Thursday, November 20, 2008

Credit card grinch steals '08 Christmas

While the US government is busy bailing out banks with billions of taxpayer money (by buying parts of them at inflated prices), banks are busy increasing credit card APRs by double or more, even to low-risk consumers.

With a number of bubbles popping in near synchronicity and an economy generally heading into the dumpster, one might think the last thing we need is for the issuers of credit cards to absolutely obliterate consumer spending right as the Christmas buying season is upon us.

Here's another major force to keep the downward death spiral momentum going... Christmas '08 was already lining up to be awful. Now it's going to be really awful. Unless you're a grinch...

Disclosure: no positions

Tuesday, November 18, 2008

X86 vs ARM for netbooks: does it really matter?

Being Internet and multi-media centric, netbooks have created a new usage model which is not focused on the conventional local-apps computing model which x86 has dominated for so long. This warrants an honest and fresh look to see if there really are still many legacy factors tethering the netbook market to x86, or if ARM is set to be a true competitor.

Intel has marketed that the Internet is built on x86, and that ARM does not deliver the same quality of experience for web browsing and consuming web content. That certainly held some truth at one point. But ARM has subsequently refuted Intel's claims. So let's a have collective and forward looking review of just how tied netbooks will be to any particular architecture. This blog is all about participation; please offer any new thoughts.

Let's 1st define netbooks as smaller notebook-like devices which are used for consuming Internet and media content, and doing lightweight Internet tasks. Which is to say, let's not focus on elements of netbooks where people use them as small notebooks, and thus desire much of the related Windows compatibility. Additionally, let's have a forward look at what will likely become available within the 2009 timeframe so we're not looking in the rear-view mirror. Here are some areas to explore -- please send input on which things you don't believe will become available for ARM in that context. I'll create an ongoing matrix.

  • local applications
  • browser plugins/add-ons/extensions
  • media players/codecs/etc
  • performance
  • UI
  • hardware
  • features
  • communications
  • other?
Worth noting, recently there was an announcement of ARM working with Adobe to port Flash 10 and AIR to ARM11 for 2009, and an announcement of Canonical working with ARM on an Ubuntu ARM port.

Disclosure: no positions

Monday, November 10, 2008

PC as a service: from margin erosion to new business model

It's no secret that PC prices have been decreasing due to ever-increasing commoditization. And then came the netbooks! Netbooks are cheap, they're portable and they're disruptively fitting with the new world order of cloud computing. The "race to the pricing bottom" is officially on, only accelerating commoditization even further.

The one component of PC pricing which has not maintained parity with the hyper-commoditization curve (at least for developed countries), is the Microsoft software stack. The more lower end PC pricing comes down, the more lopsided the BOM pricing component of Microsoft's wares becomes. This has been one of the major factors in the Linux-ification of netbooks.

Ultra cheap netbooks combined with a shift from local to web-based computing, is creating a new PC value system whereby selling the PC hardware itself is not necessarily the core business value. Rather, there are a multitude of services which can be offered and sold to users of cheap network oriented platforms such as storage & backup, search, media, app stores, location based services, etc. This takes the PC closer to the mobile phone business model, whereby the hardware is sold at a reduced cost or even given away, in exchange for reoccurring revenue and services business on the back end. Don't believe me? Look at Ubuntu Linux founder Mark Shuttleworth's comments about Microsoft possibly giving away XP:

"I've heard creditable reports of Microsoft offering XP at no cost to OEMs."

Every decrease in cost of PC hardware, as well as every increase in network bandwidth or availability moves the PC value system further from the confines of the actual hardware/software system, and closer to "the cloud". This not only forces Microsoft's hand to move their software to the cloud, but also to start focusing on a new services business model. This is not a shift the IT world should overlook. Many new opportunities abound as the new value system re-balances, for examples in the educational and lower end consumer sectors, because these sectors are not so encumbered by legacy of the non-cloud computing model. I also picked those two sectors as examples, because they have an audience of very tech adoptive people who tend to be in touch by-the-minute with the latest Internet oriented services. Innovate, partner and move quickly to ensure your spot in the new business model.

With so many netbooks for sale or announced, PC manufacturers will be forced to continually add value to their offerings, ultimately making netbooks more capable and thus eating up market from notebooks. This will bring down notebook pricing as well. And thus, the PC-as-a-service effect will ripple up the food-chain above them. Winners of the new world order have not yet been established. This is an interesting time...

Disclosure: no positions

Tuesday, November 4, 2008

Capitalism opens up secrets to sustainability adoption

"Tell them it increases their earnings and decreases their expenses." That's how Eric Schmidt, Google CEO, recommended that management be pitched on eco solutions at the Corporate Eco Forum (around the 40:15 mark).

Or in the words of Bill Green, from VantagePoint Venture Partners:

“You really don’t want the chief sustainability officer, you want the chief financial officer,” he says. “We need to change this conversation around. The chief sustainability officer, man he’s your friend. He drinks the cool-aid, he wakes up in the morning, he reads your blog, he so gets this, he hates George Bush, it’s all good. That’s not going to get us to done.

“The chief financial officer wakes up and says ‘here, regardless of my personal view, my fiduciary responsibility is to earn money for company X. How does this work exactly?’

Over the last decades, great intentions from the sustainability movement have lost ground to worsening global conditions. Reading through the history of, and monitoring the sustainability movement, I'm really disappointed and frustrated by how much religion and group-think spiritualism is baked into the culture of sustainability. And even more so, how much lack there is of habitually mapping "sustie" goals into the business case. A lack of business acumen is endemic to the movement as a whole. Pitching the religion of sustainability won't work enough, because business has no religion. Pitching global warming as a science never had a chance, because science can be debated ad nauseum until it's so obvious that it's too late. And it's just too distant sounding to resonate with business. Even at the personal level, most people operate financially within a window of time of perhaps a few days to a few months.

So it was very refreshing to hear someone of stature divulge the guarded secret of success to sustainability; the emerald gem hidden in plain sight. Systemic thinking means finding more efficiencies, which means less waste, which means less costs. And generally it means a better system, which increases revenue. A better place to work means better employees, more productivity and less turn-over. Increase revenue, decrease costs. Duh!

With companies like Google adopting green options and recognizing huge ROI in relatively short periods, it's only a matter of time before competitive pressures drive others to do the same. And btw, don't all public companies have a fiduciary responsibility to their shareholders to maximize profits, lest they encounter shareholder agitation?

Disclosure: no positions

Monday, November 3, 2008

Can coastal "dead zones" produce the next alternative fuel?

Since the 1960’s, the number of ocean "dead zones" has doubled every 10 years. As a lot of the ocean's sea life lives in coastal areas, this doesn't bode well for marine life.

But does this spell an opportunity for harvesting the next alternative energy source? In part, these dead zones are a result of nitrogen rich agricultural run-off, which feeds and makes phytoplankton proliferate, and ultimately die and sink to the bottom as organic matter. Could this massive amount of organic matter be harvested and converted into a viable bio-fuel source?

Mankind is essentially fertilizing the coastal waters. Not that this is a good thing, but could we take advantage of a bad situation by "farming" the resultant organic matter?

Disclosure: no positions

2009: Out with the iPhone, in with the Google phone

The iPhone is an example of a device built to give users what someone else wants to give them. For example, there is no substitute for a tactile keyboard, and the iPhone did not prove an exception. At a party I went to, a half dozen of us were talking about the iPhone, and it only took a minute to work into a group commiseration of the lack of a real keyboard. People hate the on-screen touch keyboard, and hey Apple, can you at least landscape the keyboard in all the important apps, like SMS?

I see iPhone losing its luster, and Android picking up steam for a number of reasons:

  • Android is an open platform
  • Android will run on a myriad of devices, giving people choices to buy one suitable to their needs
  • The very 1st Android platform has a keyboard!
  • Android devices will quickly be adapted to the preferences of users
  • The real money is in Android being a platform to offer targeted search and location based services, so the devices do not have to hold a substantial profit margin
Disclosure: no positions

2009 is the year of the Linux desktop (on netbooks)

It's been forever the Linux community's hope that Linux would make a big splash on the desktop, but that hope has not yet materialized. However the netbook category has created a new set of circumstances which has set up Linux to finally have a sizable presence on the netbook desktop:

  • Netbooks need to be inexpensive (currently $300 to $500); in fact that's their biggest draw
  • A proliferation of models from various OEMs/ODMs will drive fierce competition and razor-thin profit margins
  • In some cases, netbooks will be given away in return for service provider contracts (the mobile phone model)
  • Netbooks are largely Internet centric (web browser, IM, VoIP, web apps, ...) and thus don't have as much, the Windows application compatibility constraints
  • Netbooks tend to have smaller screens, making new UIs more compelling. This opens a path to disruption by Linux
  • Netbooks tend to have less resources than full notebooks, making bloatier software less compelling
  • Intel has created a Moblin ecosystem around Linux and the Atom processor line, and made it far easier to license proprietary codecs for Moblin compliant software stacks
  • Adobe has finally synchronized releases of Flash for Linux and Windows
  • Hardware vendors are pressured to open up or at least well-support their driver software for Linux, or miss out on the netbook market.

In light of this, Microsoft will likely have to reduce cost of XP (and Win7 moving forward) for netbooks, and/or move to a services model for netbooks where they don't charge (much) for the Windows image itself. Given the netbook usage model and Microsoft's move towards cloud computing, this may not be a bad model for Microsoft if they execute well, but it's definitely a departure from their current business model.

Disclosure: no positions