JimPinto.com - Connections for Growth & Success
No. 120 : 21 May 2003
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
- Automation Update
- The impact of cheap memory
- Book: War Talk
- Review: The Matrix Reloaded
- eNews - your feedback results
- Lamenting the global job shift
- More on the copyright problem
- Spam, spam and more spam
No big Automation company news recently. Everyone has their head
down, slogging through monthly and quarterly benchmarks. That is
not to say that trouble is now brewing below the surface. RIFs and
layoffs continue, as bookings and shipments continue to fall short
of plans and budgets.
Many people have asked why I don't do weblogs on two of the largest
automation suppliers - Emerson and Schneider. My response: I'll
start when I get sufficient interest, fuelled by emailed news, views
and comments. So, if you're interested - fire away!
The weblogs continue to generate significant traffic; many people
report that they visit daily to look for updates. Again, I feel
somewhat apologetic about the negativity. But, it seems that many
employees need this communications outlet. I have invited executives
to comment positively, but they don't respond.
The JimPinto.com weblogs are not just Chatrooms. Please understand
that the news is checked, data-points confirmed and clear bias edited
out before posting. Your own comments and suggestions are welcome!
Here is a brief summary on some of the majors. I am sorry that I
cannot provide more of a positive slant. Anything remotely positive
is the subject of a cycle of press-releases, clearly copied by the
industry journals. So I'm left with the not-so-good news, and
analysis which no ones wants to voice.
The Automation & Drives Division is clearly the largest of the
automation majors. Honeywell and Emerson are the only companies
with larger market share in process automation, and Siemens intends
to close the gap by acquisition. Siemens has already made several
acquisitions in recent years: Applied Automation, USA (1999),
Turbo-Werk, Germany (1999), Milltronics Process Instruments,
Canada (2000), Moore Process Automation, USA (2000), Axiva (2000),
AltOptronic, Sweden (2001).
Siemens just acquired the Flow Division of Danfoss on May 12, 2003.
Danfoss Flow Division manufactures products for flow measurement
of liquids and gases. It employs 450 people, with a worldwide sales
organization and two production facilities in Denmark and the UK.
Sales in 2002 were about $60m, a tiny fraction of Siemens' total.
Clearly Siemens is a leading candidate to buy either Foxboro (from
ailing Invensys), or the Industry Solutions from Honeywell.
I've been asked a hundred times - what's happening with Rockwell?
Is the Eaton acquisition still on?
Well, no news yet - though my "guess" is that it's still brewing.
Don Davis is getting up to retirement age, and no one is sure whether
he can hold out till he is 65 (2 years). His target sales price is
reportedly $30.00 per share, and the stock fiddles around at $21.
To fuel the price, Rockwell continues to trim employment as the best
way to stay profitable. The Anorad acquisition didn't help, and is
reportedly a disaster. The Weidmuller alliance is just a drop in
Eaton remains the highest probability acquirer. Sandy Cutler, CEO
of Eaton, was asked directly about it recently; caught by surprise,
he agreed that there was something big in process, but nothing
would happen before June. So, stay tuned.
Rockwell Automation weblog
Baan is almost sold, but the paltry sale price won't really help
Invensys debt load. The hunt for buyers of the for-sale companies
continues, and there is a lottt of activity behind the scenes.
Employees are clearly nervous about the vultures hovering overhead,
though many will indeed be relieved when the suspense is over and
they are employed by a motivated buyer.
In the meantime, Invensys stock hovers around 16p, while the
stockholders and analysts wait for 2003 results to be announced
formally at the end of May. The moans and groans about clueless
managers continues on the Invensys weblog. I have invited responses
from Rick Haythornthwaite, Leo Quinn, and a multitude of VPs,
or even HR - but they remain aloof.
Movie: The Matrix Reloaded
The original movie "Matrix" was an inflection point. It brought a new
approach to movie making, with intriguing and futuristic ideas. It
raised compelling issues that generated intense reactions, including
thousands of articles, several books and a cult following.
"Matrix Reloaded", the sequel which opened in theaters this week,
was a disappointing follow-on. Picking up where "The Matrix" left off,
the hero Neo struggles to deliver the oblivious masses from an
elaborate matrix of computer simulations, crafted by a cunning
artificial intelligence that harvests humans as batteries. If you
didn't see the original, you'll probably be lost.
Neo is the hacker-savior, jujitsu-messiah battling the villain Agent
Smith who replicates endlessly. You'll enjoy seeing their fierce and
fiery fighting about as much as a 12-year old enjoying the latest
video game on Playstation 2, or X-Box, with boom-box speakers.
The "Matrix" creators, the brothers Andy and Larry Wachowski,
developed some interesting new techno-human themes in Matrix, with
nothing really new in this sequel. They posture with philosophical
puzzles, probing the nature of knowledge, reality and free will,
echoing the works of Plato, Descartes and Nietzsche. They pile on
references to movies and mythology, religion and a jumble of
ninja cartoons, a "juxtaposition of incomprehensible intellectual
pretensions and extreme, primitive juvenilia," according to an
Internet geek posting.
Techno-futures guru Ray Kurzweil writes:
"The Matrix Reloaded is crippled by senseless fighting and chase
scenes, weak plot and character development, tepid acting, and
sophomoric dialogues. It shares the dystopian, Luddite perspective
of the original movie, but loses the elegance, style, originality,
and evocative philosophical musings of the original."
The film ends without an ending, mercilessly promising another
episode: "To be concluded". That is "The Matrix Revolutions",
coming November 15, 2003. I'm not sure I'll bother to go.
TIME: Unlocking the Matrix
Ray Kurzweil - The Matrix Loses Its Way
Read what Kurzweil, Drexler, Hans Moravec
and other techno-gurus say about "The Matrix Reloaded"
The impact of cheap memory
If you've worked with computers for a decade (and who hasn't?), you
remember the floppy-disk which forced you to get file-sizes to less
than 360K. Then came the high-density floppy, which held 1.44MB. And
huge hard disks had as much as 50-100MB - wow!. Bigger hard disks
were connected only to mainframes, at tens of thousands of dollars.
Now, the Cheap Revolution is here. 700 MB CD-memory costs less than a
buck - who uses a floppy anymore? And 100 gigabyte hard-disks (that's
100,000 megabytes) at a buck a gigabyte. Within a decade, the $100
hard-disk will hold a terabyte - 1,000 gigabytes. Wanna bet?
Moore's Law (the doubling of computing power) and Gilder's Law
(doubling of bandwidth) are being outpaced by mass storage for three
reasons. 1/ Keeping pace with Moore's law in silicon is becoming more
and more expensive, as the cost of a semiconductor fab rises beyond
$3 billion. 2/ Because of the current business recession, telecomm
capital and regulatory games have slowed down the bandwidth explosion,
far below Gilder's gilded projections. 3/ Mass storage is relatively
simple: Writing and reading, magnetically or optically, with higher
and higher densities.
An interesting article in the May 2003 issue of Wired magazine
discusses the impact of widely available, cheap memory. What will
the world look like if mass storage is available dirt cheap?
Traditional media business models will continue to change as disk
space becomes cheaper. For media companies, revenue from recorded
audio and video will continue to decrease as downloaded copies
proliferate. Most people recognize the value of authorship and
intellectual property, but many do not see why the publishers,
distributors and other intermediaries should get most of the money.
There seem to be no clear ethical barriers against copying widely
available media. In the future, media revenue will come from new
and live content, or giant-screen movie-displays, which cannot
easily be duplicated.
In the future, the overwhelming cheapness of storage will cause
anything and everything to be saved. But that is useful only when
a specific saved item can be found, quickly and easily. This will
continue to drive the importance of search-engines. It is already
much easier and faster to look up a telephone number on Google,
than to look it up manually in a phone book. Google has become
preeminent because of its valuable search algorithms. In an
information-storage-based world, "search intelligence" attains
major proprietary value to drive a knowledge-based economy.
During the next decade, cheap memory will be available to anyone
and everyone, and its impact will continue to increase. There will
be space to store whatever you wish to recall - pictures of people,
words you hear, whatever you thought worth recording. Your life will
be archived, and your archive will be your life.
Wired (May 2003) - Shifting Into Overdrive
Rich Karlgaard - Forbes - The big, cheap chance
Book: WAR TALK - by Arundhati Roy
The Booker prize-winning Indian writer has written some significant
essays in the UK Guardian, among others. In her new book, (April 2003)
she boldly addresses the questions of power and its abuse, and the
transformation of powerlessness via dissent and activism into a force
for positive change.
"War Talk" is a collection of new essays by this prolific writer. Her
work highlights the global rise of religious and racial violence, and
confronts the call to militarism. She discusses the mess in the Middle
East in a clear, analytical style and direct, uncompromising language.
Her interpretations of US foreign policy are sharp indictments. She
exposes the insidious influence of mega-corporations and the political
power-structure. Her prose is fluent, her understanding of global
politics is crystal clear, her book is uplifting and motivating.
Paul Hawken in Wired Magazine says, "If Arundhati Roy continues to
upset the applecart, she will either be greatly honored or thrown
in jail." Read this significant author, and browse these websites
for more of her mind-stirring essays.
Read reviews and buy the book - War Talk
War Talk - Excerpts from the book
Arundhati Roy's website
UK Guardian, Sept. 2001 - The algebra of infinite justice
On the Iraqi war - Mesopotamia. Babylon. The Tigris and Euphrates
Thank you for your response to my recent request for feedback on eNews
content! I received a whopping 2,000 responses within the first day,
and the email is still flowing in. 30% of the list is a strong
statistical sample, and so I proceeded with the tabulation.
Your comments, & suggestions (May 2003)
Here is a summary of the results.
| ||Future Trends
| ||Marketing & Sales
| ||M&A Analysis
| ||Social Commentary
| ||Book Suggestions
| ||Need to improve
| ||Never visited
The content preferences are clear. My primary emphasis will continue
to be automation, technology and future trends, with some marketing,
sales and M&A information, plus a sprinkling of social commentary and
book suggestions, where appropriate.
Many people included good comments (some more than a line or two)
which I appreciated very much. I shall endeavor to read all the
comments and respond when I can.
On the "social commentary side" I got the occasional "stop the liberal
crap" crap, mixed in with the comments that this was not needed, being
available elsewhere. The extremists were more than offset by the
requests to continue my "refreshing and independent point-of-view",
and the advice to be even bolder, with "no need to apologize".
I shall continue to comment, when I feel it is appropriate.
Jim Conoby [email@example.com] wrote regarding the global job shift:
"After viewing the waves of manufacturing jobs that have shifted
overseas, I can come to only one conclusion: not only are these jobs
gone for good, many of the workers cut loose by that shift will never
recover their earnings or standard of living.
Jake Brodsky [jBrodsk@wsscwater.com] provided more insights on the
"Indeed, we are seeing much of this in the Northeast already with the
professionals that you describe. We recently put a help-wanted ad in
a small newspaper for just one Sunday. The result was startling.
"The job advertised was for a (one) water treatment technician. We
received a couple of hundred responses, mostly engineers, computer
technicians and programmers and former managers. These people need
retraining, but can't afford to take an entry-level job in a new
industry. Many of these people are middle-aged and older. Barring a
huge jump in the economy, I do not see most of these workers
reclaiming full employment again.
"The fallacy to realigning the workforce to a new high-value industry
and cutting technology is as follows:
"I used to think that globalization was not the evil that most blue
collar workers would have you believe. But, the more I look over the
situation, the more it becomes apparent that the only solution is to
limiting the transfer of jobs to offshore locations. We cannot and
should not become isolationist in trade, but we have to view the
economy as a type of ecosystem. The extinction of a type of job or
industry in our economy may have farther-reaching effects than anyone
- For high-tech/cutting-edge jobs, younger workers are preferred;
few companies are willing to spend the time and money retraining
older workers when young hot-shots are available.
- If we export most of the manufacturing, engineering, programming,
accounting and other classic blue- and white-collar jobs that employ
the middle class, we will not have enough consumers with sufficient
spending power to carry the retail, health care and service
industries. No one will be able to afford to buy some necessities,
never mind new cutting-edge products. Neither companies nor
individuals will be inclined to gamble on new technology when their
budgets are so tight.
- As the decline in spending power advances, the requirements to
reduce costs in the remaining industries will cause a continued
shift of every possible job to offshore locations. This will cause
a "vicious circle" effect that will probably result in a very
serious recession, if not worse.
"I am worried that we will not be able to replace jobs at that "top,
controlling level" while the "bottom level" continues to decline. I do
not think that we are continuing to create new technologies, products
and services that can employ at the rate other jobs are being lost. I
see so many R&D budgets cut at large corporations and financial
hurdles for small companies. This is what discourages me.
"I have no problem with the issue that many will need to learn new
technologies to maintain or recover their standard of living; everyone
must grow throughout their lifetimes. I am becoming disturbed by the
number of people who must take a significant cut in pay because they
cannot find good jobs despite retraining."
"Umm, Jim, take a look at what the price would be for downloading
a whole album. Figure I download a typical CD with 11 tracks. The
album now costs $10.89. That's supposed to be the newer and better
price? And I have to supply the CD, case, and covers? This is
hardly enough of a deal to entice freeloaders from copying P2P.
Tom Inglesby [firstname.lastname@example.org] who is now semi-demi-famous (his new
magazine project has been awarded four editorial and one design award
in the past month) was really mad about spam proliferation:
"The problem here is much larger than the industry is willing to
admit. Once upon a time it took substantial work and money to copy
someone else's work; with today's technology, that's no longer true.
It took substantial work and money to produce (or typeset) a work;
that's no longer true, either. The only remaining item which requires
substantial investment is that of book binding.
"The one-to-many distribution scheme, which has served our society
well for centuries is quickly losing it's viability. The original goal of
copyright law was to encourage creativity. Today it's used more to
stifle creativity in all but the high profile artists.
"Most starving musicians would rather produce their own albums or give
away their music for free than sign with a major record label. Look at
the history of how the Dixie Chicks were treated by the major labels
for an inside view at where the money really flows.
"The laws of copyright have been bent by the recording and movie
industries to the point where they really serve and support the
distribution industry - not the artists nor the consumers. I'm all
in favor of intellectual property rights, but I'm not in favor of
supporting a business model based on outdated technology."
"Reading the Spam comments of Dan Daugherty made me want to start a
small revolution. But I couldn't get the bandwidth to tell people
about it because of the Spam coming in.
"Dan was worried about 100 a day. I get that many in a few hours
online. Really, over the past weekend (Saturday, Sunday and half-day
Monday) I received more than 800 Spam e-mail and 15 worthwhile or
requested ones. That ratio changes slightly, mostly for the negative,
on workdays. Sundays are still slow Spam days, I guess.
"I have broke my multiple e-mail addresses up and redirected them to
three ISPs so I could track some of the Spam, then tell my wanted
correspondents to use the least traveled path into my computer. I
thought that, anyway.
"The "old" e-mail addresses, some dating back 12-14 years and
therefore well into the CDs and e-mail Spam programs sold online, are
going to one ISP and now show a ratio of 100 Spam to 2 positive
e-mails. I'll have to get those 2 onto the new address quickly, then I
can just ignore the Spammail addresses.
"But the scary thing is that propagation of e-mail addresses isn't
static. Within one week of doing this, I saw my "prime" e-mail
address, given theoretically only to people and places that I want to
hear from (like JimPinto.com) go from a ratio of 10 Spam to 10
positive e-mails to 100 Spam to 10 positive. It was like a gusher
triggered by some unknown random byte that recognized that I wasn't
checking the old addresses as often and switched all that garbage to
the new one.
"I queried my broadband ISP (cox.net) about (a) them using a Spam
filter to prevent 90 percent of this stuff coming through, (b)
increasing my e-mail storage capacity (at my expense) so when I travel
I don't lose valuable e-mail due to an inbox at the ISP level that is
overfull with Spam (this has happened each of the past four trips,
losing some important magazine-related material), and (c) them
providing a dial-up access number (800-) so I can get online to get
the e-mail when traveling.
"And the Spam goes on."
- They don't provide Squirrel or anything to filter Spam and don't plan to.
- They won't increase the 10Mb capacity, even for money. 200 e-mails
190 Spam, 10 valuable) ate up 10 Mb in one-half day during a recent trip.
- They don't offer dial-up so I have to maintain a second ISP that
does so I can access my e-mail from the road. That's
an extra $16/month over the $50/month cable service.
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