The Week in Geek – June 14, 2006
Harder than Harvard
The first-time Bangalore visitor encounters a city that whose population has grown from 4.7 million in 2001 to some 7 million today. That’s like adding more than three Boston’s in 5 years! Bangalore moves forward in fits and starts to upgrade the airport, create flyover roads, and improve other aspects of infrastructure (photo & story). It’s not uncommon to see cows or even an occasional elephant on the crowded road to Electronic City, the tech epicenter of India. Enter the campus of tech giant Infosys, however, as BC IME attendees did in May, and one marvels at a truly world-caliber, best-in-class facility. Campus buildings inspired by the Louvre, Sydney Opera house, and Japanese gardens are interspersed between a putting green and Domino’s pizza. Three on-campus power stations ensure the multiple daily brownouts that are common to the rest of Bangalore have no effect on the firm. Security is ultra-tight, and the glistening, flat-panel-rich executive briefing center in many ways exceeds what one might encounter in Redmond or Silicon Valley. Geeks in India and abroad clamor to be part of the success, and Infosys can be selective, admitting only 1% of applicants. ‘Freshers’ receive intense training at the firm’s similarly high-tech Mysore facility, where site rooms are named after tech icons like Jeff Bezos and Gordon Moore. India isn’t playing for U.S. table scraps, nor is it sucking up all of the domestic jobs. The reality is something in between – cheaper (currently) but ultimately competitively high quality work that enables a net increase in the tech savvy of client partners.
China’s Lead in Tech
More insight from geeky Asia – Rising China doesn’t just lead the world in cell phone and DSL use, it’s also rolling out the next-gen internet protocol (IPv6) faster than anyone else. China hopes to announce by ’08 (the Olympic coming out party) that it has the world’s most advanced Internet infrastructure. By 2009 the country will likely have more Internet users than anyone else. Then the tide swings. China becomes Microsoft. By this I mean that in the way developers today flock to Windows, innovation will increasingly happen in China first because that’s where the market is. Users will still have per-capita incomes much lower than the States, and as we’ve seen with NTT DoCoMo in Japan, not all this cool stuff readily translates overseas, but a host of feeder businesses will take Chinese tech and migrate it worldwide. Those bonehead pundits who advised US firms to wait with post-bubble tech investment, or who “Chicken-Littled” about IT jobs going abroad got it way wrong. Waiting wounds us deeply and now nearly every IT shop in the US is scrambling for US-based talent. This is the story – US is behind in critical tech and that gap will almost certainly increase.
The Next Job Boom
The news on campus is that employers are being turned away – there are simply not enough tech majors for the unprecedented demand. Business 2.0 is one of the few publications to have gotten the current up-tick right years ago. Here’s a corollary to consider (Gallaugher’s law?) – people are like processors. Lower cost technical workers mean the enterprise becomes more geeky, not less, with tech permeating every function at increasingly deeper levels. Tech savvy managers are vitally in demand, while the domestic tech talent needed to conceptualize & manage strategic projects can once again command a premium.
Google Office: It’s about File Formats
Since Spring ’05 our classes have been talking about a possible Google spreadsheet & now it’s here (so is the Google Calendar). But the folks who are talkin’ smack about the Google spreadsheet (see also ‘Google Fatigue Sets In‘) seem to be missing the point. It’s not whether the products are good enough today to steal market share from Microsoft, the real concern is the threat that the next versions present. AJAX isn’t as robust as Windows today, so it can’t capture what most corporate users need in a spreadsheet, but what’s the rule on Microsoft’s success in a product category? Don’t fear version one, don’t fear version two, it’s version three that will kill you. Could v.3 of Google app suite win? Google’s track record on non-search apps is sketchy (Picassa is a mostly unused App, and Google video is getting creamed by YouTube – Eric Schmidt should own these categories). But with $10.5 billion in coin, Google has the deepest pockets of any competitor Microsoft has faced. And which spreadsheet do you suppose all those kids using the $100 laptop are gonna use? The open-source, Firefox crowd will push web standards so that the browser will be nearly as feature-rich as the OS GUI. This isn’t the last shot in the battle, but here’s the key question, will Google be able to offer credible desktop alternatives before Microsoft’s inevitable right-click-to-search functions across its product line eat into Google share.
Microsoft’s Cash Vs. Google
If Microsoft is going to distribute software as a service, offer ad-based apps, & compete with Google, it’ll need data centers. Microsoft recently paid $1.08 million for 75 acres, where it’s building three structures totaling 1.4 million square feet. That’s about the size of 10 Costcos! The facilities will host legions of web-slinging servers. And with Google spending more money on power for its servers than the hardware itself, Microsoft will need juice. Redmond says it’ll need 48 megawatts of power for the facility, and will build its own electrical substation and transformer on site. In an excellent piece, the New York Times verified the spending arms race discussed in my talks at EMC, in prior WiGs, and in several classes this year. Microsoft’s estimated spending this year will be about $2 billion more than analysts expected, and Google will spend at least $1.5 billion this year. And while Net businesses in theory scale very well, Google claims its ‘machines are already full’ and has similar super-sized server site plans. Last fall Sergey & Larry’s shop bought about 34 acres in Oregon, with an option to buy 80 more. Google’s rivalry seems legitimate when considering the firm’s ‘freaky good’ most recent quarter. The firm posted net income of $592.3 million, or $1.95 a share, up from $369.2 million, or $1.29 a share, a year earlier. Revenue climbed to $2.25 billion from $1.26 billion. Excluding certain stock-based compensation and other factors, Google earned $2.29 a share. Analysts had projected earnings of $1.97, according to Thomson Financial. “Google absolutely blew forecasts away,” said Marianne Wolk, an analyst with Susquehanna Financial Group. “The company has tremendous momentum and clearly is leading the growth in this market.”. The numbers are so good, even perennially dominant eBay may be looking to partner up. Recently eBay also unwrapped an ad service where affiliates carrying ads could land a percentage from click-through auctions. This while Google’s GBuy will meld transaction data with search in an uber-PayPal that analysts call ‘revolutionary’.
Why is Google #4 in South Korea?
Two home grown players, plus Yahoo’s Korean arm, trump Google in the world’s most wired (and unwired) nation. Naver.com’s people-centric approach, where users share & post query answers, has left Google with a market share significantly less than 20%. Also on Google abroad – the NY Times Magazine did an excellent, lengthy piece titled Google’s China Problem (and China’s Google Problem).
Microsoft Buys Massive
Worth a click, just to see GMSV’s title on this piece 🙂 Redmond ponies up $400 million for a firm that runs ads inside video games. The firm has rather notoriously placed in-game ads for Deuce Bigelow: European Gigolo, and its ads for “V for Vendetta” in Anarchy Online are described by one user as so annoying it should be deemed a human rights abuse). While in-game ads may be a revenue boost for Xbox, ownership of Massive also brings credibility needed to jumpstart an industry, convincing others to design games with spaces for inserted ads.
VoIP Systems Hacked
If the plummeting Vonage IPO was not scary enough for the VoIP world, now comes news that two men allegedly hacked into a number of VoIP computer networks and fraudulently routed more than a half million calls made by unsuspecting customers. One of the bad guys sold some 10 million minutes of VoIP service at rates as low as 0.4 cents a minute, pocketing more than $1 million from the scheme, which he spent on real estate, a 40-foot-long motor boat, two BMWs and a 2005 Cadillac Escalade.
Dell Buys AMD Chips
Now every major PC manufacturer except Apple offers PCs with chips from Intel alternative, AMD. Dell announced the move after reporting an ugly 18 percent drop in fiscal first-quarter profit as PC sales lagged aggressive price competition from rivals like Hewlett-Packard.
Will Videogame Race Go To Tortoise, Hare, or Alien?
The PS3 is late, expensive, and early reviews at E3 suggest it’s not that snazzier than the Xbox 360. The WSJ quotes perennial speaker P.J. McNealy (who will teach his own course at BC in Spring 2006).
Anger Grows Over NSA Surveillance
Most of the complaints about surveillance would go away if we had believable assurance that checks & balances were in place. BC Grad, Congressman Ed Markey, quips – “We’ve got a new slogan for the AT&T and NSA: Reach out and tap someone.” MIT’s Tech Review has a piece on data mining and the NSA.
Telecom Remystified
More props to Ed Markey – as the guy sponsoring the Net Neutrality act, he has tirelessly sought to keep the bandwidth playing field level so that the guys in a garage (think the entrepreneurs who founded Google, Yahoo, MySpace, Amazon…) have the same access to net consumers as the big boys (well, that would currently be Google, Yahoo, MySpace, Amazon…). Unfortunately, congress killed Markey’s efforts, but CNet’s Net Neutrality Showdown site is working to rally geeks on what may be the most important tech legislative effort in a decade.
Inside the Spyware Scandal
When Sony BMG hid a “rootkit” on their CDs last year, they spied on you and let hackers in. What were they thinking? MIT Tech Review profiles.
Supreme Court Backs eBay
MercExchange lost its bid to extort coin from eBay, and in more good court news, the Beatles Apple Corps lost their fight to stop Apple from using its logo in the iTunes music store.
Bogus Hits Could Make Up 12% of Ad Clicks
Gadzooks! More bad news on the reality of pay-per-click revenue. Still, the medium is way more accountable than most forms of advertising, and advertisers continue to migrate boatloads of cash to the Net.
Apple Profits Surge
The Apple financial juggernaut continues. Latest quarter yielded 8.53 million iPod sales, up 60% from a year ago. Mac sales are up 5%, showing the Intel transition is going well. What to do with all the success? Build a new 50 acre corporate headquarters! BC Cyberposium panel host, the WSJ’s Walt Mosberg, offers insight on how Apple is changing the game in the post-PC era.
Nokia Puts Digital Life in Your Hands
Despite iPod’s success, rivals continue to circle. Nokia seems ready to give Apple a run for their money with it’s “N” series gadgets that serve as multimedia computers, offer features and picture quality to rival digital cameras or camcorders, and music quality to challenge an iPod. And because they can connect to the Internet you can check e-mail, download songs, or even update your blog while on the go (The devices are a noted improvement over the ill-fated N-Gage videogame/phone combo that one analyst described as ‘craptacular’). Nokia’s site has photos & demos.
Five Lessons from the Netflix Startup Story
A NetFlix co-founder offers insight on how a startup beat back Blockbuster& Wal-Mart to become king of the DVD rental market.
Cooler, Brainier
Xbox 360 has a 3 core processor, the PS3 will have 9 cores, but Azul’s systems have 24 cores per chip and up to 16 chips per box . That’s 384 brains ready to be dispatched, all with super-cool, low-power drawing specs compared to rivals. Forbes profiles the pioneering hardware firm that looks to be the NetApp of processing.
The Dell De-Crapifier
Buyers of new PCs know their machines come pre-loaded with a lot of trial-ware they don’t want & will never use. Google has recently spent $1 billion to get its (decidedly more useful) stuff on Dell’s desktop. But the interest in getting rid of the extra garbage on one’s PC led Jason York to create a script, dubbed the Dell De-Crapifier, to remove all of the unwanted extras that come with a new Dell.
BC Grad Named Boston CIO
Former Starwood CIO & VP (and TechDay speaker) Bill Oates has been tapped as Boston’s Top Tech. Oates will head the effort to WiFi the city. While Boston’s efforts are laudable, little Rhode Island pledges to build a state-wide WiFi network.