Cellphones in South Korea

WSJ writes how cellphones are being used for a wide variety of purposes:

Stuck on a cramped bus in this congested city’s rush-hour traffic, Oh Hye Rin whips out her cellphone and puts it to work. The 25-year-old Web designer logs onto her wireless Internet service and starts downloading Korean pop songs to the MP3 player in her phone. Then she switches to online banking, pays some bills and transfers money.

South Korea, where about 70% of the country’s 48 million citizens have mobile phones, and where the broadband penetration rate is one of the highest in the world, offers a glimpse into a future in which cellphones play an increasingly multifunctional role of connecting people to the Internet. For local cellphone providers, the challenge is to feed this expanding market with new data services.

Simple data services, meanwhile, like SMS, a cheap method of communicating through short text messages sent via mobile phones, are no longer major revenue earners either. So, while the carriers are placing new emphasis on data services, they have to be very creative. Residents of Seoul already use their phones to watch movies, activate home appliances, bank online and post photos and commentary on Web sites. So the trick now is to work in partnership with banks and credit-card companies, appliance makers and even construction companies to devise even more services to maximize phone usage in everyday life.

Turning cellphones into remote-control devices for home appliances is seen as a particularly promising area. Since April, residents of a large Seoul apartment complex who sign up for the service with SK Telecom have been able to control lights, TV sets and other electronic appliances with their phones while they’re away. The user dials into a control module in their home that is linked to their electronic devices. Lee Hee Won, a 56-year-old recent retiree who spends a lot of time traveling, says the service is convenient. “You don’t have to worry about leaving the lights on because you can always check with your cellphone whenever and wherever you want,” he says.

More on IBM Workplace

Yahoo News has an AP report on server-centric computing in the context of IBM’s efforts to push Workplace:

IBM and Sun Microsystems Inc., which also offers a server-based computing system, the Java Desktop, insist their efforts aren’t a direct stab at Microsoft’s huge and hugely profitable presence on corporate desktop computers.

Even so, the rivals say they hope to win over corporate technology managers who are tired of the cost and security headaches inherent in having hundreds of PCs running Microsoft’s Windows operating system.

In a server-centric computing system, software updates can be pumped to every machine at once, and individual computers can be shielded from viruses and attacks.

“That’s one of the biggest things (information technology) faces today: keeping all of the software on the PC up to date,” said Bruce Elgort, manager of information services for Sharp Corp.’s U.S. microelectronics division. “It’s a nightmare.”

He said he’s “50-50” on whether to have his organization adopt IBM’s new server-based desktop system, known as Workplace 2. Even so, he said, “I’m pretty keen on what they’re trying to do.”

Workplace is accessed over a Web browser, so users can be anywhere, even on a handheld computer or an Internet-connected cell phone. A Macintosh version is due this fall.

Also, unlike earlier incarnations of thin-client computing, users don’t have to maintain a constant connection to the network. E-mails and other work can be performed off-line and synched up with central servers later.

Amy Wohl, who runs the Wohl Associates tech consulting firm, said it will take a few years to gauge the success of programs like Workplace.

Switching isn’t easy for many companies, especially those with internal programs written to work with Office.

“If you’re looking for Office to disappear, that’s not likely,” Wohl said. “If you’re looking for IBM to have a fairly substantial number of customers, large customers, I think that’s reasonable. … It’s going to be really interesting to see.”

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Jonathan Schwartz on Commoditisation

Sun President Jonathan Schwartz writes:

What do oil & gas, telecommunications, and financial services have in common?

They’re all commodities.

They’re also the industries that have yielded the world’s largest companies. Oil companies, Telcos, Banks. The Fortune 50 are littered with them. Why? Because commodities, by definition, are those products for which a universal and perpetual demand exists – the planet is your marketplace, and everyone is your customer. Commodities yield massive opportunities. If you’re prepared.

A whole host of folks like to believe the computing industry is commoditizing. I don’t buy it. Some technology products are certainly becoming interchangeable (why buy WebSphere when you can deploy the J2EE Reference Implementation for free?) – but what’s really commoditizing? Bandwidth. Not software, not hardware, bandwidth. It’s coming out of the wall in your house and office, just like a three prong outlet provides another commodity, electricity (and broadband, soon enough).

Having spent a great deal of time with some of the world’s largest commodity companies, I’ve taken note of three simple imperatives.
One, the largest companies serving commodity markets are all technology companies. Talk to a bank with a trading operation, and you’ll hear all about how better order execution or analytics give them a competitive edge. “Banking is a technology industry.” Oil and gas companies invest billions in R&D – for the same reason. And the telecommunications companies? That’s getting more obvious by the day. Technology is their most significant means of differentiation. It’s true for every company engaged in supplying a commodity marketplace. Don’t be deluded by the retail bonanza – in commodity markets, retailers have a much harder life than wholesalers.

Second, technology differentation is necessary, but not sufficient. Companies serving commodity markets must leverage their technology to drive business model differentation. Oil and gas companies leverage the derivatives markets to better serve customers (and stockholders) – and manage production and supply through those systems. Financial services companies, especially in their consumer businesses, use disruptive pricing – with offers of “free checking,” discount trading or other incentives to leverage consolidated product portfolios. And obviously, telecommunications companies are famous for innovative pricing, from free handsets, to call plans that make it more expensive to call outside your network (MCI’s Friends and Family was among the first). The point behind all of this – technology is a must have, but only insofar as it enables disruptive market moves.

Lastly, among the most interesting characteristic I’ve seen in companies that win in commodity markets – they’re intensely focused on standards.

6 Clarifying Questions

Johnza points to a post by Cliff Atkinson which discusses questions to ponder “when you’re so far along you seem to have lost your way, sometimes it’s easiest to map your way back to the beginning.” Johnza applies the same questions in the marketing context:

– WHO: Who do you need to be thinking about? Who are your target customers, your competition, your partners, your constituents?
– WHAT: is your product, offering, category?
– WHY: should you exist in the first place? What is your vision and mission?
– WHERE: are you trying to go? What are your goals and objectives?
– HOW: are you going to achieve them? What is your core strategy or play, what bets are you making? What are the tactics your will deploy?
– WHEN: are you going to do what? What is the actual plan for rolling out these strategies over time? With what realistic milestones and expectations?

TECH TALK: Tech Trends: 9. Outsourcing

India has been in the limelight over the past year for the business process outsourcing that international companies have been doing in order to cut their costs and sharpen focus on their core businesses. Some Indian companies too have started to outsource their non-core operations. Bharti recently decided to outsource its IT operations to IBM in a multi-year, $750-million, deal. Various banks are also starting to do the same. Think of this as the IT equivalent of the build-own-operate model common for infrastructure development.

Thomas Friedman writes how globalisation 3.0 is making outsourcing possible: These work-flow platforms can chop up any service job accounting, radiology, consulting, software engineering into different functions and then, thanks to scanning and digitization, outsource each function to teams of skilled knowledge workers around the globe, based on which team can do each function with the highest skill at the lowest price. Then the project is reassembled back at headquarters into a finished product. Thanks to this new work-flow network, knowledge workers anywhere in the world can contribute their talents more than ever before, spurring innovation and productivity. But these same knowledge workers will be under more pressure than ever to constantly upgrade their skills in this Darwinian environment.

John Hagel looks at the wider view: Offshoring is not just about cost reduction through wage rate arbitrage. Instead, it is a powerful way to improve performance by accessing distinctive resources and accelerating capability building. Bottom line: offshoring will force all of us to become more specialized and to make some difficult choices to exit certain activities along the way. In fact, by viewing offshoring too narrowly as simply a way to access cheap labor, companies risk unleashing a vicious cycle that will lead to value destruction.

Outsourcing is a fundamental trend, and there is little any US government is going to be able to do anything about it. What is clear is that companies globally are relooking at their cost structures and leveraging the commoditisation that has taken place in IT as well as services to focus on what they do best. It is hard to overlook a 30-70% cost savings for certain processes, but that is just the start. What outsourcing also allows is to also fundamentally redesign business processes. This is what companies like IBM are onow offering the global majors.

From the Indian viewpoint, outsourcing has been the key driver in making it a critical component in the global value chains of organizations. The Economist wrote about four trends in the context of Indian outsourcing: Some multinational firms with captive offshore operations in India, such as Phoenix, are thinking of selling themin effect, outsourcing through divestment. Second, young, fast-growing India-based firms, flush with cash and besieged by would-be investors offering more, are thinking of acquisitions as a way to sustain growth. Thirdly, while these upstarts race to expand in their target markets, the big western IT consultancies are reversing the process. Last month, mighty IBM bought Daksh, one of India’s biggest call-centre firms, with about 6,000 employees. Finally, as these multinationals bulk up in India, extending the range of their wares to include call-centre and other BPO operations, Indian firms such as TCS have been matching themas well as expanding overseas.

Tomorrow: The Future of Services

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Broadband Super Portal

DigitalJournal.com has an article by Chris Hogg:

Recently, Rogers Cable Inc. and Yahoo! Inc. unveiled what they call a new integrated broadband experience. Combining high-speed Internet with a large suite of services like news, music and videos, yahoo.rogers.com is designed to provide a media-intensive trip for Net addicts and media junkies.

The Rogers-Yahoo site features an email system with anti-virus and spam protection; 2 gigabytes of email storage; unlimited storage space for uploading photos; a messenger service; an intricate system of parental controls; and music, videos and games.

This incursion comes one month after Bell Canada introduced a similar co-branded Web portal, Sympatico.MSN.ca, with Microsoft Canada Co.

However, both these new portals dont come free: To use the yahoo.rogers.com portal, you must be a subscriber of Rogers high-speed Internet services to use the perks, and Sympatico.MSN.ca demands that users pay for premium services.

Looking beyond the fine print, it becomes obvious that these two converged giants are looking to capitalize on this growing Web trend, and are working to shape an if you build it, they will come corporate strategy. The creation of these two new portals also suggests a new generation is being born from the information superhighway.

In the early days of the Internet, consumer demand called for speed and a stable connection. Now, with broadband connections being far more common (especially in Canada), the name of the game has become content. The current generation downloads everything, so it was only a matter of time before corporate think tanks would start churning out ideas to capture this growing market.

Connected Information

[via Anish Sankhalia] Flemming Funch writes:

There’s an implicitly idea somewhere that data adds up to information. Which potentially might be structured into knowledge. And if you then really internalize it, it might become wisdom.

It is a questionable model. It assumes that the direction is from disjoined snippets of data towards something more integrated and useful. Who says it works like that? Nature doesn’t seem to me to work like that. There nothing quite equivalent to data out there. Nature includes lots of systems that have partipating elements that send messages to each other. A plant or animal that is trying to procreate often sends out millions of little seeds or pollen or eggs. And there are millions of ways they might get activated. DNA is certainly information, but it is replicated billions of times. There are billions of ways that DNA might hook up and produce the next generation. Billions of signals with certain receptors might be met with billions of possible counter-parts that have matching receptors. It certainly doesn’t depend on one little piece of information hidden once somewhere, which somebody has to remember to go look for.

That is where our informational systems tend to go wrong. We put something in some suitable place, and then one is just supposed to know where to find it. And, oh, one can make all sorts of reminders that makes it easier. Like, if on the web a piece of information is stored in some place, other sites can link to it, and people can make bookmarks, and they can write a little note for themselves to remember where it was. And you can go search in a search engine. And that helps, and somehow most things work out. But it still seems vastly inferior in some way to the relatively effortless manner information is used in the natural world. Our systems depend on somebody remembering what to look for, at the right time, and discovering the right context. It is very fragile.

Can’t it all connect better? Well, one possibility is a structured semantic web. If all information is meticulously categorized and related with all other information. Possibly in some huge all-encompassing hierarchy. I don’t know how likely or possible or even desirable that is. Another possibility is making everything easier to find, and to constantly look for matches for everything. That’s more like nature’s way, I think. You put everything that needs to be remembered out in loads of redundant copies. And then loads of little pieces are constantly looking for matches to what they’re looking for. You know, a Synchronicity Engine of some kind.

There’s still some major key missing, though. We need a paradigm shift that takes us from the overwhelming complexity of scattered information to a world where things might again be simple, but at a new level. You know, you’re hungry, there’s an apple on the tree in front of you, so you eat the apple, and you feel good. That kind of simplicity. You’re tired and you sleep. But while at the same time being globally connected with a vastly bigger network of people and information. Rediscover the simplicity in a higher order of complexity. I have no doubt that it is there. And if we don’t find it, it is probably because we still address information complexity the wrong way.

Rich Clients

Barry Briggs has a counterpoint on the rich web clients discussion that has been going on in the wake of Yahoo’s purchase of Oddpost and IBM buying Alphablox:

Many thought browser-based delivery was the wave of the future — zero-install, low TCO, blah, blah, blah. But here’s the deal, and unfortunately only a few of us recognized it then: nobody wants spreadsheets or for that matter, rich content creation apps generally, delivered in a browser! If you’re going to interact with a web page, we realized, you want — a purchase order or an expense report, or an approval form — not a blank spreadsheet!

You can see this even now: odds are you’re running Windows and IE, and I bet you’ve never run a spreadsheet ActiveX in your browser, even though there are lots of these available. Obviously it’s not exactly the same thing — ActiveX’s do get installed; the point however is that they can run in the browser window. You have to ask yourself: what’s the value of a blank spreadsheet inside my browser? Conversely: if desktop-apps-inside-browsers are so compelling — where are they?

On the other hand, you’ve almost certainly run pages that “calculate” — an custom intranet expense report app, or maybe Dell’s online configurator. You use your desktop spreadsheet app all the time — but you didn’t need it inside your browser. (Now where this gets really interesting is when you run the spreadsheet engine on the server — another one of my pet prototyping projects years and years ago — that’s a separate story though).

Unfortunately, IBM doesn’t seem to recognized any of this. Browsers and desktops are different; the apps that live on them conform to entirely different, and coequal, usage styles.

How News Will Change

Om Malik writes: “Cheap cameras – both of camera phone and digicam variety, cheap hosting on the Internet, and always-on connectivity are going to change the concept of news, especially during in the wartime. If satellite television was the catalyst of capitalism change, always-on connectivity will change societies.”

[via Dan Gillmor] Separately, The Guardian writes about OhMyNews, a South Korean website that has let more than 30,000 citizens try their hand at journalism.

Microsoft’s Future

Barron’s writes that “[Microsoft’s] shares have rarely been cheaper or its outlook more promising” and discusses “why the titan of Techdom is primed to grow, and grow, and grow.”

Investors are missing the big picture. The stock, which dipped slightly Friday following a fourth-quarter earnings report that came up a penny shy of expectations, is trading at a near-historic low valuation. Investors are interpreting the software giant’s new plan to pay out a mountain of cash to shareholders as a signal that its days as a growth stock are over. But the opposite is true: Microsoft is gearing up for further revenue gains and accelerating profits. The company has never been better positioned, and the stock has rarely been more attractive.

The real story on margins in recent years has been the company’s strategic decision to spend heavily on new businesses, losing billions of dollars in the process. When you look at the numbers, however, and you find Microsoft is making fundamental progress in all of its new lines.

Thanks to the surge in Internet advertising, for instance, the ‘Net service MSN is now in the black, having just completed its first profitable year; it generated $121 million in operating income on $2.2 billion in revenues. Meanwhile, profits are surging at the company’s fast-growing server software unit, the third biggest slice of the company after the divisions that include Windows operating systems and Office business software. In fiscal 2004, the server business grew 19%, to $8.5 billion.

The back-office, enterprise-applications business, created essentially from nothing from the acquisitions of Navision and Great Plains software, has struggled, but it has pared losses and continues to generate strong revenue growth — 18% in fiscal 2004. While Microsoft continues to suffer losses on the Xbox game console — $1.2 billion in fiscal ’04 — a recent price cut sent unit volume soaring 27% in the fourth quarter, and the company is hard at work on a second-generation console, expected in 2005.

And while all this has been going on, the company has been cranking out the usual solid numbers from its core Windows and Office businesses. In fiscal 2004, both segments got a push from strong personal-computer sales. The company’s information-worker segment, which includes Office, increased revenues 17% last year, including 23% in the June quarter. And revenues for the operating-system business grew 11% for the year and 9% for the quarter.

Personal Information

Jon Udell has an idea: “Suppose we create an ecosystem in which users maintain public profiles, Web services dispense them, and applications talk to those services? Your profile would contain only the facts you want to publicly assert about yourself. No secrets, no trust. We don’t know how to solve the trust problem yet. While we’re sorting that out, maybe we ought to bootstrap the formats, protocols, and mechanisms that will have to support whatever trust solutions emerge.”

TECH TALK: Tech Trends: India Action: Replicate the Famous Five

If there are five devices that define the new world in the developed markets, they are Vonage VoIP box (and service) which uses the Internet to route calls and has dramatically cut the cost of phone service for Americans, TiVos personal video recorder which timeshifts television, Apples iPoD which delivers music wherever and whenever we want, the Treo 600 from PalmOne which is a smartphone, and Microsofts Xbox which is a gaming console. Can we create similar such devices for the Indian market?

Lets start with Vonage. VoIP can help cut costs of telephony further in India and give a big boost to the rollout of broadband networks. Theres plenty of backhaul fibre that exists in India. The challenge is in the last (or first) mile. That has still been the domain of the local phone company (primarily BSNL and MTNL). Telephony is where the money is today. By creating a box which can work with cable or DSL lines and route calls over the Internet, competitors get the necessary incentive to deploy networks with good revenue potential until the time that data services start picking up.

A TiVo-like device is bound to do well in India, given the craze for television and the evening soaps! Families will no longer have to make a choice on which programme they will have to watch. This device could also be used to deliver other digital content (education, for example). Again, it leverages the broadband infrastructure and provides services that people are likely to want to pay for.

Music is part and parcel of our life in India. Thanks to the movies, there is a song for every occasion. Music consumption is now largely limited to radio or television. The iPod-like device can now be used to deliver music on a handheld device. More importantly, it can create an additional revenue stream for the music companies.

The Treo 600 with its small keyboard (like the Blackberry) can be used as a computer-on-the move with a thin client interface. There is plenty of dead time that we face in India. A device that can become an adjunct to the computer, besides serving as a cellphone, can work wonders.

Gaming hasnt really taken off in India, even though India has the worlds largest youth population. Piracy has been a deterrent, along with the costs of gaming consoles and the games themselves. A device, which can complement an online gaming service and build aspects of the console into a residential gateway or a set-top box, can help launch a new industry.

There is another agenda in creating these devices. Along with low-cost thin clients, these five devices can spur the development of a local hardware industry. The key in all these cases is to have price points which are very affordable in the Indian context. By building two or three multi-purpose hardware platforms for consumer devices, India can start to define, rather than follow, the consumer market.

Tomorrow: Outsourcing

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Returning Home to India

The New York Times writes:

Drawn by a booming economy, in which outsourcing is playing a crucial role, and the money to buy the lifestyle they had in America, Indians are returning in large numbers, many to this high-technology hub.

What began as a trickle in the late 1990’s is now substantial enough to be talked about as a “reverse brain drain.” By one estimate, there are 35,000 “returned nonresident Indians” in Bangalore, with many more scattered across India.

For this still developing country, the implications of the reverse migration are potentially vast.

For decades, it has watched many of its best-educated move abroad, never to come back. Now a small portion of that talent is returning, their influence amplified beyond their numbers by their high-level skills and education, new cultural perspective and, in many cases, ample wealth. They are both staffing and starting companies, 110 of which set up shop in Bangalore in just the year that ended in March.

In some cases, they are seeking to refashion India implicitly in America’s image. It takes leaving and returning, said Arjun Kalyanpur, a radiologist who returned in 1999, to ask, “Why should my country be any less than the country I was in?”

This impulse is not universally welcomed by some Indians who never left and who see a globalized elite – many of whom now carry American passports, not Indian – importing a Western culture as distorting in its way as British colonialism.

Still, returned reformers are already sparking change. Srikanth Nadhamuni, who helped design the Intel Pentium chip, is now applying his formidable skills to designing a software platform that could revolutionize the administration of India’s local governments.

Lathika Pai, one of the few women in India’s high-technology sector, is trying to bring America’s best practices for working mothers to the B2K Corporation, her business-process outsourcing company. Others are trying to encourage schools to teach critical thinking, or force government to be more responsive to citizens.

S. Nagarajan, an entrepreneur, calls it “brain gain.” “They have not come back just as they went there,” he said.

The returnees describe identities in flux, riddled with continuing questions about what to cook, what holidays to celebrate, what languages to speak, and how to interact with a country that sometimes seems as foreign as the United States once did.

15 Years of PC World Magazine

PC World looks back at its 15 years. A nice trip down memory lane. Here is what 1989 was like:

June 1989: PS/2 luggable gains positive reception
The PS/2 Model P70 is a high-functionality, 20MHz 386 portable ($16,425) that weighs in at 9kg (the lightest notebooks today are 1.2kg CK). PC professionals are saying the VGA monitor and the 4MB of memory (expandable to 8MB), make it a powerful luggable.”

July 1989: IBMs 486 steals show
The past 10 years have seen a dramatic increase in clock rates, from just under 5MHz for the original IBM PC to 33MHz for the latest 386 systems. This more than six-fold increase will not be repeated.

Dec 1989/Jan 1990: Easy DOS it
Processing speeds are now fast enough to satisfy all but the most exacting user.

PC World Awards
Best desktop PC: Apple Macintosh IIcx
Best laptop: Compaq SLT/286
Best word processor: WordPerfect 5 for DOS

Email: Alive and Kicking

[via Brad Feld] Matt Blumberg, the CEO of ReturnPath, writes:

– Consumer email adoption is huge and rising
– Email business usage is now mission critical for most employees
– Spam filters are getting better by the day
– People are signing up for email newsletters and marketing at astonishing rates
– The email industry will not allow itself go the way of the typewriter

ComputerWorld has a special report on Email and Groupware.

StoryBlog

Innovation Weblog points to StoryBlog, “a repository of stories for use in presentations.” Here’s one story sent in by Ankesh Kothari:

A university professor went to visit a famous Zen master. While the master quietly served tea, the professor talked about Zen.

The master poured the visitor’s cup to the brim, and then kept pouring.

The professor watched the overflowing cup until he could no longer restrain himself. “It’s overfull! No more will go in!” the professor blurted.

“You are like this cup,” the master replied, “You are full of ideas. You come and ask for teaching, but your cup is full; I can’t put anything in. Before I can teach you, you’ll have to empty your cup.”

Moral: keep an open mind.

Asian Perspectives

WSJ writes that “the rising incomes of many of Asia’s rural residents — thanks in part to government spending — are beginning to make a mark in both the economic and investment pictures around the region.”

Rebellious farmers in India, fed up with development skewed toward technology and the urban elite, set the stage for what is developing into a pan-Asian development and investment theme by throwing out the Bharatiya Janata Party-led government in elections in May. The new ruling coalition promptly passed a budget that included an extra 100 billion rupees ($2.18 billion) for investment in irrigation, food-for-work programs and other rural projects.

The message from India — that rural areas really matter — has been resonating for some time with the Chinese Communist Party, which doesn’t face popular elections but feels the heat from peasants angry about widening income disparities, proliferating local fees and taxes, and the loss of farmland to factory owners and golf-course developers. After decades spent cosseting urban industry with subsidies and preferential policies, tax breaks and other benefits now are flowing to farmers.

Another article in WSJ (no link available) had an interesting point – growth in Asia (especially India and China) is being driven by thw twin resolutions of outsourcing and rising domestic consumption.

The consumption revolution changes how Asian consumers consume and the outsourcing revolution changes how Asian producers produce. Each ushers in further changes. The new ways of consuming and producing turn out to be intricately linked and mutually reinforcing, and will prove to have far-reaching ramifications.

The consumption revolution is better known as it has been going on for longer. The export-led growth regime that served the Asia/Pacific region well for much of the post-World War II period has now been supplanted by domestic consumption-driven growth.

Setting the stage is the rapid expansion of the middle class, which is defined as someone with a minimum level of income of $5,000 per person per year (which is the level where consumption begins to shift quickly from basic necessities to discretionary spending). The investment bank CLSA estimated the total size of this middle class at 226 million in 11 Asia/Pacific countries excluding Japan in 2002. More than 65 million of these individuals are already in China, which is the country where the middle class is growing fastest. By 2010, this number could reach 541 million in Asia/Pacific.

The rise of the middle class translates into broadly based growth in domestic demand. This phenomenon stands in sharp contrast with the past situation of a small elite at the top buying luxury goods, while the vast majority lived at subsistence level.

This twin revolution, which is firmly underway today, will therefore see the emergence of Asia/Pacific as a high-performance economic region in the coming years. The region’s foundation of growth will therefore be more balanced and sustainable. More knowledge-intensive and higher-paying employment will be created. The middle class will grow much bigger, with all the benefits that a vibrant and prosperous middle class brings.

Kevin Rollins Interview

SF Gate has an interview with Dell’s new CEO Kevin Rollins (Michael Dell is now chairman):

Our model is a very intensely execution- oriented model. We have a strategy, which is a Dell Direct business model, but then the key to its success is how well we implement it day in and day out. Anytime we fail to execute is the biggest risk by far.

[HP] had a great, profitable printer business before [their merger with Compaq]. They still have a great, profitable printer business. … Their profits are 70 to 80 percent from the printer business. So that’s the area where the profit pool still lives. It’s where it lived before. It’s where it still is now. So I just ask, what’s changed?

[PC growth is being propelled by] New technology. The Internet. Broadband. Wireless. More software. More media capability within the home. Obsolescence and just wearing out. You have to upgrade your PCs. You have to do that at some point in time because they just fall apart. They don’t last forever.