At the intersection of technology, finance and the Pacific Rim.

Tuesday, November 28, 2006

Adjournment of the Blog

KDI classes are over for the winter and I will be back online writing in early February--seems like a long time--and the coverage will be on investment banking and the financial world (at least for a few months).

However, before you sign off, I encourage you to view this presentation by Dan Gilbert, a professor of psychology at Harvard. He presents some interesting observations on life--such as why are pepople who have won millions of dollars in the lottery not any happier than people whose legs have become paralyzed? It is all in your attitude and in your mind. Please listen and consider.

Sunday, November 26, 2006

Smart Homes in Korea

The BBC has published online an article for the Smart Home in Korea pasted below. So what do you think? What services have value and what do not? We will discuss this tomorrow in class.
The original link is here.

Smart homes a reality in S Korea

By Dan Simmons Reporter, BBC Click Online
More than 100 homes offering smart technology have just been built in South Korea and another 30,000 are planned.

Homes are controlled by adjusting a panel on the wall
Mi Yung Kim and her 10-month-old son Jae Won recently moved into their new smart flat. From the outside, their building looks like just another apartment block, but these new homes in Seoul were built with technology in mind.
The control panel on the wall maps out the apartment so Mi Yung can choose which devices to control.
The air quality here is important to mother and child and so she pops on the air purifying unit, which could be anywhere in the home, because it gets its instructions from the plug socket.
Each flat makes use of the electricity cables to transfer data as well as power.
Each appliance has to be compatible with a system called HomeNet, one of a number of competing systems on offer in South Korea. The choice of service also limits what devices Koreans can buy to hook into the system as each appliance needs to be compatible.
The panel also keeps track of Mi Yung's electricity consumption, pays her power bills, and holds video messages - either sent to it over the net, or from neighbours.

Technology heaven in South Korea
Cyber bullying rises in S Korea
Digital living takes off in Asia
The home's TV is also linked up to the system, so it can tell you when your washing machine has finished, or if someone visits you can decide whether to let them in or not; pretending you are not around has never been so easy.
From outside the apartments you can access the system remotely, and even check who has been trying to get in while you were away.
Local electronics giant LG is behind this project, and says it already has construction deals to deliver around 30,000 similar homes each year from 2008.
Futuristic vision
It is a concept that is now a reality, but the next house we saw was a mock up of what things could be like.
In South Korea's vision of the home of the future we will all wear mini-PCs on our wrists, which turns things on or off, opens doors, and tracks the wearer's position in the house at all times.

Style advice is offered by a mirror on the wardrobe
Here, everything is voice activated, and the fridge can provide you with recipes which use the ingredients inside, and let you know if your food is out of date.
It relies on the food packaging containing radio tags, or RFID labels, which can be read by the fridge each time it passes through the door.
But will the food industry or consumers be prepared to pay more for this? And what about food that does not come in lots of packaging?
In the bedroom your wardrobe mirror can tell you your schedule for the day, help you select your clothes - if all your clothes have washable radio tags compatible with the system - and keep you up to date with the weather and traffic.
When it is time to go, the house of the future will shut itself off.
While there are some nice ideas here from South Koreas top tech firms, it may be a while before any of the technologies on show find their way into our homes of the present.

Friday, November 24, 2006

Bill Gates

I am back after a "restful" week away from the blog. Bill Gates gave an hour interview on the Charlie Rose show, a noted US TV program made available on Google Video. Bill talks a lot about his philanthropic activities, the rise of India and China and lastly Microsoft and their way forward. Take a look and listen. We will discuss this in the class on tuesday.

Wednesday, November 15, 2006

Zune vs. iTunes

See Walt Mossberg's review of the Zune below. Not exactly a ringing endorsement--very MSFT start off slow and pick up steam (hopefully for them). But Tech Crunch sees a bigger picture for Zune and MSFT.

Microsoft's ZuneChallenges iPod by Walt Mossberg
Player Could Lure Converts,But It Makes CompromisesAnd Is Missing Some FeaturesNovember 9, 2006; Page B1, Wall Street Journal

Next week, Microsoft Corp. will launch the most serious challenge ever mounted to Apple Computer's iPod and iTunes juggernaut in digital music. The software giant is introducing a portable player called the Zune, an online music store called Zune Marketplace and a new music software program called Zune that links the two. It plans to put plenty of marketing muscle behind Zune, and promises to expand and refine this new product line in coming years.
This isn't Microsoft's first effort to stop the iPod, but it's the first for which the software giant is adopting Apple's own business and design model -- where one company makes and controls the hardware, software and online component, and tightly integrates them. The Zune is produced by Microsoft's Xbox group, which builds game consoles on that same end-to-end principle.
Microsoft's Zune comes in black, white or brown.

In its first incarnation, the Zune comes in only one version, a big, chunky $249 model that can hold 30 gigabytes of music, videos and photos. I've been testing the Zune for the past couple of weeks and comparing it with the most similar of Apple's six iPod models -- the smaller of the two full-size iPods, which also holds 30 gigabytes and also costs $249.

Zune has several nice features the iPod lacks: a larger screen, the ability to exchange songs with other Zunes wirelessly and a built-in FM radio. It solves the worst problem that plagued earlier Microsoft-based music players -- frequent failures to synchronize properly music and videos between the players and personal computers. Synchronization on the Zune is smooth and sure.
Also, the Zune player and software have a very good user interface, different from, but in some cases easier to use than, the iPod's. While it lacks the famous iPod scroll wheel, instead using a common four-way navigation pad, I found song lists easy to navigate on the Zune. It has only a few buttons and is quite intuitive to use. To my ears, it sounded as good as the iPod.

But, this first Zune has too many compromises and missing features to be as good a choice as the iPod for most users. The hardware feels rushed and incomplete. It is 60% larger and 17% heavier than the comparable iPod. It has much worse battery life for music than the iPod or than Microsoft claims -- at least two hours less than the iPod's, in my tests. Despite the larger screen, many album covers look worse than they do on the iPod. And you can't share music libraries between computers like you can with iTunes.

Zune's online store offers far fewer songs, just over two million, compared with 3.5 million for the iTunes store. In fact, as of this writing, songs from one of the big labels, Universal, were missing from Zune Marketplace, though Microsoft says it is confident it will have all the major labels when it launches Zune on Tuesday. Also, despite the player's capability, Zune Marketplace offers none of the TV shows, movies or music videos that iTunes does, and has no audiobooks or podcasts.

Even worse, to buy even a single 99-cent song from the Zune store, you have to purchase blocks of "points" from Microsoft, in increments of at least $5. You can't just click and have the 99 cents deducted from a credit card, as you can with iTunes. You must first add points to your account, then buy songs with these points. So, even if you are buying only one song, you have to allow Microsoft, one of the world's richest companies, to hold on to at least $4.01 of your money until you buy another. And the point system is deceptive. Songs are priced at 79 points, which some people might think means 79 cents. But 79 points actually cost 99 cents.

Unlike iTunes, Zune offers subscription plans, where you can get an unlimited numbers of songs for $15 a month. However, Microsoft is de-emphasizing this option and mostly positioning Zune Marketplace as a source of individually purchased songs and albums.

Some consumers may well choose Zune for its big screen, which looks great with photos and videos, for its wireless song swapping, or for its FM-radio capability, which requires a $50 accessory on the iPod. Others may favor Zune because they are as tired of Apple's dominance in music as some folks are of Microsoft's dominance in computers.

But Zune has only around 100 accessories at launch, versus 3,000 or more for the iPod. If you have any iPod-specific accessories, they won't work on the Zune. Also, none of the songs you may have purchased from Apple will play on the Zune, unless you undertake a laborious conversion process. Apple is rumored to be working on an all-new iPod with a screen as large or larger than the Zune's.

Zune marks an unusual turn for Microsoft. The company is abandoning its favored business model, where it builds software platforms and then lets other companies make a wide variety of products that use that platform. Instead, Microsoft is building and totally controlling the whole chain associated with the product: the hardware, the software and the online music store. Songs sold on Zune Marketplace are intended to play only on the Zune, and Zune players won't be able to play copy-protected songs bought elsewhere, even at other online stores that use Microsoft music formats.

Microsoft was driven to this approach because its platform model, so successful with personal computers, has failed miserably in the music category. Apple has simply rolled over all the hardware companies and online stores that were built around Microsoft's previous music system, called "PlaysForSure."

Zune comes in three colors: black and white, like the comparable iPod, and brown, a daring color for a consumer-electronics device, but one that has become popular in the fashion world. Each model also has a second color on a translucent band around its edge; the brown one is trimmed in green.

Placing the Zune next to the 30-gigabyte iPod provides a strong contrast. The iPod is thin, sleek and elegant looking. The Zune looks big and blocky, sort of like a prototype for a gadget, rather than a finished product. It is longer, thicker and heavier than even the 80-gigabyte iPod, which has more than twice its capacity.

Zune was adapted from a much-praised but slight-selling music player, the Toshiba Gigabeat, in order to get it to market more quickly.

The word "Microsoft" never appears anywhere on the Zune, only the new Zune logo and a cheeky, "Hello from Seattle" in tiny type at the bottom of the back of the device. The Zune's tag line, evident immediately when you open the box, is "Welcome to the Social," a phrase meant to stress the device's wireless song-sharing feature, and to reach out to the Zune's target market, young music lovers who build social relationships around favorite songs and artists.
But the wireless music-sharing feature on the Zune is heavily compromised, in a way that is bound to annoy the very audience it is targeting. Each song sent to your Zune from another Zune can be played only three times and is available for playing for only three days. After that, it dies and can't be played again unless you buy it. Even if you play the song only halfway through, or for one minute, that counts as one of your three allowed plays. In fact, in my tests, a song I sent to my assistant's Zune expired after only two plays, one of which lasted just a few seconds. Microsoft attributed that to a bug that it said would be fixed.

The Zune's other big plus, the big screen, is similarly compromised. While it is three inches versus 2.5 inches for the iPod's screen, it uses the same resolution. That combination can make images coarser and grainier. In my tests, on photos and videos, this didn't matter much, and the Zune did a good job, even automatically switching into horizontal screen mode. But images of album covers often looked fuzzy, grainy and even distorted on the Zune when compared with how they looked on the iPod.

And for a product that's all about "the Social," Zune is curiously lacking a very popular iTunes feature -- the ability to view and to listen to another user's music library over a local network. This iTunes feature works in homes, office, college dorms, hotels, and other places, and it functions in mixed groups of Windows and Macintosh computers. But with the new Zune software, you can share your library only with Xbox game consoles, not other computers.
On the plus side, I really liked the interface on the Zune. In some modes, it allows you to do things with fewer clicks than the iPod does. For instance, if you are browsing through music, you don't have to go back a step to switch from, say, a list of artists to a list of albums. Those choices are arrayed at the top of the screen and can be selected with a sideways push of the navigation pad.

Also, the entire interface is more colorful and visually satisfying than the iPod's. Lists of albums are accompanied by thumbnails of their covers. Menus zoom in and out, and some are translucent. You can also select your own photo as the wallpaper or background for the device. But, unlike on the iPod, you can't customize the main menu or go to "Now Playing," or shuffle all songs with one click.

Tuesday, November 14, 2006

In the News:

Eric Schmidt recently commented that one day your mobile phone service could be free--supported by mobile advertising. For commentary on this possibility go to this link. Does this make sense?

And Reuters has this to report on the launch of PS3 in Japan.

Sunday, November 12, 2006

Google = $100 per barrel oil?

George Gilder has this to say about the rise of the super-data centers. About two years or so ago, Intel made a sharp shift in direction--moving to energy efficiency. After reading this, you will get a clearer understanding of the reasoning. All of the computers of the five leading search companies consuming energy sufficient to power Las Vegas? Google as we have seen has increased their computing power by roughly 5,000x in the past 5 years-- And as it continues on the curve will it be change in oil prices = India + China + IT?

And where is this energy consuming hog of a web headed? People have been for years talking of the semantic web--a web whereby natural language is understood--one of these concepts (like artificial intelligence, which may be why they call it "artificial") which keeps coming back in different forms over the decades of computing science. For the latest iteration (Web 3.0) see this article by John Markoff, the respected technology journalist of the NY Times.

Lastly, the Perfect Thing--a book written about the development of the i-Pod. A short extract of the book is published in Wired. Interestingly funny to hear the author's depict how Bill Gates reacted when he saw his first I-pod. His description is pretty consistent about all that we have heard of the man. And there are some good Steve Jobs stories/insights too.

Wednesday, November 08, 2006

Divide and Conquer

Noam Chomsky, the noted linguistics professor from MIT and social critic (his views are quite radical (in the left-wing sense) from the normal range of the "US viewpoint" (if there is such a thing) had this to say in an interview:

Talk about the divide-and rule policy of the British Raj, playing off Hindus against Muslims.

(Choamsky) You see the results of that today. Naturally, any conqueror is going to play one group against another. For example, I think about 90% of the forces that the British used to control India were Indians.

There's that astonishing statistic that at the height of British power in India, they never had more than 150,000 people there.

(Choamsky) That was true everywhere. It was true when the American forces conquered the Philippines, killing a couple hundred thousand people. They were being helped by Philippine tribes, exploiting conflicts among local groups. There were plenty who were going to side with the conquerors.

Well Microsoft as well has been called the "Evil Empire" for the way it dominates the IT software world. And it has used the above tactic with the skill of the best imperialist--taking a software standard that represented a threat and dividing and conquering. This happened with Java and Sun at the beginning of this decade. A hot middleware software, Java promised the utopian vision of running the same application over numerous different hardware devices and operating systems. At the time, Java was seen as a potential "threat" to the MSFT franchise and hardly anyone would argue that now. Microsoft chipped away, creating their own version of Java and finally making it official by "collaborating" with a weakened Sun. Now there is very little, if any, talk of the threat of Java.

So it should have been no surprise that Microsoft has done the same with Linux, that open source standard "of the people, by the people and for the people". Microsoft announced last week a deal with Novell, the weaker of the two publicly listed, independent "open source" Linux based vendors. The other independent provider, Red Hat, was bombed as well late last month by Oracle--where they essentially agreed to provide support for Red Hat based Linux products at rates substantially cheaper than Red Hat. Bombing is the right metaphor as Larry Ellison, the founder and Chairman of Oracle is known for having tried to buy a MIG jet for pursuing his private passion of speed and flying but he could not get it through US customs. These "free" software companies make money on maintenance and support to enterprise for their Linux based software products. And the most substantial proponent of Linux has been IBM.

There is a well-founded view that this move by Microsoft will divide the enterprise Linux arena into two camps: Microsoft-Novell and Red Hat-Oracle. Actually, make that three as you have to throw IBM in there too. And note the continual threat of litigation as noted in this article: this is where Microsoft's potent cash generation can be deployed effectively since in contrast to young, ambitious software engineers, you can get good lawyers by trading their service for cash only. So there we have it--an open standard being slowly absorbed by the incumbents. A potential disruption that is trending toward "sustaining" for the incumbents.

Tuesday, November 07, 2006

About those game machines

As we are talking about Microsoft vs. Google this week, this article from the NY Times illuminates MSFT strategy on X-Box 360. Watch out Steve Jobs. MSFT is shooting in many directions at once and as we saw today they seemingly have the cash to do it. But as said, cash does not translate into resources, until you get the right people.....and getting the right people is a different thing altogether than just paying cash.

Monday, November 06, 2006

Recommended Reading

I spent the weekend reading a couple of books. As I noted in class, I am not that prolific a reader of business books (especially by consultants), but these two were very good within the context of what we are studying. After you spend time in IT you get the feeling that the more things change the more they stay the same--patterns repeat. But this is dangerous thinking and these days there is a definite feel that the dinosaurs are sniffing the air and sensing that something is different this time--that we are headed toward a new something--akin to when the PC revolutionalized the office worker. These books provide clues of where the direction could be. Both books are both well-kinown, recently published and much discussed in Silicon Valley and elsewhere.

The first was The Search by John Battelle. He runs an excellent blog on the search industry and its impact on media at and is the former editor of Wired. You may not have time to read the whole of it, but suggest you take a look at Chapter 7 and 10--these provide clues of where we are headed. The second is the Long Tail by Chris Anderson, also of Wired. We will be reading his views later in the course about how cheap storage and systems, plus IP networks, plus search are creating niche markets and disrupting incumbents.

I will leave my copies of the book at the front desk of the library if you would like to read and review. Please return them promptly--am going to ask that check-out be overnight only.

Lastly, David Pogue of the NYT has an interesting review of a little company's effort in Redmond, Washington to fight back against the Google threat. We will look at it at the end of the class tomorrow.

The World According to Will Wright

Will Wright is the best known game creator in the US. His signature invention was the Sims series--very original and very pooh poohed when released ("Nobody wins in this game" was the criticims). It has since become one of the best selling PC games. He is yet another example of the square peg in the round hole--a college drop-out with a quirky, off-beat way of game development. The New Yorker had this to say about his new game:

The game draws on the theory of natural selection. It seeks to replicate algorithmically the conditions by which evolution works, and render the process as a game. Conceptually, Spore is radical: at a time when most game makers are offering ever more dazzling graphics and scenarios and stories, Wright and his backer, Electronic Arts, are betting that players want to create the environments and stories themselves—that what players really like about games is exploring what Wright calls “possibility space.” “Will has a reality-distortion field around him,” his former business partner, Jeff Braun, told me. “He comes up with the craziest idea you’ve ever heard, and when he’s finished explaining it to you the world looks crazy—he’s the only sane person in it.”

I encourage you to read it--a good exposition on the creative mind.

Thursday, November 02, 2006

Go Vertical or Horizontal?

The Guardian has published a thoughtpiece, disguised as an article, on the merits of open vs. proprietary systems in today's IT market. So how do you know which way to go? Many good thoughts on Apple, Microsoft and others.

We will also discuss today the earlier link sent to you on how Steve Jobs turned around Apple today.