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TECH TALK: India Rising: Rise of the Indian MNC

January 23rd, 2006 · No Comments

One of the highlights of recent times has been the rise of the Indian multinational. What is surprising about this is that just a few years ago it seemed that Indian enterprises were inefficient (in global terms) given the labour laws, prevailing interest rates and poor local infrastructure all of which added up to higher costs. Then, there was also the China factor which seemed destined to dominate any and every type of manufacturing. The past few years have turned the tables on the nay-sayers. Indian companies have become much more efficient in their domestic operations and in many segments on international competitors quite effectively. In addition, theres been an outward focus built on the realisation that scale matters.

Whats interesting is that the story of the Indian multinational is now extending beyond software. While companies like TCS, Infosys and Wipro are giving the global IT majors a run for their money on outsourcing contracts, Indian manufacturing is also coming into its own. What is helping these enterprises is a growing domestic market combined with their ambition for greater marketshare.

Business Week wrote in October last year: Companies such as Tata, Birla, Sterlite, and Gujarat Ambuja are rushing to meet the demand of ever-higher exports of steel to China and cement to the Middle East and Asia. But it’s not just commodities that are flourishing. A hefty part of the capital expansion is going into autos, auto components, machine engineering, textiles, and pharmaceuticals. According to Projects Today, investment in these sectors grew 8.2% this year, compared with a decline of 3.6% last year. These industries have spent the past decade restructuring, battling with government to implement better economic policies, and preparing for global competition. The result has been a surge in productivity for the best companies.

The one company which epitomises the rise of the Indian multinational is Bharat Forge. Forbes wrote recently about its rise:

India’s commercial-vehicle market tanked in the mid-1990s after a false start during the country’s liberalization drive. Baba N. Kalyani, managing director of one of the country’s largest forging companies, decided that it was time to accelerate his global push.

Over the next decade Kalyani plunked about $140 million into capacity expansions at his Pune headquarters plant. He courted auto manufacturers in North America and Europe in a bid to sell engine and chassis components from Pune. And he chalked out a strategy to take over small forging companies abroad to enlarge his customer base. “We want to be the world leader in our business,” says the 56-year-old chairman and managing director of Bharat Forge.

With $1.8 billion in market capitalization, Bharat is now the second-largest forging combine in the world. It manufactures forgings like crankshafts and axle beams. The company supplies Ford, General Motors and Volvo, among others. Acquisitions have given it eight manufacturing locations across Asia, Europe and the U.S.

Kalyani says that Bharat can operate a forge business more profitably in Europe or the U.S. by using back-end manufacturing from its Indian operation to bring down costs. For instance, it can churn out forgings at its Pune factory while staff in Germany work with clients in designing and engineering products. Having a front end “gives you the ability to get involved in the design and development of new products for your customers, which is not possible from a long distance,” says Kalyani.

Financial Times wrote recently after Bharat Forge acquired a company in China:

If managers in developed economies already fear their lower-cost rivals in India and China, what about a manufacturer that combines the strengths of both places under one roof?

That prospect moved an inch closer to reality last month when Bharat Forge, Indias largest auto-components company, gained control of its counterpart in China, a division of First Automobile Works (FAW), the countrys largest vehicles manufacturer.

The deal with FAW Forging provides capacity of 100,000 tonnes and a 30 per cent local market share, boosting Bharat Forges total capacity to about 600,000 tonnes and placing it in the same ballpark as the industry leader, Germanys Thyssen Krupp.

Bharat Forge is by no means one-of-a-kind. The most positive development in recent times has been the confidence among Indian market leaders to take the battle international. Because if they dont, their competitors will come into India. The world is now a playground for the best Indian enterprises, entrepreneurs and managers.

Tomorrow: Other Positives

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→ No CommentsTags: Tech Talk

The New Organisation

January 22nd, 2006 · No Comments

The Economist writes in a survey: “The way people work has changed dramatically, but the way their companies are organised lags far behind.”

→ No CommentsTags: Management

Ten Trends to Watch in 2006

January 22nd, 2006 · No Comments

The McKinsey Quarterly offers the following list:

1. Centers of economic activity will shift profoundly, not just globally, but also regionally.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly.
4. Technological connectivity will transform the way people live and interact.
5. The battlefield for talent will shift.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.
8. New global industry structures are emerging.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.

→ No CommentsTags: General

Deconstructing the Newspaper

January 21st, 2006 · No Comments

Jeff Jarvis writes:

Newspapers waste too much money on ego, habit, and commodity news the public already knows. In an era of shrinking circulation, classified, and retail ad revenue and in the face of shrinking audience and increasing competition papers have to find new efficiencies and cut these expenses to concentrate instead on their real value (which, Ill argue, is local reporting).

Newspapers also have to have the guts to stop trying to produce one-size-fits-all products that serve every possible reader and interest in one edition. When they were monoplies, newspapers tried to have something for everyone so they would attract the largest possible audience and assure their status as the marketplaces in their markets. But today, that can be terribly inefficient: What is the real cost of maintaining stock tables for the few readers who still use them in print? More on that below.

And newspapers have to take an even more frightening step: They need to start driving readers from print to online.

→ No CommentsTags: General

The All in One Phone Concept

January 21st, 2006 · 1 Comment

textually.org writes about a concept envisioned by designer Dima Komissarov:

The device in size of a credit card 54×85,6 mm will replace all those. Moreover it can work as:

— Video phone. Before making a call you can choose an operator of a mobile communication.

— All credit and discount cards that you have. The built in program will prompt an optimum variant for discounts at the given payment place.

— A remote control for any device. It can simultaneously display a teleschedule and recommendations of your favourite site.

— Keys from doors of houses and cars you have an authorization to.

— GPS-system that can automatically upload aerial photos from the Internet.

— Library, video- and music shop. You can read, listen to and watch all that at your choice. Go to a public online library or buy all that you want in any shop of the world.

— Gaming device with support of network gaming (remember that you have a GPS and the virtual reality becomes quite real).

— Even your computer that works with any operational system that is being uploaded through the Internet.

— For any actions connected with safety (payment, opening of a door, …) the device authorizes you by reading your fingerprints.

→ 1 CommentTags: Telecom

3-D Software

January 21st, 2006 · No Comments

WSJ writes:

Standing on a street corner in Shanghai, you’re tired and thirsty after a day of sightseeing. You could really use a Starbucks coffee.

In a few years, you won’t have to worry about directions to the coffee seller’s nearest location. Instead, you’ll check your favorite electronic communications device. Computer software will display a virtual, three-dimensional view on the screen that duplicates your actual surroundings, and with the help of a global-positioning system, guide you to your destination, one step at a time.

Though still some time away from reaching consumers’ hands, the door to a tool that puts users on the 3-D map is opening wider these days. Google Inc.’s GoogleEarth, and Microsoft Corp.’s Live Local Web sites already offer three-dimensional views of certain cities. These cityscapes are just beginning to make use of a technology called 3D Situational Awareness that combines aerial photographs with ground-level pictures or videos and adds computer-generated details.

→ No CommentsTags: Software

15 Tech Concepts to Know

January 20th, 2006 · No Comments

[via Slashdot] Popular Mechanics offers some things we need to know for the coming year. Among them:

Body Area Network (BAN)
Like everything else, implantable medical devices are going wireless. A new in-body antenna chip from Zarlink Semiconductor is in preproduction, and should appear in pacemakers and hearing implants this year. By transmitting data to and receiving instructions from nearby base stations, BAN chips can reprogram your heartbeat at your doctor’s office or make a diagnosis from a bedside wireless monitor at home.

NAND Flash Memory
Compared to the mini hard drives used in portable electronics, flash memory is smaller, has fewer moving parts and uses less power. But until recently, flash hasn’t had the storage capacity to find its way into multigigabyte devices. NAND flash memory, however, can store huge amounts of data on tiny chips. (The NAND refers to the logic gate used in the circuits.) Last fall, Apple brought NAND chips into the hands of the public with the 2GB and 4GB iPod nano music players. Capacities will only increase. Samsung has announced that its 16GB NAND chip will be on the market before the end of 2006.

→ No CommentsTags: Emerging Technologies

Ajax and Mobiles

January 20th, 2006 · No Comments

[via Vinu] C. Enrique Ortiz writes:

After reading recent posts about how AJAX is the medicine when it comes to mobility app development, I have to say: STOP! For the sake of new developers entering this space let’s not confuse things. No, AJAX will NOT save mobility from fragmentation, porting issues, and so on.

There are fundamental differences between browser-based (or thin clients) and smart/rich clients — and this comes to no surprise to experienced developers. There also are reasons and requirements why you would create a browser-based vs. a smart client application. In short, the argument that one approach to mobile applications will replace the other is completely flawed.

→ No CommentsTags: Software

Google’s Offline Moves

January 20th, 2006 · No Comments

WSJ writes about Google’s acquisition of dMarc Broadcasting Inc., which “runs an online system for advertisers to buy radio airtime.”

Most people think of Google as a place to go to gather information. But in a business sense, Google operates as a huge clearinghouse for advertisers. At the heart of Google’s advertising operation is an automated system that auctions off the right to place advertisements on its search-results pages when an Internet user types in certain key words. Most of its advertisers simply log into the system to place their ads and make their bids. They pay only when someone clicks on the ad. Google also brokers the sale of ads that appear on other Web sites — sometimes tied into key words and sometimes not.

The radio deal is the latest of a series of recent moves by Google in which it aims to bring its Internet advertising expertise to bear on old-media markets. Since last year, Google says it has been placing ads on behalf of advertisers in three magazines and the Chicago Sun-Times newspaper. And Chief Executive Eric Schmidt late last year acknowledged in an interview that the company is considering extending its ad system to TV advertising as well.

At the core of Google’s foray into offline-media advertising is its realization that traditional media such as newspapers, TV and radio remain vastly larger ad markets than the Internet, despite shifts to the Web in recent years.

→ No CommentsTags: Search Engines

India’s Digital Summit 2006

January 20th, 2006 · No Comments

ContentSutra has coverage about the summit which was about the Internet and mobile space in India.

→ No CommentsTags: Emerging Markets

WSJ on Digg

January 20th, 2006 · No Comments

WSJ writes:

The Web site lets users submit links to stories they recommend, along with brief summaries. Users also vote for submissions by clicking on a button labeled “digg it.” Each person can vote once per story. The most popular stories — determined by a formula the site doesn’t disclose, including factors like the number of votes received and the time of day — are automatically promoted to the site’s main page.

The items on Digg.com tend to be a mix of uber-geek and offbeat, such as a Web tutorial titled “How to Set Up Database Replication in MySQL,” or a link to a harpsichord built out of Lego pieces. Also, stories are ranked on the home page based on how recently they were promoted, rather than their significance. On the day of Apple Computer Inc. Chief Executive Steve Jobs’s presentation at the Macworld conference last week, the stories on the subject — which had more than a thousand votes — were quickly topped on Digg by unrelated stories with just a few dozen votes.

→ No CommentsTags: General

TECH TALK: India Rising: Flying Free

January 20th, 2006 · No Comments

Another sector which has seen an amazing amount of turbulence is air travel. Until a couple or so years ago, India had effectively just three airline carriers the state-owned Indian Airlines, and the two private carriers (Jet and Sahara). Every so often, prices went up so much so that it was cheaper to travel to foreign destinations than travel within the country. All that changed with the launch of Deccan Airways. A no-frills carrier, Deccan has been the pioneer which has seen air travel become affordable. Like mobiles, it has started bridging families separated by distance and fueled an increase in both leisure and business travel. Now, any number of airlines are taking off. And just recently, Air-India, the state-owned international carrier, placed a huge order with Boeing for 68 aircrafts.

A Business Week story last September captured the essence of the change: With prices as low as 30% of current fares — often as cheap as a train ticket — the newbies could boost India’s annual air traffic by 30%, to 20 million passengers, within a year, says Kapil Kaul, a consultant with the Sydney-based Centre for Asia Pacific Aviation.

The new discount airlines are using technology to the hilt. A majority of their bookings come via the Internet. They use mobiles to alert users to delays. Here is a story of Shrikant Patil, which highlights the changing face of Indian aviation: I generally need to travel from Pune to Bangalore at short notices of 3-4 days. With Intel it was on Jet Airways and the full return fare is about Rs 14,000. On Spicejet even at 3-4 days notice I am able to fly for Rs 5000 return. It would be much lower if I am able to plan my travel at least a month in advance. Thats a Rs 9000 saving for approximately 2.5 hours of flying time. Spicejet is a true budget , no frills airline, no newspapers, no TV, no magazines, no food except a bottle of water and a cookie. Even though it is a budget airline, it has not compromised on the basics, brand new air planes, a very user friendly web site, call centre with good diction and fast turnaround time with automated boarding. This has been implemented with a laptop and a barcode scanner connected to the USB port. Even full service airline, Jet Airways manually strikes out seats as passengers start boarding the aircraft. I have to date travelled 5 times and last evening the flight to depart from Bangalore at 5.40 pm was initially delayed by 40 minutes and first informed by sms at 2 pm. I again received an sms at 2.30pm informing me that the flight has been delayed by an additional 30 minutes. This allowed me to have an additional unplanned meeting and reach the airport at the rescheduled time of 6.50 pm. The flight left within 5 minutes of the rescheduled time[Spicejet] is a good example of how various technologies have been used effectively to provide value to the customer. They are redefining air travel with all the basics to scale in place.

The interesting sidebar to this story is that the Indian Railways are also working to improve their offerings. Finally, it seems, travel in India is no longer the travail that it once used to be!

Next Week: India Rising (continued)

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Online Classifieds

January 19th, 2006 · No Comments

Andy Beal talks to Oodle’s Craig Donato:

Classifieds are simply better when used online for both consumers and advertisers. It’s easier for consumers to find what they’re looking for:

* It’s easier to search & browse online;
* It’s more effective to qualify interest when listings contain more descriptive information (e.g., more text, photos, virtual tours, etc.); and
* It’s quicker to make contact (just drop a seller an email).

For sellers, online listings are more convenient and cost effective:

* Ads can be purchased more cheaply and in many cases are free;
* It’s easier to accept inbound requests via email (using an anonymous screen name);
* Listings attract better prospects when they contain more descriptive information; and
* Advertisers can edit or delete a listing at any time.

Already, there are many more listings online than in local newspapers.

→ No CommentsTags: Search Engines

Software Start-up Pointers

January 19th, 2006 · No Comments

Joel Spolsky offers some learnings for Micro-ISVs. Among them: “Dont start a business if you cant explain what pain it solves, for whom, and why your product will eliminate this pain, and how the customer will pay to solve this pain. The other day I went to a presentation of six high tech startups and not one of them had a clear idea for what pain they were proposing to solve. I saw a startup that was building a way to set a time to meet your friends for coffee, a startup that wanted you to install a plug-in in your browser to track your every movement online in exchange for being able to delete things from that history, and a startup that wanted you to be able to leave text messages for your friend that were tied to a particular location (so if they ever walked past the same bar they could get a message you had left for them there). What they all had in common was that none of them solved a problem, and all of them were as doomed as a long-tailed cat in a room full of rocking chairs.”

→ No CommentsTags: Entrepreneurship

Managing Data

January 19th, 2006 · No Comments

Information Week writes:

Here’s a rule of thumb: The amount of data stored by businesses nearly doubles every 12 to 18 months. And the very biggest–those at or near the 100-terabyte mark–probably triple every three years.

But databases aren’t just getting bigger. They’re also becoming more real time. Wal-Mart Stores Inc. refreshes sales data hourly, adding a billion rows of data a day, allowing more complex searches. EBay Inc. lets insiders search auction data over short time periods to get deeper insight into what affects customer behavior. Data is also coming from increasingly complex sources: Radio-frequency identification readers now feed data to Wal-Mart, and Nielsen Media Research, in collecting info on TV-viewing habits, is getting data from TiVos and iPods along with the standard living-room set.

Because businesses run fast-response systems that need to quickly get data in and answers out, they’re solving some of the most interesting problems in data management.

→ No CommentsTags: Enterprise Software

China’s Five Surprises

January 19th, 2006 · No Comments

Strategy+Business writes:

There are at least five surprises in Chinas future: facets of life and global business, stemming from the cultural, economic, and political evolution of this unique country, that will turn out differently from the way most outsiders suspect. These surprises are:

1. Why not me? The intensity of Chinese entrepreneurialism is propelling many companies, even now, beyond a role as producers of low-cost commodities.
2. Fearless experimenters: Chinas emphasis on rapid-fire research and development makes it a seedbed for original products and services in the future.
3. Chinas brain gain: The ability to attract and retain executives from around the world has provided a higher level of competence for Chinas enterprises.
4. Out from Guanxi: Outsiders still view China as a largely patronage-based economy, in which connections and ethnic background determine success, but increasingly (at least in some sectors), high-quality management and transparent governance structures count more.
5. Chinas overseas ambition: The country is taking on a role as a catalyst of sustained economic growth in the emerging markets of the developing world.

→ No CommentsTags: Emerging Markets

Salesforce.com’s AppExchange

January 19th, 2006 · No Comments

Forbes writes about the new service from Salesforce.com which is “a system that allows the company to host and exchange applications developed by third parties.”

AppExchange functions much as eBay’s site, which allows third parties to buy and sell items. For now, those applications revolve around the CRM space, but the system could easily be expanded to include offerings for non-CRM applications.

Salesforce.com would then become a kind of clearinghouse and development center for many different kinds of applications developed by many different kinds of companies. It’s a strategy that could carry big rewards, but it is also risky.

WSJ adds:

Salesforce.com says it has now attracted more than 150 applications that will be sold or offered free of charge by partners on its new online marketplace.

Some of the new services were created by software developers, and some by customers that had originally developed offerings for their internal use. Others were created by Salesforce.com programmers.

“It’s like an iTunes Music Store of enterprise applications,” says Marc Benioff, the company’s chief executive.

→ No CommentsTags: Enterprise Software

TECH TALK: India Rising: Mobiles for All

January 19th, 2006 · No Comments

India ended 2005 with 75 million mobile users. December saw 4 million new additions. If that pace continues (and probably accelerate), India will see its mobile user base reach 200 million by 2007-end. Mobiles are there with almost everyone now. With the flurry of new offers, there is little excuse for not getting a mobile. And with the proliferation of mobiles, a new future becomes possible.

First, a status update on the mobile industry in India (via Mobile Pundit).

The Hindu wrote:

The subscriber base continues to grow aggressively and in end-2005 touched 75 million (48 million in end-2004).

Indian ARPUs are among the lowest in the world at around $9, the lowest being the Philippines at $7.2. To put things in context, average ARPUs are $40 in Australia, $42 in Korea and $10 in China.

Increased network coverage will result in higher month-on-month additions, scaling up India’s mobile connection base. It is expected that revenues will grow but unit contribution will drop and operators will be under pressure to reflect profitability. Telecom operators will struggle to find a balance between yield (income, earnings and margins) and growth to fulfill these expectations.

Voice revenues account for around 85 per cent of traffic while data and value-added services constitute the rest. Henceforth, the proportion will keep increasing in favour of data and value-added services, T. V. Ramachandran, Director General, COAI told The Hindu.

Currently, pre-paid users account for 77-78 per cent of users. By end-2009, this share is likely to go up to around 88 per cent. What may change during this period is the value of recharge coupons.

The mother of all telecom equipment tenders is being unveiled by BSNL. At $4.5 billion for 60 million lines, it is one of the largest of its kind in the world.

The dramatic change in the past month or so has been the introduction of the lifetime pre-paid plan. For less than a thousand rupees one-time payment, a user can get a pre-paid account with free incoming calls for life without having to recharge the account. This essentially means that any person willing to invest about Rs 2,500 (Rs 1,000 for the account and Rs 1,500 for a second-hand phone) can now receive calls for free forever. This will now open up a whole new segment of users especially in the blue-collar and rural segment.

Another aspect of the mobile growth in India is that the existing infrastructure supports data services (on both the GSM and CDMA networks). Given Indias pathetic broadband infrastructure and low PC penetration, it is possible that the mobile can become the way the benefits of the Internet are made available to the masses in India. This is similar to what happened in Japan in 1999 when NTT Docomo launched its i-mode service.

So, the mobile revolution is well underway. People are getting connected like never before. Those days in the not-so-distant past when one had to wait for months for a landline connection seems like a nightmare from a different world! Now, armed with mobiles, people are interacting with TV shows to decide who stays and who goes. This interactivity would have been hard to imagine a few years ago. The mobile has, indeed, become the cornerstone of our digital lives.

Tomorrow: Flying Free

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The World of Maths

January 18th, 2006 · No Comments

Business Week writes in a cover story: ” The world is moving into a new age of numbers. Partnerships between mathematicians and computer scientists are bulling into whole new domains of business and imposing the efficiencies of math. This has happened before. In past decades, the marriage of higher math and computer modeling transformed science and engineering. Quants turned finance upside down a generation ago. And data miners plucked useful nuggets from vast consumer and business databases. But just look at where the mathematicians are now. They’re helping to map out advertising campaigns, they’re changing the nature of research in newsrooms and in biology labs, and they’re enabling marketers to forge new one-on-one relationships with customers. As this occurs, more of the economy falls into the realm of numbers.”

→ No CommentsTags: Software

Internet TV

January 18th, 2006 · No Comments

The Washington Post writes:

The unmistakable theme [at CES] was how video is moving over the Internet onto home televisions and mobile devices in ways that will finally allow consumers to talk back to their TVs, much as they have been interacting with Web sites for the past decade.

It wasn’t just about time-shifting TV or watching shows on mobile devices, though both were prominently on display. A newer technology known as Internet protocol TV — IPTV for short — also made a stir by blending those capabilities while trying to remake regular TV shows into something more dynamic and personal.

Basically, IPTV allows multiple layers of video, pictures and text to be mixed with video feeds in ways viewers can control with their remotes. It’s the old interactive TV vision — point your remote at an actress on screen and up comes her name, prior credits and perhaps a “buy me” button for her blue sequined dress.

→ No CommentsTags: Telecom