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Wednesday, June 30, 2004

"The Constant Challenge" at eBay

Commerce, community and change makes life exciting for Meg Whitman at eBay. Meg says,"It's this unique blend of commerce and community. The community of users is endlessly interesting and endlessly surprising. That's what I love the most.Second is the constant challenge. It is one of the fastest-growing companies of any scale. Every week, there is a different set of issues, a different challenge, something new to think about. Probably at least a couple times a week, I go, "Huh! I didn't know that."" Amazing zeal and enthusiasm - definitely making the difference here.

Grid Confusion by major IT companies

All the marketing from major vendors appears to have left IT executives more confused than ever about grid computing. Grid computing is not well understood and the vendors have not helped matters in positioning this well. Lack of standardisation contributes to the confusion further. The industry leaders have a responsibility to make this potential technology clear and usable to all users.

Why Did We Invest in NewsGator? by Brad Feld

The investment in NewsGator is based on just the outlook based RSS aggregator. While the most popular product from NewsGator is currently their Outlook-based aggregator, what really attracted the investor into NewsGator as a potential investment is NewsGator Online Services (NGOS). Greg Reinacker's vision is much broader than simply an RSS aggregator - his goal is to provide RSS content on any device. NewsGator currently provides clients for Outlook, the Web, POP email, mobile devices (web-based and wap), and Microsoft Media Center (how cool is it to get an RSS feed on your TV?).Brad Feld writes,"the misperception that NewsGator is simply an RSS reader for Outlook (although it is a damn good Outlook-based RSS aggregator!). Let me move on to why we invested in NewsGator. When I started really digging into RSS and blog technology, I began by actively playing with and trying as many different products and services as I could find. I had three goals: (1) figure out which were the most interesting products available today, (2) determine what the segments of the RSS / blog universe were, and (3) determine the "analog analogs" from the evolution of other segments (publishing, email, web, and ecommerce).The first was fun for me as its appeal to my inner-nerd was very tactile. In many of the market segments that I invest in (such as IT infrastructure software products - companies like Cyanea, Newmerix, Oxlo, Rally Software and Xaffire) I can't actually use the software in a sustained way. Sure - I can look at demos - but I'm not the target customer or user - so any real use case is contrived. In the RSS / blog universe I could set up a blog, read blogs, use RSS syndication, explore the tools, look at and think about my stats, and play with new search and advertising technologies as they appeared. Once I got into this, I ran across a number of interesting new companies.Once I became "a user" (meaning I was no longer in demo mode, but I was actually using this stuff every day), I starting figuring out which segments each company fit in and correspondingly began to rank the companies in terms of my perception of their future potential. The segments I came up with in hindsight are not that surprising, so I'm happy to share them here (and take constructive feedback from anyone that's bothered to read this far). The segments I identified are content management systems (CMS), readers (aggregators), tools, hosting, content, search, analytics, and advertising. There is obviously overlap between these segments (e.g. a company could be in more than one segment - search and advertising are a natural pairing, as are readers, tools, and analytics).I decided that rather than try to find one "ultimate investment" in RSS that spanned all the segments (I don't think this will exist), I wanted to make investments in several segments. I've been working closely on this with Ryan McIntyre who was previously a founder of Excite and knows many of these segments well from his experience there (and - hence - another view on the analog analog). We identified several companies in different segments that excited us and have been systematically exploring working with / investing in them. In several cases these companies overlap in various segments, but when in the same segment (e.g. search), they are complementary to each other rather than competitive.In fact - today - NewsGator (through the Outlook client as well as NGOS) has capabilities that cross all four segments. Clearly the emphasis is readers and tools - but if you dig into NGOS - you can see how NewsGator could be very complimentary to other companies that have their emphasis on search and analytics. Very perceptive comments and a key investment indeed.

Apple Putting More Focus on Simplifying Searching via NYT

The problem of searching for information on a personal computer is one of the most troublesome issues facing the computer industry, and one that Apple - which today has only 5 percent of the PC market - will be the first to solve."Search is a problem for every personal computer company," Mr. Jobs said in an interview at the Apple Worldwide Developer conference. "It's easier to find a document in a million pages on the Web using Google than it is to find a document on your hard drive."With Tiger,Apple's search solution, that will no longer be the case, Mr. Jobs said, because Spotlight will be able to find data stored on a hard drive regardless of the type of file it is hidden in.The function is based on technology used in iTunes that permits users of Apple's music service to organize and search through song collections. Spotlight will show up as an icon in the top right corner of the screen, much like the search buttons that show up on Web pages. By incorporating roughly 150 new features in Tiger, Apple is "clearly going after Longhorn". Apple dazzles the industry by being the first to acheive new things - a trait that it has demonstrated consistently for several years. Truly commendable -Mr.Jobs

Tuesday, June 29, 2004

The CNET phenomenon via Bweek

Shelby Bonnie is a man with a brand plan. The CEO of CNET Networks is betting heavily that the brand he's building in tech news and information will turn to gold as advertisers realize that the Net offers more than search-engine ads. CNET has impressive credentials - CNET ads have boosted direct referrals to Sony's (SNE ) e-commerce Web sites by 225% since the beginning of last year, according to Patrick Vogt, senior vice-president of Sony E-Solutions, the online direct-sales arm of the consumer-electronics giant. Vogt spends 30% of his annual online ad budget with CNET, a sum worth millions. What's more, referrals from CNET sites are more likely to make purchases, vs. click-throughs from other venues. "You do get a very high-quality lead when you advertise there," Vogt says. Traffic growth is also impressive. CNET claimed 76.5 million unique visitors in the first quarter of 2004, a 27% year-over-year increase. Some of that growth comes from its strength in two of the hottest areas in technology: games and consumer electronics. And News.com is the leading tech-news site on the Web in terms of traffic. In 2004, CNET won the coveted National Magazine Award for general excellence online. That, plus further hiring at News.com has quieted chatter that Bonnie would shutter or sell the news division CNET's CEO viewpoint -"As we're able to grow the top line, we can translate that into wins on the bottom line," he says. "If more people consume our news stories or read our reviews, it doesn't require much additional resources from us.Our job is to position and grow our properties to get ahead of those dollars so we're in a position to capture them over time. We have been growing our visitors and usage. We have a model that is very leveraged to translate revenue growth to the bottom line." CNET is one the sites that I regularly visit for the past several years - I could see CNET improving qualitatively year after year consistently . I firmly believe ( and hope) that CNET has a very bright future.

SAP's billion dollar bet

It's a future that looks markedly different from SAP's heritage as the company that defined the market for enterprise-resource-planning software. Though SAP is the world's third-largest software vendor, with more than 22,000 customers in 120 countries and $8.9 billion in revenue last year, the company is thinking bigger. It's remaking itself into a platform vendor that will sell everything from application servers to middleware to Web services. It will offer slivers of applications--called composite or "snap-on" apps built using services from other SAP apps--up to full-blown business-process sets such as cash management.As it considered making NetWeaver a bigger part of its strategy, SAP leaders weren't at all sure the degree to which the company could move its applications to NetWeaver and what the vendor calls its Enterprise Services Architecture, which exploits all of NetWeaver's Web services to enable an integrated system where business processes can be assembled on the fly. "The bar is very high for SAP.Its software has to scale to extraordinary degrees. Web services in a very complex, robust application environment were an unknown entity. Nobody had ever approached that." The gutsy undertaking has played a big role in the massive NetWeaver project, the 32-year-old company's largest development effort ever. It's bigger than the project that put SAP on the software map--the retooling of its mainframe-based R/2 software to its client-server R/3 apps. NetWeaver and the Enterprise Services Architecture have so far taken the equivalent of 250,000 days of work spread across engineers in Bulgaria, France, Germany, India, Israel, Japan, and the United States, at a cost of more than $1 billion. And it's not yet complete, with a target date of 2007 for SAP to retool its entire software suite to run on NetWeaver and the Enterprise Services Architecture. SAP engineers still are researching better ways to build applications from the ground up on its Web-services architecture. SAP's mission -"To become the platform for businesses' growth."

Sun Moving to Underscore New Strategy via NYT

Sun is making concerted efforts to recover back from its lost marketshare and selective loss of leadership in chosen segments. Sun needs to win here - it is very important to have a credible server player outside of IBM and HP - all the more so when people like Dell are beginning to move into server marketspace.

What the New Asia Means for Multinationals via HBSWK

Asia is remaking itself, and that means important strategic rethinking for Western multinationals doing business there.Many of the Western multinationals operating in Asia have a head start when it comes to achieving the potential benefits of cross-border integration. They already have an international reach that spans the region through established subsidiaries and experience of how to adapt to local conditions. But arguably the presence many multinationals have established in Asia is more suited to prospering in yesterday's competitive environment rather than being well attuned to winning in the next round—especially against the new breed of Asian multinationals that seems likely to evolve as Asian companies rise to the challenge of inter-nationalization.
When compared with the demands of Asia's changing competitive environment, the limitations of Western multinationals' existing bases in Asia typically lie in three areas: the "long, thin arm" problem, lack of cross-border integration within Asia, and the belief that it is sufficient to "think global and act local."The role of the Asian units was to execute functions directed from headquarters or to apply a business formula already perfected back at home base. Just as the fingers on a hand execute commands from the brain, Asian subsidiaries acted like the end of a long arm of the corporate center. The arm was also "thin" in the sense that the breadth and complexity of knowledge that flowed along it was constrained. Thinking global, acting local often means that best practices and innovations generated in the course of adapting a global business formula to a local market remain imprisoned locally: They don't get propagated across Asia and the world. While this remains the case, Western multinationals in Asia won't be able to fully exploit the learning they are accumulating inside their Asian operations. The long-term consequence of this failure will be an inability to keep pace with their Asian cousins as they become increasingly capable of taking what they learn in one Asian country and deploying that learning elsewhere. In short, while Asia remains a recipient and implementer of best practice within Western multinationals rather than a strong contributor to global improvement and innovation, their competitive advantage will erode relative to Asian rivals capable of milking what they learn in Asia for all it is worth. Well written article, correaltes to my professional experience in dealing with various western multinationals out of Asia.

Monday, June 28, 2004

Bill Gates may start blogging via Seattle Times

Yes, the world's richest man may start his own blog, one of those online diaries that have been the rage among techies for the past three or four years.Bill's blog won't be all business, either. He's expected to share personal details such as tidbits from recent vacations, according to tech pundit Mary Jo Foley's Microsoft Watch newsletter. Citing unnamed sources, she reported yesterday that Gates is about to start blogging "real soon now."Microsoft spokesman Mark Murray would not confirm the story, but left open the possibility, saying, "Bill would love to do his own blog at some point in the future, time permitting."Murray noted that Gates talked up blogging at gathering of executives in Redmond last month. Several microsoft employees are currently active in the blog circuit - just under a week back, a microsoft employee got a positive mail reply from Bill Gates to a question whether he likes her blogging. Seriously Gates spoke highly of blogging potential in his recent address Microsft CEO summit 2004 last month.At last month's Microsoft-sponsored CEO Summit, conceived as a forum for chief executives to network and discuss business issues, Gates said blogs are useful for sharing information, particularly because they can notify people when new information is added."And so if I do a trip report, say, and put that in a blog format, then all the employees at Microsoft who really want to look at that and who have keywords that connect to it or even people outside, they can find the information," he said, according to a transcript of his talk.

Vendor Alliance Boosts Hudson's Bay Co. Clout via Optimisemag

By sharing practices with its key vendors;and getting preferred treatment in return;the giant retailer - Hudson's bay co. optimized its partnerships. The alliance turned a competitive relationship into a win for all.To survive as one of Canada's oldest companies, Hudson's Bay Co. has learned that traditional approaches don't always work. Being nimble in a fiercely competitive retail industry requires strong IT relationships and the help of many hands.
Well into the 1990s Hudson bay's use of technology wasn't competitive: IT supported the business but didn't advance it. We had disparate systems and high support costs, and we weren't gaining efficiencies across our various stores. Additionally, Hudsoncouldn't tap into the valuable information collected about a majority of Canadian consumers, nor could we pull information together to fully mine it. To fix all this, Hudson required a great deal of technology support in the stores and supply chain. As part of an analysis of business performance in 1998, Hudson shifted from a traditional mainframe-centric approach to one that matched the company's product and customer needs and moved to applications and an infrastructure that advanced the business rather than simply replicating the existing functionality with newer technology.While IT has many capabilities that are critical to the overall strategy, the innovative approach to working with key vendors has helped Hbc get optimal business results more quickly and cost-effectively, says theit IT head Hudson actually built a collabarrative alliance consisiting of traditional rivals to sevice their needs by making IBM, Microsoft, Oracle, Cisco and also brought in a new culture where the alliance members were seen as true partners and not as adversial suppliers - Interesting article - Read on..

Sunday, June 27, 2004

The Importance of Being Linux by John Dvorak

John Dvorak writes,There are mixed feelings about the open-source movement, mainly because its most popular component, Linux, is offered by over 100 vendors, each of whom has a slightly different product. Other than Linux, all the other open-source projects move along at a rate best described as glacial. Even principals in the community are sometimes shocked at the slowness of open-source development. This probably is a function of how motivation and lack of fear work among open-source developers. Often they're motivated like hobbyists. And there is no fear to drive anyone to do anything—no fear of getting fired or yelled at by a mean boss. He adds,"Still, many of the results from the open-source community have been impressive. My Web site and e-mail subsystems run almost entirely on open-source technology, starting with the standard Linux/Apache lash-up and incorporating all sorts of open-source spam-filtering mechanisms and IMAP software".Linux has not created a new kind of software, but a new kind of IT professional—the guy who actually can save a company money. There is a new generation of IT/sysop types who have been raised in the open-source environment and who've made this knowledge part of their career paths.The only way Microsoft will ever stop this trend is by keeping it underground and marginalizing its importance, which the company has apparently been unable to do. In fact, Microsoft does just the opposite, by continually fretting about Linux and making public pronouncements about the threat from this operating system. If Linux is a threat, then it's suddenly something worth looking into, isn't it? Someone needs to get me the numbers on exactly how many Linux experts there are. They must be growing like mad. The importance of this cannot be lost on Microsoft, which many people now think is responsible for the money behind the desperate SCO attempts to thwart Linux through legal threats.

"Peer-to-peer is key" says Nicholas Negroponte via Bweek

Peer-to-peer is key,in every form conceivable: cell phones without towers, sharing leftover food, bartering, etc. Furthermore, you will see micro-wireless networks, where everyday devices become routers of messages that have nothing to do with themselves. Nature is pretty good at networks, self-organizing systems. By contrast, social systems are top-down and hierarchical, from which we draw the basic assumption that organization and order can only come from centralism.Some negrponte talk in the interview include, "innovation comes from those who stand to lose the least from it.Historically, four places: government labs, big corporations, startup companies, and research universities. Government labs are shrinking (in the U.S., at least). Big companies are looking closer term, and even the most technological companies spend less than 1% of sales on research. Startups have suffered the burst bubble.Asia is already gaining great strength in the wireless industry, and the Asians dominate consumer electronics. As computing makes its way into the living room, Asian companies willwin there too.Kids five years from now will know Samsung as the premier consumer-electronics company". Overall, a very interesting interview with a very impressive personality on a very exciting theme - must read for all business and technology enthusiasts.

Saturday, June 26, 2004

How to slay America's monster trade gap via Economist

America’s trade gap is growing again. Worse, it may be extremely hard to close it without causing much economic pain—and not just for Americans.America’s willingness to spend more than it could strictly afford on other countries’ manufactures was welcome at a time when most of these countries’ economies were sluggish. But deficits of over 5% of GDP in America’s current account could not be sustained. Having carried the world economy through the first, crucial leg of recovery from the slowdown of 2001, some economists felt it was time for America to “hand over the baton” to the rest of the world and pause for breath.But America is refusing to let go of the baton. It continues to import much more than it exports while investing more than it saves. According to figures released last Friday, its current-account deficit, having narrowed to 4.6% of GDP at the end of last year, has widened again in the first quarter of this year, to 5.1% of GDP. In some countries, a swift depreciation of the exchange rate has worked wonders. A fall of 20%-plus, in real terms, in the Swedish krone after 1992, for example, turned a deficit of more than 3% of GDP into a surplus of about 4%. But Sweden is a relatively small economy. Providing it remains outside the euro, it can depreciate, gaining competitiveness against its neighbours, without beggaring them. The United States, on other hand, is such a crucial destination for the imports of so many countries that they may struggle to find alternative sources of demand.To narrow the deficit by two percentage points by the end of the decade, they reckon the greenback would have to lose about a quarter of its current value (as measured against the currencies of America’s major trading partners) by the end of this year. Since China and Malaysia peg their currencies to the dollar, and many other Asian countries track it closely, Japan and the euro area would bear the brunt of the dollar’s fall. They would not bear it easily. America is such an important export market for both that neither would cope easily with such a loss of competitiveness. The European Central Bank (ECB) has some scope to ease the blow by cutting interest rates but the Bank of Japan has already cut them as low as they can go. As a result, the strengthening yen would cut Japan’s output in 2009 by more than 2% and condemn the country to another six years of falling prices, the OECD study reckons. As Europeans accuse the United States of throwing the world economy off balance, Americans accuse an arthritic Europe of holding the world economy back. Europe’s firms and workers are too cosseted, they argue, and as a result the continent’s economies are unable to pull their weight in the world economy. America is prepared to hand over the baton; but Europe must be ready to take it up. A major global economic turbulenceis clearly ahead of us.

The hidden dangers of the informal economy via Mckinseyquarterly

Governments suppose that the gray market creates jobs and relieves social tensions. Academics think it will disappear of its own accord. Neither idea stands up to scrutiny.It's no secret that some companies operate partially or wholly outside the law by underreporting employment, avoiding taxes, ignoring product quality and safety regulations, infringing copyrights, and even failing to register as legal entities. The problem is particularly acute in developing countries, but it is widespread in some developed nations too.The World Bank estimates that this informal economy1 generates 40 percent of the GNP of low-income nations and 17 percent of the GNP of high-income ones.2 In some industries, such as retailing and construction, informality can account for as much as 80 percent of employment. Over the past ten years, MGI has studied informality within a variety of industries in a range of different countries, including Brazil, India, Poland, Portugal, Russia, and Turkey. MGI found that the substantial cost advantage that informal companies gain by avoiding taxes and regulations more than offsets their low productivity and small scale. Competition is therefore distorted because inefficient informal players stay in business and prevent more productive, formal companies from gaining market share. Any short-term employment benefits of informality are thus greatly outweighed by its long-term negative impact on economic growth and job creation.For many people, the informal economy means street vendors and tiny businesses, and it is true that informality is pervasive among small, traditional concerns with low levels of technology, scale, and standardization. But it is hardly unknown among larger, modern enterprises in developing countries, where MGI has found informal supermarket chains, auto parts suppliers, consumer electronics assemblers, and even large-scale industrial operations.Three factors contribute to informality. The most obvious is limited enforcement of legal obligations—a result of poorly staffed and organized government enforcement agencies, weak penalties for noncompliance, and ineffective judicial systems. A second factor is the cost of operating formally: red tape, high tax burdens, and costly product quality and worker-safety regulations all prompt businesses to operate in the gray market. Finally, social norms contribute to the problem. In many developing countries, there is little social pressure to comply with the law. In some, many people see evading taxes and regulations as a legitimate way for small businesses to counteract the advantages of large, modern players.Informality's deleterious effects - A.The low-productivity trap B.Curbing legitimate companies c.The social cost.Persistent myths keep developing countries from addressing the informal sector. Yet diminishing its size would, in almost every case, remove barriers to growth and development and generate sizable economic gains. Reducing the level of informality is no easy task and carries risks that are not inconsiderable. But by addressing the root causes of informality—weak enforcement, the high cost of operating formally, and injurious social norms—governments can attack the problem and reduce the possibility of further social disruption.

Airlines call for end to paper tickets via News.com

An association of world airlines agreed recently to cost-cutting measures such as full electronic ticketing by 2007, as part of a bid to save up to $3 billion a year. The move comes as the industry is faced with soaring fuel prices and mounting competition. Airlines have racked up more than $30 billion in losses in the past three years because of the effects of the Sept. 11, 2001, attacks in the United States, the deadly Severe Acute Respiratory Syndrome, or SARS, and the Iraq war.With global passenger traffic in the January-to-March quarter about 6.5 percent above the levels of 2001, the industry was expected to post combined profits of $3 billion in 2004. But it now faces another year in the red because of soaring oil prices.Aside from eliminating paper tickets,the airlines agreed to work on an industry standard for check-in terminals worldwide. The airlines also plan to replace magnetic stripes with bar codes on boarding passes so they can be printed by passengers at home to cut costs and check-in times. The industry also agreed to use RFID (radio frequency identification) technology to replace bar-coded baggage tags.Another case of technology coming to the rescue of business , more so in highly competitive sector like airlines industry.

Will RFID Spark the Next Revolution in Retailing? via Knowledge@wharton

Wal-Mart is introducing radio frequency identification (RFID) tags to its products - small devices that emit radio waves containing information about product size, price, etc. Though this scenario is still far in the future, such tags could let the world's largest retailer add up the prices of purchased goods as shoppers leave the store and deduct the tab directly from their accounts. Whether such futuristic practices materialize or not, one thing is certain: RFID has begun to acquire a buzz that positions it as the next revolution in the world of retailingFans say that RFID technology promises to revolutionize the supply chain through real-time item tracking. Its goal is to keep goods on the shelves, garner more efficiency through better inventory management, enhance safety through smart recalls and cut theft, known as "shrink" among retailers. This is made possible by the fact that when RFID tags emit radio waves, that information is absorbed by a reader, which can then compile and share it with a company's enterprise software. Suppliers can benefit from real-time inventory management that keeps goods on the shelf. Consumers may not immediately see a lot of major changes, but they would certainly benefit from better in-stock levels."RFID could put more goods on the shelf," says William Cody, managing director of Wharton's J.H. Baker Retailing Initiative. "It would certainly be better than having a skeleton crew walking around filling empty shelves. You could eliminate goods being lost in the back room."Today, inventory processing requires line of sight for bar code scanning. Bar codes aren't going to disappear, but they do have disadvantages compared with RFID. Notably, bar codes introduce human errors, can only encode limited and static information, don't offer read/write capability and cannot read multiple codes.Cohen explains the difference between current inventory management and RFID enabled systems this way: In current systems, you may know there are 10 items on the shelf, and that information is compiled in an enterprise planning software system. With RFID, you know there are 10 items, their age, lot number, expiration date and warehouse origin.“It’s like knowing there are 1,000 people in a city,” says Cohen. “With RFID, you know their names.”Most of the benefits from RFID at present will be tied to the supply chain and within three- to five-years electronic tags carrying product specific codes should be common, according to EPCglobal, the organization creating standards for the electronic product codes carried on RFID tags. Currently, RFID mindshare is the highest and is perhaps the most talked about technology today in business circles - we have to see in Jan 2005, when walmart partially rolls out this technology in a large scale. The potential benefits are unquestionable for business. I reckon that once this technology is seen to be commercially viable, i foresee a major IT investment push in upgrading and modifying the enterprise systems - not just the retail systems - RFID's reach would change the way all resources including men get utilised and may lay out new level of process structures and efficiencies across the enterprise necessitating substantial changes in the technology systems and infrastructure. The upside could be similar to the Y2K upgrade felt by several service providers

The CIO Of The Year(2003) JP Rangaswami

Deploying disruptive technology, keeping a wary eye on outsourcing and defending IT makes JP Rangaswami of DrKW our Top CIO of the Year, said THE 2003 WATERS EDITORIAL AWARDS TEAM .The CIO of Dresdner Kleinwort Wasserstein isn’t afraid of disruptive solutions, doubts the benefits of outsourcing, and has seen technology go from ‘poster child to whipping boy’JP Rangaswami is not one to shy away from strong metaphors. "Over the last three years, the IT industry seems to have gone from poster child to whipping boy," says the CIO of Dresdner Kleinwort Wasserstein (DrKW). "We’re under pressure on all fronts: budgets, delivery, reliability, and security."Like his peers, Rangaswami has seen his budget and staff slashed in the last three years. His IT budgets is down 40 percent and his staff has been trimmed 43 percent and now numbers at just more than 1,000 employees since he started as CIO. "It’s not about doing less with less, but about doing more with less, which is what technology should be about," he says.How has DrKW’s CIO managed this feat? For starters, he and his firm are driving harder bargains as they are no longer held ransom by their IT vendors, and they are demanding plug-and-play products rather than ones that require expensive customization as they did in the late nineties. Rangaswami continues to champion open source technologies, and he estimates that approximately 43 percent of DrKW’s Unix user base is on Linux. DrKW also, for example, makes use of the JBoss open source application server environment rather than pay proprietary fees.But has IT become a utility, as a controversial article argued last May in the Harvard Business Review? "Absolutely not," says Rangaswami. In order for technology to become a utility, he says, it has to reach a level of standardization, which it has failed to do. Furthermore, while certain aspects of IT have reached a point of commoditization and "could be a utility, the industry should be careful not to throw the baby out with the bath water," he says. Technology can still provide a distinct advantage, he says, but it’s an argument bolstered by the recent technology patent battles raging in both financial services and other industries. "Throwing that away is like being told that Amazon’s one-click model is not distinctive and did not give them any advantage," he says. I read this article just recently and thought that it is good enough to be referred in this blog - very insightful and straightforward comments - peraps working in financial services and equity research enteprise helps one to think more clearly and be more articulate - enjoyed reading this article.

Collaboration: The supply chain reaction via silicon.com

Modern supply chains are highly complex systems. The proliferation of just-in-time manufacturing and stock minimisation strategies means that companies all along the supply chain need to accurately forecast demand to meet supply. It's for these reasons supply chain management (SCM) systems became so de rigueur during the 1990s.Optimising the supply chain does not cease at SCM, however. Increasingly, collaborative working tools are helping to find even more efficiencies.The most successful supply chain initiatives have tended to be driven by the largest player in the value chain. According to Nikos Drakos, research director at market analyst house Gartner: "The relationship is often uneven and there is usually one dominant partner and they will insist that processes are done a specific way. Their partners have to accept the terms of engagement if they want to work with them."Among other things, collaboration helps retailers and suppliers accurately judge their stock requirements and forecasts.The next step up from collaborative forecasting is vendor-managed inventory, an approach being adopted by many big retailers. "The technology is straightforward, but changing the business process is difficult," says Bamber. "There is the very real issue of trust, because you are exposing commercially confidential and very valuable information to your suppliers." Collabaration adds a new dimension in enhancing the capability of supply chain solutions - come to think of it from a process perspective, collabaration is anyway always a key element of supply chain planning. technology enablers are beginning to be made widely available to support this and innovative use of these tools are beginning to get reported.

Friday, June 25, 2004

"Business Model" Explained via Fool.com

A solid understanding of the "business model" concept is definitely needed to assess enteprises and evaluate potential investments.A firm's business model is simply the method by which it makes its money For example, part of Wal-Mart's (NYSE: WMT) business model was initially to establish profitable stores in small communities that other discount chains had dismissed. (It's now establishing itself even in large cities.) Coca-Cola's (NYSE: KO) business model involves using its secret formula to manufacture syrup that it supplies to bottlers. By distributing its beverages through stores, restaurants, vending machines, and more, it's attempting to make its drinks easily available to anyone. Very important in differentiating enteprises, more so service enteprises like consulting where differentiation and value addition directly gets related to revenues and in providing stable growth trajectories.

Thursday, June 24, 2004

The coming IT fiscal squeeze Via Optimizemag

CEOs, other senior business executives, and corporate CIOs are insisting that financial discipline return to the enterprise management of IT. That's causing a fundamental shift in the basic premise of directing and managing business technology, creating a division between the haves and have-nots, with clearly defined vertical-industry leaders emerging. Those leaders--companies demonstrating staggeringly efficient funding and use of technology--are prompting almost every company in their markets to make difficult choices about how they budget for and finance their business-technology needs. The relative efficiency of their IT expenditure is forcing many businesses to rethink their IT strategies. Simply increasing funding for every IT opportunity that seems to have a proven ROI isn't guaranteeing a company's chances of being a winner in its category.striking findings from the interviews:Most companies are looking for a 15% to 20% reduction in their overall IT spend as a percentage of revenue; these executives say they can drive the base cost of existing IT down by 10% to 15% per year.Many of the executives feel that IT deployment is limited by business users' ability to participate in the process and absorb new capabilities. Therefore, they believe they should be limiting new initiatives to a level that will create no more than 8% to 13% new IT spend annually. Information-intensive companies tend to be at the higher end of the range.Most CIOs expect their overall IT spending to be flat or down on a year-to-year basis. If companies can cut existing IT base cost by 10% to 15% per year and also deliver new business-absorbing IT initiatives amounting to 8% to 13% of new IT spend, then the result can be a cut in overall spend by 1% to 5% per year. As revenue increases over the planning period, they should reduce IT as a percentage of revenue by the desired 15% to 20% overall.There will still be leeway at these companies for funding critical, business-driven technology initiatives.Clearly, companies in severe catch-up or aggressive breakaway mode would follow a different multiyear IT financial pattern.The respondents all agree that IT spending as a percentage of revenue is a controversial metric. However, they feel more comfortable when they understand their budget or spending boundaries. Also, such a metric provides the CIOs with a rational mandate for not spending on any and all projects they think may pass an ROI test. As one CIO said, "It's OK to be prudent once again." Redirecting IT to an affordable-IT set of premises may be essential to move ahead constructively.

The Best Things In Life Are Free via FC

In an excerpt from his new book, Free Prize Inside! , Seth Godin shows how anyone can champion new ideas. Seth Godin, in his previous book wrote that If your goal is growth, the only way to achieve it is to market a product or service worth talking about--a purple cow . Here he elaborates means to acheive these in a very simple and straightforward way.Interesting read.

Dalian has become the Bangalore of China by Thomas Friedman via NYT

Dalian, a port city in northeastern China is not just impressive for a Chinese city. With its wide boulevards, beautiful green spaces and nexus of universities, technical colleges and a massive software park, Dalian would stand out in Silicon Valley.Dalian symbolizes how much China's most modern cities — and there are still plenty of miserable, backward ones — are rapidly grabbing business as knowledge centers, not just manufacturing hubs. No, Toto, they are not just making tennis shoes here. Try G.E., Microsoft, Dell, SAP, H.P., Sony and Accenture, which are setting up back-room operations here for Asian companies and software R.& D. centers.Because of Japan's long colonization of this area in the first half of the 20th century, Dalian has a pool of people who know Japanese. And because of its proximity to Japan and its abundance of Internet bandwidth, and parks and golf courses that attract knowledge workers, Dalian has become the Bangalore of China — the center for outsourcing by Japanese businesses that want to tap China's low-cost brainpower. Japanese companies can hire three Chinese software engineers for the price of one in Japan, and still have change to buy a room full of call-center operators. Indian cities and Banglaore symbolise the fact,"The rule of the market economy is that if somewhere has the richest human resources and the cheapest labor, of course the enterprises and the businesses will naturally go there,"

Cisco's Second Act via Informationweek

Cisco Systems celebrated its 20th anniversary not long ago, a milestone CEO John Chambers noted by reflecting on his company's "rich history of enabling the Internet." Yet, before the candles cooled on Cisco's cake, Chambers was looking ahead, as well he should, given the company's continued reliance on a maturing networking business that, in its most recent quarter, still accounted for 70% of revenue. For future growth, Cisco is aggressively branching into six new lines of business--and Chambers is planning for even more. The networking leader is looking for growth in new markets such as security, wireless, storage, and telecommunications. Last year, Cisco spent $3 billion on research and development--more than 15% of its $18.9 billion in sales in 2003. Forty percent of the R&D budget went to what the company calls advanced technologies. So far, the vendor has targeted six such areas--security, optical, IP telephony, home networking, wireless, and storage--which now account for 15% to 20% of revenue. Chambers believes each of those six segments could grow into a billion-dollar business on its own, and has indicated he would like to expand into four to six more new areas over the next several years.Increasingly, Cisco is packaging its products for companies with industry-specific requirements. In addition to targeting telecom companies and Internet service providers, Cisco tailors products for health care, financial, energy, government, retail, and manufacturing companies. Chambers says,"You'll see more product announcements this year from Cisco than you've seen in any year before by a factor of two, most all of it from organic growth. It's the best product pipeline I've ever seen as CEO, across all product lines," Cisco, is a class act -in what it has done in the past, in what it is doing now, and in what it intends to do in future.

Minimizing the Risks of Leadership via HBSWK

Leaders become the focus of an organization's results. When things go right, leaders get the credit, glory, and money. Jack Welch receives the praise, but his accomplishments took 305,000 employees twenty years to produce.When things go wrong, leaders can take the fall. The Middle East peace process is regularly derailed by disgruntled people largely acting alone, and it sets back the efforts—and eventually credibility—of the leaders by decades. A good article - the article concludes by saying, "leader will always be responsible for the sins of the followers. Alas, that's the nature of the job. We can tell people the rules, but we minimize our risk through values as well as rules. By modeling clear values, discussing them, and incorporating them into the way decisions get made, we can make it much more likely our organization will do the right things".

The Gettysburg Powerpoint Presentation

A Powerpoint presntation of Lincoln's address complete with speaker notes and contact information Petr Norvig asks, "Doesn't he realize this presentation is a waste of time? Why doesn't he just tell us what matters and get it over with?" How many times have you heard (or muttered) that? How many of of us have been frustrated at seeing too many presentations where PowerPoint or other visual aids obscure rather than enhance the point? His barb at powerpoint presentations - I agree with Peter about the abuse of the powerpoint technology by various people. Several people substitute hardwork and insights with good or sometimes not-so-good powerpoint slides.

Peoplesoft wants to overtake SAP

Almost one year on from the acquisition of JD Edwards, PeopleSoft president and CEO Craig Conway claims his company is still on course to topple SAP from its number one position in the enterprise applications market.Conway said SAP's market lead is under real threat following the PeopleSoft acquisition of JD Edwards and compared the battle to airline manufacturer Airbus' steady challenge that saw it overtake the dominant Boeing."We're gaining market share every year against SAP," said Conway. "We will be the largest provider of enterprise applications in the world." Not sure where that 5 billion usd/year extra sales is going to come from.

Tuesday, June 22, 2004

Fast Times Demand Flexible Systems via ITUP

HP moves more than 100 businesses off mainframes to other servers.The mainframe has served well for many years. But with the velocity of change in IT systems today, enterprises were having a hard time keeping up
There always seems to be a void between business and IT, so we wiped the slate clean and are going forward now with what's really a business strategy. A significant happening - many cling on to mainframes wondering how to put all processes into new systems- a change in this mindset is quite discernable.

Google's Growth Engine by Warren Bennis via CIOinsight

Google's engineers, founders and CEO have all the earmarks of a Great Group—a talent-driven organization or enterprise, filled with people who set out to do something extraordinary and succeed in doing something that's never been done before. And like other Great Groups, Google has a few unique twists of its own.Google, whose revolutionary approach to search dominates the field, seems to have the ingredients that have produced greatness in the past. Whether commercially successful or not, all our Great Groups were daring innovators who were convinced not just of the importance of their work but that they were all but on a mission from God. All were carefully chosen collections of extraordinary talents who worked on their world-changing projects with an obsessive brio that often made them forget to eat or sleep—and occasionally doomed their marriages. However brilliant, they all believed, at least for the duration of the project, that "None of us is as smart as all of us." The closer you look at how Google operates, the more you see signs that founders Sergey Brin, 30, and Larry Page, 31, and their 48-year-old CEO, Eric E. Schmidt, are doing the right thing to make greatness possible. Like many other creative enterprises, Google encourages the kind of experimentation that, even if it ends in failure, identifies what won't work before the company has invested too much into an idea. The fact that Google can float new features on its site—such as its controversial e-mail service Gmail—and constantly evaluate user response, gives the company an enormous leg up in deciding which applications users like.
Just as important, Google has an organizational structure that encourages creativity instead of stifling it. Rather than being assigned tasks, engineers are guided by a company-wide "Top 100" list of projects, though the actual list numbers twice that many. And to make sure ideas are not shot down before their time, some on the list are marked with an S, for Skunk Works, to make them safe from critical battering. Google's head of engineering, Wayne Rosing, told Fast Company magazine that when he first joined Google, in 2001, its engineering department had managers. But, as Rosing put it, the managers tended to tell the engineers, " 'No, you can't do that.' So Google got rid of the managers." Now most of the staff work on projects they choose; engineers form three-person teams, and members take turns acting as leader. Great Groups are famously averse to heavy-handed management; members often respond to it by walking out the door. The unusual decision to eliminate managers is the sign of a company that is inventing itself as it goes along. Google never fails to amaze me, everytime, I read about it - Warren Bennis here gives his view of Google's greatness.

Outsourcing Could Get the Better of India, Too by David Kirkpatrick via Fortune

A top offshoring CEO worries about U.S. tech expertise and competition. The IT service industry is just another commodity business. Eventually, more sophisticated business-process outsourcing—which could, say, involve taking over the management of customer records for a retail company—will become the attractive and profitable center of the industry. "The IBMs of the world will give the Infosyses and me a run for our money," says Naren Patni,founder of Patni computers, "because they have a lot of industry expertise and that's what counts in the long term."In Patni's view, outsourcing started with manufacturing—slowly, over many years. Then services started to move offshore. The distance between America and India, however, meant projects were delivered months later. "But now time and distance have collapsed," he says. "This has come on us very quickly. What people haven't realized is that now services can be traded. We are just seeing the tip of the iceberg so far, but society hasn't had the time to adapt. It's all happened in the last two to three years." What's made the difference, he says, is business's increasing acceptance of the web as a place to do business, agreement on various web standards for exchanging data, and a rapid increase in the quality and reliability of global telecom services even as prices plunged. "This has nothing to do with India," he says. "This is a bigger global change, when societies worldwide can trade services in synchronous mode. This can as easily go to China or Jordan as to India." Parts of what Mr.Patni said is correct - I do agree that this is commodity business, indian enteprises may be taken over - but what these companies are doing can be replicated by countries like china or others just like that is not true - expertise and relationship built over two decades can not be washed out overnight even in this fast age.

Shooting for the Moon by Vijay Govindarajan and Chris Trimble Via FC

Aspirations -- like leadership skills -- aren't always enough. Leaders must do more than motivate; they must manage,says the noted authors about modern day leadership.Aspirations are crucial because organizations never outperform their highest ambitions. Not setting a high aspiration is the same as making a commitment not to achieve anything grand.One of the most fundamental questions that managers must address is "How are things going?" If things are going well, you keep doing what you are doing. If things are going poorly, you make changes.The question of how things are going is always answered by comparing an outcome to a goal. And that is where the value of aspirations is limited. Aspirations represent very distant goals, and judging progress against them is very subjective.When a management team is unable to clearly answer the basic question of how things are going, emotion takes over. This is common in new ventures, particularly when discussions about how things are going focus strictly on aspirations. As time passes, investments increase, pressure to deliver results rise, and emotions gather force.Such emotions tend to be polarizing. Some team members will be driven by ambition. Others by fear. Some will focus on what can go right. Others will focus on what might go wrong. Suddenly, there are only two options on the table. In essence, the options are "full speed ahead" and "abandon ship."Avoiding this pattern of decision making requires that long-term aspirations are coupled with short-term expectations. The aspirations inspire, and the expectations guide. I liked this piece for its simplicity and fortrightness in the message - Vijay always fnds a way of expressing himself very clearly.

IBM regains supercomputer bragging rights via News.com

IBM has regained dominance on a list of the 500 fastest supercomputers and has also landed two unusual prototypes in the top 10. The TOP 500 Supercomputer Listing-Jun 2004 IBM has built 224 of the 500 fastest supercomputers and hopes its Blue Gene/L design will carry it to the No. 1 spot within six months.Big Blue believes its designs should allay concerns that the United States is losing its supercomputing edge to Japan. And low-cost clusters of machines now account for more than half the systems on the list.The top system--NEC's long-dominant, 5,120-processor Earth Simulator--can perform 35.8 trillions of calculations per second, or 35.8 teraflops.Some comfort for all -supercomputer power is growing and the US dominance is not coming down, US company producs are indeed putting up a good show in these tests.

Monday, June 21, 2004

Blogging With The Boss's Blessing via Bweek

More companies are helping employees to speak freely -- and bond with customers Increasingly, execs see employee blogs as a way to transform a transaction with a faceless behemoth into a personal relationship with an employee. Blogs are also hyper efficient at driving product innovation. And they create loyal audiences. Once people get hooked, they keep coming back for more. This is nothing less than revolutionary.It's revolutionary because companies have usually been more concerned with controlling their message than conversing with customers. Blogging changes that by establishing a connection through real human beings speaking like real human beings, which is something companies have forgotten how to do.