says that this year many cases have been settled and equally many cases have been taken up for litigation. Clearly, significant things are happening for Microsoft- bith within and outside from competitors. IBM has just launched a concerted effortIBM's Middleware challenge to challenge microsoft as well. | U.S. nearing deal on virtual borders way to track foreign visitors via NYTimesThe Department of Homeland Security, US governmeny is on the verge of awarding the biggest contract in its young history for an elaborate system that could cost as much as $15 billion and employ a network of databases to track visitors to the United States long before they arrive.The program, known as US-Visit and rooted partly in a Pentagon concept developed after the terrorist attacks of 2001, seeks to supplant the nation's physical borders with what officials call virtual borders. Such borders employ networks of computer databases and biometric sensors for identification at sites abroad where people seek visas to the United StatesVirtual borders is a high-concept plan, building on ideas that have been tried since the terrorist attacks of 2001.With a virtual border in place, the actual border guard will become the last point of defense, rather than the first, because each visitor will have already been screened using a global web of databases.Visitors arriving at checkpoints, including those at the Mexican and Canadian borders, will face "real-time identification" — instantaneous authentication to confirm that they are who they say they are. American officials will, at least in theory, be able to track them inside the United States and determine if they leave the country on time.Accenture, Computer Sciences and Lockheed Martin are in the race to win the bid.| Monday, May 24, 2004Classical Finally Cracks the Internet via NYtimesInternet2, the next generation, with enough broadband capacity to transmit huge quantities of data, including CD-quality sound and DVD-quality images, at as much as 250 megabytes per second (more than 4,000 times the rate of a standard dial-up modem; more than 800 times that of a cable modem)can enable misical conferences over the net. No more transmission glitchesThe classical music world has been trying to figure out how best to exploit the Internet for years. In the late 1990's, it seemed that every American orchestra was trying to create a Web site with more bells and whistles than every other orchestra's: streamed concerts, educational games, interactive program notes. But users with average modems had trouble taking full advantage of the extras. Webcasts were interrupted by transmission glitches; fancy Web sites took ages to download. It gradually emerged that the most important function of a Web site for a performing-arts institution was selling tickets to events. Can this help to be the elearning media for music - the answer is - this media would be an enhancement to learning and shall not be a substitute to music learning. |Sunday, May 23, 2004Welcome To The World Wide Grid by Dr. Stuart Feldman Via ITUtilitypipelineIBM researcher Dr. Stuart Feldman, head of IBM's webahead program, shares his perspective about the future of the Web and how grid computing and on-demand computing will play a role in its future.On-demand has to offer end-to-end access so businesses can get the optimization they need. Web services and grid will promote end-to-end architecture and allow businesses to change how they act. The best way to get to this model is with grid and Web services running. The beauty of Web services and grid is that the user won't know this is the way the job is getting done. They will just be able to share services for efficiencies. on adaption of these technologies, he adds, a real indication is when the adoption increases exponentially. We're seeing grid and Web services doubling but it is still under the radar. When we see it growing exponentially year over year, then we'll begin to see people take notice. I think it will be visible to the general person in three to five years. It is still young. It was visible to insiders last year. |Saturday, May 22, 2004Charlie Munger in rare form via Tilsoncomplete unofficial transcript of charlie mungers speech at WESCO 2004 annual meeting Charlie munger's insightful and well thought out analysis about various issues like investment philosophy, moral codes,sarbanes oxley, ethics in accouting firms,workman compensation and he touches upon a whole host of issues in his Q&A session. The transcript is outstanding in its vision and elegant articulation.Treat to read. |Is Info Tech All Washed Up? via BweekRobert D. Hof reviews Nicholas carr's latest book "Does IT matter" and says that the book is no more convincing than his 2003 article on the same issue Nicholas Carr's book appears less than complete and is less convincing - My review of the book shall be out shorly as well. |Bill Gates on technology advances, and how they can impact business goals via Microsoft CEO summitBill gates tells CEOs to blog In his 2004 microsoft summit, Bill Gates identifies several areas as growth areas and points to advances in 64 bit processors, networkin -personal area networks,WIMAX, storage advances,display systems, RFID, GPS sensors in mobile, internet advertising and recommends blogging to CEO'S. Microsoft has allowed several of its employees to blog regularly. |Technology time compression via FCTechnology, of course, is the chief engine propelling time compression. While the trend began some 150 years ago with the introduction of time zones, it got a big boost in the '40s with the debut of fast food and the microwave oven, instant photography, and commercial jetliners. The jet age helped compress time zones, an advancement that unfortunately came to a halt with the demise of the Concorde.The state of mind has become a state of timeTechnology added yet another twist, Moore's Law and 18-month cycles, which moved the product development needle from steadily to fast. The media also rose to the challenge with Sesame Street and MTV, turning Generation X and Y into adept multitaskers, a computer-derived solution to making things happen faster.Time compression's blurringly fast trip includes Starbucks and FedEx, which eerily debuted almost simultaneously, as well as fax and the Internet, which ushered in the concept of "real time." It took scientists almost four years to discover the AIDS virus. SARS, on the other hand, was identified in less than six months, stoked by the communication power of the Internet.At the core of the time compression hurricane lies a little understood technology called "codec" -- a compression/decompression algorithm -- that holds the key to squeezing more bits into ever smaller packages.It's clear that future lifestyles will stress time and convenience. Don't let our current leisurely pace fool you. Because the economy has yet to clearly kick in again, the velocity of life has settled down a bit. That's merely a temporary respite. Expect the pace to pick up materially toward the end of the decade. |Gmail Supply and Demand via washingtonpostGoogle's new mail service is making news for a variety of reasons I see innovation as a key element in google's strategy - from search engine service, to specialised services like catalogue search, IPO disclosures, blogger, mail service, now desktop search, Google is setting trends -getting out of commoditized traps.. Cleary a company to watch. |Making India Shine By Thomas Friedman Via NYTimesThe lesson of India's election: the broad globalization strategy that India opted for in the early 1990's has succeeded in unlocking the country's incredible brainpower and stimulating sustained growth, which is the best antipoverty program. I think many Indians understand that retreating from their globalizing strategy now would be a disaster and result in India's neighborhood rival, China, leaving India in the dust.But the key to spreading the benefits of globalization across a big society is not about more Internet. It is about getting your fundamentals right: good governance, good education. India's problem is not too much globalization, but too little good governance. Local government in India — basic democracy — is so unresponsive and so corrupted it can't deliver services and education to rural Indians. Thomas Friedman, perhaps among the most widely travelled and hiighly incisive journalst, makes a very pertinent observation - Corruption, Responsiveness, Speed are the key and if i may add india needs to commit to 20 mega projects year after year for next 5 years are the basic requirements to keep the country improving. |Friday, May 21, 2004Netting More Business on the Web via BweekAs sources of sales and information, Web sites are opening a widening gap of traditional mediaSmall-business owners with Web sites show a clear preference for online marketing tools over traditional marketing methods, according to the results of a just-released survey.Respondents to the Spring 2004 Business Barometer of Online Activities were asked to select the three marketing tools they consider "critical in driving business." The top finishers were Web sites (69%), search-engine keywords (36%), and then community relations (35%). E-mail marketing methods (24%) beat out direct mail (22%) and long-time small-business marketing tool the Yellow Pages (12%). At the bottom of the list: newspaper advertising (5%), outdoor advertising (4%) and print coupons (2%). The web is clearly making a huge difference. In S.Korea, where broadband is widely used, 10% of retail sales happens through online media. It is beleived that in all developed world almost 50% of retail sales of big value items are influenced by web information.. clearly the tipping point in web usage for business purposes cam be almost sensed. |Thursday, May 20, 2004As job magnet, China sits far behind India Via TheworldpaperBoth India and China are top destinations in the trend in offshore job dislocation. But whereas India may easily play host to an American company’s large-scale call center, where receptionists are trained to speak English without an Indian accent, China is more of a destination for American manufacturing jobsMore Indians than Chinese have climbed to the top levels of the American corporate ladder and are more influential in deciding where to outsource the labor-intensive functions of their companies.Consequently, linguistic and cultural disadvantages situate China many years behind India.At the moment, most foreign offices in Beijing and Shanghai are sales offices of American multinational companies. Their budgets are for marketing and sales only and have little room for R&D or production facilities unless US headquarters budget it.The root of the US problem is that most of the gains from re-organization of labor and material resources worldwide are not used to ease the transition of laid-off American workers into new jobs, or evenly spread among ordinary shareholders, but are used to enrich the top executives of multinational companies.| Is Singh Right for India's Top Job by Andy MukherjeeAndy Mukherjee writes that the composition of the new indian government under Dr.Manmohan Singh would prevent him from delivering effectively I entirely agree with Andy on this - despite the general optimism exhibited by the indian press about Dr.Singh heading the government, I think at a time when India really needed to grow much faster and liberalise much more effectively, this change of guard and rise of power/influence for leftists and smaller parties woukd make reforms stagnate - at this juncture, India needs to accelarate the reform process and just staying on course alone or keeping liberalisation sentiments alive by having Dr. singh head the government would not help.There are also fears that Gandhi's coterie will not allow Singh a completely free hand in the days to come; it remains to be seen how he manages them.Another concern, not voiced openly yet, that 10, Janpath will never let Singh to grow larger than life for fear that this might destroy the chances of Rahul Gandhi, who is expected to, sooner or later, become prime minister.| Information middlemen are at risk in era of web via IHTThe Internet's impact on the value of information may still be in flux, but its long-term impact on middlemen is clear.Information is both invaluable and impossible to value. Historically, the main way around this problem has been to pack the results of intellectual or creative effort into something tangible that can be priced and sold: a book, a seat in a theater, an hour of an expert's time. Technology causes economic chaos when it disrupts this packaging plan, as is now happening in the music industry.But while lawyers and business executives worry about technology's effects on who will be paid, and how, for their creative efforts, the Internet's most fascinating impact has been on those who have decided not to charge for their work. Many are predicting radical transformation in various industries happening due to the internet in the new internet/broadband wave sweeping the globe. A recent businessweek article ebiz strikes again identifies six industries where the web is expected to make significant changes in the near future. Clearly, we shall be seeing rapid changes happening right in front of our eyes - today and early tomorrow. |Wednesday, May 19, 2004Can Values-Based Leadership be Learned? via HBSWKIs the concept of values-based leadership in a business environment just public relations mumbo-jumbo or can it positively impact the bottom-line?According to C. Tycho Howle, founder of Harbinger Computer Services and now Chairman of nuBridges, LLC, a privately held company providing fully-managed inter-enterprise eBusiness connections and communities, value-based leadership and entrepreneurship is real and can benefit any company Howle offers students two golden rules that have guided him in his career: First, “anticipate how you come across and empathize with the person on the other side of the table. There is no skill that I’ve acquired over the years that has been more important to me than the ability to put myself in another person’s shoes. Much of this ability is innate. It comes from being a good listener and conveying a sense of trustworthiness.” Second, create loyalty by managing others in the same way you would want to be managed. But be warned, “if you have a dictatorial style and you discourage independent thinking, then you need to realize that the success of your endeavor will be greatly dependent on your all-individual capabilities.”Howle suggests that graduates cultivate a relationship with a mentor of character and value even if that person doesn’t appear to be as successful in the organization as others. In my experience, the good guys always win! And those are the ones with whom you want to align your career.”| Google Moves Toward Clash With Microsoft via NYTimesGoogle, the Web search engine, is preparing to introduce a powerful file and text software search tool for locating information stored on personal computers,edging closer to a direct confrontation with MicrosoftAlthough Google's core business rests on huge farms of server computers that permit fast searching on the Internet, the company has already taken several steps to move beyond that business.Last year, Google began testing a free program called the Google Deskbar that makes it possible to search the Web by entering words and phrases in a small dialog box placed in the Windows desktop taskbar at the bottom of the computer screen.Google also sells a computer search system designed to index and retrieve information created and stored by a single organization.Internet searching is widely seen by industry executives as a powerful commercial service, but one that is difficult to defend. Google's strategy is to move quickly while Microsoft is still developing its Longhorn version of Windows, adding programs and services like its recently announced Gmail electronic mail program. The intent, say people who are aware of the company's strategy, is to lower its vulnerability to Microsoft by adding businesses that are "sticky" - in other words, businesses that create strong customer loyalty or are hard to switch away fromIt is widely presumed that Internet users who find a search service that is better than Google's will be willing to defect.Searches for information stored on a PC, however, could offer an advertising arena that is more readily defensible. Indeed, desktop searching might be particularly valuable for Google's commercial advertisers, which may be willing to pay dearly for the ability to place targeted ads in front of personal computer users.| Capgemini Wins $3.5bn TXU Outsourcing DealCapgemini SA has signed the biggest IT services contract of 2004 so far: a 10-year $3.5bn outsourcing deal.The contract is a significant boost for Paris, France-based Capgemini's ambitions in the US, and will give it a foothold in the one of the country's biggest energy companies, enabling it to compete more successfully with Accenture for energy outsourcing deals. Megadeals are beginning to happen in the outsourcing market- companies written off or said to be fading can capitalise this time by winning such opportunties and growing companies like indian IT majors can get a legup by winning such deals. Weaker companies, slowing down but not getting out will get marginalised from big players club. |Tuesday, May 18, 2004The Power Of Productivity: Why This Recovery Will Roll On via BweekThe US economy is in a sweet spot that should keep inflation at bay for some time.That's because the elongated start of the recovery means that the economy probably has a lot more room to run before it encounters a dangerous spurt in inflation. The key is productivity growth. It has been running at a remarkable 4.6% annual rate since the end of the recession and is the main reason the recovery has been so unusual. The economy appears to have entered a sweet spot in which rising corporate profits and increasing personal incomes should play off each other in a virtuous cycle of expanding activity. In the early stage of the recovery, when demand was sluggish, the benefits of productivity went largely to businesses, which saved money by cutting jobs. But now that the jobs market has finally turned up, workers have begun to share in the gains, which should make the recovery more sustainable. Because companies are getting more out of their workers, they can afford to pay them a bit more while still enjoying powerful profits. Recovery and growth confirmed from multiple perspectives. What effect this would have in the forthcoming election needs to be seen.| Offshoring increases at faster pace, Forrester says via InfoworldForrester study says that "User interest in offshore services continues to rise particularly on the IT side,companies are looking to stretch their flat or declining IT budgets and looking at offshore as a way of doing more with less, or the same amount."Adding fuel to the offshore services fire is the fact that offshore vendors and U.S.- based services providers have added to non-U.S. facilities and services offerings, said Forrester analysts on the conference call. Leading Indian suppliers such as Satyam Computer Services Ltd., Wipro Ltd. and Infosys Technologies Ltd., have grown in terms of revenue and employees during the past year and a half, Forrester analysts said, allowing them to add to their portfolio of offerings. Meanwhile U.S. vendors such as IBM Corp., PeopleSoft Inc. and Accenture Ltd. in the last 18 months have added to non-U.S. operations not only in India, but in China and the Philippines as well, they said. Confirmation that the offshoring market is picking up |The Trap of Overwhelming Demands by Heike Bruch and Sumantra Ghoshal via HBSWK"Managers who get caught in the trap of overwhelming demands become prisoners of routines. They do not have time to notice opportunities. Their habituated work prevents them from taking the first necessary step toward harnessing willpower: developing the capacity to dream an idea into existence and transforming it into a concrete intention The authors write, "Purposeful action-takers deal very differently with demands than their busy colleagues do. Rather than simply responding to any request that gets thrown at them, they manage their demands by:"- developing an explicit personal agenda, - practicing slow management, - structuring contact time, and - shaping demands and managing expectations | Monday, May 17, 2004A Crude Shock by Paul Krugman Via NYTimesThe last time oil prices were this high, on the eve of the 1991 gulf war, there was a lot of spare capacity in the world, so there was room to cope with a major supply disruption if it happened. This time there isn't.The International Energy Agency estimates the world's spare oil production capacity at about 2.5 million barrels per day, almost all of it in the Persian Gulf region. It also predicts that global oil demand in 2004 will be, on average, 2 million barrels per day higher than in 2003. Now imagine what will happen if there are more successful insurgent attacks on Iraqi pipelines, or, perish the thought, instability in Saudi Arabia. In fact, even without a supply disruption, it's hard to see where the oil will come from to meet the growing demand Paul Krugman concludes by saying,"Still, if there is a major supply disruption, the world will have to get by with less oil, and the only way that can happen in the short run is if there is a world economic slowdown. An oil-driven recession does not look at all far-fetched".Really scary.. |Sunday, May 16, 2004No Wires, No Rules - wireless wonders via BweekNew wireless technologies will soon reconfigure the Web using radio spectrum that doesn't cost a dime. In Britain, BT has installed a series of radio towers that beam signals across the countryside to small antennas on the sides of customers' homes. The system is about as fast as traditional broadband but much cheaper to set up. Why? BT is using less-expensive equipment and a free, unlicensed part of the radio spectrum, avoiding billions of dollars in fees. If the test in Campsie goes well, BT may roll out the service to consumers across Britain by next year. "This will revolutionize society, just as mobile telephony revolutionized society in the 1980s."Wi-Fi is just the first step, though. Hard on its heels are four equally innovative technologies -- WiMax, Mobile-Fi, ZigBee, and Ultrawideband -- that will push wireless networking into every facet of life, from cars and homes to office buildings and factories. These technologies have attracted $4.5 billion in venture investments over the past five years, according to estimates from San Francisco-based investment bank Rutberg & Co. Products based on them will start hitting the market this year and become widely available in 2005. As they do, they will expand the reach of the Internet for miles and create a mesh of Web technologies that will provide connections anywhere, anytime.These technologies will usher in a new era for the wireless Web. They'll work with each other and with traditional telephone networks to let people and machines communicate like never before. People in what have been isolated towns, be it in Ireland or Idaho, will find themselves with blazingly fast Net connections. Zooming down the highway, you'll be able to use a laptop or PDA to check the weather or the traffic a few miles ahead. Back at home, couch potatoes will be able to dish up movies from their PC and transfer them to the flat screen in the living room -- without any wires at all. And tiny wireless sensors will control the lights in skyscrapers, monitor utility meters in suburban neighborhoods, even track toxicity levels in wastewater. This will give rise to the Internet of Things, networks of smart machines that communicate with each other.| Forbes list of tax burden amongst nationsThe Misery Index and the Tax Matrix Forbes annual survey about tax and regulatory burden amongst nations - a very important survey useful for entrpreneurs, enteprises and individuals.Also check the tax burden matrix at Tax Burden matrix countrywise at various income levels |Does IT matter? - an HBR debateNicholas Carr's latest book - IT doesn't matter is out This is a collection of reviews opposing Nicholas carr's kernel argument that IT does not matter as it is becoming commoditized and therefore incapable of providing differentiating business value to enterprises. I shall be coming up with a review of Nicholas carr's book shortly - before that this is published by way of remembering reviews of Nicholas carr's seminal article published severla months ago. |What's The Human Speed Limit via ForbesHow fast can a human being run? Right now, the theoretical limit is just under 30 miles per hour--but a new era of gene therapy could soon extend our species' capacity for speed.Current runners already are touching the limits of what can be accomplished with the bodies nature gave themA dog, an ostrich, a cheetah, they can blow us away, says Weyand of Rice university. "And the materials they use to run--their bones, their muscles, their tendons--are no different than ours."Exactly what makes one kind of animal faster than another is complex and not entirely understood. One surprise: Apparently, it doesn't matter how many legs you have. Four-footed creatures are not inherently faster.Another surprise: All human runners move their legs at about the same rate, according to a study Weyand and his colleagues published in The Journal of Applied Physiology in 2000. "The slowest woman in our study, the time she took to reposition her leg was the same as Donovan Bailey, even though she could only sprint half as fast,".What matters is not so much how fast the legs can move, but how much force they can exert on the ground. Researchers think a genetic tweak to increase mitochondrial density just a little--a few percentage points--could make a runner much faster pushing the edge further. |Saturday, May 15, 2004Who's first with Web services? via ForresterWeb services technology--standards-based Internet middleware--promises to deliver more flexible integration more easily across more internal applications and external partnersLarge companies, which stand to benefit the most from Web services, have far more in production and development than small and medium-size ones. Companies that are increasing spending on enterprise application integration (EAI) have significantly more Web services in development, likely because they are moving toward Web services instead of message-oriented middleware in support of this effort. And companies that use J2EE have about as many Web services in production and in development as ones that use .Net, indicating that the two development platforms are used for Web services development about equally. Services leads, retail lags, and media gets into the game. The mean number of Web services for all industries is 10 in development and 10 in production.Business services companies--including professional services, transportation and logistics, and construction and engineering--are far ahead of the pack, with an average of 17 Web services in development and 12 in production. The study concludes that there is continued demand for both standards-based Web services and message-oriented middleware approaches to integration, especially where the higher quality of service available from the latter is still a requirement for the business process.| Some perspectives on information overloadComputers are great at making information cheaper and cheaper, but it takes humans to respond and act on that data. For most tasks, you still need a person in the loop. But humans can also be a bottleneck. We have more demand and overload on our cognitive abilities, and that prevents technology from being as effective as it can be.Some say that just as electricity replaced muscle work, IT is replacing mental work. That's not really a good analogy. While there are specific applications where computers replace thinking, in most cases they're more of a complement to each other, not a substitute.With advances in technology, the demand for human cognitive skills has gone up, not the reverse. In the 21st century, successful business models will take advantage of low-cost information, just as 19th-and 20th-century successes emerged when business leaders learned to exploit the falling prices of coal, iron, oil, and other commodities. Successful companies in the future will have design principles that let them exploit low-cost information without being paralyzed by information overload. The four strategies that Erik Brynjolfsson of MIT and his team have arrived at for enterprises to effectively managing information overaloads are: A.They can simply ignore some of the information. B.Develop intelligent, machine-based filters and automated decision makers that off-load processes from humans via computers and software. C.Introduce more distributed decision making. D. Improve employees' information-processing capacity. A very important area of research that can have keys to differentiating value for enterprises to competing in future. |E-commerce is coming of age, but not in the way predicted in the bubble years via EconomistWHEN the technology bubble burst in 2000, the crazy valuations for online companies vanished with it, and many businesses folded. The survivors plugged on as best they could, encouraged by the growing number of internet users. Now valuations are rising again and some of the dotcoms are making real profits, but the business world has become much more cautious about the internet's potential. The funny thing is that the wild predictions made at the height of the boom—namely, that vast chunks of the world economy would move into cyberspace—are, in one way or another, coming true.The raw numbers tell only part of the story. According to America's Department of Commerce, online retail sales in the world's biggest market last year rose by 26%, to $55 billion. That sounds a lot of money, but it amounts to only 1.6% of total retail sales. The vast majority of people still buy most things in the good old “bricks-and-mortar” world.One of the biggest commercial advantages of the internet is a lowering of transaction costs, which usually translates directly into lower prices for the consumer. So, if the lowest prices can be found on the internet and people like the service they get, why would they buy anywhere else?One reason may be convenience; another, concern about fraud, which poses the biggest threat to online trade. But as long as the internet continues to deliver price and product information quickly, cheaply and securely, e-commerce will continue to grow. Increasingly, companies will have to assume that customers will know exactly where to look for the best buy. This market has the potential to become as perfect as it gets.Half of the 60m consumers in Europe who have an internet connection bought products offline after having investigated prices and details online, according to a study by Forrester. The E-Commerce numbers reported is just the tip of the iceberg.E--commerce is already very big, and it is going to get much bigger. But the actual value of transactions currently concluded online is dwarfed by the extraordinary influence the internet is exerting over purchases carried out in the offline world. That influence is becoming an integral part of e-commerce.| Mr Vajpayee’s high ground, Mrs Gandhi’s road ahead via IEShekar Gupta writes,"For, if there’s one thing Verdict 2004 tells us, it’s this: the voter wants to see a better future, not tomorrow or the day after but today."This dramatic verdict is as much about anti-incumbency as about the rising expectations of our voter. As reform pulls more Indians above the poverty line, they are moving the bar of their expectations higher. From roti, kapada aur makaan to bijli, sadak, paani and then education, health, social dignity and security, all quality-of-life issues. This voter is more unforgiving, demanding, tougher to fool. It would then require something extraordinary to blunt his almost compulsive rejection of the incumbent. Vajpayee had it in him to do so. There were times when he rose above his party in the national interest. A pity, the party failed to rise with him and when it went out seeking votes in his name, there was a disconnect. As if he did not belong to them, or they did not deserve him. He concludes,"For, if there’s one thing Verdict 2004 tells us, it’s this: the voter wants to see a better future, not tomorrow or the day after but today." |Friday, May 14, 2004A Big Blue Gauntlet for Microsoft via BweekIBM's new Workplace just might succeed where so many earlier attempts have failed: Getting complex software off the desktop.With its new Workplace product, IBM (IBM ) has launched a frontal attack on Microsoft's (MSFT ) dominance of the desktop, but you can expect to hear Gates & Co. repeatedly shrug off the assault as the latest in a long line of blanks fired at the world's most successful software company. Don't believe it. IBM's move could actually prove to be the biggest threat to Microsoft's hammerlock on PC software since IBM was pushing its own competing operating system, OS/2, from 1987 through 1996.In a nutshell, Workplace takes Microsoft Office and moves it to a server.IBM has been pushing the concepts behind Workplace for several years, calling it "utility computing" and rolling out these capabilities in a more limited fashion.The model's attraction is clear. Workplace administrators will need to service only a single machine, the server that houses the software. The only thing users need to run Workplace is stripped-down software installed on their PCs and a fast connection to a corporate network or the Internet. By extension, users don't have to worry about complicated software upgrades or installations, let alone the constant problems that come from conflicts between different programs installed on desktop PCs.In the past, too, attempts at network computing on desktops didn't work because broadband Internet connectivity wasn't ubiquitous. The link back to the network data center -- where software like Workplace runs -- was slower than the Lincoln Tunnel coming back into Manhattan after a holiday weekend.Now the growth of wireless broadband networks has made speedy access common in business environments such as convention centers, airports, and hotels, which allows applications such as Workplace to appeal to workers on the go. And a new wave of wireless data services that run at close to broadband speeds could soon make high-velocity connectivity nearly ubiquitous in major cities and for large swathes of the world.The world has changed, and IBM may finally have reached a point where Redmond's desktop chokehold might prove more choke than hold.| The IT Marksman at Wal-Mart via BusinessweekAs the retailing behemoth's CIO, Linda Dillman sets -- and hits -- the tech targets that change how the entire industry operates.Wal-Mart has long regarded being on the cutting edge of technology as a strategy for cutting costs -- and as the surest way to beat the competition. Consequently, the world's largest discount chain "is usually one of the first movers in retail technologyTo Linda Dillman, executive vice-president and chief information officer at Wal-Mart, info tech is a puzzle to solve -- just like Scrabble, the crossword, or Rubik's cube. "I've spent hours, hours, and hours working on this stuff," Dillman says. "With technology, you're constantly trying to arrange things differently to solve a problem." In fact, Dillman is likely partly responsible for this year's jump in retail industry spending on technology. With Wal-Mart upping the competitive ante, retailers that historically been thrifty will spend 9% more on technology in 2004 than in 2003, according to an April survey of 27 retail-industry CIOs by tech consultancy AMR Research. |The great fall of China? via EconomistChina's economy is growing too fast for comfort, and the country's leaders know it. In recent weeks they have promised forceful measures to cool things down, but it is not clear what they will or can do. Rumours are rife that China's central bank may raise interest rates for the first time in nine years.If China's soaring economy has a hard landing, the rest of the world will feel the bump.During the past three years China has accounted for one-third of global economic growth (measured at purchasing-power parity), twice as much as America. In the past year, China's official GDP growth rate has surged to 9.7%. Even this may underestimate the true rate, which some economists reckon was as high as 13%.China's scorching growth has helped to prop up other economies by sucking in imports, which surged by 40% last year alone. While America's industrial output has shrunk over the past three years, China's has increased by almost 50%. As a result, its demand for commodities has skyrocketed, driving up prices. Last year it consumed 40% of the world's output of cement. It also accounted for one-third of the growth in global oil consumption, 90% of the growth in world steel demand, and more than the whole of the increase in copper demand. If China's economy slows sharply, commodity prices will fall everywhere, especially hurting producers in countries such as Russia, Brazil and Australia, which have gained so handsomely from China's boom.| German demography via EconomistAfter half a century of obscurity, population issues are resurfacing in headlines, bestseller lists and talk shows.Germany's chattering classes are facing up to the country's biggest long-term challenge: an ageing population. “In Germany, 2004 is the year of demography,” Some regions are in a death spiral of sorts, says Reiner Klingholz, one of the authors of the study—and others may share that fate in years to come: their population is imploding, not just because of a lack of babies but because young, qualified people are moving away, making many regions even less attractive for job-creating investments. |Thursday, May 13, 2004Database of leaders via Harvard databaseHarvard Business School has developed a database of 20th Century Great American Business Leaders. Partially available online -- the full data set can be gotten on request -- the database can be sorted by last name, birthplace, industry, gender The Harvard business school says, "The Great American Business Leaders database was compiled over a two-year period in an effort to identify and chronicle the lives of individuals whose business leadership in the twentieth century shaped the way people live, work, and interact. The impetus for the creation of the database stemmed from the Leadership Initiative's desire to better understand how business leadership legacies are developed and nurtured over time. Understanding what we can learn from the past will undoubtedly assist us in better preparing leaders for tomorrow". A very important initiative. |Capgemini succumbs to rebranding madness via The RegisterCap Gemini launches a new rebranding exercise All western consulting companies, in the wake of losing competitiveness are realigning their way of working in many ways to survive - cap gemini is no exception and is trying to realign its branding message consistent with the changing buisness environment. |EBay's Growth Just Beginning via WiredWhen sifting through the rubble of the Internet economy, Meg Whitman is among the few who not only survived but did quite well.Under her stewardship, eBay -- now one of the most highly valued companies in the United States -- has shown steady growth in revenue, profit and stock price, even following the aftermath of the dot-com implosion that began in March 2000. Now that the economy appears to be recovering, eBay's chief executive has turned her attention to small businesses, which are increasingly becoming eBay's bread and butter.First is the U.S. business, which continues to grow at a 30 to 75 percent compound annual growth rate.Second is international expansion.The third leg of our strategy is PayPal. |Wednesday, May 12, 2004Charlie Munger in Rare FormCharlie Munger, who runs Wesco Financial, is the famed right-hand man of Warren Buffett. He is also a master investor in his own right and has an acerbic, dry wit and had shareholders in stitches at numerous points Lovely speech indeed. |New Undersea Cable Projects Face Some Old Problems via NYTimesAnnouncements came in February and March that two new large cables would be built under the Indian Ocean, the Persian Gulf and the Mediterranean Sea to connect East Asia with Europe via the Middle East.The projects - the Falcon cable financed privately by Flag Telecom and the Sea-Me-We 4 line built by a consortium of global telephone companies led by Singapore Telecommunications - are nothing if not ambitious. The cables, which were several years in the planning, will stretch more than 9,300 miles, touching some of the more underserved parts of the globe. Flag did not announce a price tag for its project, but the consortium said it would spend $500 million on its line.Internet use is surging in many of the countries to be served by the cables - particularly in India, where Western companies are shifting some of their data businesses. And demand for high-speed connections will certainly grow in places like Bangladesh and some countries in the Persian Gulf that have had little access to global undersea networks.But the operators of the new cable lines face the same problems that sank many competitors. Chief among them is that the amount of capacity being added far outpaces growth in Internet use and demand for long-haul lines. Until this changes, prices will slide, making it harder for investors to recoup the hundreds of millions of dollars they are putting into these projects.The submarine cable industry's woes have a silver lining, though. Rock-bottom prices on cable leases mean that phone companies and Internet providers can offer cheaper long-distance calls and Internet connections, a boon to consumers and corporations. That, in turn, is helping increase Internet use - which in turn is good news for companies that depend on online sales and other activities.| Four Ways to Innovate in Operations by Michael Hammer Via HBSWKInnovation in operations—not to be confused with mere operational excellence or improvement—can yield competitive advantage Dr.Hammer known for his radical ideas and outstanding expression writes, "Operational innovation should not be confused with operational improvement or operational excellence. Those terms refer to achieving high performance via existing modes of operation: ensuring that work is done as it ought to be to reduce errors, costs, and delays but without fundamentally changing how that work gets accomplished. Operational innovation means coming up with entirely new ways of filling orders, developing products, providing customer service, or doing any other activity that an enterprise performs. [...]". Inventing a new way of operating that achieves the target need not be simply a matter of crossing your fingers and hoping for inspiration.Only a daunting target—clearly unattainable through existing modes of operation—will stimulate radical thinking and willingness to overturn tradition.Suggestions to accelarate operational innovation are, A.Look for role models outside your industry. B.Identify and defy a constraining assumption. C.Make the special case into the norm. D.Rethink critical dimensions of work. Powerful ideas that every organisation should ponder over..| Tuesday, May 11, 2004Steve Jobs is still important by George F.Colony via forresterJobs is delivering on the digital dream. While other companies in the tech industry are either stumbling (Sony), services-focused (IBM), protecting their monopolies (Intel), or shepherding their legacy systems (Microsoft), Jobs is delivering inspired, compelling digital alternatives to the old analog world. The guy has the creativity of Sergei and Larry at Google, the experience of Michael Dell, and the connections and persuasiveness of Carly Fiorina. What this means is What It Means No. 1: To the enterprise world? Nothing. Jobs is digitizing the consumer world. This isn't about helping large companies clear checks, run supply chains, or manage inventory. Jobs has never understood the use of computing in large companies. The minute he or Apple mentions “enterprise,” run in the other direction.What It Means No. 2: Consumer electronics vendors, whether they like it or not, will have to contend with a resurgent Apple and an omnipresent Steve Jobs. The company scored in the top five most-recognized consumer brands in Forrester's 2003 Tech Brand Scorecard — with numbers that have continued to improve. What It Means No. 3: Watch for Apple to take its music strategy (elegant integration of the personal device, desktop management software, and online music store) into new spaces. Still cameras and video cameras would be obvious markets to attack. Making mobile phones easier to use and highly integrated with the desktop could be a big win for Apple. iSync with Bluetooth would finally make it dead simple to switch phones without trashing address books. What It Means No. 4: Linux + Apple? Somehow, you know that Jobs won't be able to resist this one. If Jobs and team point their considerable innovation and creativity back toward desktop applications, they could blow a lot of new thinking into the market. Call it "iWorks" — an integrated desktop suite based on Linux. Apple would feature iWorks first on the Mac and then make it available on Intel machines. This would mean that 5% of desktops would have Linux desktops right out of the chute — a great start for the first serious Linux-based Microsoft Office fighter. This one's a stretch, given that Mac is based on open BSD, not Linux. But if the opportunity becomes compelling, I'll bet Jobs will move. All that can be said is inspirational maverick,that steve is. | Monday, May 10, 2004Protectionism never helps via News.comEconomic protectionism, the mandate that strangely ties the likes of John Kerry, Pat Buchanan and Ross Perot together, suggests that in order to protect jobs in America, the government should put up barriers to free trade that give "advantage" to the American worker over others. If implemented, a protectionist policy will have a profoundly negative effect on high-tech start-ups, entrepreneurialism and innovation.Wlliam Gurley says that are seven reasons why Silicon Valley should be very alarmed over protectionism:- A.Protectionism will hurt the overall economy. B.Start-ups don't collect subsidies. C.Diversity is critical to start-up success. D.Start-ups are increasingly global at an early age. E.The critical emerging markets are outside the United States F.It is equivalent to taking a step backward. G.Protectionism is inconsistent with the entrepreneurial mind-set. William gurley concludes by saying that What many in America may miss is that the rest of the world will go on without us. Over the past 30 years, the key market for technology products was obviously the United States. Start-ups in Europe, Israel and Asia would develop their products at home but quickly shift the focus to the United States, when the time came for marketing and sales. This is no longer the case. In many instances, Europe and Asia are quickly becoming the enviable markets. What's more, as recently noted in The New York Times, "Foreign advances in basic science now often rival or even exceed America's, apparently with little public awareness of the trend or its implications for jobs." If America closes its borders, resourceful entrepreneurs in Europe and Asia will cheerfully step in and generate tomorrow's leading break-through companies. | Sunday, May 09, 2004The half-life of a professional by Subroto BagchiPROFESSIONAL careers and the radioactive nature of nuclear fuel have interesting similarities. Consider the very nature of nuclear fuel. Its value is at its peak when in an enriched state. Then it goes into a state called 'half-life' and begins to lose energy. After attaining this state, the decay of the nuclear fuel becomes exponential. Thus, at its half-life, much of its utility is over and it becomes what is known as 'spent fuel'. At that state, it is an environmental liabilityOur professional careers are like enriched uranium. The tragedy, however, is that when we reach our half-life state, most of us do not notice the fact. Other people come to learn of it before we do. The interesting aspect of all this is that the time to reach half-life in every career is shrinkingIn the half-life state, nuclear fuel starts losing energy. Man can reengineer himself to avoid being spent fuel.The process of re-energising must happen much before a person hits the peak. Subrot Bagchi concludes the article by saying,"There is usually a gap between knowing and doing; let's call it the 'know-do' gap. As the world around us is becoming more complex and demanding, the know-do latency is shrinking. As a professional, I need to be cognizant of this and make sure my radioactivity is never past its half-life. The danger is, when it does get past, I will be the last to know." A very nice article- very relevant to progress in today's professional life. |What an Old Sears Catalog Could Teach eBay Today via NYTimesWhen Internet bulletin boards were first melded with auctions, there was little reason for buyers to pause in the absence of a guarantee. Bids were tiny, the risk small and the entertainment value of the novelty considerable. In the beginning, eBay's rise was anything but predictable; as late as 1997, it was but one funky site among 150 or so online auctions.Today, of course, it is the behemoth, reporting quarterly results last month that its chief executive, Meg Whitman, says put it on track to reach merchandise sales of $32 billion this year. Its 105 million registered users constitute a sprawling country without borders, which Ms. Whitman notes is equivalent to the 11th-most-populous nation in the world, just ahead of MexicoEBAY is not wholly consistent, however, in maintaining that it is merely the disinterested landlord of the auction shed. To coax leery buyers into purchasing used automobiles for prices that put at risk a bit more money than a Care Bear collectible, eBay Motors offers the buyer some service protection, gratis. It's only for one month or 1,000 miles, but the details are less important than the principle that eBay has quietly embraced in this one corner: it is willing to spend some of its own money to offer buyers the same protection that would be found in similar transactions elsewhere, though the company never holds legal title to the goods.As eBay sells more new goods, the brand's lack of a money-back guarantee will become a hindrance. "History suggests that in order to remain competitive, retailers must match the offerings of others," Professor Koehn said. "EBay is unlikely to be an exception." Interesting observations about the ebay model. |It's Not Google. It's That Other Big I.P.O via NYTimessalesforce.com is taking a significant step by filing for an IPO.Mr. Benioff is inclined to use the word "revolutionary" to describe his service, and not without reason. Unlike most software makers, Salesforce does not sell a product that is installed in the buyer's computer. Instead, the company leases software to subscribers who pay a monthly fee. The company maintains its customer-related software on its own computers; subscribers can visit Salesforce.com whenever they choose, courtesy of an Internet browser much like one that would connect to, say, Amazon.com. Salesforce also provides the perfect lens for watching one of the more interesting - and potentially significant - trends in computers |Are You Aiming Too Low with RFID? via HBSWKToo many RFID programs focus solely on increasing supply chain efficiency. Aim higher and you’ll profit more, says Jonathan Byrnes.In many companies, managers are preparing to use RFID (Radio Frequency Identification) technologies to make existing supply chain processes more cost-efficient. The problem: By focusing on cost efficiencies, they are losing opportunities to use RFID to change the basic nature of their supply chainsRFID, in which products are “tagged” with chips that "announce" their identity when hit with a non-line-of-sight electromagnetic field, offers the promise of huge gains over time (see “Who Will Profit from Auto-ID?"). These gains come from two areas: (1) analytical, or business intelligence, applications, which are rooted in marketing and materials management; and (2) production, or validation, applications, which are rooted in operations and physical distribution.Analytical applications improve supply chain coordination, ensuring that the right amounts of the right products are in the right places at the right times. An example of this is using RFID to get an early read on demand trends, and transmitting this information throughout the supply chain to align production and inventory levels. Production applications, on the other hand, reduce handling costs and improve handling accuracy. Employing RFID to reduce labor at the receiving dock exemplifies a production application.The key success factor is to focus early on analytical gains, and only later on production gains. Unfortunately, all too many companies are losing critical opportunities because they are going about it backwards.The true promise of RFID is to make supply chains better, not just to make parts of them more efficient. To accomplish this, you need one part technology to nine parts vision and good management.| Saturday, May 08, 2004With digital cameras, the world is watching via IHTTo the legions of Internet photo-bloggers who make a habit of snapping and circulating digital pictures of everyday life, the unofficial images of Iraqi prisoner abuse appearing in news reports recently may be shocking, but the fact of their existence is unremarkable. "People just capture whatever goes on in front of their eyes, and then it's on the Internet two minutes later.That's the whole ethos of this technology." That ethos - made possible by the plummeting cost of digital cameras and instant Internet distribution - is forcing a major shift in the expectation of what can be kept private, experts say, and may ultimately hold everyone more accountable for his or her actions, whether those actions take place in military prisons or on public streets. For Brandon Stone, 27, the creator of the Web site www.photoblogs.org, merely browsing through pictures that are submitted to the site can be overwhelming. During one recent day the shots' subjects ranged from a pretty pile of leaves to a charred remnant of a foot in Baghdad to the eerie images posted by a Russian woman who took a motorcycle trip to Chernobyl. Some of them are taken with standard digital cameras, other with cameras built into cellphones or pens. "It's just going to be more and more, because so many things are happening in the world right now, and people don't have to develop film in order to capture it - there is no film," Stone said. This new technology has become so pervasive making several unimaginable things happen in the world - setting of a series of changes - speed, societal change, transparency etc.. |Moving Beyond The Core - Review via ForbesZook(Bain consulting) has taken years worth of research and distilled it down into a tightly written 200 pages of very important advice for senior executives who are struggling to crack the code on how to grow their companies. The book focuses on how to best manage growth using "adjacency moves," an awkwardly titled but effective (when properly managed) growth strategy to complement, rather than detract from, a company's core business. Zook isn't peddling a panacea for senior managers. His underlying message hasn't changed since he co-authored Profit From the Core in 2001: Successful growth is hard work and the devil is in the details. Successful companies consistently have CEOs who sweat out the strategy and the implementation with his or her troops, and who champion the new growth initiatives and protect them from the entrenched interests that companies of any significant size have. "The management team that applies rigor, not a vague sense of creativity or gut instinct, wins the long-term adjacency game," Zook writes.In the author's view, an "adjacency move" is any attempt by a company to move beyond its core business in search of growth. These moves can take many forms, such as selling current products or services through a new channel or in a new geography, or selling new products or services to current customers.Some firms face bigger challenges than others in moving beyond the core.Zook makes it clear that if you want to shift your entire company in a dramatic lunge for growth, forget it. Adjacency moves work best if they are incremental and repeatable and don't drain your core business of resources. Think you can cure the problems of your core by growing away from it? Don't bother. Data supports the conclusion that moves away from the core won't pan out if the fundamental problems of the core are not fixed first. A very well written book by one of the top consultant in the world. |Germany's Moment of Truth Via CECan the largest economy in Europe remain competitive?Germany’s erstwhile model society—aging, mostly well-off and lulled to sleep by the hum of its economic engine—has gradually been surrendering economic leadership, while clinging to the illusion that it remains on top. Granted, Germany is still the world’s largest exporter and Europe’s biggest economy. But it has been consistently falling behind in economic growth, innovation and job creationThis is a moment of truth for Germany, and for both German and non-German CEOs who operate here. Will this country of 82 million pull itself together and reverse the inexorable slide into irrelevance and mediocrity? Can it break the cycle of ever-rising social costs? The alternatives are dire. “If Germany fails to radically reform its pensions, health care, education, social welfare, taxes and the labor market, this could lead to fundamental shifts in political and economic power constellations in Europe and beyond its borders,” warns Norbert Walter, chief economist of Deutsche Bank.If his statement sounds almost like panic, it’s because it very nearly is. “Our impact on the rest of the world keeps dwindling,” says Lutz Raettig, CEO of Morgan Stanley in Frankfurt. “It’s a process of slow erosion.” Due to high cost structure,it’s little surprise that few fresh dollars—or euros—are going into German manufacturing. The Bundesbank has calculated that industrial investment fell by almost 5 percent in 2001, plummeted by 9 percent a year later, and declined by a further 3 percent last year.It’s not the first time, of course, that Germany has to pull itself out of an economic mire in the last ten years. But the signs of economic and social decay have never been clearer. |IT : The Engine That Drives Success by Dan TapscottThe best companies have the best business models because they have the best IT strategies says Tapscott in refuting Nicholas Carr's views expressed in his latest book -Does IT matter? Dan tapscott expands his ideas and says,IT and business models are not discrete factors in strategy; increasingly, they are inseparable. IT is leading to profound changes in business design—not just to new business processes but to the deep structures of the corporation. Because IT and networks radically reduce internal transaction costs, companies can conduct business in real-time.IT is slashing transaction and interaction costs between companies. The upshot is that partnering is becoming more cost-effective than performing many business functions internally. The vertically integrated corporation is unbundling, and companies can now focus on what they do best and partner to do the rest in what I've called "business webs." Leading companies grow by focusing on their core—that cluster of activities where they have unique capabilities and where they create true barriers to replication. The evidence is clear: Companies that forge high-performance business webs tend to have better products, lower cost structures and better profitability than their vertically integrated counterparts. |Friday, May 07, 2004How Much Does Information Technology Matter? Via NYTIMESHal Varian reviews Nicholas Carr's latest book - Does IT Matter?It's a good book. Mr. Carr lays out the simple truths of the economics of information technology in a lucid way, with cogent examples and clear analysis.His basic point is straightforward. At one time, information technology was so expensive and so difficult to manage that companies could make large amounts of money simply by being able to make systems work. (Think I.B.M.).Companies that lacked the skills to manage information technology effectively suffered compared with competitors that had mastered those skills. But over the years, as information technology has become cheaper and more manageable, this source of competitive advantage has been reduced and perhaps eliminated. Hiring knowledgeable employees is much easier than it used to be, and the tools to manage this technology are far more powerful than they were a few short years ago. Nowadays anybody can set up a Web server, or an accounting system, or an inventory management system.The ability to manage technology effectively is no longer the barrier to entry it once was. Hence, it no longer serves as a source of competitive advantage.So it is with every new technology. When electric motors became small enough to drive individual machine tools, it became possible to set up assembly lines and greatly improve productivity.Henry Ford and his colleagues created the assembly line and other techniques of mass production in the formative days of the automobile industry and enjoyed a significant advantage over their competitors for nearly 20 years. Hal Varian concludes his review by saying,"In my view, companies cannot afford to ignore information technology, or relegate it to the back burner. Commoditizing it does not necessarily mean innovation slows. If anything, it could accelerate as more and more innovators experiment and tinker with those cheap, ubiquitous information technology commodities". Powerful set of arguments by Nicholas carr - this created a big fizz last year. pl. watch this space for additional comments and reviews | Thursday, May 06, 2004Super organics - Genetically modifed food via wiredThe new-and-improved flavor of gene science is Earth-friendly and all-natural. Welcome to the golden age of smart breeding.GMOs have fulfilled their promise. They've allowed US farmers to be more productive without as much topical pesticide and fertilizer. Our grocery stores are stuffed with cheaply produced food - up to 70 percent of all packaged goods contain GM ingredients, mainly corn and soybean. GM has worked even better with inedible crops. Take cotton. Bugs love it, which is why Southern folk music is full of tunes about the boll weevil. This means huge doses of pesticides. The world's largest cotton producer, China, used to track the human body count during spraying season. Then in 1996, Monsanto introduced BT cotton - a GMO that employs a gene from the bacterium Bacillus thuringiensis to make a powerful pesticide in the plant. BT cotton cuts pesticide spraying in half; the farmers survive.But while producers have embraced GMOs, consumers have had a tougher time understanding the benefits. Environmentalists and foodies decry GMOs as unnatural creations bound to destroy traditional plants and harm our bodies. Europe has all but outlawed transgenic crops, prompting a global trade war that's costing US farmers billions in lost exports. Now enter smart breeding. Researchers are beginning to understand plants so precisely that they no longer need transgenics to achieve traits like drought resistance, durability, or increased nutritional value. Over the past decade, scientists have discovered that our crops are chock-full of dormant characteristics. Rather than inserting, say, a bacteria gene to ward off pests, it's often possible to simply turn on a plant's innate ability.The result: Smart breeding holds the promise of remaking agriculture through methods that are largely uncontroversial and unpatentable. Think about the crossbreeding and hybridization that farmers have been doing for hundreds of years, relying on instinct, trial and error, and luck to bring us things like tangelos, giant pumpkins, and burpless cucumbers. Now replace those fuzzy factors with precise information about the role each gene plays in a plant's makeup. Today, scientists can tease out desired traits on the fly - something that used to take a decade or more to accomplish. A very detailed thought provoking article summarising most of the research that is happening centered around GMO's and their impact on society.. Must read for all.| Web Search for Tomorrow via BusinessweekGoogle's success is spurring competitors to take search technology to the next level. Here are some areas they're exploring.Ever since google was planning to file for an IPO, so much of analysis is happening about the company,competitors, future opportuntities etc..The glimpse into Google's financials, released on Apr. 29, reveals one certainty: There's plenty of money to be made in the search game. Silicon Valley's new favorite company is on pace to pocket over $600 million in operating income this year on revenues of $1.6 billion. And that juicy 38% margin is already attracting plenty of attention from potential rivals. Research indicators point to personalisation,search history,deep search within objects,clustering results could be hitting the market in the near future- these would further make search indispensable for all of us. |From Subject to Citizen by Shoshana Zuboff Via FCGetting the feudalism out of capitalism.A couple of centuries ago, we were "subjects." New ideas, revolutions, and the spread of democracy transformed us into "citizens" with personal choice and freedom -- except at work. Our industrial-age organizations are the last redoubts of feudalism. CEOs can still be like monarchs surrounded by courtiers. Behind the progressive window-dressing, a one-way chain of command remains in force. As employees and as consumers, most people follow orders with little voice or influence. Instead of mass consumers, we're now complex individuals in search of choice, control, and influence. We're not buying just products anymore, but health care, insurance, credit, education--things that intimately affect our quality of life. We want more from companies than efficiency. We want relationships that help solve our unique problems, not anonymous transactions that create more of them.It's time for a new bargain. Let's drop the myth of consumers and employees. Let's recognize that we are each an individual economic citizen at work or at home. Some of us sell; all of us buy. The cash we spend sustains more than two-thirds of all jobs--so we're actually paying one another. Instead of cash for compliance, we need a new deal in which authenticity, knowledge, and empowerment on the job produces more shared life satisfaction, releasing more cash that in turn supports more jobs. Instead of the old zero-sum roles, let's acknowledge that we are interdependent and assert our rights of citizenship in commerce as well as in politics. If we reconceive the enterprise as being of, by, and for individual economic citizens, what will the monarchs do? Very powerful argument. worth definitely pondering. |Tuesday, May 04, 2004The CEO of the 21st Century by Mark GoulstonWith business leaders' public -- and private -- behavior coming under increasing scrutiny, it's becoming nearly impossible to avoid getting caught in a lie. Few things detract more from your credibility and the respect of your colleagues and peers than being called on the carpet to deflect accusations and defend an untruth. Can leaders who lapse learn how to be truthful in words and honorable in deeds? The answer is YES.If you're fortunate, you'll meet people over the course of your career who exceed your expectations in every way. When you work or spend time with them, you find yourself wanting to be a better person. You put a lid on your neuroses (which might cause you to coax others to go easy on you because you are wracked with worry) and on your sense of entitlement (which can drive you to manipulate others into doing what you want through intimidation). Chances are they possessed the following four attributes:The judgment to know the right thing to do. The integrity to do it. The character to stand up to those who don't. The courage to stop those who won't. If you consistently practice and develop these qualities in your professional and personal life, you will accrue an additional benefit beyond getting the best out of your peers and colleagues, as well as your family. You will develop wisdom. With that you will be able to distinguish what's important in life, what's worth fighting for -- even dying for -- and what makes up a life that's worth living. | Monday, May 03, 2004New book challenges old views on wealth creation via BusinesstimesProductivity determines GDP per capita, not size of labour and capital markets.It's all due to, in a word, productivity, says a McKinsey study on why rich countries become richer, and others get poorer. And government policies that distort competition - rather than factors like low education - are the biggest barrier to the sprouting of productive, efficient industries.Conventional wisdom has it that improvements in infrastructure, technology, capital markets, education, and health care would narrow the global wealth gap. Fifty years and billions of dollars of international aid efforts later, this wisdom has proved wrong, notes retired McKinsey partner William Lewis in a new book, The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability.GDP per capita - or the average amount of goods and services produced by each person - is widely seen as the single best measure of economic well-being. And virtually all the differences in GDP per capita around the world are explained by productivity, rather than by the size or structure of the labour or capital markets.The conclusion arrived in this book stands as,"Economic progress depends on increasing productivity, which depends on undistorted competition. When government policies limit competition, even unintentionally, more efficient companies can't replace less efficient ones. Economic growth slows and nations remain poor." Very nice perspective. | Sunday, May 02, 2004Let Us Pray -On china by Thomas FriedmanThe most striking thing about being in Asia today is hearing how much more important China's growth engine has become for companies all across the region — and well beyond it. When Chinese authorities told banks last week to cut back their wild lending, commodity prices and stock markets tumbled all over the world. News that China is having regular blackouts because it can't buy enough crude oil is helping push up gasoline prices the world over.To some degree the world is getting hooked on China — its cheap labor, its voracious appetite for commodities and capital (over $50 billion in foreign direct investment last year) and its emerging middle class. The more hooked we become, the less the world can tolerate any sort of prolonged instability there. If the China bubble bursts, it will be the mother of all burst bubbles. Which is why we need to pray that China's leaders will have the skill to cool things down, just enough but not too much, without some wheels falling off."A lot of the world's stability or instability is resting on the leadership in Beijing — there is no question about that," argues Richard Koo, chief economist for Nomura Research Institute. But, he insists, "Chinese leaders understand what world they are living in. They have a general equilibrium view of the world — that what they do affects us all and then comes back to affect them." Thomas friedman concludes,"The relationship of the world to China right now reminds me of that old banker's rule: If a client owes you $1,000, that's his problem. If a client owes you $1 million, that's your problem. China's stability is our problem".| Saturday, May 01, 2004How VCs earn their keep via Knowledge@WhartonIf a company borrows from a bank and the terms are similar, it does not matter what bank it gets the money from. In seeking venture capital investment, however, a company is hungry not just for cash but also for the venture firm’s "reputation and access to a network of relationships--with customers, suppliers, investments bankers and other important constituents in the universe that the entrepreneur cares about,"Reputable venture capital firms also play an information-brokerage role that is vital to young companies. In their early stages, companies are insecure and opt for secrecy to protect their competitive position. Venture capitalists, in their role as trusted intermediaries, can act in a variety of ways on behalf of the company--from assisting in recruiting executive officers to striking up strategic alliances. |Crunching Monster's Numbers Via FCFor Jeff Taylor, founder and chairman of Monster.com and a longtime observer of the employment tea leaves, the hot-button issue of jobs moving abroad ignores what he thinks is a cold, hard fact: The biggest job-related challenge in this country is likely to be too many jobs, not too few. This Web Exclusive offers Taylor's argument on why the aging of the baby boomers means dynamism, not depression, for job seekers Jeff Taylor writes,"If you look at the momentum of innovation and labor together, the US has gone from a manufacturing society where 75% of jobs were in agriculture and manufacturing to only 15%. Now the US has 70% of jobs in service. It's a complete transition from hard goods to information. If you look at the impact that globalization of labor has had on manufacturing, it's been a 20-year transition. Between 5 and 6 million jobs have gone to China, but the U.S. economy has gracefully changed what it does -- and its role -- by moving to more service-oriented business.simple math is that the US shall be still 10 million people short after outsourcing and job loss by 2008. Very interesting.. |on eBay user experienceAndre Haddad, vice president of user experience and design for eBay says, "Pierre Omidyar's vision was to create efficient markets. He was thinking of a public forum that could enable to interact based on commerce. In a public forum, honest dealings are encouraged, and despite the fact that buyers and sellers are strangers, the system helps support trust."What actually happens on the platform? A tractor or tractor part sells every hour. A video game sells every eight seconds. An IBM laptop is sold every 3.5 minutes. A digital camera sells every minute. And trading cards sell every six seconds.There are two extremes thinking that eBay is a retailer and thinking that it's a marketplace in which there's no human intervention. eBay is a marketplace manager. We provide the framework for trade, inspire the culture to the community of users, and provide the eBay community with a suite of tools.Think about eBay as a neighborhood marketplace. It's at the intersection of commerce and community. Interactions are personal. eBay works at the tale ends of the product lifecycle: collectibles and extremely new and scarce products.The buying experience brings a joy of discovery and excitement. Winning or losing an auction at the very last minute is a very human experience. And the community experience encourages interaction and communication.| Why phones are replacing cars Via EconomistUsing automotive imagery to sell a handset makes a lot of sense for, in many respects, mobile phones are replacing cars.Phones are now the dominant technology with which young people, and urban youth in particular, now define themselves. What sort of phone you carry and how you customise it says a great deal about you, just as the choice of car did for a previous generation.The design of both cars and phones started off being defined by something that was no longer there. Cars were originally horseless carriages, and early models looked suitably carriage-like; only later did car designers realise that cars could be almost any shape they wanted to make them. Similarly, mobile phones used to look much like the push-button type of fixed-line phones, only without the wire. But now they come in a bewildering range of strange shapes and sizes.Mobile phones, like cars, are fashion items: in both cases, people buy new ones far more often than is actually necessary. Both are social technologies that bring people together; for teenagers, both act as symbols of independence. And cars and phones alike promote freedom and mobility, with unexpected social consequences.Less visibly, as the structure of the mobile-phone industry changes, it increasingly resembles that of the car industry. A very nice article.| Localized Google search result exclusions - An interesting studyJonathan Zittrain and Benjamin Edelman - Berkman Center for Internet & Society, Harvard Law School are studying the exclusions from search engine search results, and have found some 113 sites excluded, in whole or in part, from the French google.fr and German google.de compared with google.com. All over the world, several countries and laws prevent some websites and search results form appearing in search in their countries.A well-known example is the attempt by the French judiciary, acting on complaint of a French NGO, to prevent those on French territory from viewing Yahoo auctions that include the display of Nazi memorabilia, and Yahoo's response. This blogsite is banned in china!. This research is studying the internet filtering that is happening worldwide. | |
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