InfoWorld outlines 2004’s top stories. Among them:
– IBM bows to reality, sells PC unit to Lenovo
– China: The next India, or the next … U.S.?
– Oracle v. PeopleSoft part II: Larry wins it.
– E.U. slaps Microsoft with antitrust ruling
– Gaga over Google
– SCO case imploding, Linux growth exploding
InfoWorld has another review of the year.
iMediaConnection writes:
blinkx TV announced the first search engine that enables personal computer users to search TV across news, sports and entertainment programming.
blinkx’s technology works by capturing and indexing the entire video stream directly from TV. Consumers search and access news, movie trailers, popular multimedia segments and other video formats on demand.
“blinkx TV fills the gap between the explosion of rich media content and the growing consumer interest in harnessing it. At blinkx we’ve recognized consumers’ needs and taken the search engine to a new level. Ground breaking automatic transcription technology, which transcribes content straight from the cable box on the fly or from video already stored on the Web, together with advanced phonetic matching speech recognition technology, automate the process of searching TV clips for the first time,” says Suranga Chandratillake, founder, blinkx.
blinkx plans to make money through a distribution network model where content owners would pay a fee or share of the revenue for delivery traffic to their site. Serving video ads before and during the content search is another potential revenue model.
At ONA Hollywood. Excerpts:
The ubiquity of the Internet now affects a media enterprise’s entire business, not just an “online market” segment.
While we have dug pretty deeply into how the Internet affects content creation and distribution, we frankly understand much less about its impact on the commerce and business models that support content creation and distribution.
Reaching a better understanding of those business issues, and making the necessary adjustments, will be as critical to the next phase of the Internet, as building Web sites was in the first 10 years.
When the Web was born as a commercial content enterprise back in the mid-’90s, we thought it was about replicating — that is, “repurposing” — our news and information franchises online. Looking back, the first Web sites produced by many newspapers were very close cousins to the paper-and-ink versions.
Eventually, things began to change. More multimedia elements were introduced, although that was a painful experience for dialup users, and news companies that were used to one deadline a day began to cover stories differently for real-time consumption.
But “Web 1.0” didn’t take us much further than that. And, in the past few months, the pace of change has vastly accelerated.
Broadband penetration is the key driver of that acceleration. As it zooms beyond 100 million connections worldwide, and half the American Internet population, broadband means more hours spent online, by more people and more machines.
We are getting closer and closer to Professor Lessig’s vision of “every machine with electricity” moving to the network.
That is the essence of what some are now referring to as “Web 2.0” — the next phase of the network, where the machines are “always on,” and the users are, too.
Ever since I wrote my first Tech Talk column on creating a Mass Market Internet for India four years ago, a pet theme of mine has been about making computing affordable and manageable for the next billion users. My belief is that the current computing architecture and business model is only good for the top of the pyramid of India. The real opportunity in India and other emerging markets lies in creating a next-generation computing platform for the middle and bottom of the pyramid. To make this happen, we need to understand the realities of emerging markets as well as learn from the cellphone industry with two key innovations zero-management end-user devices, and a subscription-based business model. Taken together, the total cost of ownership for hardware, software, connectivity and services should start at no more than Rs 700 ($15) per user per month. To make this happen, a combination of thin clients, server-based computing and open-source software needs to be used as the building blocks. A number of columns over the year discussed these ideas in greater detail.
Reinventing Computing (Aug 2004): To reinvent computing, six challenges need to be overcome, five goals need to be met, and seven revolutions need to happen. This is what will start the next 12-year tech cycle which will bring in the billion users across the worlds emerging marketsThere are six important computing challenges that need to be tackled: Affordability, Desirability, Acessibility, Manageability, Security, Ubiquity. There are five goals which a new solution set in computing needs to meet: Solve the Six Challenges simultaneously, Make CommPuting as a Utility, Enable Human-centred Computing, Integrate with Cellphones, Construct the Memex. The seven rainbow revolutions that need to happen to address the five goals to meet the six challenges are: Grid, Virtual Computers, Ubiquitous Connectivity, Loosely Coupled Software, Two-Way Content, Humane Interface, Tech 7-11sBy taking a holistic view of the ecosystem and building a chain of integrated innovation, it will be finally possible to fulfill the dream of making computing accessible to every family, student and employee in every corner of the world. Only then will the true promise of the computer as a means to deliver solutions and services for the next users be realised. This is where the future of computing lies. This is why computing needs to be reinvented. This is where the next technology cycle will begin. This is the next big thing platform and opportunity entrepreneurs have been waiting for. This is a transformation that will take root first in the worlds emerging markets. This is what we need to make happen. This is the next computing Kumbh Mela.
The Network Computer (Oct 2004): The network computer that I am envisioning is a $60-$65 (Rs 3,000) device, excluding the display. In India, a refurbished colour monitor (about 3-4 years old) would cost about Rs 2,000, while a new monitor would cost about Rs 4,000. Thus, the network computer would cost about Rs 5,000-7,000 ($110-150). This is 50-65% lower than the equivalent cost of a personal computer today, and a little more than the cost of a mobile phoneThe network computer by itself will not make money for its makers. It needs to be part of a wider ecosystem where computing is proffered as a servicethe network computer company of tomorrow is more likely to resemble a utility company than a computer maker. By making computing a utility, users are also being provided with the flexibility of cancelling service anytime something that is not an option when computers are bought on installments. This is possible because the network computer is a device that really does not age and become obsoleteThe magical monthly fee for the computing service should be no more than Rs 700 ($15) What is on offer is a computer that looks and feels like a regular desktop computer but without some of the hassles associated with it. As a critical mass of these network computers gets deployed, software and content providers will be attracted to this platform since now they have a much more cost-effective way to deliver their offerings to users. This will in turn create a positive feedback loop for adoption.
Tomorrow: Rethinking Computing (continued)
Continue reading TECH TALK: Best of Tech Talk 2004: Rethinking Computing
AlwaysOn Network has an interesting comment by John Hagel:
Innovation blowback refers to a phenomenon that’s occurring in the global marketplace, particularly [in] emerging markets like China and India. My sense is that most companies significantly underestimate the importance of those economies. In part because they’re viewing them simply as a growth market; they’re rapidly growing markets, they help to compensate for lower growth in the more developed economies, and so you ought to invest in those markets.
In fact, that’s only a small part of the opportunity. The real opportunity in those markets has to do with the pressure of very demanding customers who want more value at much lower prices and [who] are forcing product innovation in a variety of industries. It goes across from healthcare, to motorcycle manufacturing, to cell phone and wireless network equipment, where companies are being forced to fundamentally redesign products to deliver more value at lower prices. And guess what? Those products are not just going to serve those marketsthey’re going to blow back into the developed economies and become the basis for attacker strategies against products in these markets. So think about these emerging markets not just as growth engines in their own right, but as a seedbed for product innovation that will provide the basis for attacking strategies here in developed economies.
News.com discusses the possibility:
Apple is widely expected to announce a flash iPod at Macworld in January. But for now, the company has declined to comment.
Today, the flash market overall is larger in units than the hard-drive market, but it’s split among a number of players. The largest share of the U.S. retail market over the past year belongs to iRiver, followed by Rio and RCA. Other players include Nike/Phillips, Samsung and Creative Technologies.
NPD analyst Stephen Baker said that flash will carve out a larger slice of the market, likely forcing Apple’s hand.
“They have to get into it eventually,” he said. “If you look at the reasons for success of the (4GB iPod) mini and the price value curve in flash, at some point soon you’re going to get some flash players with some pretty hefty memory–2GB to 4GB–at price points that are between $149 and $199.”
Flash players, because of their lower prices, have proved more popular overseas than in the United States. Still, Baker questioned whether now is the right time for Apple to enter the flash player market.
“I’m not sure they need to go there now, given that the (iPod) mini’s only been out a year,” Baker said.
The 4GB to 5GB player is an area where the battle between flash and hard drive is likely to be most intense, as flash prices come down and capacities go up.
News.com has a list of suggestions for 2005 from Directions on Microsoft:
Better detailed, multiyear road maps for major products such as Windows XP, Office and Exchange. Revenue-generating acquisitions. According to Directions on Microsoft, the Great Plains Software, Navision and GeCad buys are not delivering enough fast enough. Better security–“despite laudable efforts by Microsoft, such as drop-everything-else code review, security is still a problem…In fact, the bad guys seem to be winning.” Making the PC a home entertainment hub, not trailing integrated digital-lifestyle approaches that, at the moment, are led by others, notably Apple Computer. Fending off open-source software. This is about server software but now increasingly also about the desktop, in the form of the Linux operating system, the Firefox browser, and OpenOffice.org and its commercial variants.
There are a few others, but no hints for an emerging markets strategy. Arguably, that’s a critical challenge and opportunity.
WSJ writes:
U.S. videogame sales are expected to rise 10% this year to $7.76 billion, according to Wedbush Morgan Securities. That’s not far behind total U.S. box office receipts, which stood at $8.6 billion at the end of November.
But the fast-growing industry also faces a major challenge: Escalating development and marketing costs are sowing the seeds of an “arms race” that analysts say will intensify as publishers rely more heavily on big releases to generate the lion’s share of their profits.
The string of big-budget games released for the holidays is expected to put pressure on some of the smaller publishers, who have significantly fewer titles on shelves and may not be able to survive if even one of them stalls…Once the arena of children and hobbyists, videogames are now a big business dominated by a handful of large media firms that are spending heavily on popular franchises.
Developers now spend upward of $10 million to create their leading games — an unheard of amount just a few years ago — and budgets for some high-profile titles can be much higher. Analysts estimate production costs for Microsoft’s “Halo 2” were about $20 million (a Microsoft spokeswoman says the cost was “less than $20 million,” but declines to be more specific). It’s not uncommon for publishers to spend even more on marketing for a hot game.
Despite rising costs, hit games are extremely profitable. Take Two Interactive Inc. spent less than $10 million to develop the latest “Grand Theft Auto,” says President Paul Eibeler. The game, which retails for $50, could generate world-wide sales of $400 million by year end, says Michael Pachter, analyst at Wedbush Morgan. After taking into account advertising, bonuses for the designers, hardware royalties and manufacturing costs, Mr. Pachter figures the game’s gross profit — in the three months since its release — has been about $285 million.
WSJ writes that the Indian government may ease banking restrictions to allow more foreign investment:
Deregulation and a burgeoning middle class are spurring an Indian banking boom that is likely to attract fresh investment from international banking giants eager to get in on the action.
India’s central bank is expected to announce new guidelines soon on how banks — both local and foreign — will be allowed to expand through acquisitions or mergers. International bankers, in particular, are hoping for relaxed restrictions on foreign ownership of banks that will allow them to cash in on the millions of increasingly affluent Indian consumers who have benefited from economic liberalization in recent years.
With millions of Indians opening savings accounts, using credit cards and taking car loans for the first time, Indian banks cumulatively reported a 13% jump in income to about $30 billion in the year ended March 31. While India’s stodgy state-run banks have been slow to innovate, privately owned domestic and foreign banks have led the way, with income growing more than 30% annually during the past five years. Income from the high-profit credit-card and consumer-loan businesses — dominated by foreign banks — has been expanding at more than 40% a year, bankers say.
“We expect an average of about 12% to 13% [revenue] growth for the next five to 10 years definitely, if not beyond,” said Neel Chatterjee, senior vice president of Standard Chartered Group in Bombay. “That’s huge compared to the developed world where banking is not growing more than 2% or 3%.”
AlwaysOn Network offers a projection from ITfacts: “By 2010, mature markets in the United States, Europe and Asia-Pacific will have added 150 mln new PCs, while emerging markets will have added 566 mln new computers, Forrester says. Overall, there will be 1.3 billion PCs, up from 575 mln today. The number of PCs in emerging markets will grow at a 31% compounded annual growth rate.”
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