Month: October 2004

Clay Christensen Interview

[via Dave Pollard] Gartner Fellows has an interview with Clay Christensen. Some excerpts:

A disruptive innovation brings to market a product not as good as the products in the current market, and so it cannot be sold to the mainstream customers. But it is simple and it is more affordable. It takes root in an undemanding portion of the market, then improves from that simple beginning to intercept with the needs of customers in the mainstream later.

I call that a disruptive innovation not because it’s a breakthrough from a technological sense, but instead of sustaining the trajectory of improvement that has been established in a market, it disrupts it and redefines it by bringing to the market something that is simpler.

we hire products to do jobs for us. We hire services to do jobs for us. If an innovating company focuses on the job, then when you go through that sequence, and you become aware you’ve got to get that job done, there’ll be a product sitting there designed to do that job. You don’t think in terms of demographics…If I, as an innovator, try to understand you as a consumer, this is a volatile, unpredictable target. But if I, instead, try to understand the jobs sitting out there which periodically might arise in your life, and then I communicate to you, a brand associated with the job, then geographically, as you wander aimlessly through life, if you find yourself needing to get the job done, then you just look down on the floor and say, “Oh, that’s who I should hire to do this job.” Bingo.

TECH TALK: The Network Computer: Application-Specific Computing

The idea of simplifying computing was echoed a couple weeks ago by Jim Smith, a general partner with Mohr Davidow Ventures. In an article on Always-On Network, Jim wrote:

It may come as a surprise to some people that the cost of operating a computing infrastructure now dominates the cost of acquiring it. At the same time, while we’ve made huge leaps in all areas of computing we struggle to make use of those advancements.

For example, we’ve proven that we can build 10GHz microprocessors, but we leave a massive portion of those cycles unusable. We can build petabyte-scale storage systems, but absorb a huge chunk of that storage with often inaccessible data. We can connect to one another at 10Gb per second, but don’t know what information to exchange.
The key to lowering operating costs, reducing complexity and making better use of technology advancements is application-specific computing.

The low cost of computer components today allows system vendors to target systems to specific business processes. By reducing the general-purpose nature of these systems, configuration demands can be minimized. By reducing the base of software that resides on a machine, there are fewer knobs with which malicious users can abuse infrastructure. By reducing the number of applications that share infrastructure, the likelihood that applications will corrupt one another’s data stores is greatly reduced. A byproduct of application-specific systems is the opportunity to more efficiently use computing resources and vastly improve the performance of those systems.

Consider how we use toasters and personal computers. When you unbox that new toaster, you can plug it in, pop some toast in, and push the button. Contrast that with when you unload a new desktop. You set it up in a few hours and constantly update the software. Mind you, the overwhelming majority of that software you will never use. Malicious users floating through the network may use it, but you likely won’t.

When the toaster doesn’t perform up to expectations, you throw it out and buy a new one. When the computer (loaded with all types and flavors of applications) reaches a breaking point, the specter of transitioning to a new machine is almost always (and rightly so) cause for hesitation.

A crucial aspect of application-specific computing is raising the level of abstraction at which enterprises operate computing machinery. Were a toaster to operate like a general-purpose machine, a user would be forced to specify the temperature at which to toast the bread and the amount current to supply to the heating coils, and time-share that energy with the DVD player. Instead, the single-purpose nature of the machine allows it be a simple choice between light and dark.

While Don Norman comes at the issue of the complexity of computing from the consumer viewpoint, Jim Smith addresses it from the enterprise side. Their views may have come a few years apart, but they underline a common thread that of making computing less complex, more manageable, and reducing the total cost of ownership. Add to this the growing demand for affordability from the next billion users in the worlds developing countries, the growing use of open-source software in the creation of sites like Google and Yahoo, the rapid proliferation of broadband networks. This is the backdrop in which the resurgence in interest in network computers needs to be evaluated. So, the question that arises is, are the conditions any different now to ensure the rebirth and success of the network computer?

Tomorrow: The World Today

Continue reading TECH TALK: The Network Computer: Application-Specific Computing

Web2.0 as Jeeves!

[via Anish Sankhalia] USA Today writes about the next Web: “Instead of having to find information or entertainment, it will find you and be exactly what you want or need at that moment. The network becomes a butler.”

The Web is over. Now comes the next big thing, growing out of the primordial soup of wireless and wired networks, gadgets, software, satellites and social changes created over the past decade.

The Web is becoming the first piece of the bigger network as it meshes with new technologies that started from disparate corners of the industry such as Wi-Fi wireless broadband connections, the Global Positioning System (GPS) and radio frequency identification tags (RFID).

The technologies are becoming a network of networks, enabled by a sea of powerful new devices and databases, all interlinked and talking to each other. To some extent, these are the “Web services” and .Net that Microsoft and other companies have tried to encourage, but broader and better.

Web creator Tim Berners-Lee has been talking about a version of such a system for a couple of years. “The Web can reach its full potential only if it becomes a place where data can be shared and processed by automated tools as well as by people,” Berners-Lee said.

On that world network, companies will build services only dreamed about during the Web mania. In the Web era, you went on the Internet to find something you sat down at a computer and tapped into search engines or shopping sites. In the new era, the network and the information will give you, unprompted, what you want depending on where you are and what you’re doing.

One other factor makes tech experts optimistic about this next phase: The economics in place are 1,000 times better than 10 years ago, says Internet pioneer Marc Andreessen. “If you launch an Internet business today, it’s probably going to cost you about a tenth of what it would have cost five years ago, but you’re going to have 10 times more consumers you can address and probably 10 times the ad revenue,” Andreessen says. “And people are going to be 10 times more willing to buy online. So you have this big economic swing” in favor of a next wave.

How to Write a Column

[via Atanu] Hal Varian has an essay on “how I came to be a columnist, and how I go about writing the columns.”

My view is “Power corrupts, and Powerpoint corrupts absolutely.” I generally avoided Powerpoint unless I really needed it. The way I see it, Powerpoint is fine for presentation. But if you are just going to give a talk then you should do it without mechanical aids. I found that people paid a lot more attention to what I was saying when I just spoke.

The great thing about writing the Economic Scene column is that you can avoid Baker’s panic-if you can’t think of something to write about yourself, you can just write about someone else’s ideas.

This is a fantastic help, since there is no end of interesting economic material being written. Since essentially no one reads those papers-except for other economists-there is a vast reservoir of untapped material.

What I try to do is to take some current event-Social Security, or drug prices, or technology-and find some relevant work in economics. Sometimes it is recent work, sometimes several years old. And then I try to explain how this economic thinking casts light on the issues being debated.

It doesn’t always work like this. Sometimes I come across an interesting working paper or recent publication and I use that as the basis for the column.

Sometimes someone (usually a non-economist) will ask me about something and this will inspire me to write a column explaining the economists viewpoint.

And sometimes I even have an idea of my own.

BlogStreet India

We have soft-launched BlogStreet India this week. It is a pioneering service for Indian blogs offering analytics and services like Blog Directory, RSS Search Engine, BlogProfile, BlogRank, RSS2Mobile and more.

There are various useful tools for both, authors and readers of blogs. Some of the salient features include:

  • RSS Search Engine for Indian blogs. It searches the Indian blogosphere and takes you directly to the blogposts which contain what you searched for. Unlike other search engines, the database is current and updated daily.
  • The Top 100 Indian blogs and Most Influential Indian blogs lists
  • RSS2Mobile service is India’s first service enabling you to read your favorite blog / RSS feed on the go i.e. on your WAP enabled mobile phone.
  • Blog Directory listing Indian bloggers city-wise
  • Find out what popular Books, Movies and Music are the Indian bloggers talking about in their blogs
  • Community Forums are a place to discuss anything that is blog related, show off your new blog, ask for help if you are newbie, announce the blogger meet in your city or just make friends with other bloggers.

    Blog authors can have more:

  • A blogger can check his popularity by way of BlogRank listed in his BlogProfile.
  • The BlogBack features tells you which blogs link to you from their blogroll.
  • Another interesting feature is BlogNeighborhood which take a blog URL and lists other blogs that are similar to it.
  • Those whose blog is already listed in BlogStreet India can claim their blog and update their profile.

    BlogStreet India is part of BlogStreet, one of the first portal in the world dedicated to blogs. BlogStreet was launched in August 2002 and grew to be one of the most popular web-services in the blogosphere.

    • The Innovation Economy

    Business Week has a special issue on “The Innovation Economy.”

    One of the articles discusses innovations in India. ” Banking. Education. Health care. Autos. In these areas and beyond, Indians are increasingly demanding better products and services at an affordable cost. Strong economic growth this year will only enlarge that demand. The phrase ‘Made in India’ may come to represent low-cost innovation in the new global economy.”

    China and the World Economy

    The Economist writes in a survey that “American consumers and Chinese producers have led a global boom. China is creating genuine wealth, but America’s binge is based partly on an illusion.”

    Over the past year the world economy has grown by almost 5%, its fastest pace in two decades. Growth has been powered by two high-octane fuels: America’s exceptionally loose monetary policy, which has encouraged consumers to keep spending; and an unprecedented investment boom in China. America and China together accounted for almost half of global growth over the past year. If American consumers and Chinese producers were to retreat at the same time, global growth could slump.

    Only a few years ago, the term the world economy was used as shorthand for the economies of the developed world; China would at best rate a brief mention. But now it is too big to ignore. It was largely thanks to China’s robust growth that the world as a whole escaped recession after America’s stockmarket bubble burst in 2000-01. But its recent boom is also responsible for much of the surge in global energy demand that has pushed up oil prices. China’s massive purchases of American Treasury bonds explain why the dollar has not fallen further or bond yields risen more sharplyeven though America’s huge current-account deficit continues to widen. Last but not least, many people blame the sickly state of America’s jobs market on imports from China and on outsourcing.

    This survey will explore the many ways in which China’s rapid economic development is affecting the rest of the world, from jobs and growth to oil prices and inflation. The integration of China’s 1.3 billion people will be as momentous for the world economy as the Black Death was for 14th-century Europe, but to the opposite effect. The Black Death killed one-third of Europe’s population, wages rose and the return on capital and land fell. By contrast, China’s integration will bring down the wages of low-skilled workers and the prices of most consumer goods, and raise the global return on capital.

    Some central banks, slow to grasp the effect of these structural changes on inflation and monetary policy, have been running overly loose policies that have fuelled unsustainable booms in America and some other economies. In the short term, therefore, China could make growth more volatile, but in the long term it will be a powerful engine of global growth. The Black Death is thought to have originated in China and spread to Europe through trade. This time China will export vitality to the world economy instead.

    Microsoft’s Hindi Windows

    WSJ writes that after Malaysia, Indonesia, Thailand and Russia, India has become the fifth country to gets its low-cost Windows (XP Starter Editions) pilot programme which will last a year. In India, the first language chosen is Hindi.

    The Starter Edition tests are part of a wide-reaching effort by Microsoft to gain better connections with governments around the world. Over the past few years, many governments have started to explore Linux and other alternatives to Microsoft products. Several developing nations also are considering programs to distribute Linux-based personal computers as a potentially cheaper alternative to PCs running Microsoft’s Windows.

    The tests are a break from Microsoft’s policy of following a strategy of offering “global pricing” that dictates uniform pricing for its products world-wide. By making Starter Edition very focused on first-time users — and leaving out certain features that businesses would need — Microsoft executives say they can curtail the cheaper software seeping into other markets and eroding its prices.

    “This is a product that we are trying to make more relevant to a segment of customers that are ready to purchase their first PC,” said Mike Wickstrand, manager of the Starter Edition program.

    By seeding the markets with a version of Windows that is more affordable than today’s versions, Microsoft hopes the program will allow it to combat software piracy, which is rampant in Russia and other young PC markets.

    While the price hasn’t been disclosed, it is likely to be around Rs 1,500-1,800 from indications from the other countries.

    Microsoft is caught between piracy, non-consumption and Linux in the developing markets. Rather than low-cost, reduced functionality Windows, it should look at reducing cost of the desktop computers (think thin clients) and running Windows off centralised platforms, with a pricing of $1 per month. Not just the limited versions, but the full-featured versions. But this requires Microsoft to think not like a monopoly but like a utility company.

    Digital Disruptions

    Om Malik writes that “digital disruption is happening all around us. Music, Movies, Telephone, it all is being digitized, chopped, assembled and reassembled by us.”

    Among the disruptions happening: MPEG/MP3s, PVRS, Internet, JPEG/Digital Cameras, Linux, Networked Computing, Wireless Networks, VoIP. These disruptions threaten incumbents and create opportunities for new players.

    Clusty and Vivisimo

    The New York Times writes about Clusty, a new search engine launched by Vivisimo based on clustering technology:

    Vivisimo already offers a search service for corporate customers, which clusters results into categories to make them easier to sort through. Search “swift boat,” for example, and Vivisimo returns 149 results – listing them one by one, and also as a table of categories, like “Swift Boat Veterans,” “John Kerry” and “Patrol Craft Fast” on the left-hand side of the Web page.

    The new Clusty service for consumers, which will be free and supported by advertising revenue, uses a similar organizational structure. But it also presents a series of tabs enabling the user to see results from sources besides the general Web, including shopping information, yellow pages, news, blogs, and images.

    Vivisimo, which is privately held and is profitable, according to its executives, has been selling its clustering technology to corporations for research by their employees. Now Vivisimo is making an effort to compete more broadly by attracting consumers to its Web site, clusty.com.

    The service is meant to address the confusion that can be created when search engines return huge lists. Clustering is also intended to help users find related material they may overlook when they employ services that utilize page ranking methods. Such methods employ a variety of software algorithms to rank Web pages by their perceived relevance to a query.

    Many search experts say that clustering offers a better way of looking at information than Google’s page ranking system.

    “As databases get larger, trying to pull the proverbial needle out of the haystack gets tougher and tougher,” said Gary Price, a librarian who is also the news editor at SearchEngineWatch, a Web site that covers the industry. “Here, you’re getting a bit of extra help.”

    “Search will look more like the magazine business than the soda market,” said Oren Etzioni, a computer scientist at University of Washington and an advisory board member of Vivisimo. He predicts that users might select from a variety of services, rather than from a few dominant players.

    “The competition has shifted from crawling the Web and returning an answer quickly,” Mr. Etzioni said, “to adding value to the information that has been retrieved.”

    “Google is excellent at crawling as much of the Web as they can; we don’t do that,” said Mr. Valdes-Perez. Instead, Vivisimo tackles the question, “How do you solve the problem of information overload?”