Next Big Thing(s) in Technology

BusinessWeek (Aug 25, 2003) identifies following four tech waves to watch:

Utility Computing

Make IT as easy to use as plugging into an electrical outlet. This does not require corporations to rip out technology already installed and replace it with expensive new hardware and software. Instead, they can gradually add technologies or services that make their computing systems more automated.

Following obstacles need to be overcome to turn this into a reality:

• Task-division and sharing: Its too hard for computing systems to parcel out processing jobs in response to shifting demand.
• Pricing: New ‘metering’ technologies are needed to figure out exactly how much ‘power’ is being consumed.
• Standards: Technologies need to work seamlessly together under clear industry standards.
• Hype: Some tech companies are over-promising on the idea which could turn off wary corporate buyers.

Some of the technology is real today. HP sells ‘Utility Data Center’ that is essentially a switching device for doling out computing jobs. A customer’s entire network is wired to this machine, so an application can be switched to any computer server or storage device on the network. Veritas is targeting niche – it sells software that anticipates when additional storage capacity is going to be needed and alerts operators to provide it.

Sensor Networks

Soon, sensor networks may be tracking everything from weather to inventory. There are two basic forms of these networks

• RFID (Radio Frequency ID) tags (a.k.a. smart tags): RFID tagged goods identify themselves to a radio reader. This information can be combined to create an up-to-date inventory picture in a warehouse.
• Self-Networking, Wireless Sensors: Simple machines, equipped with ‘eyes and ears’ of chemical, motion or temperature detectors, act as nodes and pass information from one neighbor to next. At a control center, a sophisticated computer harvests all the data and makes sense of it.

A few interesting applications

• Tesco (British retailer) and Shell track inventory and check pump status at gas stations.
• York plans to use sensors for monitoring its clients’ air-conditioning units. These will monitor temperatures and send updates to York offices – thus improving the productivity of its technicians.
• US Military plans to use them to monitor enemy troop movements.

Challenges of privacy concerns and standards in sensor hardware/ software remain to be overcome.

One emerging standard is an open source operating system called ‘TinyOS’. This is developed at the UC Berkley and backed by Intel, other universities and startups. It works on less than 8kb of memory – ideal for tiny sensors.

Plastic Electronics

Plastics may act as cheap and pliable alternatives to silicon in electronics. Special inkjet printers could print polymer displays and tiny circuits.

Displays made using these plastics can be paper thin, are brighter than LCDs, produced cheaply with inkjet printers, and flexible and unbreakable.

Similarly, chips made of these plastics can be so cost effective as to be used in applications such as smart tags.

Bionic Body Parts

The marriage of biology and electronics in the form of exotic combination of human and synthetic tissue, silicon circuits and tiny motors create replacement organs that are neither human nor machines. Currently, most bioartificial organs are meant as temporary solutions until patient receives a human organ. Ultimately, scientists want to ‘grow’ living tissues that will eliminate the need of a transplant.

The holy grail in replacement body parts will be devices that incorporate living human cells - e.g. a bioartificial kidney developed at Univ of Michigan Med School, Ann Arbor, that uses a plastic cartridge containing millions of human kidney cells to replace dialysis.

This blend of technologies can redefine life. An example is ‘printing’ of 3-D sheet of living tissue using standard inkjet printers at Med University of South Carolina. Cell solution acted as the ink and biodegradable gel acted as paper.

Dances with the Elephants

“Who Says Elephants Can’t Dance?: Inside IBM’s Historic Turnaround” (Amazon.com link) is a personal account of Louis Gerstner (‘Lou’) about his tenure at the helm of the world’s largest technology company. It’s very insightful to read how he managed the company to make it adept to, and finally, become a leader in, the rapidly changing competitive landscape of the technology industry.

The context of his success in IBM’s turnaround adds immense weight to his ‘lessons’, many of which may otherwise appear to be obvious and common-sensical. A few interesting observations:

On Challenges at IBM

IBM is arguably the most complex organization anywhere in the world outside government. It is not just its sheer size ($86 million in 2001 sales), nor its far-flung reach (operating in 160+ countries). One of the reasons behind this complexity is that every institution and almost every individual is an actual or potential customer of IBM. We have to be prepared to serve every institution, every industry, and every type of government around the globe.

To me, this appears to be a challenge that every manager should be prepared to face. In an increasingly market-driven and capitalist economy, corporations become almost as big as countries. This makes their management a very complex, Herculean task.

On Linking Stock Options and Direct Stock Ownership

Executives at IBM were not going to be granted stock options unless they concurrently put their own money into direct ownership of company stock. We established guidelines that effectively said: “You have to have skin in the game.” No free ride.

I think that this is a much better and more elegant solution to foster complete commitment and accountability than just stock options. Another example that comes to my mind is that of Terry Semel, Yahoo chief, who bought substantial number of shares (~$20 million) after his appointment at Yahoo about 2 years back. The stock has almost tripled since then.

Financing as part of the ‘Technology Stack’

While describing the major pieces in a computing environment (hardware, software, services), Gerstner notes ‘Financing’ as one of the Services. To me, this appears very similar to aerospace industry (or for that matter, automobile industry) where companies such as Boeing build the plane, its systems and provide services such as maintenance and financing.

Survival of the Fattest: Challenges in Resource Allocation

The Darwinian concept of survival of the fittest doesn’t work in a lot of companies. Instead, often the rule is ‘Survival of the Fattest’: divisions or product lines that are successful today always want to redeploy their cash and resources into existing products and existing markets. Finding ample resources to fund new growth and new businesses is one of the hardest tasks of a corporate leader.

For example, it would be interesting to note how many resources does Microsoft allot to Windows vs. its new initiatives.

On Importance of Corporate Compensation and Result Measurement

People do what you inspect not what you expect.

Quoting Competitive Strategy from Ray Kroc, McDonald’s founder

When you see your competitor drowning, grab a fire hose and put it in his mouth.

Permalink, (0) comments

 

SAP Talk

“Anticipating Change: Secrets Behind the SAP Empire” (Amazon.com link) - this book aims to cover the business history and future vision of SAP through conversations among Hasso Plattner (the co-founder) and three distinguished practitioners and scholars namely Dr. Scheer, Dr. Wendt and Mr. Morrow.

I read the year 2000 version of the book and what strikes me is the relevance of the observations made by Dr. Plattner about the software industry. Also impressive to me is his background as a ‘nuts-and-bolts’ guy (he is an accomplished software systems technologist – he worked on development and implementation of financial accounting package of SAP in its early days and later directed and managed the R&D of SAP systems) who could successfully build and manage a huge global business. This reaffirms my belief that you can’t be a good coach unless you are a good player.

Apart from describing the turning points in SAP’s history (and also Dr. Plattner’s professional career), the book includes some very interesting observations made by him. Below are a few:

Impact of Recession on Software Industry – Software OEMs

At this time [in 2000], everything is being developed in parallel direct to the customer. Very few software publishers are concentrating on defining it as their business objective to build components that will then be used by other software producers. With the next recession a lot more of these software companies will end up in a crisis situation of competition, so they will have to consider whether they really need their own sales or it should be an engineering type sales for those who reuse their components. Automobile industry is a good example of this evolution.

Inversely Proportional Relationship between User Simplicity and Engineer Complexity

A tendency in a technical field is that when you want to make it simpler for the customer or actual user, the complexity of the implementation increases for an engineer. [For example] With an old car you had to double-clutch to shift gears and the transmission design was very simple for the engineer. Today, you drive with automatic transmission, the driver has it much simpler - but for the engineer it has become many times more complicated to build an automatic transmission.

Applications –Going Beyond One System

An application no longer moves from the user over several stages to only one data source (as in the N-Tier architecture), but rather it moves in several directions simultaneously. It accesses various data sources. Today we are building applications that relate to execution by various data banks and by various service providers. For example, planning for an event where services of airlines, hotels, rental cars and service personnel need to be claimed.

Global is Big

If an enterprise will really be active on a global basis, it just has to be big. A small global enterprise is a contradiction in itself. The actual resources that give an enterprise strengths are access to market, sales, access to knowledge and engineering.

The mid-size businesses have a tendency to be swallowed up. The idea of being quick and nimble applies only for a start-up phase when the intended purpose of the enterprise is being explored and sought. After that, the growth laws apply very soon and they shift notably in the direction of globalization.

On Japanese Version of SAP

We got pressure from our [multinational] customers in USA and Germany to export our software to Japan. We invested for three years to build a full-blown, two digit, double-byte character version of the system, and every single word is Japanese – all documentation, all screens. [Yet,] All the testing was done in German and English. We hired Japanese people to do the translation and to retest the system. [Having a Japanese version] was a big selling point to all the high tech companies on the West Coast because they have ties into Japan. We got HP, Apple, Digital, Compaq, Intel and finally Microsoft as our customers. Today (in year 2000), Japan is our third largest market [after USA and Germany].

We expanded the internal system to handle double bytes. Due to this, one system can handle not only Japanese but also Chinese, Korean and all other languages that require a double-byte system.

Permalink, (0) comments