Friday, April 29, 2005
Bill Gates recently went on a lobbying visit to Washington and when asked what he'd do if he were in charge, one answer that seems to have surprised some in the media is that he'd advocate removing the limit on H1B visas. Gates views this limit as crazy and in essence said we are capping the number of smart people allowed to work in the US. A few politicians took issue with his view saying that tech jobs are not being created in US right now and thus the cap made sense. Of course what these politicians failed to say was what type of jobs were not being created. While many engineering jobs have found there way to places like India, the largest shift in recent years has been in areas such as customer support and customer service. The people who do these jobs are not the ones Gates is talking about. He wants programmers and software engineers so that the US can maintain its position as world leader in the tech arena. If we keep the cap places like India and China is where these engineers will wind up being employed - and there's a good chance they won't be employed by US companies. As you may tell by my tone, I tend to side with Bill on this one. I think it's crazy that the US limits how many scientists and engineers come in to the US to work. The future of the US will not be determined by call centers, it will be determined by people developing great new products that people want or need to buy. So please, let's focus on the destination not the current economic situation.
Wednesday, April 27, 2005
The May 2nd issue has, as I'm sure you've noticed, a cover story on Blogs and how they're going to change business, specifically your business. The article makes some excellent observations as well as some more obvious ones. That said as a piece aimed at the average business person that has yet to really discover the world of blogging it does a good job of getting you at least up to speed with this phenomena. The piece points out how blogs are changing various businesses and gives some examples of how blogs can be applied to a range of comms activities. Not surprisingly perhaps, the blog devotes a lot of space to talking about how blogs will change the media and of course to promoting a new Business Week blog - blogspotting.net. I would have loved to see this piece look more at how it's really shaping business communication and thus business structures but perhaps that will come as they delve into things deeper. Anyway, if you have not read the piece I would, if only so you can comment on it when your clients ask about the piece.
Tuesday, April 26, 2005
Mixed results from technology companies in recent weeks have people speculating that the tech market is still in or perhaps heading for another recession. A closer examination of the data does of course tell a different story. Indeed close examination can tell you almost any story you want it to. In recent weeks we saw Intel raise guidance on profits and Apple again exceed expectations. We then saw IBM miss its numbers due to weakness in some of its markets in Europe followed by Lexmark that missing its profit forecasts. These contradictory results have been attributed to economic cycles, business management and simple poor forecasting. What’s clear however, in almost all cases is that sales have actually been rising. Even IBM, which has sales that rival the GDP of some countries, saw an increase that would satisfy Alan Greenspan. Wall Street, however, doesn’t care about sales that much. Wall Street cares about margins and of course earnings - and most importantly future earnings. It’s this last point that still seems to be where the tech industry is struggling. The bumpy state of world markets is making it hard for most businesses to project with certainty. The good news is that almost all the trends in tech sales are up. Of course there are sectors that are struggling but the encouraging news is that in general sales are trending in the right direction. The real challenge for the tech industry would however appear to be how to break out of low GDP-like growth and get back to the high growth rates achieved in the late 90s. Companies like Oracle are saying that growth will only come by acquiring market share. That seems rather a defeatist approach but who am I to argue with Larry Ellison. Actually I will argue with him on this point. The tech industry has a great chance to break out of GDP level growth but only if it wants to. I think the drivers of potential change exist. For example the growth in wireless technologies that make infrastructure way simpler for businesses and individuals to deal with. This growth is fuelling the opportunity for millions of people to access technology and technologies previously available only to the likes of the Fortune 500. At the same time the success of On Demand software such as Salesforce.com is showing that if you make it easier for people to access the technology they’ll buy it. At this point both of these areas of technology are relatively small when compared to the large traditional enterprise software and hardware markets. But I’d argue that if the industry really does focus on reducing barriers to technology in the same ways these markets have then growth could once again be quite explosive. Look hard at all the small businesses you know and ask if they use all the technology they could. The answer is no in almost all cases. Of course most businesses now own a computer but an alarming percentage of companies still don’t have a meaningful online presence. Add to that the unsophisticated approaches to distribution and purchasing that most small companies use and you see how big the potential opportunity is for just a few areas of the small business market. Getting to this market is of course easier said than done. Barriers such as affordability, accessibility and reliability still need to be adequately addressed but again examples such as the OnDemand software solutions from Siebel and Salesforce show that when you tackle these issues markets open up. So in closing I guess the message I want to leave is one of optimism about the long term opportunities facing the tech industry. This optimism, however, rests on the tech industry’s ability to create new markets by tackling the barriers that exist rather than simply fighting over existing market share.