February 19, 2008


So much for originality

Bloggers, by and large, have a code of conduct for attribution. All the sources are generally given link love in the posts. But, what I saw today is little surprising.

In a comment, on Basab's blog, Krishna wrote
It looks lot less scam now. The Web 2.0 geeks built their *Velcro business models* tried putting everything in the cloud and on open-source stack and raved about the freedom from vendor lock-in, while locking their own users in. It took a while to dawn on the users - You need to sweat out to get out.
5 days before that comment, FSJ wrote,
So here's the racket. All these Web 2.0 guys built their businesses on open-source software like the LAMP stack and all went around raving about the wonders of open source and how great it is that there's no vendor lock-in -- and then they set about locking their own users in.... At Google they call this the "Velcro business model," meaning you can, in theory, get yourself unstuck, but it takes some effort.
So, you read one the most prolific blog, "internalize" the thoughts, and them spew them out as your own comment on some other well-known blog. And pray that nobody else reads both the blogs. Cute!

February 13, 2008


Get over the Thackeray episode

As I see, the only people giving Thackeray's son-of-soil campaign this much importance are either non-Marathi or staying too far from Maharashtra. As a Maharastrian, I can vouch that not as many care a damn about the whole campaign as the media believes to be. They are pretty much irrelevant today. They represent Marathi manoos as little as VHP represents the Hindus of the world, which is close to zilch. But, media, and in this case the bloggers as well), loves rubble-rousers for they provide people an opportunity to show their liberal inclination by using fanciful words like "freedom," "right," etc.

February 04, 2008


Mabani who?

I suppose, DNA will see smaller share of ad stream from ADAG.


February 03, 2008


Ignore India and China at your own risk

Motorola, after reporting massive drop in profit, is thinking of spinning off its cell phone business. And this happens when the market leader Nokia posts very strong results.

So, what's the difference? Here is one dimension. Motorola is paying the price for ignoring emerging markets, China and India, specifically. Five years back, when Nokia was flooding the market with new handsets Motorola had only couple of utterly ugly and unusable handsets as competition. It simply showed the lack of commitment on the part of Motorola for Indian markets. Guess, which company will be benefited with India's mobile subscriber base is quarter a billion and growing.

Apple is probably also making the same mistake. Its talks with China Mobile failed, supposedly due to Apple playing the big brother. Apple could do it with telcos in developed market as for them iPhone was much needed drug. But in emerging markets telcos are doing fine. China Mobile acquired 300 million subscribers without the help of Apples of the world (may be with the help of Govt.) Apple needs to come down from its high pedestal because the numbers we are talking in India and China are huge. A 5% market-share of handsets doesn't look too high for iPhone in India. (The stinking trash that is being sold at Rs 15,000+ doesn't come close to iPhone which sells at same price.) Even at 5% we are talking about more than 10 million units.

Idea courtesy: Shyam's post about IBM's looking to grow outside US.



Why would Microsoft buy Yahoo?

Here is my theory. Microsoft has cash. Lots and lots of it. In last 5 years, Microsoft has made profit of $54 billion. 3 years ago, Microsoft paid dividend of $32 bn for the first time in their corporate history. They returned that money to shareholders probably because there was no better use of that money. Once again, today, when they are sitting on huge mountain of cash, buying Yahoo for $22bn cash and $22bn stocks doesn't seem to be bad use of that money.


February 01, 2008


Will slowdown in IT sector affect economy?

Six months ago, in a post titled Pause On Dream Run, I wrote,
But in last few quarters, the INR vs USD equation has changed. INR is at 9-year high against USD. And if the results of latest quarter clearly indicate that it is hurting the profitability of the IT companies. They have reduced their INR profit guidance. What does all this translate for the employees in tech industry? Obviously, the I-want-only-30-per-cent-hike days are summarily over.
Looks like the time has come where IT companies are taking a not-so-benign look at the salaries with TCS making a tiny cut in variable pay. While the salary cut is more of tokenism than shoring up the bottomline, it shows the willingness of the companies to stop chasing the bus. According to this article, while Infosys sees no cut in the recent salary raises, TCS and Wipro look more conservative. The larger point is companies will politely say no if candidates demand huge raises over their current salary which already has a 3-month old raise built into it.

Clearly, the days ahead are not very rosy for IT employees. But, what does it mean for rest of the economy? To consider why IT is important to rest of the economy we need to understand how much money is channeled in the economy by IT industry. The employee cost for the IT industry is approximately 35% of the total revenue, which, probably, is the highest across industries and ahead by wide margin. If IT industry's total revenue is $40 bn in 2007-08, that means $13 bn was the employee cost. Add to this the employees of MNCs like IBM, Accenture, EDS, we are probably looking at a figure of $20 bn. And much of this $20 bn (and rising) is returning to the economy in the form of consumption - housing, automotive, leisure expenditure, etc. This is real money flowing in the economy and not some idle cash lying in high-interest treasury bills. It is unquestionable that the IT spillover effect has happened in past and been one of the key drivers of growth of economy. Now, when the IT industry hits the rough patch, economy will have some impact.

While tech sector may contribute a single digit percentage of GDP, it probably has much more than its fare share of impact of the economy.

This page is powered by Blogger. Isn't yours?