Archive for March, 2004

TI follows Intel – “Pictures by DLP: Technology from Texas Instruments”

March 14, 2004

What Intel was doing to microprocessors for decades, Texas Instruments is
doing to DSP today. Intel dominated microprocessors for decades. With DSP
sales going past microprocessor sales in 2002, Texas Instruments is aiming the
No 1 position long dominated by Intel.

Intel pioneered the “single chip” computer; TI is betting on “single chip cell
phone” by mid-2004. So, it is but natural to watch TI strategies these days.

Texas Instruments pioneered Digital Light Processing – an alternative to LCD
that uses thousands of mirrors and micro-movement controlled by software. This
technology is likely to dramatically improve price performance, and all the
leading edge Digital Projector vendors (InFocus, Canon, and Sanyo) are
licensing the technology from TI.

Intel through its innovative “Intel Inside” campaign brought brand recognition
to the commodity microprocessor over the past decade. Digital projectors use
TI branding – “Pictures by DLP: Technology from Texas Instruments”. It
will be interesting to watch the impact of this development – will it be
another textbook success story like “Intel Inside” campaign?

HP is rumored to be building TV sets using DLP technology! Interesting
indeed!!

Outsourcing NOT the real culprit – according to US Economists

March 13, 2004

Wall Street Journal caries an interesting article on March 11, 2004, where a
large number of economists interviewed by WSJ had opined, that only 690K jobs
moved out of US over 2001 to 2003. In the same period 58.6 Million jobs were
created by USA though there was a net job loss of 2.3 Million as per payroll
data. The learned economists had given many other reasons for job loss.

Coming on the heels of Fed Bank Chief Greenspan’s view, that outsourcing is
not the reason for US job reduction, and protectionism will ultimately hurt US
economy, it is a “good feeling” for India; particularly when so much “India
bashing” is seen in the US media (in sites such as YourJobGoingToIndia.com
site
). Considering the fact that of the 690K jobs that moved out of USA
502K jobs were in manufacturing and only 188K jobs were in services; India
gets only services jobs outsourced from USA.

Hopefully these figures will be used carefully by the Indian Government,
media, diplomats and lobby groups to deflect the rather strong “anti-India”
sentiment on account of job losses amongst professionals. We need to
demonstrate all the empathy for fellow professionals in USA (especially in
IT), who have lost their jobs; but the perspective should not be lost,
particularly during the Election Year in USA.

Wall Street Journal carries some positive news on India

March 12, 2004

For years, the Western media had projected India negatively (Our own media is
to be blamed partly for this). We were in the news, if at all, in the
Western newspapers for all the wrong reasons
. I was pleasantly surprised
to find the influential WSJ carrying three positive news item (two of them had
found a brief mention in the very first page) on a single day (March 12, 2004)

• The first item was about Telecom – “India – A Market Unleashed”
quoting Morgan Stanly Research projection of 125 Million phones in India by
2007.

• The second item talked of IBM adding 4,000 jobs in India that too in
Calcutta.

• The third was a write-up by Paula Szuchman under “India in Vogue”,
where the tourism boom was mentioned in glorious terms.

It was such a pleasant surprise for me that too reading WSJ in New York
Airport (under the nose of Wall Street) on my way back home!

Technology changes the contours of businesses

March 11, 2004

Every B School student knows the key questions

“What business are we in” and
“Who are our key competitors?

Thanks to technology, these questions are becoming very hard to answer. Here
are a set of examples

No one would have thought of HP and Xerox as competitors in 80’s. Xerox was a
legendary copying company; HP was an instrument & computer company. Thanks to
HP’s foray into Laser Printer and its extra-ordinary success, HP realized that
once it mastered Laser Printing, it can easily take on Fax machines, Scanners
and Copying machines; soon it made “All in One” Office machines and started
competing headlong with Xerox. Thanks to “digitization” the same “imaging
competence” put HP into photo printing market competing with the likes of
Kodak & Canon; today HP is even into camera market!

In a similar vein, no one in 90’s would have suspected Microsoft as a
competitor for SONY, a legendary Audi & Video giant. Thanks to “digitization”
that converts all audio & video into bits & bytes, that can be stored as
“files” on a computer (and managed by an Operating System like Windows),
Microsoft with its Media Player competes with SONY in its efforts to control
the “software” that would control the next generation of TV’s.

In addition, Microsoft decided to enter the “gaming market” through its xBox
gaming console, a direct competitor (in fact a late entrant) in the Game
Console, that has become increasingly a software controlled programmable
device than a “hard-wired” hardware piece.

I could quote any number of examples, but the key point I want to make is
this– IT is changing the very landscape of several key businesses.

It is important for key business executives to visualize such deep changes
that technology can bring, and be prepared to face competition from completely
unexpected quarters. That would become a prime requirement of any business in
tomorrow’s world. MBA students as tomorrow’s managers must be sensitive to
this issue.

(Based on a talk given by the Author to MBA students of IAE (Instituto
de Altos Estudios (A top B School in Argentina, that is in the Top 30 Global B
Schools in America) in Buenos Aires on March 11, 2004)

The secret of success of Indian IT

March 10, 2004

India started as software services industry, using cost as an entry
strategy
; using tele-communication links to Texas, from Bangalore in India
and taking the “unusual” advantage of working on computers located in Texas
from Bangalore when programmers in Texas were sleeping, one could get the
2-shift productivity advantage with US programmers & Indian programmers
working only a single 8-hour shift in a day; thanks to near zero marginal cost
of computing, low communication costs (that have become dramatically lower
today) and the huge wage differential Indian software industry got a foothold
into he huge US software industry during 1980 – 1986.

The emergence of low cost PC as “development platform” (thanks to tools from
Microsoft, Rational & Borland) and cleverly using CMM (Capability Maturity
Model) of SEI (Software Engineering Institute) of the celebrated CMU (Carnegie
Mellon University) of the United States, Indian software industry used
quality as a growth strategy; the first CMM Level 5 (the highest level
of quality attainment) in the world was from India. India has consistently
maintained a global leadership with more than 50% of the global CMM Level 5
companies in India ever since (1986-1995) and till today.

Extending the software success to ITES, hardware design, outsourced services
including design, accounting, IT infrastructure management, healthcare and a
whole range of high value services, Indian IT industry in 1995 onwards has
become the global leader using the value-based basket of off-shore services
as a consolidation strategy (1995 onwards).

(Based on a Talk I gave to CIO’s and Senior Management in an event
organized by Microsoft Argentina on March 9, 2004 at Caesar’s Park
Hotel
, Buenos Aires)

Software suits Argentina – but speed is the essence

March 9, 2004

Software creates jobs; the jobs create genuine wealth (unlike arms, drugs
etc.,); since software wealth goes directly to people the wealth distribution
is much better (compared to other industries).

Indian software industry grew from nothing to $ 14 Billion over 20 years; it
is expected to grow into nearly $ 100 Billion by year 2010. It has created 1
Million direct jobs in IT & ITES industry; it is expected to create another
0.5 Million jobs on the next 2 years.

With a well-developed higher education system, a society that values education
Argentina can get a foothold of the global software industry. Indian
experience can be of value. With others including China, Philippines, Russia,
Vietnam, Singapore, Malaysia eying this market, and with the well-developed
markets of Ireland, Israel & India to contend with, Argentina should start
right today (not tomorrow) in full earnest

(part of my Luncheon Talk on “Software and Public Policy” to
Secretaries to the Government and Senior officials of the State-owned Banco
Nation at the Bank Headquarters in Buenos Aires and the public lecture on
Software and Poverty Reduction – An Indian Experience” organized at
Centro Cultural San Martin’s A-B Hall for private & public sector leaders and
IT & Engineering students on March 9, 2004)

Latin American market offers a huge potential for Indian IT industry

March 8, 2004

Attending the Advisory Board meeting of the IdeaFactory Software, a software
company based out of Buenos Aires, Argentina was an eye opener. The interest
shown in learning from the Indian software services industry by academicians,
policy planners and the Government was overwhelming. Several Universities
greeted my visit with a red carpet; the Congress offered a special meeting
with the Vice Chief making a special mention of my visit to their country in
the historic Congress Building – a rare honor indeed. There were any number of
media interviews and a special Breakfast meeting organized by Microsoft.

With US market saturating Indian IT companies should seriously look at the
emerging markets in South America, both as end consumers as well as a Gateway
to Latin-speaking economies across the globe. It is a golden opportunity and
the friendly Spanish speaking people seem to really want India to help them

Sears to outsource IT to CSC

March 7, 2004

The retail giant is reported to be talking to CSC (Computer Science
Corporation), one of the top five System Integrators, on outsourcing its IT at
a cost of nearly $ 1 Billion over the next 10 years. Earlier Sears had given
the job to IBM.

While such large-scale outsourcing is NOT new, such deal going to system
integrators / software & services vendors is new. A decade ago, it would have
been unthinkable for system integrators like CSC to get such contractors; such
contracts were mainly with hardware vendor.

This is an interesting development to watch. It also opens up such contract
opportunities to Indian companies like Wipro

Biocon IPO oversubscribed

March 6, 2004

Kiran Mazumdar founded Biocon IPO (Initial Public Offering) was oversubscribed
on Day 1 when it went for an IPO. It is an interesting development to watch.
Biocon is a promising Biotech company started years ago in an entrepreneurial
spirit by Kiran Mazumdar. Biotech is the next promising opportunity for India
and a successful IPO will be a source of encouragement for Biocon in its
growth plans and for other entrepreneurs in the wings. Of course it is one
more “feather in the cap” for the Bangalore professionals!

Gateway Home Theater for $ 999 onwards

March 5, 2004

Gateway, one of the top PC seller has been selling an interesting product
PC-based Home Theater – Multimedia PC with in-built TV tuner running
Microsoft Windows, High-end Monitor, Remote Control, Wireless Key Board &
Mouse, DVD player and a hard disk.

This device can be used as a PC or a TV; the quality of the TV
reception is good; thanks to remote control, you get TV viewing experience.
Thanks to Internet, you get “digital TV” and “digital audio”. You can even
view Instant Messages / urgent e-mail in a PIP (Picture in Picture) window.
The pricing is attractive; you can view digital photographs on the monitor,
host them on the server for others to see, download / buy music and a whole
range of things that you do on your network-connected PC. With broadband
steadily increasing in US homes it is an interesting development to watch.

It is a real demonstration of convergence between computing and home
entertainment
!

HP and many others too are offering or contemplating to offer such products.