China’s Huawei

NYTimes writes about the Chinese company that is taking on Cisco with its “affordable” telecom products:

With dozens of sleek stone and glass buildings that would not look out of place in Silicon Valley, the expanding campus houses many of the 10,000 engineers working to establish Huawei as China’s first international player in the communications equipment business…In a tough market, its domestic sales grew by a third in the first half of the year, and analysts expect international sales to grow from $550 million last year to $1 billion this year and $1.4 billion next year.

Started on an investment of $1,000, Huawei began by selling imported telephone call switchers before turning to making them itself. Huawei grew rapidly by first focusing on the poor, rural regions ignored by larger companies and then, taking advantage of China’s rapid upgrading of its communications infrastructure, entered more lucrative cities like Shanghai and Beijing.

“Because the development here has been so rapid, there have been many opportunities for us to develop new products,” said Xu Wenwei, the executive vice president for international marketing. “That’s how we were able to move from the margins to the center.”

Its product line expanded from telephone exchange equipment to fiber optic networks, mobile telephone technology and data routing systems. Huawei’s critics claim, however, that its growth was also fueled by a fast and loose attitude toward the intellectual property of rivals.

Huawei has an R&D centre in Bangalore and has also been making some inroads in the Indian market.

Innovation Convergence

Renee Hopkins has a compilation of notes from the Innovation Convergence conference.

[One of the presentations was on] Customer-Centric Innovation: Turning Consumer Pain Into Innovative New Products by Tom Kuczmarski and Scott Lutz.

Tom quoted a 2003 best practices study his company did: 85% of CEO respondents said conducting customer problem/need identification research prior to ideation is the most important driver of new product/service success in their organizations.

A main reason why research for new product development should focus on consumer needs and an understanding of consumers lives rather than product and service attributes is that the resulting ideas are more likely to be true breakthroughs.

This makes absolute sense to me. If you focus on needs, youll come up with new products that meet those needs. These products may or may not resemble current offerings, but at the very least they shouldnt be so far out in left field (a common problem with unfocused new product development efforts) that they dont still meet those needs, since that was the objective.

On the other hand, when you focus on researching what consumers do and dont like about an existing product, the best you can expect is incremental improvement suggestions.

One more point Tom made about starting with pain your new products are more likely to be profitable if they enable the solution to a problem on which consumers place a higher need intensity.

Blogging Survey

[via Dave Winer] Perseus Development Corp has done a survey of blogs. It “randomly surveyed 3,634 blogs on eight leading blog-hosting services to develop a model of blog populations. Based on this research, Perseus estimates that 4.12 million blogs have been created on these services: Blog-City, BlogSpot, Diaryland, LiveJournal, Pitas, TypePad, Weblogger and Xanga…The most dramatic finding was that 66.0% of surveyed blogs had not been updated in two months, representing 2.72 million blogs that have been either permanently or temporarily abandoned.”

Enterprise Social Software

VentureBlog has a post on enterprise social software and some of the companies that are working in the space, concluding that “This stuff may take a while to make its way into enterprises. But in the mean time social software is building a cadre of believers in the consumer space and with critical mass will undoubtedly come crossover.”

It is a question that I have been pondering over: how can all these new software ideas make us more productive – personally and in the groups that we work with? We need to combine the tools (blogs, wikis and the likes) with appropriate methodologies. What is missing is the recipe for putting together the various ingredients to help us manage the growing quantum of information that we need to manage in both our personal and professional lives.

Bill Joy Interview

Excerpts from a Fortune interview with one of the co-founders of Sun who just left:

The hardest part isn’t inventing the solution but figuring out how to get people to adopt it.

On the network, where part of the software works here and part of it works there, programs also behave in emergent ways that are more biological and difficult to predict. So until you have a science of doing distributed computing, software developers will continue to just throw stuff out there. That’s why the Net is not going to be secure.

I’d really like to go and do something that’s more like Javathat starts from a clean sheet and that isn’t required by its compatibility with something else to be so complicated.

The first point he makes is so correct. So many ideas and inventions come up – the challenge is how to make them acceptable to users and profit from them.

Ozzie on Email Alternative

Ray Ozzie states that “if you’re doing a critical process in e-mail now, you won’t be doing it there for long…Think about the rate of increase of “noise” in email over the past two years, which is a very short time. Think about where we’ll be in as short as five years. Can you imagine?”

Ozzie’s alternative: “If you have work to do with others, online, try workspaces. There are many different types – from Groove if you like client-based mobility, to SharePoint if you like using Websites. No noise, no spam, tuned to save your time. Of course, you can’t give up on eMail, and likely never will. As time goes on, though, you’ll only visit eMail as a low-priority background task, much as you do when sorting through your physical mail at home.”

VentureBlog has an opposite view:

Email’s too important to die, or even change in any significant way, and tens of billions of dollars in entrepreneurial capital and hundreds of millions of votes can be brought to bear on the spam, noise and virus problems.

Too much spam in your mailbox? Use Bayesian filters, which have gotten pretty good, or just subscribe to a service in the cloud. Need an instant, one-time email address? Mailinator it! Overwhelmed by virus-generated mail? Use a simple virus filter or rules that recognize the pattern(s) of emails generated by said virus.

Sure, a few, tech-savvy people will get frustrated and try and use a different mechanism. Many will use webs of trusted whitelists (think sixdegrees on your address book) or challenge-response systems. A few will storm off to some new, secure communications mechanism, that authenticates senders and imposes a true cost on them. Even fewer will migrate to wholly new paradigms like “shared workspaces.”

But they’ll be back – email is the ultimate network effect, and we’re all locked in. Hundreds of millions of users have agreed upon a simple protocol, use it to exchange 31 billion messages per day, and no-way, no-how is that going to change.

I wrote on this topic a few weeks ago – “The Death and Rebirth of Email“.

Developmental Path of Economies

Atanu Dey provides an explanation on the interplay and co-existence between agricultural, manufacturing and service economies: “A modern efficient large economy is a service economy only because it is also a very efficient agricultural and manufacturing economy too. Its sustainability derives from the productivity of the two older activities.”

TECH TALK: SMEs and Technology: The Market Opportunity

Technology has changed a lot over the past decade. And yet, when we look at how small- and medium-sized enterprises (SMEs) use technology, there has been only a limited adoption of the various new technologies. Even as the rate of change in technology accelerates, the pace of usage of these technologies in businesses at the bottom of the pyramid has not increased dramatically. In this series, we will look at how SMEs, especially those in emerging markets, can make better use of the new, emerging technologies and also consider the business opportunities that entrepreneurs can look at in targeting these organisations.

SMEs are seen as the next frontier in new markets for technology. In the recent past, companies from IBM to Microsoft, and HP to Cisco have all announced specialised solutions targeting SMEs. As growth in established markets (the large companies in the developed markets) slows, there is a greater focus on looking at the business and technology needs of SMEs.

And why not? Just look at the numbers. There are estimated to be more than 75 million small and 600,000 medium-sized businesses. (While definitions vary, typically, a small business is one with less than 100 employees, while a medium-sized business is one with 100-1,000 employees.) It is estimated that the market for hardware, software, services and other related IT spend by SMEs is about USD 420 billion. While more than two-thirds of the business are reckoned to have more than one computer, only a fifth of them have a server, according to Microsofts Orlando Ayala.

Even among SMEs, there are two clear segments. The SMEs in the developed markets have a greater capability to spend on technology than do the ones in the emerging markets. In fact, if one were to look at the IT maturity levels of companies, even some of the larger companies in the emerging markets would be considered as IT babies. So, the potential for improved use of technology is substantial in fact, one could argue that what we have so seen so far with technology adoption across the value chain has been restricted to the larger companies. The SMEs have been impacted only to a small extent with usage being primarily driven by email, Internet access, accounting and promotional use of an infrequently-updated website.

At the same time, we are seeing new technological innovations. This raises the question: how can SMEs partake in this revolution? Do SMEs have the ability to leapfrog with these new technologies? How can they make their businesses more productive by leveraging some of the newest ideas?

Our focus in this series will be on the SMEs in the emerging markets think of them as SMEEMS (Small- and Medium-Enterprises in Emerging MarketS). There is an opportunity to define a new IT reference architecture for this category and create a computing platform out of many cold technologies which can dramatically reduce cost of ownership and management. At the same time, there are plenty of opportunities for entrepreneurs in targeting these SMEEMs. Think of this category as the teenagers of the consumer market growing, aspirational, a greater ability to spend and needing unique solutions.

Tomorrow: Recent Developments