Saturday, December 31, 2005

Tech 2005

What better way for me to wrap up 2005 on my blog than with a tech industry post? I am business geek, fear me. :)

So guess who is the Forbes Company of the Year for 2005? I must say, I was really surprised to find out that it was Seagate. After all, it's not as intuitive a choice as some of the other more flashy companies this year, like Google or Apple. Apple still takes the cake in the marketing factor, while Google is still king in the innovation arena, with both delivering fantastic financial results. Both companies seemed to make headlines every single week. So Seagate was a huge dark horse to win it. After all, what's so interesting about a storage company, working in an industry that is known to have low profit margins? Well, I guess they did manage to make the blockbuster deal to buy up Maxtor, a very interesting development, considering that when Maxtor bought up Quantum in 2000, Maxtor instantly became the harddrive market leader. But what else?
It is underappreciated no more. Retooled and relisted on the New York Stock Exchange in 2002 (the investor group reportedly made six times its money on the deal), Seagate is the biggest and most efficient stand-alone hard-drive maker in the world. Its $925 million net for the past 12 months was three times what its two nearest competitors earned, combined. Its revenue in 2005 climbed 21% to $7.5 billion, even as the disk industry saw its price per byte of capacity fall by 40%. For 2006 analysts expect sales to approach $9 billion. By redefining storage as a sexy, high-growth, high-return business, Seagate earns its title as the Forbes Company of the Year.
In retrospect, it makes perfect sense. Apple made all the big splashes with their iPod, but who was making the harddrives for the iPod? After all, it wasn't the miners that made all the big money during the gold rush; rather, the people who made the big money were the ones making the shovels, pickaxes, and other tools required to work as a miner. And the need for storage is booming with new growth markets developed for music, video, games (remember when we all laughed at the idea of a harddrive being in a game console?), etc. Flash memory is a worthy competitor for sure, but Seagate is not backing down. I still remember buying their fluid-based ball-bearing harddrives when they first came out, just to have a quieter computer. I was impressed by Seagate's innovation, and judging from their recent R&D efforts, they'll be more than capable of meeting the challenge presented by flash memory. What is most interesting is that Christensen's disruptive technology theory is still at work in the storage industry, but the next winner may or may not be flash memory, as speculated by Christensen in his original groundbreaking book, The Innovator's Dilemma. Time will of course tell.

Speaking of innovation, who can seriously beat Google? They've had an amazing year,
and seem to be the fastest growing company in terms of value in recent history, if not all history. A stock price of $414.86 (at market close today) so quickly after IPO is just sick. And they are the only company to make my jaw drop with every single product release. They've done things that nobody even dreamed of doing, and half the time, nobody could figure out what they were up to.

Joe Kraus, a founder of the portal that merged with Internet service provider @Home before filing for Chapter 11 bankruptcy in 2001, agreed that Google executives are likely thinking big, although he acknowledged he "doesn't have the slightest clue" what they are doing.

"They've been buying dark fiber for a good five years. It allows them to have such cheap communications between all their data centers," said Kraus, chief executive of online start-up JotSpot.

"A lot of people have talked about Google's core ability to host thousands of applications and being your desktop in the sky," he said. "They certainly never fail to take advantage of it when launching new products."
Things like purchasing dark fibre, Keynote, making gmail's storage capacity increase by the second (and it's still going), and doing other crazy things. Google is the company that has the potential to finally make the world realize the potential of the Internet. It's funny because everyone predicted this future years ago. They all just thought that it arrived a little earlier than it really did, creating the dotcom bomb. But now with web services, we can truly use the Internet as the next great development platform that can finally replace Windows.

The notion of a network computer isn't new. Sun Microsystems CEO Scott McNealy has for years been saying "the network is the computer." Oracle CEO Larry Ellison formed a company around the idea. It was called the "New Internet Computer Company," and it sold Web surfing devices before shuttering two years ago.

But unlike Sun and Oracle, Google's timing could be impeccable, Arnold argues. "Sun defined it. Ellison tried to build it. But Google owns it," he said.
By the way, if you want an interesting book on Google, you can download this one for US$180. I obviously haven't bought it, but the Table of Contents do look very interesting. Anyway, Ray Ozzie's memo is a great outline of where the world is headed in this regard, and I love some of the directions where he plans to take Microsoft's technology. Besides, what tech industry post would be complete without some stuff on Microsoft? Some great quotes from his memo:

Platform Products & Services Division
a. BASE vs. ADDITIVE EXPERIENCES – In MSN, and in Windows Update and software deployed by it, we have quite a bit of experience with methods and practices for getting innovations to market on a rapid cycle. In the form of a newly combined division, we should consider many options as to how we might bring user experience innovations and enhancements to users worldwide. Specifically, we should consider the achievability, desirability, and methods of increasing the tempo for both 'base' OS experiences as well as 'additive' experiences that might be delivered on a more rapid tempo. In doing so, we would better serve a broad range of highly-influential early adopters.
This is awesome. No longer having to wait for a huge rollout of the next version of Windows, just to be able to experience some cool new features will be great. As rapid application development is a huge part of my job, I see firsthand the benefits for end-users of incrementally delivering new features speedily and on demand. As well, quality control is obviously much easier, because the application experiences an evolution, rather than a revolution. From a developer's perspective, he notes the following:

d. LIGHTWEIGHT DEVELOPMENT – The rapid growth of application assembly using things such as REST, JavaScript and PHP suggests that many developers gravitate toward very rapid, lightweight ways to create and compose solutions. We have always appreciated the need for lightweight development by power users in the form of products such as Access and SharePoint. We should revisit whether we're adequately serving the lightweight model of development and solution composition for all classes of development.
Serve it! Serve it! As the vast majority of IT projects in this world either completely fail, or run drastically over-budget, more support for rapid application development would be fantastic. We're already using the .NET platform for our rapid stuff at work, and I have to say that it just works. As well, working iteratively involves users in the development process, rather than having them provide input at just the beginning and end of a system's development. Want to know why rapid and lightweight are good? Ozzie answers that too. Ozzie is the man!

Complexity kills. It sucks the life out of developers, it makes products difficult to plan, build and test, it introduces security challenges, and it causes end-user and administrator frustration. Moving forward, within all parts of the organization, each of us should ask "What's different?", and explore and embrace techniques to reduce complexity.
Do it! :) It's funny when I look at the way the industry is going. I remember first reading Breaking Windows: How Bill Gates Fumbled the Future of Microsoft and thinking that it was the perfect subject for my paper on organizational theory back at SFU. The disruptive effects of the Internet matched every single symptom enumerated by Christensen for The Innovator's Dilemma. However, no technology existed to actually make those disruptive dreams a reality, because the Internet was so unmanageable. Well, I suppose it was all part of the S-Curve process anyway. But when XML came into the picture, Microsoft was doomed if it didn't jump on board. XML was the final development to allow the Internet's capabilities to jump into the exponential slope of the S-Curve. And I find it funny that some of the comments I made in that paper years ago are finally becoming reality today. If you haven't read Breaking Windows yet, read it. It is an amazing book, and presents a picture of conflicts and strategies inside Microsoft like no other book I've ever seen.

I have lingered far too much on Microsoft. But one last thing, were Bill and Melinda Gates and Bono really deserving to be the Time People of the Year? As one person noted:

Wow! Truly Amazing! Hey, I have a really cute puppy ... I'm sure he will a great companion and may even bring me my slippers throughout the year ... maybe you can put him on the cover on TIME next year. Come on ... although it's really nice these 3 people donated their time and money, but millions of people (even ordinary Americans!) do it every day. Next year please try and chose someone pithy ... pretty please!
Olympia, WA
I'm not sure I would have picked them myself... but perhaps this decision had more to do with the fact that there weren't many worthy candidates this year. But I'll admit that I do like Bono. And they all actually do a lot, but the Gates do it much more behind the scenes. If Gates were more public and likable, he probably wouldn't have near the "evil" reputation he has.

In other news, a company that used to be cool can now be officially labeled evil after the big Sony rootkit snafu. They've settled the class action lawsuit against them with some token gestures. This incident will probably provide the biggest product-based business ethics case in business strategy classroom discussions out of all recent ethics cases (Enron and Worldcomm obviously still take the cake for financial business ethics cases). I do not think we have seen a product ethics case on this scale since Johnson & Johnson's Tylonel scare, and everyone knows how long ago that one was. Except that Sony handled the situation miserably, unlike Johnson & Johnson. The big question will be whether Sony suffers long-term brand damage; will the PS3 be enough to make the same demographic that bought Sony Music CDs forgive and forget about the whole rootkit fiasco? Of course, the PS3 will probably have its own problems, as is the case with most major console releases. XBOX360s are still overheating and crashing, while the PS2 had its own launch problems trying to read discs properly.

Speaking of brands, Intel will drop Intel Inside. This is unexpected news, but it also makes a lot of sense. AMD has no caught up to Intel to the point where having Intel inside does not really provide any advantage to an end-user. As well, CPUs are becoming increasingly commoditized, rendering brand value minimal. The time is ripe for Intel to change its branding and present a value proposition that customers actually care about. What that will be is unknown, but Intel definitely can't stay in CPUs forever, if the industry becomes truly commoditized. They've been making moves for years now to develop new markets and products, and base their strategy around entire platforms and infrastructure, rather than simply CPUs. Will we see them go head to head with the likes of Cisco and Nortel? Or will they go head to head with the likes of Dell and IBM? Or something totally unexpected? Will the Internet and convergence have such a huge impact that Intel is forced to go head to head with even Google? Or maybe Intel will just continue focusing on low-level hardware and carve out their niche there. But I think Intel has bigger dreams than that.

And who said that wacky Internet ideas were dead? This guy made almost a million bucks. I call that crazy. I remember when I first saw the website and laughed at the interesting novelty, but everyone was predicting and agreed that he would do awesome. And I remember thinking that if he did do awesome, I still wasn't sure if I'd ever want to try to make money that way. But no matter I thought, his creativity still astounds me.

What can peer-reviewed academic journals do to maintain their integrity? They already have a pretty airtight process... can they do more at all? To have a prestigious journal like Science be made into a mockery by this man is a crazy thought; I never would have thought it possible. I know there have been academic journal hoaxes in the past, but this surpasses anything I've ever heard of before (mostly because it was Science...). But it is interesting to see that despite all of our scientific advances, we're still having trouble making clones. Me, I'm not sure I'd want clones... I have several non-religious arguments against the idea; obviously, I have a couple of religious ones as well, but those arguments have no merit in discussions with non-religious people. :)

On the other hand, we've made some pretty interesting advancements in space. What I wish is that people would give science more merit and that more would want to study science. Myself as a business geek and techie, I get to reap the benefits of science. But at some point, the innovation of people like myself is limited by the advancements of the hard sciences. Applied sciences can't do much more if it's already applied everything that science has discovered. We need more scientists who are able to raise that ceiling on innovation. Like, if we finally ever do hit that theoretical barrier that silicon has on clock speeds, will nanotechnology be ready enough to take the reins? We still have quite a bit of room to play with for now, but decades down the road, what will happen? We'll see, I guess. :)

I am looking forward to 2006. I may get a new cell phone that finally has all the features I want.

No comments:

Post a Comment