The Beliefs of Silicion Valley: by Mike Vizard at eWeek

Mike Vizard at eWeek is doing one of those David Letterman 10 best lists which seems to have become de-rigeur in the Pundit Pontificating Place. Mike has certainly a provocative list – the ten things most fervently believed in Silicon Valley but nowhere else. It is done with a certain amount of tongue and cheek humor; so it it seems a shame to examine the premises from a rational point of view. But I found my self saying – “this belief is universally true but for …hmmmm”

So without further to do, here is Mikes list with comments:

1)SaaS Dominates All – Every Sunday they go to church to listen to the latest software-as-a-service sermon from Marc Benioff, CEO of Salesforce.com. This is the rise of Web 2.0 and AJAX. It would have more legs if a)Salesforce.com had a wider base of underlying business software(like a more complete ERP set) on the order of Microsoft, Oracle or SAP ERP coverage; b) Salesforce.coms Apex had a model for offline operation more similar to Googles Gears; and c) Saleforce would take GUI Integration to heart – the need to run on any platform not just the Web well and with minimal retooling of programs to reach Linux,Mac, PCs with more than a browser interface. Now some might argue that if Saleforce did have ERP smarts like Oracle or SAP it would not be taking the approach it is and it would not be adopted as much as it is because SaaS is really one big pilot project like SOAP. No argument from here.

2)Google is always Good – Google has no interest in dominating markets the way every other company with more than 80 percent market share has done before, because in California absolute power doesnt corrupt absolutely. Well Google has yet to cross the 70% threshold let alone 80% in any of its major markets – but not for lack of trying. So the world has yet to see if Google would adopt the Zero-Sum (“our win means everybody else has to lose”)strategy of 80-95% market share holders like Microsoft. But there is an arena where Google may be getting 80% “market share” and that is in the private data of US Google users. Almost like J.Edgar Hoover, Google is amassing huge video, image, search requests, and email traces of all Worldwide but the highest % on US citizens which I think it is reducing its holding period to 10 years down from 15. But I can easily stand corrected. The Dems are worried about NSA and privacy. I am worried about the boys and girls in Mountain View.

3)Microsoft is irrelevant – Microsoft is so large, bloated and morally bankrupt that it can no longer compete effectively. $40B and a still fanatic workforce – you would think the staff would revolt at having to be the flak-catchers for their managements hypocrisy and self-serving Machiavellianism. But with one or two strokes, Microsoft could become a dominant IT powerhouse. Microsoft buys Novell and Xandros and enters the Linux marketplace in a controlled way(the US Antitrust is going Democrat in the 2008 election, Bill and Steve will lose their moles at DOJ, so they will have to ward off the Open Sourcers – but on their terms). And as for moral reform, IBM which has gone from “We have the one best way” to “we will adopt to whatever our customers want” has remained distinctively second fiddle to Microsoft in software and HP in overall IT revenues. So much for “serving our customers”. When Bill gets his Nobel Peace Prize how can anyone criticize Bill and Boys, especially because they single-handedly rescued Linux on the desktop from Apple hegemony. Therefore, expect Microsoft to remain morally corrupt …. uhhh hardball, ZeroSum players.

4)IBM is a Shill for its consulting business – Despite the fact that IBM sells billions of dollars in software and hardware, its only real ambition is to fuel overpriced consulting hours for the people who work for IBM Global Consulting. This would be true except for two big flies in the ointment. A)Globalization along with cheap IT expertise from India, China and Eastern Europe has killled the consulting fee schedule and B)the results are already in: IBMs consulting fees cannot match software growth and profitability in the current IBM portfolio. Janet Pernas vision may still take root at IBM. But IBM have let a lot of good IT technology horses out the barn door.

5)EMC is home of the New England disaffected. EMC workers are all New Englanders who used to work for Digital Equipment Corp. and Data General and are still angry about the demise of the minicomputer. I have never been good on IT geneology – I would flunk the Boston Computer museums computing gee-nealogy test. But there seems to a logic to the EMCs otherwise willy-nilly acqusitions: EMC is doing what Sun is following with – wanting to dominate the provision of data-based hardware and software provision. Geewhiz, aint that sector which IBM abandoned under Sam or Lou a few years back, now growing superfast. And there is a logic to it – once you have a dominant share it may be 2-8 years +0r- 3 years before a new breakthrough in data hardware/software handling comes rumbling through and replacing everything in the market. Risky business but at least because you are surfing in the territory you have got dibs on at least sighting the next big wave.

6)Larry Ellison is Really Patton – Its our God-given right to dominate the enterprise application space at the expense of rigid German SAP programmers that are clearly totalitarian in their approach to software. This one is hard to top. But Larry may have to watch out, I suspect having access to hardware smarts is going to be critical to even data application software. But hey, Larry has never been shy about spending money.

7)We are all Going to Get Rich – No ones shares will ever be under water again and losses associated with irrational exuberance were an East Coast conspiracy led by the Federal Reserve Bank. The Bank is the problem, but it is the Knowledge Bank. The US has still not recovered from the 40% or more declines in IT and Computer Science enrollment(not to mention declining Science and Engineering graduates). And with the likes of Microsoft ordering up 5000 HP1B visa holders each year, IT wages neutral or declining, and IT governance plus representation as CEO at laughably low levels (remember manufacturing, the other great strength in US business, has consistently lost out to marketing, finance and legal in the executive CEO sweepstakes – and look what happened to the MidWest and Northeast – rust belt country). Houston, we have a major problem which even those closest to it have just given up on.

Another example is Healthcare IT. Hospitals and doctors offices are screaming for a $300 touchscreen WIFI PC with fingerprint control and sound recording that can be jammed into a deskstation with keyboard, faster/more secure network connections and Xray/Ultrasound/Vitals display. Meanwhile the dominant PC tablet player is Mickey-Mousing around with a $1500-2500 job that only they will let in the ball game. As long as Microsoft can do to the Web standards and Tablet markets – dictate and/or thwart standards plus innovation and development as they have for the past 8-10 years, think of Let the Good Times Roll as a pop tune on a Wurlitzer Player. Oh and Venture Caps, your exclusive hold on the market is in direct proportion to where the big innovations want to come from – and burgeoning Chinese, Taiwanese, Indian and Eastern European IT businesses will have the capital, the access to markets, and the savvy to do it themselves. Remember the US is a debtor nation by more than $1/2 trillion (that is 15 Microsofts per year).

8)We Can Create Another Billion-Dollar Company – Despite what everyone else thinks, the companies we create are not merely research and development projects that have been outsourced by Cisco, Sun, Oracle and others who will acquire them when they see fit. See heaven and 7) above.

9)What Power Crisis? – The fact that processors continue to consume more amounts of costly power is not going to reduce server sales because Al Gore lost the presidential election, so everything he says about energy is conveniently wrong. Now look at what innovation not just in IT power consumption, but general energy usage is lined up against. A President who has denied global warming and is just turning to admitting their may be a problem but “we will handle it my way”. Energy companies who have been given $trillions in subsidies and who have 1)reduced Nigeria, Ecuador, Angola, Iraq, etc, etc to economic basket cases (coming up next – Cambodia and Azerbijan); 2)not delivered on energy independence from foreign oil for 30 years and counting but in fact increased dependence from less than 50% to more than 75% from foreign and potentially hostile sources; and 3)are talking in major advertisements about “getting started” and “partner with us” on new energy innovation when their ad dollars have been going to fight the notion of global warming. Finally, look at the captains of major energy intensive industries like autos, IT hardware, chemicals, electric utilities and other transportation modes – do you think with quarterly income reports Job One, they are going to be thinking about energy innovation in their industries ? Do you think they can perceive the box let alone think out side it for the necessary solutions ?

Now lets step back for a moment. The Energy Crisis, be it finding ways to reduce greenhouse gases and pollution in general (we get 4 times as many smog days in rural Ontario than we used to get just 12 years ago while asthma incidence is now reaching as high as 20% of the youth population) or transitioning to realistic renewable energy sources (not glow-in-the-dark, radioactive nuclear terrorist stockpiles) is The Major Problem of the Next Decades. But as my business prof used to say Problem=Opportunity. Now after all is said done(including a clear call to action from Harvard Business Review), how would you rate the US business communitys approach to this Immense Business Opportunity?

10)Web 2.0 Rules All – This is a return to the one true Internet religion focused on giving total freedom to users who want to own their own data. The original religion was corrupted by East Coast bankers that compromised the Wall Street financial analyst community.
One can see from this and the previous comment that Mike has not made the transition from the Left Coast very well. Web 2.0 is getting closer – it rescues two notions: 1)information at your finger tips is a worthwhile and attainable goal and 2)the Web as an open and non-proprietary set of standards and technology is also worthwhile(counter to Cisco and Microsofts directions). But Web 2.0 needs to embrace a)GUI integration so that Web 2.0 does not target just Web pages but any display both online and offline with or without a browser. And the likes of Adobe AIR/Apollo/FLash/Flex, Microsoft SilverLight (but in proprietary works best in Windows fashion), Sun JavaFX, Zimbra and others are moving towards the Java-like ideal: one set of code for any display and processing mode. With this as a foundation Web 2.0 will make a transition to a broader scope and will be able to help with Data Workflow integration across structured, semi-stuctured and unstructured data being used synchronously or asynchronously. Finally, Web 2.0 should lead to component management and governance beyond the limitations of SOAP-only solutions currently being offered in the marketplace. IT has been plagued by partial solutions. SOAP and BPM are headed in the right direction – they just have to manage and architect IT resources beyond the SOA and SOAP-only components viewpoint. And Web 2.0 => IT 3.0 is the right way to go.

Give Mike Vizard top credit for identifying key trends in tongue and cheek fashion; I take full responsibility for the Inquisitorial Pontificating. My only excuse – I am reading The Evolution of Christianity, by Marshall D. Johnson. Lots of “P” to be found there too.


(c)JBSurveyer 2007 If you liked this, let others know:
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