President Obama’s rhetoric and life beyond outsourcing

There seems to be widespread angst, especially in India’s business circles, each time President Obama steps up his anti-outsourcing rhetoric. Our software industry was quick to respond, crying foul after President Obama’s state of the union speech in which he said, “It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.” Not to be left behind, our politicians joined the chorus of disappointment. “Protectionism ultimately does not help the country that resorts to protectionism,” lectured our Finance Minister, Pranab Mukherjee.

Firstly, Obama’s anti-outsourcing job campaign was directed mainly towards manufacturing jobs that have migrated to China. While anti-outsourcing legislation might certainly affect India, the impact is likely to be far greater on the manufacturing sector than on IT services. To put things in perspective, let me recount an anecdote. A friend of mine who lives in Michigan said that a man approached him while he was mowing his lawn and asked him if he could work for him as his gardener. My friend agreed, and over time, got to know him better. It turned out that this man was a middle manager at one of the big car companies. He was in his mid-forties, had worked for over twenty years for the same car company, had two school-going kids, and had been out of a job for over six months. He had joined the company fresh out of school and had worked his way up to the middle management level. In other words, he had dedicated the best years of his life to the car manufacturing industry. After over twenty years of serving the company, he was laid off along with several colleagues, and as luck would have it, there were no matching jobs available in the area.

Click here to read the rest of the article in The Economic Times

 

Yahoo-Microsoft Battle Gets Interesting

Yahoo! is shooting in all directions hoping that something falls from the heavens. First it was Google, then it was News Corp., then it was AOL. In short, anyone but Microsoft. But as the deadlines nears and Microsoft and Yahoo try their best to outsmart each other, the battle lines appear to be re-drawn all of a sudden. The mighty News Corp. appears to have joined hands with Microsoft while Yahoo has teamed up with AOL and simultaneously announced an ad deal with Google.

At the moment though it looks like Yahoo will do a deal with any company that wants one! If you put the numbers aside, the Yahoo-AOL merger can be a good one. Both companies are quite lost and desperately in need of new direction. AOL more so, than Yahoo. An merged company with new leadership could keep Wall Street off their backs for a year and half at the least. This could give the companies’ some time to get their act together in the midst of the overall downturn in the market.

The Microsoft-News Corp. combination is bound to be hard to fend off. It would be sad to see Yahoo disappear to an acquisition (my earlier analysis not withstanding) . But at this point, the game is far from over. In fact, it might just be the beginning of a long battle provided Yahoo can turn in some decent quarterly numbers later this month.

Microsoft Home Server

It is amazing how things have changed over the years in the world of home computing. Computers have become ever more powerful. Dell (and other PC vendors) today sells a desktop for about $600 inclusive of a flat panel monitor, 160GB hard drive and 1GB of RAM. Microsoft Vista requires a minimum of 1GB RAM (this means you better make sure you have at least 2GB!). There was a time when you could not buy a monitor for the same price! 

Well, if you thought this was a big change. Enter the next phase — the home sever. Over 10% of the US population has over 4 PCs at home. If both husband and wife are working regular jobs, that usually means two laptops, plus a home computer for general use. One additional computer is not a stretch. This means you have shared internet access, hence a router, plus four computers, all in one home! It is not in the least bit surprising that Microsoft and its hardware partners are launching a home server to handle common tasks like backup, virus protection etc.

While this vision of a home network is a clear extension of the expanding home computing market, it does come at a time when the “Google vision” is one that is based on the concept of remote hosting. All vendors including Microsoft, Google, AOL, Dell and others offer remote storage and other similar services.

This does raise the question about what the best recommended approach might be for home networks. Years after the failed concept of the NetPC, the jury is still out on the best approach, except that it is now being applied to the home PC market. For now, it still looks like the Microsoft vision has the edge/lead until the dust settles on all the Web 2.0 technologies that promise to deliver a host of remote applications all available over the internet.

Perhaps its time for a new breed of independent “home networking consultants or sys admins for the home!” (if they don’t already exist).

Open Social: Google plays catch up!

Nice to see Google desperately trying to play catchup.

Facebook after a long period of being out in the cold, recently opened up its platform. Since then, it seems to have caught fire and today appears to threaten to Google’s (and all other social networks) bread and butter (Adwords) from a new unexpected direction. Google has had Orkut for years but has done little with it. It is slow and clunky and used mostly in Brazil and India.

On the other hand, over 5000 developers made their applications available through Facebook (don’t miss the hot “Techniq eLearning” application) and this list of applications continues to grow. Unlike Google’s conventional search play, Facebook has oodles of information about people, their social networks, like and dislikes etc. Having suddenly attracted a host of developers and end users, Facebook was now uniquely positioned to take on Adwords by selling adveristising. Thus, in a fairly short span of time Facebook stole a march over the one-dimensional social networking LinkedIns, Plaxos and the Nings of the world. However, things really got heated up after big brother Microsoft stepped in and bought a stake and did an advertising deal with Facebook.

Facebook started its advertising foray with simple “flyers”. Its kind of like a black hole. You create your an ad and pay for it, and Facebook displays the ad a pre-determined number of times. If someone clicks on your ad, consider yourself lucky. That was the start. Now Facebook has Flyer pro which follows a pay per click model. Clearly the sophistication (reporting and other bells and whistles are lacking) in Facebook’s ad platform. In fact even simple features like the ability to edit an ad once its created are lacking in Facebook. But its improving by the day. The best part about the newly introduced Flyer pro is that you can target ads based on a host of parameters like city, age group etc. Everytime you select one of these parameters the target number of users updates on the fly! This is very powerful when compared to what you can do with Google’s Adwords of today. Further, by partnering with Microsoft, Facebook has threatened Google where it could really start to hurt.

Enter Open Social. Its now all about democracy, a level playing field, mother of all APIs and what not as far as Google and other social network sites are concerned. As the NY times rightly put it Google and Friends are ganging up against Facebook before it becomes too powerful. For now, Facebook has a clear headstart. The Open Social idea does make sense in theory, however. As a developer I don’t need to port my application to each social network that comes along. But as an end user do I want every single social network out there to have access to all my private data?

Finally, there is a tiny window of opportunity to challenge Google’s virtual internet advertising monopoly (and GOOG topped $700+). The bad news is that a the monopoly from Redmond is the force behind this new challenge!

Microsoft ‘s Yahoo Acquisition Still Possible

With a $6B acquisition, Microsoft is significantly beefing up its online ad strategy. Although the rumors of the Yahoo acquisition having died down, the aQuantive acquisition just confirms the fact that Microsoft is looking very actively at various strategies to counter Google’s huge lead in the advertising space, before its too late. With Yahoo’s acquisition of Right Media and Google’s acquisition of Double Click, the online ad space is prime for some serious competition among the big 3 and the fast fading AOL.

The Yahoo acquisition is still very much a possibility for many reasons. (Not to mention, Yahoo now has a new CFO with deep ties in the banking industry).Yahoo is still the #2 player in the search space. With Panama, Yahoo has managed to ape Google’s Adwords to a great extent. Further, Yahoo still has a huge market of advertisers, second only to Google. If you disregard the overlap between Microsoft and Yahoo services, and look at only the search and advertising market, a Yahoo Microsoft marriage still seems a distinct possibility with plenty of synergy despite the aQuantive acquisition.

MS To Acquire Yahoo: Two “Search” Losers Make a Winner?

Google is growing from strength to strength. A lucrative advertising industry is at stake. Yahoo’s Panama might have been an improvement over what Yahoo had before, but its in no way strong enough to pose a challenge to Google. Besides with the recent management exodus, the peanut butter memo-gate, the none to impressive quarterly results, and a shaky top management, Yahoo has hordes of challenges at hand.

As for Microsoft, their search and advertising strategy is simply way behind. It is struggling to get a foothold in this space and with each passing day, Google is expanding its presence and reach, thanks to its growing dominance of the search market. For an advertiser, the default choice is to advertise with the network that has the greatest audience. Moreover, once you start using Google Adwords and get familiar with it, you need something more compelling to change. It is almost like Microsoft’s hold over the desktop but certainly not there yet. But unless, the Yahoo-MS move fast, Google is going to be even harder to dislodge from a potentially huge advertising market.

So do two losers in the search and advertising market make a winner? Probably not. But at least it will pose a bigger challenge to Google, provided they can get over the integration issues that are likely to come with so much product/service overlap.

Check out stories on this news in the WSJ and the NY Times.

Custom Home Furnishings

There was an article the Mercury News the other day about a home furnishings company by name Divine Designs. Its a great story about an Indian immigrant who was into Home Furnishings as a hobby. She started her business after she re-decorated her home with custom drapes and caught the interest of friends to start with and then slowly expanded beyond that rather organicaly. In the midst of all the conventional hi-tech stories that make the rounds in Silicon Valley, its great that the Mercury News has chosen to highlight an off-beat, yet fascinating success story.