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Monday, May 31, 2004Influentials are actively involved. But more importantly, what drives them? They take an active approach to life. They have an enthusiasm for learning. They're connected to many people and groups. They have a clear set of priorities. They have a strong belief in growth and change. These aren't people who get comfortable. And they have the ability to create change. Demographically, they're largely average, but they are more highly educated. There's something in the college phenomenon.There are three key reasons why the influentials matter. They are leading indicators of consumer trends. They are consumer advocates. And perhaps most importantly, they are market multipliers.In terms of being market trendsetters, consistently, the influentials tend to be two, three, and five years ahead of the curve. But they are not the earliest adopters. They're the early majority. Early adopters don't necessarily have the broad social connectivity you need to throw an idea forward. They led the way in personal computers. In the '80s, they led the way with catalog shopping. They also fueled the online shopping phenomenon. We see this in area after area, like in hybrid cars now.Influentials also drive marketplace acceptance and rejection. They're highly discriminating consumers, and they will speak their mind. In any given moment in time. 40% of influentials have had a problem with a product or service in the last three months. They have a higher threshold for what a quality product or service should be. And they're more than twice as likely to do something about it. They'll complain in person. They'll write you. They believe that they have the right to do something if something doesn't go right.Not only can influentials help advocate your brand through word of mouth, they can help indicate new market opportunities, identify new product needs, and position old products.
Online retailers executed a sharp turnaround to profitability last year, according to a report released by Shop.org, an industry trade group. The numbers indicate that some of the reasons Web merchants attracted investors during the dot-com boom were not so far-fetched after all.The annual report, based on surveys of 150 online retailers earlier this year, indicates that merchants generated profit margins of 16 percent last year, compared with losses of 15 percent in 2002. Offline retailers, by contrast, typically generate profits of 3 to 10 percent, according to the study.Excluding travel, online sales grew 34 percent last year, to $72 billion, according to the Shop.org report, a figure that represents 5.4 percent of total United States retail receipts in 2003. According to Shop.org's estimates, consumers will buy 43 percent of their computer hardware and software online this year, and 23 percent of their entertainment tickets, 22 percent of their travel and 19 percent of their books. But nearly all other categories are at or below 10 percent. Just 4 percent of home furnishings, for instance, are bought online, and Web purchases represent 1 percent of food and beverage sales.Many companies that hedged their e-commerce strategies in the past did so by either relying on outside warehouse operators to "pick, pack and ship" their goods, or by asking manufacturers to ship directly to consumers. But with companies sensing the opportunity in online sales, they have had to assume more control over shipping processes - often investing in warehouses and owning more of the inventory, to insure smooth deliveries and no unexpected merchandise shortages. This segment is bound to get stronger and stronger - tipping point is reached when 10% of retail revenues happen through online sales -Korea has acheived this in select merchandise. |
Sunday, May 30, 2004That 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 |
In 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.
One 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.
Saturday, May 29, 2004Britons 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. |
Amazing 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.
Bweek 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. |
Friday, May 28, 2004Mckinsey 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 |
Enginering 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.
On 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 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.
Global 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. |
A good counterview to Nicholas Carr's core ideas centered on commodisation of components and systems |
Although 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.""
In 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". |
Cameron 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.
Compartmentalizing 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. |
Strategic 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, 2004Nokia 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.
Wednesday, May 26, 2004Peter 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.
Companies 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."
They 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. |
Tuesday, May 25, 2004Europe 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" |
The 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. |
No 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.
Businessweek 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. |
Monday, May 24, 2004The 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."
Linux 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." |
Nanosys 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. |
For 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 effort
IBM's Middleware challenge to challenge microsoft as well. |
The 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.
Sunday, May 23, 2004Internet2, 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. |
IBM 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, 2004complete 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. |
Robert 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. |
Friday, May 21, 2004Bill 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, 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. |
Google'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. |
The 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. |
As 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, 2004Both 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.
Wednesday, May 19, 2004Andy 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.
The 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. |
Is 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, 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 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 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.
Forrester 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 |
Monday, May 17, 2004"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 |
The 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, 2004New 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.
The 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 |
Nicholas 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. |
Saturday, May 15, 2004How 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. |
Web 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.
Computers 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. |
Friday, May 14, 2004WHEN 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.
Shekar 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." |
IBM'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.
As 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. |
China'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.
After 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, 2004Harvard 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. |
Cap 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. |
Wednesday, May 12, 2004When 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. |
Charlie 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. |
Announcements 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.
Tuesday, May 11, 2004Innovation 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..
|Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld