Jacob Varghese

Hopeful, heartbreaking portrait of a Nation’s Remaking

2011-01-01T16:30:00.002-05:00

I loved this article....beyond the obvious accusation of condescension, it is a hopeful, heartbreaking story being played out a million times over everyday in India.

My favourite quotes
...
"Ravindra Misal rejected tradition to become that rarity in India: A Self Made Man"

"A generation being trained rather than educated. They knew nothing about industry, art, history, literature, science"

"Their heads were filled with SWOT analysis and ways to win friends and influence people, not with the tolerance of Asoka, the poetry of Kabir, the universalism of Tagore."

Worst case scenario for US: IRELAND!!

2009-04-20T01:49:00.006-04:00

Paul Krugman on Ireland

Let me also say that Ireland’s recent policy moves — raising taxes and cutting spending in the face of a severe recession, so as to reassure nervous lenders — are an extremely disturbing omen. Iceland was one thing; but now another advanced economy, with a 7-digit population, has hit the limits of anti-recession policy.

Click here for Krugman's NYT article

No bad politicians, only misunderstood voters

2009-04-17T04:10:00.006-04:00

I have never believed in this strange notion of "all politicians are bad", I believe it is always a case of where the true intent of voters is not understood.

A very interesting article by Madhav Raghavan based on a paper: "Public Disagreement" (Sethi, Yildiz), makes the that discussions and interactions among segregated groups could actually magnify initial biases. Especially when there are inherent bias shared in groups that are invisible or incomprehensible to external folks.

Madhav Raghavan writes

This is reflective of much of India’s caste-based politics, where leaders are able to unite a caste or sub-caste under one ideology, but in a manner that makes their collective views more opaque to everybody else. The Yadavs may unite under Lalu Prasad, but few who are not Yadavs may understand their motivations.

Sethi & Yildiz write

"Members of different social groups often hold widely divergent public beliefs regarding the nature of the world in which they live. Communication in segregated societes can cause initial biases to be amplified, and new biases to emerge where none previously existed."

Also check out Nandan Nilekani's opinion of caste based politics

Astrology vs. Rocket Science

2009-04-15T05:33:00.002-04:00

Who gains from Doha round and by how much,? Is it rocket science or astrology? Are the US bank bailouts trade distorting subsidies?

Read this article in Business Standard

Hoping for a crisis to reform!

2009-04-15T03:45:00.006-04:00

Ajay Shah' in this article: India in the Great Recession points out the industrial production growth is at its worst levels since 1993. In addition capital inflows are down, tax collections are down.

Yet private investments have been surging and today constitute a larger piece of the pie, compared to government and household sector, are also the most volatile.

According to Ajay any reversal in private investments, which is likely given the drop in production, could tip India into downturn similar to 1992-93. And given the weak state of fiscal and monetary mechanisms to counter the downturn, we could be in quite a "spot".

Given the surging private investments, Ajay Shah is almost hoping for a crisis that would kickstart the necessary reforms just like in 1992.

Economists on Indian Economy

2009-04-14T11:22:00.003-04:00

In a series of interviews Ila Patnaik talks to leading economists on India. Being an economist herself, the questions are intelligent with ample time to explore responses, where issues like quality of IIP data given its 1993 base are discussed in depth. I wonder what was the size and profile of intended target audience.

I am slowly making my way through them. But definitely a must see to get a quick handle on Indian economy.

Need for caste based politics

2009-04-13T14:24:00.009-04:00

As India prepares to elect its 15th Lok Sabha: "the biggest, largest political, democratic show in the world"; we will witness yet another spectacle, a tamasha and hopefully, a peaceful election of a new government in a country that is so uniquely...hmm...Indian.

As is often said, in India "we do not cast our vote; we vote our caste", elections will all be about herding the 3700+ "vote-banks" of religions, castes, sub-castes by scores of political parties into various permutations of coalitions to form a "majority" government. Indian politics is rarely about competition of ideas or issues or ideologies but a huge negotiating table with all castes/religions/regions represented based on their numerical strengths hoping to get hand on the various levers of state power.

Many would find this blatant deeply divided, splintered identity based politics appalling...I believe it is a step forward, where the elite have lost their monopoly control over the main political parties.

The intelligentsia's response to this is lot of hand wringing and self-loathing about "bad" politicians who exploit the illiterate and poor. The upper class elites who decry identity politics, also don't care to vote. At least they didn't have to. The upper classes/castes have managed to maintain their environmental privileges i.e. near monopolization of jobs, good (free) education, & professions.

Caste-based identity politics is not "bad" politicians taking advantage of illiterate rather represents a legitimate hunger & aggressive demand for equality, justice and freedom.

Even after decades of Independence, the caste you were born into determines your education, profession, income, quality of life and opportunities presented. And till recently the lower castes and less privileged have accepted the inequities as predestined "karma" most probably from previous births.

But since the 1990s, with opening of the economy, legacy of Mandal Commission, greater awareness and access to economic opportunities, "genteel" expressions of reform are being replaced by a more militant demand for change and reform.

And since power is never relinquished without a fight, the backlash to this movement is also equally gaining ground mostly in the form of radical, nationalistic Hindu parties. Demands for affirmative action & social justice is met with arguments of meritocracy, highlighting inequality is met with need for nationalistic spirit of unity, demand for religious freedom with fears of proselytizing and claims of "historical" wrongs, police brutality with need for security and war of terror, and when all else fails plain denial works just fine. Even today Indian census deliberately avoids gathering crucial caste/religion related data or in many cases just refuse to count key minorities.

India has a long road to reach the point where an individuals "karma" is not predestined at his/her birth rather a choice available equally to all. Rather than seeing identity politics as regressive, it should remind us of the inequalities. And till caste determines an individuals destiny, caste based politics will continue to play a big part in Indian elections.

The uniqueness of India is that this battle will happen using ballots and not bullets..mostly..hopefully!!!

My recommended reading...

Shakespeare & Banking Regulation

2009-04-13T04:12:00.003-04:00

[Via Dani Rodrik]

Dani Rodrik writes...

A single loan requires not one but two terms to be negotiated, and that one may become much more important than the other in certain situations was clear enough to Shakespeare four hundred years ago. Wrote Geanakoplos:

“Who can remember the interest rate that Shylock charged Antonio? But everybody remembers the pound of flesh that Shylock and Antonio agreed upon as collateral. The upshot of the play, moreover, is the regulatory authority (the court) decides that the collateral level Shylock and Antonio agreed upon was socially suboptimal, and the court decrees a different collateral –a pound of flesh but not a drop of blood.” Thus did the The Merchant of Venice end happily, not with a cramdown, but with very different terms if the loan were to be foreclosed.

[Via Economic Principals]

For at least a century, he noted, economists have been accustomed to thinking of the interest rate as the most important variable in the economy – lower it to speed things up, raise it to slow them down. Yet especially in times of crisis, collateral demands – alternatively, margin requirements, loan-to-value ratios, leverage rates or “gearing” – become much more important.

Central banks, therefore, should rethink their priorities. The Fed should learn to manage system-wide leverage, he said, reining in on it in ebullient times and propping it up in anxious times, in order to prevent the worst outcomes.

Kudos to RBI

2009-04-13T02:20:00.010-04:00

Economist article raises questions on RBI/Govt's stance on the need for foreign banks, at the same time one has to credit RBI for NOT being asleep at the switch. It had raised provisioning for real estate loans way back in Apr 2006. To quote then RBI governor YV Reddy:

"It’s based on the feedback that there was a tendency of multiple acquisition of houses by the consumers which was increasing the risk profile of both the banks and the consumers... If the real estate market improves by way of scrapping of Urban Land Ceiling Act, rent control laws and low transaction cost... then we may look at reducing the risk-weight of real estate sector loans.”

In contrast to Greenspan's reluctance to recognize asset bubbles, RBI had been very vocal about asset bubbles and the risks they posed to banking system. Yet even they thought "developed" countries would be less immune.

According to Reserve Bank of India (RBI) Deputy Governor Rakesh Mohan,

"The elevated realty prices along with non-transparency in the real estate sector may lead to an “asset bubble” and pose risks to the banking system. Moreover, real estate markets are characterised by opacity and other imperfections in developing countries. Such developments can easily generate bubbles in the real estate market because of problems in the elasticity of supply and information asymmetries.”

Even at the risk of giving into "consipiracy theories", it is difficult to ignore Simon Johnson's assertion that financial oligarchy in US led to the regulatory lapses and will block essential reform.

Religion of Free Markets

2009-04-11T16:43:00.007-04:00

Quotable quotes below from Dick Armey from Freedom Works that is organizing Tea Parties against taxes & bailouts.

Dick Armey:

"Markets will punish immorality"

"When you are dealing with the government, its like dealing with the devil, you're gonna be the junior partner"

No wonder right-wing folks also fervently believe in the Second Amendment, if you are going to trust markets to punish immorality, you better bear some strong arms!!

Bankers victim of predatory lending by Govt.

2009-04-11T08:45:00.008-04:00

[via Beat the Press]

Interesting headline raises the point about sanctity of contracts.

After the AIG fiasco, just when you thought things had reached the rock bottom, bankers start digging faster.

From the original NYT article

Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans. At a meeting last month, the chiefs of three of the largest banks separately asked Mr. Obama to direct the Treasury not to exercise the warrants, Mr. Fine said.

Bankers want to return the bailout money, to avoid excessive compensation caps and get this, government should make it cheaper for bankers to pay themselves more. Imagine Goldman trying to renegotiate its contract with Warren Buffet, claiming the conditions were "too tough" post signing the contract. I guess no harm in trying!! Dig away!!!

While it is easy to beat up on Bankers now, one cannot and should not expect anything other than self interested behaviour that responds to incentives. Just as "War is too important to be left to Generals", "Banking is too important to be left to bankers" hence strong regulation & oversight etc. etc. as much as one may cringe at the prospect, the only hope is politicians along with academic economists step up to the plate.

Ten principles for a Black Swan-proof world

2009-04-09T19:52:00.004-04:00

Initially I thought it must be me, unable to grasp the deep meaningful thoughts, cloaked in otherwise simplistic, vacuous, vague and obvious terms that Naseem Taleb uses to explain his "Ten principles for a Black Swan-proof world".

That was till I came across the first line on Taleb's homepage

"My major hobby is ... [to] get some entertainment & make a living out of the epistemic arrogance [or is it "ignorance"] of the human race."

Taleb's self description gets more entertaining with words & phrases like "how not to be turkey", robustify, fragilize, "pull tricks on reviewers", "a style that owes as much to Stephen Colbert as it does to Michel de Montaigne" (WSJ), Had Nassim Taleb been born in any other period, he would have certainly been put to death”, Carine Chichereau and "Please do not ask finance questions (not my specialty)"

Mechanism to scale rural innovations

2009-04-09T17:34:00.006-04:00

In a visit to India, Navi Radjou came across many "rural" innovations and wonders "Can they scale?". It is rather ironic that these are idealistic, romantic, "rural" innovators and NOT generic run-of-the-mill entrepreneurs out to make money.!!

I have little patience for such patronizing do-gooder's romantic pet projects that do not meet the simple test of markets i.e consumer acceptance and business viability.

Navi suggests "What is missing is a mechanism to cross-pollinate and scale up these bright ideas among India's 250-million-strong agricultural community which lives scattered across more than 600,000 villages"

The obvious answer has to be "THE MARKET MECHANISM". The perfect mechanism is "profit motive" combined with this strange and wonderful mechanism called "markets" that automatically connects to utility to consumers. Unless one can show market failure and/or social barriers. And if it works why leave city dwellers out of benefiting from these innovations.

The list of silly projects is long "Simputer", OLPC $100 Laptop, usually run by academicians, specialize in guilt tripping and clamour for government subsidies.

Tata's ADR premiums

2009-04-09T17:14:00.001-04:00

Ajay Shah points to ADR premium given the Nano buzz and rotation within automotive sector given Detroit's troubles

Ajay Shah's blog: Spike in the ADR premium for Tata Motors

I would be curious to analyze the individual company's reaction to these premiums. Infosys repeatedly sold into these premiums through local shares to ADR conversions. Does concentration of ADR holdings, strategic investor in ADRs etc. make a difference?

Conglomerate discount

2009-04-09T10:43:00.007-04:00

(Via Greg Mankiw)

In an article in WSJ Jeremey Siegel points to possible problems with the way S&P calculates P/E ratios. He later responds to critics in an article on Yahoo, in which makes an interesting point about "the sum of stock prices of 500 stocks must be worth more than "a single company with 500 divisions,". The logic here being losses cross boundaries within divisions with shareholders sharing combined losses, while in case of seperate companies, bondholders bear the losses. Since as per option theory "The value of a firm's equity can be viewed as an option on the total value of the firm, after the bondholders and other claimants have been paid. It is a fundamental theorem of option theory that the sum of the option prices on individual firms is worth more than a single option on the value of all the firms."

Taking the logic forward, what does that say about the value a company with multiple divisions...as per above it would depend on whether the management cross-subsidizes losses across divisions or if it sells of loss-making divisions at the value of the option the division represents. So greater the diversification among divisions lower the value or higher the conglomerate discount, unless the conglomerate is run strictly as a portfolio with high correlation among divisions.

Cycling back Jeremey Siegel's argument would depend on the correlation between the 500 components of S&P 500. So if you believe S&P 500 companies offer significant diversification, lesser the reason why you should treat it as "company with 500 divisions".

Recession talk-free zone!!

2009-04-09T09:17:00.001-04:00

Ireland's "Cheapest Bailout" turning costly

2009-04-09T05:38:00.007-04:00

Ireland's bank bailout was supposed to be the "cheapest bailout", according to Finance Minister Brian Lenihan. Obviously events since then have shown that the claim was premature and plain wrong. Things have continued to spiral downwards.

Given that past experience, Minister's claim "we don't need any bailout here" from EU for Irish economy is completely inexplicable.

As economists (Kevin O'Rourke & Barry Eichengreen) suggest there are essentially three ways out. 1.)Devaluation, 2.) Fiscal Stimulus and/or 3.) External bailout

1. Devaluation: It is not so much that Ireland should not devalue, rather that it cannot. As Kevin O'Rourke explains "devaluation [should be] unilaterally decided upon and announced under cover of darkness."... BUT "the technical and legal problems associated with switching from one currency to another are immense -- just think of all the planning that accompanied the introduction of the euro in the first place. Laws would have to be passed. Notes and coins would have to be produced. Somebody would notice."

2. Substantial Fiscal Stimulus: Peer pressure from EU membership and need to maintain euro membership means government cannot cut taxes or increase expenditure. Rather it has been forced to commit to cutting to deficits back to 3% as required by EU commission.

3. Bailout: That leaves the only option being fiscal transfers from abroad, equivalent of California getting federal stimulus. Parallels have been drawn between California given the property bubble and lack of control over its currency.

So it is strange to hear Brian Lenihan claiming no need for EU bailout. Rather he should be "shaming" EU into extending substantial support and shoulder the cost Irish population is paying to keep Euro afloat.

Kevin O'Rourke suggests stimulating a devaluation by cutting wages across the economy. Unless there is a mechanism to get free agents to act against their perceived interests or act in unison, this is equivalent of leaving the recovery to labour markets to correct, i.e. do nothing!!.

I guess it would be instructive to re-read Paul Krugman's article on Spain as it is very relevant here in Ireland.

Just discovered MIA

2009-04-08T17:25:00.008-04:00

I completely missed the whole MIA phenomena, I guess it was around Grammys; just discovered and "blown" away

I bongo
with my lingo
And beat it like a wing yo
To Congo
To Columbo
Can't stereotype my thing yo
I salt and pepper my mango
Shoot spit
Out the window
Bingo I got em in the thing yo
Now what? I'm doing my thing yo

Talking about inspirations check out Jimmy (In case you missed the original connection/inspiration)

London, tamil tigers, terrorism, politics, immigration, bollywood, rap, Africa; its all in there.

Her story from Wikipedia

When she was six months of age, her family moved back to their native Sri Lanka. Motivated by his wish to support the Tamil militancy on the island, her father became a political activist, adopting the name Arular, and was a founding member of The Eelam Revolutionary Organisation of Students (EROS), a political Tamil group that worked to establish an independent Tamil Eelam. Her alias, M.I.A., stands for both Missing in Acton and Missing in Action.

Because of the conflict, the first years of her life were marked by displacement. relocated to Chennai, Tamil Nadu, India, moving into a derelict house. Contact with her father was strictly limited, as he was in hiding from the Sri Lanka Army. Later resettling in Jaffna, the conflict deteriorated further, and the family once again tried to flee the island.She has stated that her school was destroyed in a government raid. Eventually she, her two siblings, and mother (Kala) moved back to London where they were housed as refugees.

M.I.A. gave birth to a boy on 11 February 2009,naming him Ikhyd Edgar Arular Bronfman, just days after performing at the Grammy Awards.

Finally!! A cure for happiness

2009-04-08T13:55:00.000-04:00

FDA Approves Depressant Drug For The Annoyingly Cheerful

Gaddafi: "Obama flickr of hope"

2009-04-08T03:00:00.004-04:00

A sign of times? Hopefully!!... when Gaddafi worries for Obama's life

"Obama is a flicker of hope in the middle of the imperialist darkness," the Libyan leader said, adding: "There is a fear that they would liquidate him as they liquidated Kennedy, Martin Luther King and Abraham Lincoln."

"He (Obama) speaks logically. Arrogance no longer exists in the American approach which was previously based on dictating to the rest of the world in order to meet its own conditions," Gaddafi said in the remarks carried by state media.

Our amazing capacity to hate

2009-04-07T03:46:00.005-04:00

I completely echo the Jug Suraiya's sentiment on our amazing ability to hate

Click here for VHP's website to see an example: "Pujya Swami Laxmananandji killed in a cowardly attack by Christians in Orissa". Not some criminals, not some murderers rather All Christians are responsible!!. And VHP is a not a fringe organization but plays a central role in Indian politics. And based on this allegation hundreds of christians were killed.

Will economists save the world?

2009-04-07T03:14:00.008-04:00

Barry Eichengreen and Kevin O’Rourke in this article write that the world is doing as bad as the 1930s Great Depression so far. In response to Eichengreen and O’Rourke's scary paper, Paul Krugman writes

"the only thing standing between us and Great Depression 2.0. It’s only to the extent that we understand these things a bit better than our grandfathers — and that we act on that knowledge"

Hopefully the economists understand and politicians will oblige, while the rest of us quiver in fear

"The poll found that 70 percent of respondents were very or somewhat concerned that someone in their household would be out of work and looking for a job in the next 12 months."

and hope for the best from Obama...

"For all that, the number of people who said they thought the country was headed in the right direction jumped from 15 percent in mid-January, just before Mr. Obama took office, to 39 percent today, while the number who said it was headed in the wrong direction dropped to 53 percent from 79 percent. That is the highest percentage of Americans who said the country was headed in the right direction since 42 percent said so in February 2005, the second month of President George W. Bush’s second term."

No Guantanamo in India

2009-04-06T03:19:00.002-04:00

Kasab the Mumbai terrorist who killed 180 stands trial.

Kasab made a plea to speak to his lawyer Anjali Waghmare, who was appointed by the special court last week. He was granted permission to do so by Special Judge M.L. Tahilyani.

Kasab is a coward, Anjali is the hero(ine)!!

Petraeus: "Pakistan could be facing internal collapse within six months"

2009-04-06T02:46:00.005-04:00

Dire assessment of Pakistan in NYT today.

For an alternative perspective to Pakistan being a failed state, click here to read Wajiha Ahmed's second take on Long March. Pakistan is a country fighting itself, a fledgling democracy bravely figthing to survive. To quote Wajiha:

But Pakistani religious parties (JI, JUI) are more similar to some factions of the BJP or Shiv Sena in India than they are to any militant terrorists in FATA and Swat. And just to emphasis, they have never received more than 14% of the vote and lost the 2008 elections.

But democracy is not an event, it is a process. Therefore, rather than being reported with cynicism, this important civil disobedience movement should instead have been encouraged and celebrated. In the past year, Pakistanis have successfully forced out a military dictator (Musharraf) AND compelled an authoritarian leader (Zardari) to listen to their voices – a rare, uplifting story in these trying days.

Dire assessments were made of India's breakup, throughout its history, check out

India After Gandhi: The History of the World's Largest Democracy

Big B's Bizzare Blogpost

2009-04-05T08:39:00.010-04:00

The story begins not too long ago...

In the begining Big B is "misquoted" in the media as trashing Slumbog Millionaire for its depiction of poverty. Without full facts Jug Suraiya in his column picks on Bachchan and "people like Bachchan" while making his point about recognising reality of poverty in order to obviously state the obvious.

But along the way he calls BigB's daughter-in-law a "manglik" (some rumor about bad inauspicious astrological mumbo jumbo), accuses "people like Bachchan" of being "culpable...in the continuance of poverty, and makes references to flatulence, passing wind, incest and family secrets

That sets the stage for BigB to make his entry and respond through his BIGADDA blog. The blogpost is angry, falsely modest, long, with meaningless interludes and dramatic emotional rhetoric. Just like a true BigB movie.

Below is my "slightly" faithful summary of Big B's argument....

--------------------------

I am but a small and insignificant metaphor in this huge ocean of knowledge and principles.

There is an odious culture that has given to lacerate and destruct the very existence of those that have through hard and difficult labour, earned what in my most modest disposition, can be termed public celebrity, which only exhibits how dubiously one could destroy individuals, with malicious bias.

I shall make myself literate enough to challenge any personal unjustified and prejudiced accusation. If you shall abuse me unjustly, I shall not hesitate to pay you back justly !! In a free society there cannot be a select community that shall have the liberty and protection of passing judgment without answerability.

I accuse the journalist Jug Suraiya of a rare episode of sheer cerebral inertia. Two journalists sparked this ‘hoo-ha’ (by) both brazenly cut and pasted passages from my Blog into unrecognisable gutter-press filth.

As (to) the marital disposition of my daughter-in-law as ‘manglik’ is disgusting. I came in person to you, at my own instigation and of my own volition. I confronted your entire editorial staff in your offices , after I had presented a faithful account of the private events surrounding my son’s marriage.

My wealth is not shameful. I am not ashamed of it.

He may turn up his nose at my commercial endorsement of ‘the world’s most expensive suiting material’, but I am proud to represent such a fine example of India’s great industrial heritage, that of the production of textiles. I refuse to be considered by his ilk as a specimen of ‘dirty laundry’ that must be ritually beaten clean, with my fellow citizens as witness.

Here I accuse Jug Suraiya of a pauperised conception of poverty. I am not splitting hairs here: ‘poverty’ ceases to be a useful word unless it is carefully defined. Come to think of it, any other view manifests a form of aesthetic poverty. Add it to the list of possible poverties a human being may suffer.

Please refer to Amartya Sen’s great book, ‘The Argumentative Indian’, and find that if you disagree with him, then you make his point in the process. May I also remind him as well that I defend until (his) death his right to disagree with me.

I argue that India needs more wealth. Hope is not the point. The point is the binding nature of an oath. Jug Suraiya has lost sight of the global industrial context and commercial meaning of SM, which surely have some measure of relevance on the subject of India’s material wealth prospects, and hence its correlative poverties.

SM is a deeply symbolic foot through the cinematic door into the vast domestic Indian market by the Western film industry. Why else would Hollywood have been so wildly ecstatic about a small budget British outfit with American funding? It is time for Jug Suraiya to wake up and smell the Starbucks.

It is the common ‘disease’ rife amongst the so-called ‘urbangentsia’: that of neurotic self-referentiality. At its worst, this self-referentiality is infested with effete self-loathing, born from that kind of masochistic conscience possessed by the culturally decadent, infected with the hypocrisy and self-righteousness of a self-styled elite who confuse their own egoism and class prejudices with genuine social conscience.

I contend that merely acknowledging how culpable we all are in the continuance of ‘disowned [material] poverty’ and engaging in some ritual hand-wringing is about as useless as all his publicly aired gastric wind. That your own esteemed associate editor, Jug Suraiya, has himself fallen victim to Media propaganda, is an indictment of its wild intoxications.

After all, Jug Suraiya may find his greatest talent yet - and even relief - in the rolling up of sleeves and the digging of new sanitary facilities with his own hands. He could not only do with some such facilities for his own scatological literary tropes.

I offer my humble apologies to the author if I fail to adequately paraphrase him but I am confident enough that I have not misunderstood his point.

-----------------------------------

I do not know if it is just me, but I am still rolling on the floor LOL!!!

In the end there is an interesting point Big B makes about "the cultural bias towards foreign representations of India’s identity, privileged above our own" which inspite of everything written above is heartfelt. I only wish he would have made it in a way that made sense!!!

Oooh! It is a beautiful day

2009-04-04T07:47:00.000-04:00

Beautiful sunny day in Dublin

2009-04-04T07:33:00.001-04:00

St. Patricks parade in Dublin

2009-04-04T06:51:00.001-04:00

Mamma's boys (sic)

2009-04-04T03:22:00.002-04:00

Not all Indian males are Mamma's boys ! but enough jokers exist for one NY Times story.

Aravind Adiga in Dublin

2009-04-03T12:56:00.004-04:00

Heard Aravind Adiga on Radio today. Truly refreshing to hear a confident genuine Indian accent. Few quotes (as I remember)

"Ashrams and Yoga are the Disney version of India. Nobody in India is into ashrams, yoga and spirituality. Truly spiritual thing about India is men taking their destiny into their own hands and shaping better lives for themselves"

"India traditionally has had very low crime rates, the lower castes/classes meekly accepted their plights, but with education and great awareness through media, things are going to get worse". ( I totally agree, India is in huge denial when it comes to its casteism problem.)

I resisted reading "White Tiger" for sometime given media blitz but was hooked from the first page finished it in one long plane ride. Among the very few books that speak to the truth of contemporary India. It truly describes the cruel reality of Indian existence in a honest way. Nothing romantic about India, nothing redeeming about any of the characters. Just the reality of things as they are, and it is painful.

Academic Promotion Systems

2009-04-03T11:27:00.003-04:00

It truly is scary how mediocrity & bureaucratic red tapism can become self sustaining within organizations. Read this article to see how this draft UGC (University Grants Commision) proposal for promotions within universities, actualy discourages genuine quality research publications. The scary part is that UGC sets standards for ALL universities across India.

Even private organizations could easily read this document to see many aspects of their own performance and promotion systems reflected in here. I sure there is a Dilbert cartoon for this.

India in G20

2009-04-03T05:41:00.004-04:00

Hu Jintao wanted a world currency. Sarkozy wanted more regulation and an international regulator. Merkel opposed additional fiscal stimulus. Medvedev was re-seting Russia-US relations.

And Manmohan Singh wanted Obama's autograph!!

Listening to Manmohan Singh's press conference later it seemed we were glad that we were invited and that in itself was an achievement.

I am sure we could have done better. Protectionism and IMF reform were items we could have championed publicly. Atleast got the PR right. But I guess with elections back home, really, who cares about a "fancy" global financial meltdown. We truly have bigger issues to worry about.

Visit msnbc.com for Breaking News, World News, and News about the Economy

Orphans of Ireland

2009-04-02T03:32:00.002-04:00

Interesting article on where Ireland finds itself today. It is a strange amalgmation of European & American ideals/ideas. Sometimes I think the Irish have it backwards: when it comes to "pop culture" it is closer to America and in "economics" it is European. Ideally it should be the other way around.

Lessons from the New Deal

2009-04-01T14:57:00.005-04:00

A very clear articulation of the economic history of depression era and lessons (hopefully!!) learned from Christina Romer Chair of Council of Economic Advisors to President Obama.

To quote Economist "Christina Romer... is very fun to listen to. She provides an extremely cheery account of the policy failures and successes of the 1930s."

In addition I would recommend Paul Krugman's "The Return of Depression Economics" to understand global crises since Depression.

Nandan "stepping up"

2009-03-17T14:08:00.009-04:00

It is very interesting to note that Nandan (Co-Chairman of Infosys) links to a scathing Atlantic Monthly article on Narendra Modi and critices Mayawati & BJP for their divisive politics.

While most captains of industry generally tend to stick to broad obsequiousness, atleast publicly, when it comes to policitians it is refreshing to note that somebody is standing up. Even though it suspiciously coincides with his US book tour. Nothing like a little controversy to get a promotional book tour going!!

While the cynic in me notes that Congress party is missing and thus signalling his political ambitions or at least a bias or hopefully it is a genuine appeal for tolerance and for leaders with "Universal Appeal", and if that is too much, atleast lets have status quo and ineffective coalitions.

And it is about time. The ugly speech by Varun Gandhi deserves stronger language and any person with any conscience and voice has to stand up and speak. The sheer irony of Varun speaking of "cutting necks and hands" when his mother Menaka Gandhi is the biggest champion against cruelty towards animals. This is just the tip of the growing intolerance against so called “western values”, “Christian conversions”, “muslim terrorists” & “lower castes reservations”.

While it has been always been assumed that China will have the rockier path to being a modern, developed, democratic society; I believe it is India that has bigger demons to exorcise before it reaches the goal of modern tolerant genuinely democratic society.

Review of banking crisis from "doer of deeds"

2009-03-14T07:35:00.004-04:00

Jamie Dimon quotes Teddy Roosevelt

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."

Moment of Zen

2009-03-05T14:14:00.003-05:00

It is easy to stand on the sidelines and take cheap shots in hindsight, but by God it is funny.

The Daily Show With Jon StewartM - Th 11p / 10c

CNBC Gives Financial Advice

Daily Show Full Episodes
Important Things With Demetri Martin

Political Humor
Joke of the Day

Keep the foreigners out, unless they want to die!!!

2009-02-15T12:40:00.013-05:00

Somedays the world just makes less sense

GLOBAL UNEMPLOYMENT IS A HUGE THREAT!!...

Job Losses Pose a Threat to Stability Worldwide
Just last week, the new United States director of national intelligence, Dennis C. Blair, told Congress that instability caused by the global economic crisis had become the biggest security threat facing the United States, outpacing terrorism.

...SO LET'S HIRE FOREIGNERS TO FIGHT IN IRAQ...

U.S. Military Will Offer Path to Citizenship
Stretched thin in Afghanistan and Iraq, the American military will begin recruiting skilled immigrants who are living in this country with temporary visas, offering them the chance to become United States citizens in as little as six months.

BUT DON'T GIVE THEM THE JOBS AMERICANS WANT...

(Computerworld Article)
"A provision intended to require banks receiving federal bailout funds to give hiring priority to U.S. workers over foreigners with H-1B visas was left in the economic stimulus package when U.S. House and Senate negotiators agreed on a compromise bill this week."

EVEN IF IT MAKES LOTS OF ECONOMIC SENSE

The Cheapest Bailout: Thomas Friedman, NY Times
“All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”

“Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”

For a "civil" society

2009-02-14T02:50:00.006-05:00

Never felt so patriotic. Support the The Pink Chaddi Campaign. It is about equality, it is about dignity, it is about freedom. It is about my daughters.

Obama: The Poetry

2008-02-05T12:06:00.003-05:00

HOPE: Obama wins

2008-01-04T10:12:00.000-05:00

It is rare nowadays when one feels hope, it is difficult to rise above one cynicism & indifference towards riots in Kenya, murder in Pakistan, deaths in Iraq, SUV driven petro dollar funded terrorism, pollution, global warming...

But today was different. Barack Hussein Obama won!!

Father is muslim from Kenya, grandfather used to herd sheep, mother from Kansas, studied in Indonesia, smoked cocaine, opposed Iraq war, went to Harvard, teaches constitutional law, speaks the truth and speaks well.

I have a man crush on this guy. Strongly recommend his first book "Dreams from my father".

Amazing this happen in a democracy. I am currently reading the book "India after Gandhi" (Ramchandra Guha). Recommend that to feel hopeful about India.

'Free trade' and 'freedom of movement'

2007-03-09T00:10:00.000-05:00

Bill Gates calls for infinite visas to fill the 'critical shortage' of high tech workers in US. Greg Mankiw's blog post has on this has attracted the expected spectrum of opinions on this issue.

Unfortunately the spectrum does not go wide enough to cover complete 'freedom of movement' for all people across national boundaries. While restrictions on movement of capital, goods, knowledge are rapidly reducing, existing barriers on free flow of labor does retard our march towards the overall goal of "global economic integration and interdependence" for everyone's benefit.

Clearly labor markets are getting integrated using Interent ( where services can be provided from a remote location ) and the trend towards temporary and short term labor mobility replacing permanent migration.

All this means countries that choose to isolate themselves from these integrated labor markets should be ready to pay a price for that choice

Tough Interview

2007-03-08T08:35:00.000-05:00

More often than not interviewers on Indian Television are servile, squeamish, hagiographical when it comes to politicians, powerful bureaucrats, and big-successful businessmen.

Here is an exception...Udayan Mukherjee on CNBC interviewing Kamal Nath, questioning him on the government's moves to control cement prices. I wish we had more of this.

Good show... Udayan.

But the question still remains: Why is Government targeting cement companies...

is it because mid last year cement companies reneged on their promise to reduce prices

or is it a surgical move to burst the real estate bubble

or a fear of cartelization since 40% of capacity is owned by the top 4 players

or if this was indeed a move to counter inflation it has clearly backfired as cement companies hiked prices in defiance

I hope this is as Surjit Bhalla says a sign of the rise of markets and decline of dangerous "populist" politicians used to passing on orders of the high command.

Clearly politicians and media owe us better answers and insights

Why God exists??

2007-03-08T00:22:00.000-05:00

A fascinating article in New York Times titled "Darwin's God" By ROBIN MARANTZ HENIG, March 4, 2007 :

In the world of evolutionary biology, the question is not whether God exists but why we believe in him. Is belief a helpful adaptation or an evolutionary accident?
there seems an inherent human drive to believe in something transcendent, unfathomable and otherworldly, something beyond the reach or understanding of science.
Scientists studying the evolution of religion agree on one point that religious belief is an outgrowth of brain architecture that evolved during early human history. What they disagree about is why a tendency to believe evolved, whether it was because belief itself was adaptive or because it was just an evolutionary byproduct, a mere consequence of some other adaptation in the evolution of the human brain.
Evolutionary Byproduct
Hardships of early human life favored the evolution of certain cognitive tools, among them the ability to infer the presence of organisms that might do harm, to come up with causal narratives for natural events and to recognize that other people have minds of their own with their own beliefs, desires and intentions. Psychologists call these tools, respectively, agent detection, causal reasoning and theory of mind.
Agent detection evolved because assuming the presence of an agent — which is jargon for any creature with volitional, independent behavior — is more adaptive than assuming its absence.
It means our brains are primed for it, ready to presume the presence of agents even when such presence confounds logic.
The human brain has evolved the capacity to impose a narrative, complete with chronology and cause-and-effect logic, on whatever it encounters, no matter how apparently random.
Gods, by virtue of their strange physical properties and their mysterious superpowers, make fine candidates for causes of many of these unusual events.”
Belief in the separation of the body (the visible) and the mind (the invisible). If you can posit minds in other people that you cannot verify empirically, suggests Paul Bloom, a psychologist and the author of “Descartes’ Baby,” published in 2004, it is a short step to positing minds that do not have to be anchored to a body. And from there, he said, it is another short step to positing an immaterial soul and a transcendent God.
Evolutionary Adaptation
Intriguing as the "byproduct" logic might be, there is another way to think about the evolution of religion: that religion evolved because it offered survival advantages to our distant ancestors. This is where the action is in the science of God debate, with a coterie of adaptationists arguing on behalf of the primary benefits, in terms of survival advantages, of religious belief.
Religion made people feel better, less tormented by thoughts about death, more focused on the future, more willing to take care of themselves. As William James put it, religion filled people with “a new zest which adds itself like a gift to life . . . an assurance of safety and a temper of peace and, in relation to others, a preponderance of loving affections.”
The advantage might have worked at the group level too, with religious groups outlasting others because they were more cohesive, more likely to contain individuals willing to make sacrifices for the group and more adept at sharing resources and preparing for warfare.

Amartya Sen and IT Industry

2007-02-26T11:21:00.001-05:00

Giving the keynote address at the NASSCOM 2007 India Leadership Forum in Mumbai on 7 February 2007 Amartya Sen talks about the moral imperative for the IT sector to feel some responsibility towards making India a more equitable country

My point is not that the IT industry should do something for the country at large, for that it does anyway... rather, is that it can do even more, indeed in some ways, much more.

Why assume there is any obligation at all for IT to do anything other than minding its own business? I think part of the [reason] for human interest in justice and equity...lies in reciprocity....

IT has benefited from

...the visionary move, originally championed by Jawaharlal Nehru, to develop centres of excellent technical education in India i.e. IITs, IIMs.

...the nature of Indian society and traditions [that] have tended to support the pursuit of specialized excellence

...a general attitude of openness in India to influences from far and near - of admiring excellence no matter where it is produced.

...the love of mathematics that has inspired so many young Indians throughout history,

...many ways Indian IT has depended on what we can call TI, that is, "talkative Indians."

Gary Kildall : A good life !?

2006-08-15T12:56:00.000-04:00

As the popular press celebrates the 25 years of PC revolution, and recounts the PC stories where the heros are Bill Gates, Steve Jobs, Michael Dell etc., it is also important to remember Gary Kildall who could have/should have been where Bill Gates is today.

I came across this article about Gary Kildall, head of Digital Research and who wrote CP/M operating system. According to article/legend when IBM came knocking for an OS to run its PC, Kildall was of flying his aerobatic biplane, and left his wife Dorothy to do the talking who in turn was too hassled planning for vacation to take the IBM proposal more seriously.

The article quotes former CEO of Symantec Gordon Eubanks: "Gary could have owned this business [ie, computing] if he had made the right strategic decisions... He did not care that much. Dorothy ran the business and he ran the technical side, and they did not get on."

Article goes on to mention : "Kildall died in 1994 at the age of 52 from injuries received in a biker bar brawl during a night out in Monterey, California."

A more sympathetic story in Dr. Dobb's journal mentions the cause of Kildall's death as falling from a ladder in the bar. The story refers to Kildall as an academic type who cleared the path on which Microsoft flourished.

He starts of happy, a laid back academic -- "Gary was happy in his marriage, happy to be living by the ocean, happy not to have gone to Vietnam, and most definitely happy in his job". -- whose accomplishments though path breaking was overshadowed by the success of Microsoft "his resentment of Bill gates was inevitable" but "never expressed publicly"

He did become wealthy by selling his company to Novell 1991.

Gary then moved to the West Lake Hills suburb of Austin, Texas. The Novell deal had made him a wealthy man. His Austin house was a sort of lakeside car ranch, with stables for 14 sports cars and a video studio in the basement. He owned and flew his own Lear jet and had at least one boat

A great quote from Tom Rolander's eulogy at Kildall's funeral " ...It was then that I learned that computers were built to make money, not minds."

In some ways every competitor to Microsoft has been a repeat of the Kildall story. Kildall was passionate about software, Bill was passionate about the "business of software".

Everyone is a hero, depending on your perspective.

Gordon Eubanks sets the record right about the MS deal with IBM in this interview. (very interesting reading)

Norlin's Maxim & Digital Footprints

2006-08-10T12:55:00.000-04:00

AOL's accidental release of the search records, while giving an interesting peek into private livesof its users, is another proof of Norlin's" Maxim: that "The internet inexorably pulls information from the private domain into the public domain"

Inspite of Norlin's Maxim, enterprises are clearly duty bound to treat users/customer's digital footprints with same level of care as they would treat their credit card numbers. I don't think I am comfortable with AOL/Time Warner having any such data in its possession in a manner that is potentially accessible to someone/anyone. My identity and my digital footprints should be inaccessible to anyone that includes people within organizational boundaries.

Digital lifestyle does leave footprints, your entire life is being recorded. Here is interesting article that appearded on this issue: "Beyond the question of informed consent lie larger questions: Should all of this electronic flotsam and jetsam be archived in the first place? What are the consequences for us if our digital footprints survive indefinitely? Who should decide whether they do survive?

IBM is Legacy, Infosys is the future

2006-08-06T10:13:00.000-04:00

It's been interesting to see the reaction to Chidamdaram's (Indian Finance Minster) comment "IBM is legacy, Infosys is the future,". Beyond the sheer immodesty of comparing a $90 billion American/Computing icon to an $2 billion Indian firm, the reactions have generally been dismissive ranging from denial, shock, angry, patronizing.

IBM has transformed itself before; it could and most probably will transform itself again. Clearly IBM has woken up to Indian skills and it is re-organizing itself coupled with $6 billion investment over next 3 years , and few would dare to bet against IBM. Yet till it successfully achieves this gut wrenching transplantation/transformation, I guess it is fair to call IBM legacy.

Stephanie Moore of Forrester Research in her latest report points to some reasons why Chidamdaram might be right.

Open Source & Open Innovation (Cont'd)

2006-08-04T02:54:00.000-04:00

Below are reasons why IT services firms will begin to look beyond supporting third party open source communities and instead will look at open source as way to enable rapid innovation, rapid diffusion and market acceptance of those innovations.

Overcome Frontloaded Investment Model

Major successful open source communities represent cumulative effort running into billions of dollars. Many IT service vendors would abandon pursuing such opportunities due to capital constraints and risks involved.

De-risk early adopters

Open source reduces risks for early adopters, which is especially important for enterprise IT customers. Enterprise IT customers are among the most risk-averse. They assiduously avoid building in any dependencies on specific IT service vendors. Open source model allows them access to source code and any derived work or modifications can used under the same terms as the original work.

Software especially un-proven, "innovative" code needs to be observed to make sure it performs the desired operation without undesired side effects. Using software means placing an enormous amount of trust on the IP provider’s intentions, capability and future roadmap and viability. Making source code available mitigates a significant amount of these risk perceptions in an effective manner. Clients can now maintain independence from vendor in the event of technical difficulties and/or bankruptcy of the software vendor.

In-Built viral marketing model

General Public License (GPL) and similar licenses guarantees your right to share and change software. This encourages developers to share their work and modifications. Key strength of OSS is the ability to customize to satisfy heterogeneity of demand. By creating, building and maintaining external communities, the firm can now engage in serious, in depth discussions with influential individuals, companies & organizations. This puts the firm in a position to demonstrate leadership & vision and enable us to influence the direction and structure of the competitive landscape.

Network Externalities & Complements

By being the first mover in the market, a firm can “cross the chasm: and build a large user base, leading to network externalities especially if the innovation can act as a platform on which others can innovate upon. But the biggest gains come from reputation of being a thought leader and building relationships with the most likely early adopters who will reveal themselves as participants in the open source project.

Network externalities manifests itself in multiple ways 1.) New users are always influenced by what previous users have chosen, 2.) Early entrant in market can acquire superior reputation, capabilities, alliances & resources 3.) Having one's innovation accepted a standard in certain situations may lead to user lock-in 4.) Tap into ingenuity of outsiders to develop complements on the firm's IP. All of these increases the value of underlying innovation to the market and hence higher the chances for making money.

Open source community can now supplement a company's sales force as a lead generator and an effective channel to push IP assets that then generates demand for high margin services. Incubation & stewardship of successful open source projects can act as an inexpensive (based on opportunity cost of status quo) reputation building tool to extract higher margins. Being the gatekeeper of the open source projects can act as a sustainable competitive advantage.

Open Source & Open Innovation

2006-08-04T00:11:00.000-04:00

Traditionally open source has been seen as an community based software development model which was an alternative to more structured development methodologies. Today "open source" from its origins in utopian ideas of free & open software movements, has morphed into a deadly weapon that is tactically used for larger strategic objectives. Significant number of programmers, who are part of the open source movement are paid to do so and not necessarily doing so as hobbists, amatuers or for other altrustic purposes. Large corporations have usurped the open source movement to commodotize competition and/or increase adoption of complementary offerings by offering it free.

[Complements: Bread & butter are complements, so if price of bread goes down (becomes zero/free) and demand for butter goes up]

Clearly few independant developers would want to be willing participants to such shenanigans given that increasingly objectives of more successful projects are for a for-profit organization for private returns. So the point I am getting to is this: Open source is becoming less & less of an altruistic alternative development model and increasingly become the mainstream ADOPTION model for profit-oriented corporations. And there is nothing wrong with that.

What software companies in the open source space aim to achieve and more likely to get are groups of early adopters and dedicated users, who can act as highly informed and credible validators, some of whom could contribute code. More simply companies will aim to create a market for an innovation that was not their earlier.

My argument is that open source will evolve as a robust business strategy where software and services are complements. With the growth of services, software will increasingly become "freer" and companies will resort to open source. R&D invesments of services companies result in IP assets that are complementary to services and rapid diffusion of IP assets using open source will generate demand and reputation for associated consulting and application development and support services. The primay goal is to increase the number of potential customers/market for the innovation then use their superior strengths in service delivery to monetize the innovation. Beyond monetization & business models open source is a compelling model to benefit from innovation that happens outside the firm also referred to as the "open innovation" paradigm.

It's official, its mainstream & its called Crowdsourcing

2006-07-22T08:59:00.000-04:00

Open source paradigm now moves beyond building software, to building anything or atleast many things. Check out Crowdsourcing

Something business will clearly have to look closely at and see what it means for them and how to leverage it.

Invention & Innovation

2006-07-22T02:28:00.000-04:00

Invention is the development of a new device, process or method. Innovation is when the invention succesfully meets a market opportunity.

From the mythical days of lone inventors Ben Franklin, Wright Brothers, Edison, Alexander Bell etc. to mammoth R&D labs of large corporation like Xerox, IBM a single entity whether an individual or corporation could "innovate" if it owned the invention.

But things are changing as barriers to acquiring knowledge across the globe fall, ability of anybody anywhere to create new connections, new knowledge and hence "invent" constantly rises. Invention always a stochastic process is not something large R&D even with billions of dollars can now hope to control and own.

As Chesbrough points out "the old 'closed innovation' model-vertically integrated research-and-development departments that develop technology in-house for the sole use of their corporate parent-is becoming obsolete "

“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.”

Invention is not the sole domain of a few subject matter experts, scientists, or technical folks; users and customers are also participating as individuals and more importantly co-create their experiences as part of communities.

P&G gets this phenomenon and is captured in its Connect & Develop Innovation Model

Open Source movement in software is the most visible example of this paradigm. Ron Goldman & Richard P. Gabriel's book "Innovation happens elsewhere" explore this phenomenon. But their book should have been more appropriatly titled "Invention happens elsewhere, but Innovation (hence profits) should happen here"

So how should firms and their R&D departments respond and see this paradigm as an unprecedent opportunity to deliever superior experience to their customers.

Coming up...stay tuned...

Appropriating value from innovations in IT Services

2006-07-06T09:16:00.000-04:00

Over next couple of posts, I would like to explore the subject of extracting value from innovation in IT services industry. I believe this is an extremely interesting problem.

In summary:

Unlike pharmaceuticals, biotech, microelectronics, chemicals; IT Services industry structure provides a “weak” appropriability regime for innovation. Patents, copyrights, secrecy etc. do not provide effective models to protect innovation from imitation by clients, competition and/or software application vendors.

In addition IT services firms rarely possess any “special” synergistic superior complementary assets for extracting value, rather it's salesforce that is "partner-led" or high touch account managers have very limited reach and associated overhead costs makes wider selling & marketing very costly & difficult.

Obviously I am ignoring innovations where value extraction can be achieved by spinning of subsidiaries, selling or licensing the innovation. In most cases R&D and innovation plays a critical role of signaling superior capabilities to prospective and current clients, thus playing a critical role in “premium rate justification”

Hence in general I believe IT services firms will move towards an “open innovation” paradigm by leveraging open source based business models to extract value out of technology innovations.

It's not the method(-ology or tools), it's the mindset

2006-07-03T03:55:00.000-04:00

On a recent roadshow I had the opportunity to visit and talk about innovation & research to IT leadership teams of some of the biggest/well-known corporations in US. Sadly most enterprise IT folks viewed innovation as mere application of new technologies, widgets etc. i.e SOA, BPM, Mobility. IT management practices in itself are rarely viewed as a source of innovation or catalyst to "business innovation".

Successful examples of truely innovative companies like Wal-Mart, Dell, Toyota, Progressive (Refer to HBR article "Deep Change: How operational innovation can transform your company") exemplify how IT can be exploited to achieve breakthrough business impact. IT leaders are supposedly in a unique position to champion this form of operational innovation. They have the broad top-management org-wide view of strategy, in addition are connected intimately with the nuts and bolts of key organizational & operational processes. Unlike HR or accounting leaders who might be constrained by their functional views & reach within the organization, IT managers have the resources and relationships to affect broad change and innovation. I have always held the view that IT function can be as good a breeding & training ground for general management leaders as finance, marketing functions.

YET, IT leaders are struggling to gain credibility, struggling to go beyond organizational cultures that devalues information technology. Worse many have abdicated the responsibility and instead of stepping up to the leadership challenge, view themselves primarily as a support/enabler function.

I believe it is this dangerous self-perception of IT as merely a support function that leads to some very dangerous trends of bureaucratic procedures, obsession with new technologies, us vs. them divide. Even the some of the popular industry language perpetuates this mindset i.e. "busines-IT alignment", as-if business (them) & IT (us) are different in the first place. Nobody talks of "business-marketing" or "business-finance" or "business-accounting" alignment.

IT leaders clearly have to step up and view themselves NOT as just supporting operational processes, but step up and show leadership in achieving operational innovation through effective & innovative IT management.

"Doughnut effect" in Enterprise IT

2006-02-19T08:35:00.000-05:00

For decades enterprise IT was the queen bee around which all cutting edge technologies were developed. But just like many cities in the United States were subjected to the “doughnut effect”: the city centre becomes “hollow” as population moves from inner suburbs to the outer suburbs in search of newer, larger or more affordable houses, enterprise IT is going through a similar hollowing out effect.

Consumers & Clients drive technology choices

Today consumers external to enterprise boundaries have access to more choices, more powerful, richer technologies than enterprises. Earlier era was dominated by “processing industries”, where enterprise IT was characterized by “islands of automation” and that was ok as long as the islands supported the critical internal processes. Today with the growth of knowledge based economy, organizations cannot afford to lag behind in terms of being able to connect with stakeholders using latest technologies, where transactions, processes & relationships with all stakeholders, especially those external, need to be rich, dynamic, and adaptable, subject to constant reinvention. Ubiquitous connectivity and pervasive computing throws open unbounded opportunities for innovation across the enterprise. Consumers can now migrate from passive recipient to active co-creator of value.
Yet there is a rapidly widening technological schism between technologies within the enterprises and technologies consumers have access to. Rapid adoption rates of new technologies mobile phones, web based services, communities, blogging etc. is in sharp contrast to the way enterprise IT is stuck in legacy traps and is generally resistant to and suspicious of all new technologies even in the face of obvious end user adoption. In a competitive marketplace IT departments will have lead the way and move fast to close this gap to provide information and interact with consumers on their chosen technology platforms.

Software as Service

SaaS represent another dimension of this technology doughnut effect, where huge monolithic applications are being replaced by external web service providers. SOA & SaaS (Software as a Service) is gathering huge momentum; the buzz on the web is overwhelming. Salesforce.com has now morphed into Appexchange with all kinds of services available. http://www.salesforce.com/appexchange . MS has released Office live beta. Google is providing “customized” hosted email service. Rather than look SOA from internal Enterprise IT perspective, the disruption is applications being replaced by “outside-in” services. While conservatives would point to security, data ownership, customization challenges, I believe there are enough instances of Global 2000 going for salesforce.com. “Outside-in” services solve the legacy trap issue in single sweep. While the trends are not new or unknown, the tipping point is approaching faster than earlier thought.

Outsourcing

While nothing new, earlier outsourcing contracts were designed as a “all or nothing” total outsourcing deals, that essential transferred employees, sold assets to the outsourcer, changing little else. Infosys was among the earliest to promote Modular Global Sourcing where executives have to work hard to “modularize” IT into strategic and logical components that can then be distributed geo-locationally, to perform them where it creates the maximum value. Since then subsequent large outsourcing deals have confirmed this trend where companies have started thinking very strategically about how exactly outsourcing can/should add value.

Innovation Networks

Innovation and continous innovation is critial and this can only be supported by a market ecosystem i.e. Innovation Networks — that matches an enterprise demand for innovation with worldwide supply. "Innovation Networks will let firms fluidly weave internally and externally available invention and innovation services to optimize the profitability of their products, services, and business models. Innovation Networks will deconstruct vertically integrated invention-to-innovation cycles in software, finance, and CPG industries" (Forrester.com). Enterprise will have to facilitate complex webs of relationships among firms, universities, and other organizations for generating and sharing knowledge relevant to innovation.

While intimidating I believe these trends offer a unique unboundless opportunities to “Enterprise IT” leaders to go beyond “business-IT alignment-subservience" to leading businesses to horizons they could never see.

Digital Identity, Reputation meets real world

2006-02-16T04:43:00.000-05:00

Check out dontdatehimgirl.com. Is this identity theft or freedom of speech? How far behind is a mashup with Google Maps ;-)

21 million subscribers of myspace.com, facebook, and other public social networking group don't care about privacy. Reputation is treasured more than privacy and security is taken for granted (government's job)

Sometimes with issues like privacy, security, trust we get confused between "ends" and "means". And the technology possibilities overshoot real world requirements

Internet Freedom and Tech companies

2006-02-16T02:41:00.000-05:00

The recent controversy around Yahoo’s role in arrest of Chinese writer, Google’s self censorship, and in the context of “Prophet Muhammed’s cartoon” controversy raises the question of role of industry in furthering values of democracy and freedom of speech. Should industry and companies go beyond mere passive compliance to local laws to a more activist stance?

In the 80s Sullivan Foundation & Sullivan principles represented a voluntary industry effort to oppose apartheid. Religious, gender based discrimination, repressive Islamic regimes, environment, etc. etc. are all equally worthy issues that companies should not shy away from. Passive compliance seems like the easy way out, I believe firms should proactively aim to be a force for “good” while striking a fine balance with respect for diversity and differing value systems. It is difficult, yet responsible leaders will have to struggle with and find the right balance.

As opposed to a voluntary effort the proposed “Global Online Freedom Act 2006 ”, does look like overly intrusive in scope that takes a rather simplistic view of the nuances of issues involved. Check out Rebecca Mackinnon’s (former CNN China correspondent) website for a better understanding of the context and issues involved.

Universal Identity Metasystem

2006-02-15T13:30:00.000-05:00

Recently announced Infocard project from Microsoft aims to provide “a uniform way for people to log on to Web sites, conduct transactions and prove their identities online” and will be incorporated into Vista. According to Kim/MS, Infocard shows the way to a Universal Identity Metasystem.

Kim Cameron’s website http://www.identityblog.com/, gives a good insight into the thinking that went behind the project. It begins with laws of identity that defines the architecture:

Law 1. User Information should be revealed only with consent & user has control of how and when this information is released
Law 2: Minimize the information revealed
Law 3: Information should be released to only participating entities in the relationships
Law 4: The universal identity metasystem should support “omnidirectional” identifiers (for public entities) and “unidirectional” identifiers for use by private entities
Law 5: The Universal Identity Metasystem should channel and enable interworking of multipleidentity technologies run by multiple identity providers
Law 6: The system should extend to and integrate the human user in a manner that is meaningful to him/her
Law 7: The system should provide a consistent experience across contexts,

The components that implement the above architecture are

1. A way to represent identities using claims
2. A means for identity providers, relying parties, and subjects to negotiate
3. An encapsulating protocol to obtain claims and requirements
4. A means to bridge technology and organizational boundaries using claims transformation
5. A consistent user experience across multiple contexts, technologies, and operators

The Identity Metasystem is built on interoperable Web Services (WS-*) protocols, i.e WS-Trust, WS-Metadataexchange, WS-Security Policy and secured using WS-Security

The first law concerning user consent and control has generated some controversy. What extent of control should user expect over the records of transactions he/she conducts with service providers? What about reputation information like credit score, ebay ratings etc.? What happens when regulations demand users reveal their identification? Does users control over their identity information conflict with someone else’ freedom of speech? Check out http://identity20.com/ for in depth exploration of these issues.

Within large enterprises too identity management aims to go beyond access control, SSO, directory integration and provides scalability and business agility in a way the was not possible with earlier technologies. Whether strong centralized IT departments see the need to re-engineer their legacy identity management systems yet is still unclear. But as SOA paradigm gains momentum federated digital identity cannot be far behind.

Security, trust, authentication, privacy, identity management are all interlinked and among the biggest challenges facing Internet based applications/services, yet the solution has to be “simple, and open” and Infocard from MS looks like a great start.

Other candidates include sxip.com

Bill Gates sees end to passwords in sight

2006-02-14T16:12:00.000-05:00

"Bill Gates sees end to passwords in sight:

Bill made it clear that he really cares about privacy and security, just as he is committed to helping build an identity metasystem that moves the industry to the next stage of collaboration and reach. ...Now, with Windows Vista, Gates feels he finally has the right weapons to supplant the password as a means of verifying who is who on computers and over the Internet. The new operating system, due later this year, introduces a concept called InfoCards"

For detailed background, whitepapers on Infocard, design principles check out Kim Cameron's blog at www.identityblog.com

Technology Futures and Forecasting

2006-02-13T23:11:00.000-05:00

For the zillions of techgurus, futurists etc. out there, here is a publicly transperant way to prove your technology forecasting skills: http://buzz.research.yahoo.com

My guess is there are some holes in the system: Volumes are low, keyword selection could be controversial, multiple accounts can skew results

This is definitely something that can prove useful, at the minimum some fun.

Blogging issues (Crisis & Ethics)

2006-02-09T23:23:00.000-05:00

Companies & their PR agencies are getting savvy (Jim Allchin meets bloggers) in the way they handle influential bloggers, which raises full disclosure & ethical issues for bloggers. A well written article by Rebecca Buckman in WSJ highlights the these issues. (here's the other side of the story)

Anonymity is a desirable feature in blogging. I do not think "credible" and "anonymous" blogger/blogging is an oxymoron. That said clearly people (anonymous or otherwise) should be able profit from their "influence", why should it be restricted to movie stars, athletes, models...

As long as one is not crossing legal boundaries (insider trading, contractual confidentiality etc.) I do not think the ethical issues are as simple as straitjacketed "full disclosure".

As bloggers wade through these issues corporates have to prepare for the consequences. Link to an interesting article on the Economist.

$100 laptop

2006-02-09T03:26:00.000-05:00

Nicholas Negroponte's vision for $100 laptop for every child in poor countries has stirred quiet a debate with Bill Gates/Microsoft, Craig Barrett/Intel expressing apprehensions and suggesting alternatives. Others too have chimed in with articulate arguments against the project, yet we do not see equally well articulated arguments in favour addressing the above concerns.

A look at the principals involved in the project gives some inkling why this may be so. Each one is a tech guru/star and for them collectively, an $100 laptop is an interesting technical problem to be solved whose success will not be measured in through effective market adoption and successful usage, but in just having achieved what they set out to do: make a laptop for which governments will pay atleast $100. Maybe the innovative approaches & technologies is something to look forward for, hopefully could even push industry in the right direction: simpler & cheaper.

Jealousy & Envy

2006-02-08T11:43:00.000-05:00

Sometimes I think jealously & envy more than greed (which is mostly good) is a behind seemingly inexplicable actions and decisions of people who should know better.

Two examples

1. The proposal by broadband operators to charge websites money for providing "better" service. "We have to make sure that they [application providers] don't sit on our network and chew up bandwidth," says Whitacre (AT&T), who believes companies like Google and Microsoft should "share the cost" of operating broadband networks.

2. Opposition to Google's Library project. Imagine having all books from the biggest and best libraries, searchable at your fingertips. If there is one thing that should be done to bridge the digital divide it is this: Access to knowledge. Yet it is the authors themselves who oppose! Why?? Here's a better articulated argument for the project

Google Vs Yahoo Vs Amazon Vs ebay

2006-02-08T10:49:00.000-05:00

In a interview with FT ebay CEO Meg Whitman claimed "The four dominant internet groups - Google, Yahoo, eBay and Amazon - will increasingly focus on their core activities rather than compete with each other head-on...I think we will end up specialising,...We have specialised in e-commerce, payment and voice communication. Google stands for search, Yahoo largely stands for content - so I think we may on the fringe compete, but I suspect that over time the businesses will become more specialised."

That sounds reasonable, or is it!?!

The more obvious differences are in the revenue models, broadly: Advertising for Google, Ads & paid content/services for Yahoo, commissions for ebay and sales minus costs for Amazon. All these require more than a few geeks working on Ajax, it means different competencies, capabilities, supply chains, distribution, business relationships, alliances and so specializing and focus will definitely help in ensuring efficiency in operations.

Inspite of all efficiencies, effectiveness & strategy will only be driven by two things 1. User Experience 2. Communities, and that is where the differences begin to collapse and all four do begin to look like competition.

Another way to look at it would be that a user reads about the newest, coolest widget on Yahoo, researches about it on Google, while clicking on a few ads there, buys the product on Amazon, and then auctions it off on ebay. I guess it would be easiest for ebay to move upstream, scale up and/or out spanning the entire chain and even into all aspects of e-commerce in manner that significantly impacts even mainstream retailers/manufacturers forcing them to set-up shop on ebay-ville(ebay-halli in Bangalore). I also do feel ebay has the maximum stickiness, durability & network externalities among its community compared to the other three.

It truely is a drama of epic proportions being played on the most exciting theatre: Internet

Challenges ahead for Web Services Management

2006-02-07T22:44:00.000-05:00

Business logic, embedded in services fabric implemented through SOA, is not a monolithic determinstic entity. Rather sevaral externalities like regulation, changing business dynamics, partners have to be addressed in order to minimize continous changes to the core services.

Recent outages experienced by service providers had a cascading impact on downstream mashed-up website raising issues of reliability & availability. Use of external services leads to rise in risks levels that might not be within the consumers (of web services) control. How do you build redundancy in such cases i.e. multiple providers of equivalent services??

There might even be cases where for building in differentiation in QoS parameters to different consumers. This article published by SETLabs researchers gives a good overview of the challenges ahead, also proposes a practical architecture to address QoS issues in Web Services management.

2006-02-07T12:09:00.000-05:00

Computing History tidbits

Picture of the first mouse invented by Douglas Engelbart

Intel, founded by Noyce, Grove, Moore was short for INTegrated ELectronics

The first computer hackers emerged at MIT (Massachusetts Institute of Technology). They borrowed their name from a term to describe members of a model train group at the school who "hack" the electric trains, tracks and switches to make them perform faster and differently.

Original home of Yahoo http://akebono.stanford.edu/

Larry Page and Sergey Brin begin collaboration on a search engine called BackRub which later becomes Google.

Changing CIO priorities

2006-01-31T00:11:00.000-05:00

Over the last year there has been a distinct evolution in business expectations from CIOs. This change is evident through the Gartner CIO 2006 survey where the top 5 priorities are 1. Business Process Improvement 2. Controlling costs 3. Attracting and growing customer relationship 4. Improving competitive advantage 5. Improving competitivness.

These priorities have clearly evolved from last years priorities which were 1. Business Process Improvements 2. Security 3. Costs 4. Supporting competitive advantage 5. Data protection & privacy.

These trends will accelerate over this year and CIOs will be expected to leverage technology and truely deliver business innovation. Over last few years IT departments were expected to streamline operations and reduce costs. While the pressure on costs still remain and wider economic risks still loom in the horizon, achieving business growth is back on boardroom agenda and this will trickle down IT departments in form of expectations for new applications, services & infrastructure.

The one clear area of opportunity for IT to deliver on these expectations is customer relationships, customer interface, front office capabilities. CIO have to look beyond their enterprise silos and immerse themselves in some of the amazing ways users, customers are using the web. Refer to my earlier post on "Future of Marketing". These trends are best appreciated through first hand experience. Are you a blogger, are you linkedin, where are you in myspace, did you check out that podcast, how do you search for information etc. etc.

CIOs are in a unique position to seize initiative and show leadership across functional boundaries of marketing, operations, HR as the next wave of business innovation will be technology led.

Web 2.0 Meme

2006-01-18T12:20:00.000-05:00

"Web 2.0" is one of those overhyped terms that started as a vacuous concept yet the popularity it has gained over last one year makes it a useful term that marks a milestone in the evolution of the Internet/web.

Tim OReilly, orignator and chief evangelist of Web 2.0, tries to articulate the principles governing Web 2.0 as being

1. Web as Platform: Web Services, Mashup sites, software-as-service
2. Long tail Business Model: Instead to targeting the few big fish, build for millions of small ones
3. Harnessing Colletive Intelligence: Network effects, folksonomy, wisdom of crowds
4. Ease of building mashup websites make data and content ownership critical to maintaining competitive advantage
5. Software products morph into software services
6. Ajax: Asynchronous data retrieval

There is an interesting discussion on the definition of Web 2.0 here

To me the key insight in following the trends that constitute Web 2.0 is that it is not about "cool, bleeding edge" technologies rather every successful example of Web 2.0 implementation/example provides its user the ability to create his/her own experience as an individual or as part of a community.

e.g.

Google redefined "relevance" of search results from being output of "sophisticated computer algorithms to collective judgement of human web authors

Amazon allows users to create unique experiences for themselves

Ebay is a community co-created example of online marketplace as opposed to uninspired B2C websites

myspace.com, Wikipedia, Flickr, BitTorrent, Napster, blogs etc. each is an example that allows users to create unique experiences for themselves

In my opinion ability to co-create should be the central insight of Web 2.0, while principles put forth by Tim above only contribute to realizing this central concept of co-creating experiences

The book that put forth this idea of Co-creation is : The Future of Competition: Co-creating unique value with Customers by C. K. Prahalad, Venkat Ramaswamy

Wall Street Tech Stories

2006-01-18T06:15:00.000-05:00

Current market capitalization of companies is a function of future expectations. It is the best mechanism of quantifying the (smartest) collective judgement of people who are voting with their money.

Below is a market cap (as of Jan 18 2005) of key competitors and they do tell a story

Dell vs. Apple

Apple: $71.39B (Revenue: $13.93B)
DELL: $71.5B (Revenue: $54.18B)

Apple has a future, Dell might not

Oracle vs SAP

Oracle: $64.22B (Revenue $12.89B)
SAP: 56.94B (Revenue: $9.9B)

It's a tie

Google vs. Yahoo

Google: $138.05B (Revenue: $5.25B)
Yahoo: $56.91B (Revenue: $4.83B)

Advantage Google

Microsoft vs IBM

Microsoft: $287.3B (Revenue: $40.34B)
IBM: $131.10B (Revenue: $94.28B)

Products is a better business than Services

IT services

Accenture : $17.55B (Revenue: $17.57B)
EDS: $12.71B (Revenue: $20.51B)
Infosys: $19.82B (Revenue: $2.01B)

Infosys has beaten Accenture & EDS

Google vs. Microsoft

Google: $138.05B (Revenue: $5.25B)
Microsoft: $287.3B (Revenue: $40.34B)

Who Knows??

Bangalore floods on Hosur Road Oct 2005

2006-01-12T12:11:00.000-05:00

Floods in Bangalore

Photos on flickr.com

Future of Marketing is now

2006-01-12T06:34:00.000-05:00

Effective Ads, Viral Marketing, Communities or social networking, Co-creation

1. Ubiquitous, contextual, granular ads everywhere (Online, Mobile, Print): www.google.com
2. Viral marketing: Buzz-oven
3. Communities or social networking: www.myspace.com , www.milliondollarhomepage.com
4. Co-creating experiences: www.converse.com

Portfolio Approach to SCM

2006-01-12T00:37:00.000-05:00

An old article of mine published on CIO.com

A Portfolio Approach to SCM

Seamless collaboration with complete information sharing between all supply chain participants is still in the future. But there are strategies to dealwith the current transitional state to help you come out on top today.

Link to article

IT imperatives beyond strategic alignment

2006-01-11T23:40:00.000-05:00

Article I wrote published in Handbook of Business Strategy

While enterprises across the board have identified significant productivity improvements, and realized substantial improvements in consumer surplus using Information Technology, there has been little evidence of significant positive impact to sustainable business profitability. While IT systems so far have provided operational benefits and enhanced consumer experience, unless managers take care to go beyond strategic alignment of their information infrastructure investments to ensure architectural flexibility and constantly optimize IT delivery efficiency, they will begin to see diminishing returns from IT as the pace of business changes increase.

Link to paper

ROI is not a formula, it is a Responsibility

2006-01-11T23:23:00.000-05:00

Article I wrote sometime ago and was published in Journal of Business Strategy

Ronald Reagan once famously said of government, “Just like a baby – an enormous appetite at one end and no sense of responsibility at the other.”

Excessive amount of ink has been devoted (in trade publications, marketing brochures and analyst reports) to help a CIO calculate “Return on Investments.” Methods recommended include, simple Cost-Benefit Analysis, IRR, Discounted Cash Flows, Total Cost of Ownership, EVA and real options. Among all this mumbo-jumbo of numbers and formulae, one loses track of the most important factor that will ensure “returns” on your investments, that is, “Accountability.” This paper lays out a framework to assign responsibility for various types of IT investments to ensure that you realize the projected “rosy” ROI numbers that any of the above formulae throws up.

Link to the paper

IT+BPO Combined Power

2006-01-11T23:14:00.000-05:00

Integrating IT and Operational Resources for Continuous Improvement
By Krishnan Narayanan & Jacob Varghese

Managers have to look beyond the myopic silos of business transactions, IT applications and infrastructure and take a holistic view of business processes that includes all three components

As organizations begin to focus on generating long term value from offshore outsourcing, the emphasis has shifted from tactical cost reduction to sustainable continuous business process improvement. This has triggered a number of discussions about the merits of combining IT and Business Process Outsourcing (BPO). So far managers have made a clear distinction between outsourcing operations vs. IT systems within business processes. Since outsourcing has been viewed as a tactical make vs. buy decision, businesses have ended up outsourcing components of a single business process to disparate service providers. What are the relative merits of an integrated IT and BPO approach? How it can be achieved for optimal results?.

Link to paper

Patents vs Open Source to Patents with Open Source

2006-01-11T00:00:00.000-05:00

US Patent office to partner with the open source community to improve quality of software patents.

Key Points

1. Open source recognized as prior art. A consortium including IBM to build a searchable database of open source

2. Public can send emails on review of patent applications to identify prior art

3. Development of patent quality index http://www.patentqualityindex.org/.

2006-01-09T23:33:00.000-05:00

From Computerworld

Ray Kurzweil: IT Will Be Everything: "Future Watch: AI pioneer Ray Kurzweil looks out across the century and sees a wondrous but at times frightening world, where technology is everything and we have computers in our brains. "

From Amazon

Ray Kurweil referred to as "technology's most credible hyberbolic optimist" author of The Singularity Is Near : When Humans Transcend Biology ("the singularity," a reference to the theoretical limitlessness of exponential expansion) that will see the merging of our biology with the staggering achievements of "GNR" (genetics, nanotechnology and robotics) to create a species of unrecognizably high intelligence, durability, comprehension, memory and so on" quote from Amazon editorial review.

I have not read his books but a quick google has left me curious, given he is one of the 5 advisors to the US military on advanced technologies. (Who are the other 4?.) Would he have addressed issues from social, cultural, ethical, philosophical dimensions or would it be Moore's law exaggerated & extrapolated to everything. E.g. check out Omnipotence paradox

2006-01-09T23:32:00.000-05:00

Best books of 2005: (Amazon)