JimPinto.com - Connections for Growth & Success
No. 103 : November 12, 2002
Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.
Contents:
- More on human longevity - 3
- Electric-auto technology will spread
- Siemens & ABB - Compare & Contrast
- JimPinto.com Weblogs growth
- The Pervasive Internet
- eFeedback:
- Chinacosm comments from an American living in China
- ABB commentary was unfair; switching to Reps & Distributors
- Acquisitions of small companies doomed to fail
More on human longevity (3)
Our coverage of this subject continues to generate great interest
and discussion.
Just a generation ago, 40 was over-the-hill. The idea of sexy 50-,
60-, 70- and 80-year-olds seemed a contradiction in terms. This is
no longer true - as has been demonstrated by Tina Turner, Goldie
Hawn, Diane Keaton, Farrah Fawcett, Candice Bergen, Lauren Hutton,
Sophia Loren, Jane Fonda, Raquel Welch, etc. Not to mention Peter
Jennings, Clint Eastwood, Robert Redford, Harry Belafonte, Sean
Connery, Colin Powell, Kevin Costner, Ricardo Montalban, Harrison
Ford, Paul Newman - and the list goes on and on.
Today, there is a whole new industry involved with halting, slowing
or actually reverse aging. Their marketing message is NOT just
achieving advanced years, but doing so vigorously, and even
youthfully. Americans are spending an estimated $6 billion on
substances from ginkgo biloba to human growth hormone, that claim
to offer new powers.
Some skeptics believe that all these potions producing nothing but
expensive urine. But, consider this:
- Respected demographers calculate that half the babies born today
will live to be 100.
- The number of 100-year-olds in the US has been increasing by over
7% per year since the '50s. The fastest-growing group of drivers
in Florida is over 85.
- Dozens of companies (some staffed by distinguished scientists)
are in the business of dramatically slowing aging.
- Bets have been placed (amounting to millions on payoff) that
at least one person alive today will live to 150.
- Eminent technologists believe that science will evolve so fast
in their lifetimes that they themselves will live energetically
for a very long time, if not be effectively immortal.
The list of believers includes William Haseltine, CEO of Human Genome
Sciences in Rockville, who soon may be biotech's first billionaire;
Ray Kurzweil, the technology futurist who I have written about and
quoted many times; and Eric Drexler, the nano-technology guru and
author of the ground-breaking book "Engines of Creation."
Ray Kurzweil, now 54, sees biotechnologies within the decade that
will allow us to regrow our tissues and organs, prevent hardening
of the arteries and cure diabetes. Ray agrees that the vast majority
of us are going to get sick and die in the old-fashioned way; but
he suggests that we don't have to do that - we're right on the cusp!
Ray Kurzweil insists that the human biological systems are really
very inefficient, not optimally engineered. A well-designed blood
system should allow you to sprint for several minutes without
getting tired. And the human gastro-intestinal system is
inefficient - it stores too much fat.
Beyond 10 years Ray Kurzweil sees technologies that will supplement
red and white blood cells with little robotic devices that are
hundreds of times faster. And he also sees gastrointestinal systems
being replaced with engineered ones that would allow us to eat as
much of anything as we want, for sociability and pleasure, while
intelligently extracting nutrients from food and trashing the rest.
This long view has had a profound perspective on Ray Kurzweil's own
life. He says: "I really envision living through this century and
beyond, and it does give me a sense of the possibilities. I am not
looking to slow down 10 years from now and be happy if I make it to
80. It's liberating. I envision doing things and being different kinds
of people that the normal model of human wouldn't allow." Ultimately
Ray envisions us expanding our brains through "intimate interaction
with non-biological intelligence" (computers).
Beyond just futurists and enterprising startup companies, INTEL has
formed a new "Proactive Health Research" group to look at how
computing can be used in the health care industry, especially to
help take care of the quickly growing population of senior citizens.
Intel is using sensor networking, smart home technology and artificial
intelligence to develop products that can be used in the home and
applied to the quickly growing population of senior citizens.
So, if YOU live to be 100, with energy and vitality, what do YOU
think YOU will be doing?
Washington Post - Forever Young
Intel gives health care a tech checkup
Ray Kurzweil's book - The Age of Spiritual Machines
Electric-auto technology will spread
This (summary) from the latest George Gilder weekly e-news
(gosh, I love the way this guy writes....)
Picture a vast parking lot filled with 10,000 cars. At exactly the
same moment every single driver turns the ignition key, shifts into
neutral, floors the accelerator, and 10,000 engines go screaming up
to the red line on the tachometer. All together, those engines are
now generating about 1 gigawatt of power. Which is about as much
power as flows down a few dozen high-voltage lines from a typical
electric power plant operating at full power.
America has some 200 million power-plants-on-wheels (automobiles).
If they ran flat out, all the time, they would burn 5 to 10 times
as much fuel as 2-3,000 electric power plants. But the electric
power plants in fact burn more fuel, and produce much more useful
power, because they run very efficiently, around the clock, and
at close to peak capacity for many hours of the day.
Heat, which defines the third principal sector of our energy
economy, is about the same size as the transportation sector.
The thermal sector uses furnaces, ovens, dryers, and welders
to heat air, water, foods, and chemicals, to cure paints and
glues, to forge steel, and to weld ships.
The future of energy technology comes down to one overarching
trend and one key paradox. The trend is electrification:
electricity is the ascendant fuel of our energy economy.
The paradox is that the automotive sector consumes barely 30%
of our energy but builds about 90% of our energy conversion
technology. Thus, while the automotive sector is certainly
the last of the three main sectors to embrace the electric
drive train, the technologies that electrify the distribution
of power under the hood of the car will ultimately dominate
electrical power processing everywhere.
Automobiles have a unique demand for high volume, low cost and
exceptional reliability. The best energy-technology companies are
working with the auto-manufacturers to electrify brakes, steering,
pumps, valves, suspension, and ultimately the wheels - everything
downstream of the internal combustion engine. Very profitable
margins are now opening up between the old mechanical-hydraulic
power distribution systems (almost a century old) and the electrical
systems that now offer at least ten-fold improvements in speed,
precision, reliability, fuel economy, and environmental performance.
These same auto-industry suppliers will quickly dominate the rest
of the energy-tech sector as well - the power-related tiers of
industrial machines, consumer products, and information technology.
Intel developed its microprocessors for desktop computers but ended
up selling them for cars, cell phones, and microwaves. The companies
that come to dominate the market for automotive power processors will
end up selling them to factories, offices, and homes. The big telecom
story of the current decade is the convergence of telephony, cable,
and broadcasting into a single, digital, broadband market. The big
energy-tech story will be the convergence of the automotive,
industrial, and electrical sectors.
Digital Power Report - Pontiacs & Powerchips
InTech Pinto's Point (24 Apr. 2002) - The Silicon Car
Get George Gilder's Friday letter (free):
Siemens & ABB - Compare & Contrast
The largest (by far) company in the industrial automation business
is Germany-based Siemens. The 155 year-old company has always been
considered staid and conservative. It's European rival ABB, on the
other hand, had always been held up as a model of enlightened
leadership, good management, aggressive growth orientation.
ABB (the Swiss-Swedish result of the merger of ASEA & Brown Boveri)
grew through literally hundreds of acquisitions. Chairman Percy
Barnevik, who ran ABB from 1988 to 1996, was considered by many
to be the chief architect of the company's growth strategy.
Barnevik thought that ABB could gain a leadership position in the
vast industrial automation & process controls business by stitching
together the fragments, with the vain hope that an enlightened
management style could generate positive results.
Barnevik would have found these Pinto-maxims useful:
- Pig + pig = Piglets
- The only person interested in a lot of pigs is a pig farmer
- Never play with a pig - you both get dirty and the pig likes it
With ABB's continued decline, Barnevik's departure was clouded
by the news that his golden-handshake was a little too golden
for European tastes. And today, with a combination of bad luck
and bad timing, after 3 departed CEOs in 5 years, Jurgen Dormann
is cutting the company down to size.
US-based Combustion Engineering, acquired in 1990, faces
asbestos-related claims that may exceed the subsidiary's book
value of $812 million, ABB says. That wouldn't be enough to
crush a healthier company. But ABB's $5.5 billion debt load
has forced a costly reorganization and undermined confidence
in the company's future.
In contrast Siemens (which competes with ABB in factory automation
& power-distribution equipment) looks set to emerge from the current
economic downturn battered, but intact. For the latest quarter
(Sept. 2002) Siemens made a profit of about $250m on sales of
$21b - not a bad accomplishment in these tough times. Although
still burdened by losses that relate to the telecom business,
Siemens appears to be in good shape, with no sense of anything
like the crisis that embroils most of the other automation players.
And, it is evidently out hunting for good deals in segments of
automation markets where it does not have leading market-share.
Siemens is reported to be looking closely at both Honeywell IS
and Foxboro. Siemens tends not to buy whole pig-farms (to
sell-off unwanted segments); rather, they negotiate only for
pieces that fit their strategy.
Siemens has long been criticized for slowness, lack of focus, and
excessive caution. But its strength may have been its stubbornness
and refusal to stray too far from its traditions of prudence.
Siemens & ABB have radically different attitudes toward debt.
Siemens raised billions by spinning off its semiconductor and
components businesses at the peak of the tech boom. But, with
the cash raised, it did not rush into any big acquisitions.
Siemens' debt is now $1.8b, which is reasonable for $83b sales.
The third player in this drama is GE, whose high-growth, high-return
record has not been matched by its European rivals. GE's potent mix
of manufacturing, media, and finance has powered a total return on
its shares of 363% since 1992. In contrast, total return for Siemens
equity is only 117%. GE's shares have trailed Siemens' of late. But,
with all its prudence, Siemens has yet to meet the GE challenge.
Business Week: Siemens Proves Prudence Is a Virtue
Siemens Weblog
ABB weblog (new):
The pervasive Internet
Within a few years, billions of Internet-enabled microprocessors
will provide digital intelligence and connectivity for almost every
commercial and industrial product and appliance, extending the
Internet into most aspects of our lives - this is the concept of
the pervasive Internet.
The next era of connectivity - device connectivity - will allow
product suppliers to provide increased benefits for their end
customers, hence providing increased competitive value. Device
networking allows product and service companies to communicate
with their products, without the interruption that might be imposed
on an end consumer. This allows both the supplier and the customer
to benefit significantly.
Imagine any product you know being Internet-enabled - an automobile,
a house, a washing machine, an office thermostat - these all have the
potential to be networked. Skeptics think that this kind of gadgetry
has few practical applications for the user of the product (do we
really need to talk to our washing-machine?) But, it's not the
consumers that initially have the most to gain from device
networking - it's the businesses that support them.
Manufacturers will use their connected products to develop customer
service relationships that ultimately recreate the nature of revenue
growth and customer management in an information economy. Product
companies will use device-networking technology to reduce, or even
eliminate (for their customers) the hassles of product ownership.
This allows the manufacturer to reduce costs, achieve revenue growth,
and pursue new opportunity areas. Device networking is not only
possible, but also essential.
Soon, digital intelligence and connectivity will be available for
almost every commercial and industrial product and appliance,
extending the Internet into most aspects of our lives. Products
and companies that fail to exploit this next wave of the digital
revolution will simply obsolete themselves.
This article was published by AutomationTechies.com, November 2002.
And a copy is available on the JimPinto.com website.
Harbor Research - The Pervasive Internet Report
The Pervasive Internet and It's Effect on Industrial Automation
The Pervasive Internet (JimPinto.com website)
JimPinto.com weblogs
Since we started the weblogs a few months ago, traffic on
the JimPinto.com has jumped significantly - double and triple
previous levels, and still growing.
The Weblog (or "blog") is a relatively new email-publishing
phenomenon. It is attracting a lot of new people to insert their
own comments and read other people's feedback on a particular topic.
Blogging is NOT on-line "chat" (which is relatively real-time) and
is not quite the same as "groups", where a lot of irrelevant and
sometimes rude and crude remarks get published automatically,
with no moderator. A weblog always has a "moderator" (for the
JimPinto.com weblogs, that's me) who has editorial privilege
and inserts only those that make sense for the subject-thread.
JimPinto.com weblogs are available for 2 topic-threads, relating
to my articles & eNews:
- Social commentary: This category includes my trilogy of
articles - Crony Capitalism, Creeping Criminality, Lure of the
Lifestyle. And, the central theme is "Soft Solutions for Hard
Problems", relating to the "hard" problems of the new century
which appear to defy the old "hard" solutions of the past.
- Industrial Automation: This includes weblogs on several of the
major industrial automation companies - Rockwell, Invensys, Siemens,
Honeywell, ABB (recently added) and the Japanese automation leaders
(Yokogawa and others).
The major traffic that the automation-company weblogs generate
indicates that many people (mostly employees, or ex-employees)
have a NEED for some (ANY) type of discussion. I have sometimes felt
uncomfortable that the JimPinto.com weblogs could become merely be a
platform for the chronically dissatisfied, or for insecure employees
who are recently, or soon-to-be, laid-off. But I am happy to report
that, considering the difficult economic environment, there is
indeed a balance of realism.
I have tried (more than once) to exert my editorial influence to
encourage the optimists to get involved - with at least some results.
But the overall tone of the complaints is that of simply the NEED TO
BE HEARD.
If you are still an employee of one of weblog subject
companies, you can do 2 things :
- Weblog your own comments to spread your own sense of positivism;
- Forward the weblog-link to the highest level possible, or at least the HR (Personnel) department,
with a simple request: PLEASE READ.
Several people have pointed out that a couple of major companies are
conspicuously absent from this list: Emerson and Schneider. I am aware
of this, and will be working to start weblogs on these (and others)
sooner or later.
In the meantime, you can help to start new weblogs simply by sending
your comments and feedback to me directly by email. Send your comments
on the topics discussed in the regular JimPinto.com eNews - or for
that matter ANY topic that relates to my articles, poems, news,
discussions on the JimPinto.com website. Or, bring up a new topic,
or question.
Typically, your name and email address will be published in the
weblog. If you would rather have your name withheld, simply don't
include it. Confidentiality will be respected.
Your 'blog' will usually be published the same day on the weblog
for that topic. You can read the relatively immediate feedback and
commentary from many others, on the same, or similar, or new topics.
Happy blogging! Stay tuned!
JimPinto.com weblog Index
The Blogging Phenomenon
eFeedback
Perry Marshall [perry@perrymarshall.com] sent our Chinacosm comments
to his brother Bryan who has lived in China for 3 years. Bryan came
back with these interesting comments:
- "465,000 sci-eng students are graduating from Chinese universities.
But these are not American universities; they're Chinese universities
and this is still China. That raises my eyebrow toward those who see
China ruling the sci-tech world.
- "Many experts predict India will actually surpass China's population
by 2010.
- "A major irritant to Chinese business is that their economy is not a
free-market, though it seems to look like it. The government has its
hand comfortably and greedily in the pocket of every profit-earning
company in the country. And corporations that don't kowtow to Beijing
or the local authorities won't get anywhere. So it's not a level
playing field.
- "I'm highly skeptical when comparing China to Japan. Quality is NOT
built into the Chinese culture."
Marc Cote [marc.cote@everest-automation.com] complained about my
apparently unfair comments on ABB:
"Jim, as a regular reader of your eNews letter, I have to say that
I am disappointed with the biased comments you expressed about ABB.
It is clear that even though they would agree that things are not
all that great at the present time, their analysis certainly is very
different than yours (and a number of shareholders too apparently).
"Some would say that many of the changes brought about by Jurgen
Dormann are positive and will help to improved the situation in a
relatively short period of time. The reality is that apart from the
Combustion Engineering situation, ABB is suffering the same woes as
the economy.
"The main purpose of my reply is your 3rd point - about the "key
mistake" ABB has made going to channel partners (rep's/distributors)
and as a result apparently losing touch with customers:
"First, you obviously have NO idea how this process is being done.
If you did, I suspect your view might change.
"Second, how many large corporation do you know take truly good care
of customers ? Other than certain exceptions such as Dell computers,
they are few and far between.
"Third, Emerson Process Management is built on a Rep system?
So in your opinion, Rep systems work for Emerson - but for ABB,
it is a mistake?!
"These comments you have made are very disappointing. I thought your
objective was to communicate up-to-date impartial information about
the industry, while clearly expressing your opinions separately. In
this case, your opinions expressed seem to me quite slanted."
Jim Pinto response:
" Marc, I had reported on ABB in the past, but always that it was a
well-run company that was having bad luck. Just recently, I have had
a lot of requests to start an ABB weblog, which I have done.
"After the exit of Percy Barnevik (with excessive post-departure
compensation) I was positive about Centermann, who I thought was an
excellent manager. I think too that Dormann is a good manager and
is doing what needs to be done. I pointed out that the Combustion
Engineering fiasco may bring the company down, because a court
ruling has already determined that ABB cannot simply wash their
hands with a CE bankruptcy. I am sorry if you don't like that news.
"Channel-partners: Yes, most good companies work through Distributors.
And I am well aware of the background and history of the Fisher Reps.
Indeed, I have worked with several Fisher Reps in the past and I am
intimately familiar with their business model. However, the Fisher
Reps are an exception (name another?) that was developed over many,
many years. Simply switching to Sales Reps will NOT help ABB, in my
opinion."
Steve Cuff [SCUFF@Calex.com] wrote about the seemingly inevitable
result of being acquired by a conglomerate :
"Well, your analysis of what happens to small, acquired companies
proves once again that greed knows no bounds.
"It's embarrassing to say you are a "CEO" these days. These fellows
do such stupid things with good companies and they do it for personal
gain only. This applies to the people at the top, as well as the
middle-managers who simply follow orders.
"The record of successful acquisitions is dismal. Something like
4 out of 5 acquisitions end in failure (closure of the firm acquired).
I've heard similar stories for years. A lot of them by disillusioned
company founders who sold out for stock and then saw the stock become
worthless. Indeed, Cash is "king" for these transactions."
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