JimPinto.com - Connections for Growth & Success™
No. 131 : 19 September 2003

Keeping an eye on technology futures.
Business commentary - no hidden agendas.
New attitudes, no platitudes.

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The List - Automation Majors financial rankings

A lot of people appreciated the list which was published in the recent eNews (Sept 11, 2003) - major company rankings and market shares for process and discrete automation.

We had previously published "The Famous List" - annual sales and market-cap for the industrial automation leaders in the "Urge to Merge 2001" article, and there have been several requests for an update. The Table below is the latest version (Sept. 2003).

Annual sales and market-cap for industrial automation leaders
Updated August/September 2003 - latest available data

Name Sales
$bn (est)
Value $bn
Price/Sales Price/Earnings
Siemens 92.19 56.47 0.61 23.1
Tyco 35.59 41.11 1.15 18.15
Honeywell 22.27 24.93 1.12 17.5
ABB 18.30 7.01 0.38 1947.3
Emerson 13.85 23.48 1.69 24
Schneider 9.94 12.44 1.25 21.8
Invensys 7.88 1.94 0.25 14.2
Eaton 7.21 7.03 0.98 19.95
Danaher 4.58 11.83 2.58 24.5
Rockwell 4.07 5.04 1.24 25.56
Yokogawa 1.56 2.47 1.59 negative

    Sources : Bloomberg, Deutsche Bank, Datastream
    Courtesy: Peter Reilly, Deutsche Bank
Notes :
  1. Market Value : total number of shares outstanding multiplied by recent stock price.
  2. Price-to-sales ratio shows the valuation of the stock relative to its revenue, an indication of market acceptance.
  3. Price/earnings (PE) ratio fluctuates, depending on current earnings and stock price, which relates to book value when profit is low, or negative. The ratios are based on current year (2003) estimated earnings.
I should mention that GE is not included because it is involved in too many other non-automation businesses. GE-Fanuc should be on the list, but it is jointly owned by GE and Fanuc and not an independent public company with published financial results.

It's interesting that in the automation business there are few (none?) independent public companies between $100m and $1b. Other "large" companies are division of companies not involved primarily in automation, or simply conglomerations of smaller companies. I'll be dealing with this point in a future article. Suggestions are welcome for companies that are big enough to be included in this list.

Automation company Weblogs:
6 of the 11 automation majors have weblogs on this website, generating a lot of traffic - especially Invensys and Rockwell. Honeywell traffic has slowed down since the JimPinto.com website was blocked from company Internet access. Has that helped them? Who knows...

I have had many, many requests for Schneider and Emerson weblogs. I am currently working on introductory articles, and these weblogs will be on line soon (within weeks). In the meantime, if you'd like to offer any comments that you'd like to have included, simply send me an email - don't wait for the weblogs.

Click Send Jim Pinto email

Click Major automation suppliers - rankings & market shares

Click JimPinto weblog index

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9/11 anniversary - afterthoughts

My comments on the 9/11 anniversary brought in a flood of protests, and positive support. I'm not sure why I invite dissent. On the other hand, it IS worthwhile, for some of the jewels of understanding. A LOT of people DID take the time to share their views. I sincerely appreciate their sincerity and willingness! Thank you!

Half of America supports President Bush, and I didn't mean to demean their support. Indeed one person felt that "George W. Bush is one of the finest President's of recent times." In the light of recent events, I don't understand that kind of support. It's interesting how the "facts" mean different things to different people. I suppose that's what makes democracy so powerful.

I really, really don't understand those who use the word "liberal" as a pejorative. I saw an interview with General Wesley Clark, who has just entered the Presidential race. He was asked if he was a liberal. And he said yes, he was, and that he did not think liberal was a bad word. He said America is a liberal democracy that offers its citizens the right to have different opinions, to discuss their differences openly. That is how he defined "liberal". I like it!

The words liberal and conservative need to be re-assessed. They are both positive, and should not be thought of as conflicting. The media has taken these words and redefined them, assigning negative connotations. They make money by inflaming the arguments, polarizing the positions, increasing the drama to increase ratings.

I benefit much from hearing views that do not line up with my own. Especially when the other opinions have merit. I grow by thinking about new and different points of view. Your strong feelings and opinions about the Iraq war are the part of this "liberal" nation that makes me proud. What I like most is the opinions that are expressed sincerely, not just emotional rantings.

Thank you to all those who, even with strong emotions, explained their position sensibly and intelligently, giving thoughtful expression to their views. We all grow from that kind of sharing!

Click Dictionary & Thesaurus comparisons of 'Conservative' and 'Liberal':

Click Conservative vs. Liberal morphs into Good vs. Evil

Click Visualize a Fair Election in 2004

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Media download roadblocks won't stop the flood

The music industry snuffed out Napster with a legal barrage two years ago. But users promptly shifted to downloading from peer-to-peer P2P sites such as KaZaA and Morpheus, which generated even more traffic. This piracy has hit CD sales, expected to fall by 5-8% this year, after an 8% drop in 2002.

Many people think that the record labels profit too much, with too little money filtering down to the musicians and songsters. Others think it is a rip-off to buy an expensive CD with several songs on it, when all they want is one key item. And most people want to have their own, custom selection of songs on one disc. Meanwhile, the downloading traffic continues.

In an effort to limit this seemingly inexorable growth of file-sharing, the Recording Industry Association of America has launched a big publicity campaign about its plans to sue anyone who continues this "illegal" practice. Now they are collecting "examples" to back up the threats. They have filed 261 lawsuits against individual downloaders. Will this radical strategy work? And is it fair? The "public" is still divided.

Even in the face of the threatened lawsuits, file-swappers are moving quickly to videos, downloading some 500,000 movies a day. Hollywood seems scared! Their lobbyists are pressing for stringent laws that would wrap their products in enough legal and technical barriers to make them unappealing.

Will the legal efforts actually turn the tide against file sharing? After the RIAA announced its intention to sue consumers, activity indeed dipped this summer. Last week a Newsweek poll found that 54% of the respondents say the crackdown will make them less likely to continue. The traffic declined. But the decline may have been only temporary, because of the summer holidays. After Labor Day there was a dramatic uptick again, and the numbers were as high as ever. And there was no significant drop-off after news of the lawsuits last week.

For digital entertainment to flourish, there will have to be innovative protection which satisfy downloaders, making it tough to download a protected copy, and cheap enough to buy a legal version, without making it inflexible and difficult to use.

Apple's iTunes, which started in April 2003, gives customers much of the freedom and selection they want. It lets them buy songs for 99 cents each, and copy them to as many as three other computers or music players. Now Shawn Fanning, Napster founder, is proposing another solution: a music clearinghouse that will automatically check copyrights on a song and charge a user for it.

These are steps in the right direction. The key is for Hollywood to hammer out agreements on building sophisticated yet flexible copy protection into the next generation of digital TVs, cable boxes, and personal video recorders.

Will the lawsuits and advertising campaigns - the FUDS (fear, uncertainty, doubt) - stop "illegal" file swapping? In my opinion, not likely. This is a worldwide phenomenon, like a flood which cannot be stopped by "local" legalities. The solution MUST come from copyright protection that cannot be broken. And that's a tall order!

Click Record Industry Sues Music File Swappers

Click Newsweek (22 Sept. 03) - Courthouse Rock

Click CNN/Money: The Kaaza conundrum

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The Google "pecking order"

If you're hooked on Google (who is NOT?) then you are used to the speed and accuracy of a Google search. How exactly does Google manage to find the right results for every query as quickly as it does?

The heart of Google's search technology is PigeonRank™, a system for ranking web pages developed by Google founders Larry Page and Sergey Brin at Stanford University.

The basic idea comes from the curious fact that the common gray pigeon can easily distinguish among items displaying only the tiniest differences. Google mimics this ability that enables it to select relevant web sites from among thousands of similar pages.

When a search query is submitted to Google, it is routed to a data coop where monitors flash result pages at blazing speeds. When a relevant result is observed by one of the "pigeons" in the cluster, it assigns the page a PigeonRank "peck" of one. Those pages receiving the most "pecks", are returned at the top of the user's results page with the other results displayed in "pecking order".

Yes, I know this sounds strange. But, it makes sense in a reverse complexity, chaos-theory sort of way.

Click Read: The technology behind Google's great results

Click Useful booklet: Google Pocket Guide

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Dilbert Humor

If you're an Engineer (like me) - and even if you're not - surely you follow the daily exploits of Dilbert. There are now 697,741 members of DNRC (Dogbert's new ruling class). Non members are called in-duh-viduals.

In typically dry and unimaginative industrial magazines, Omega Engineering stands out with very successful advertising that features Dilbert cartoons. Nice!

I thought you'd enjoy some extracts from the latest Dilbert Newsletter 49.0.

DNRC Wise-Ass Encouragement
How to insult an Induhvidual while making it sound like encouragement:
    "The key to our success will be your execution."
    "You're a minefield of information."
    "You're like a snowball gathering steam."
Quotes From Induhviduals
    "Can I pick your ear?"
    "I've got an ace up my hole."
    "I don't want to shoot myself in the hip."
    "The monkey is in their court."
    "The money clock runneth over."
    "We'll kill two rocks in one basket."
    "The phones were ringing out of their wits."
    "Well, that really puts a wrinkle in my ointment."
    "That was a real notch in his feather."
    "I'm going to watch you like the back of a hawk."
Induhvidual Politics
    "I don't get why we're having a war. I mean, if Bush owns Texas, that means he owns all that oil they farm there, right? So why do we need the oil in Arabia? I mean, it probably costs a fortune just to drive the stuff over here, what with the price of gas and all."
Visit the official Dilbert website, where you can get your Dilbert comic e-mailed to you every day for free, read past strips and sign-up for Scott Adams' occasional newsletters.

Click Official Dilbert website

Click Request a new subscription to the Dilbert Newsletter

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Dick Caro [RCaro@CMC.us] regarding unionization of the white-collar workforce:
    "Roy Slavin is dead right. Top management, fueled by Management Consultants, has come to believe that their entire workforce is "fungible", an interesting consulting term meaning Interchangeable. The concept that the workforce contributes to the success of the company through individual creativity is lost in this process. Shifting work to offshore low wage countries then makes sense, particularly IT work. The consultants make this even more possible through BPR, Business Process Redesign, a form of office automation. If only someone could produce a paper-processing robot, corporate America would be satisfied.

    "Long ago we lost the principle that a supervisor could manage between 6-10 people. Blowing away middle management has been in style for several years now, resulting in direct reports generally ranging from 25-100 or more. It's real easy to lay off a worker you don't really know!

    "High tech white collar (knowledge) workers have long been brain-washed to avoid unionization, yet that is exactly what Roy Slavin is calling for. I don't like the basic principle of unionization that all workers are equal (fungible), and it really doesn't apply in creative areas such as programming and product design. However, the actions of unions, slowdowns, strikes, negotiations, etc. are exactly what is needed to increase the demand-effect of knowledge workers. Imagine the effect of placing one or two of these knowledge worker representatives on the executive compensation committee.

    "Knowledge workers need the protection of unionization laws of collective bargaining, but right now these workers are classified as "exempt" and cannot be protected. I don't like this turn of events, but the corporate abuses of labor in the 19th century that led to the AFofL/CIO unionization movement, are now repeating themselves in a different form. Excessive executive compensation at the expense of knowledge workers is an abuse of management and is currently unchecked."

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Jiri Baum [jiri@baum.com.au] from Australia considers Microsoft operating systems the primary weakness which makes users vulnerable to computer virus infections:
    "People already are patching their MS Windows machines as fast as they can, and they're already using anti-virus programs. Doing more of the same can only result in more of the same kind of problems.

    "Yet in the weeks that Blaster and SoBig.F struck, there was a class of companies that perhaps got some of the back-wash (delayed by the bulk of other people's SoBig.F bounces) but were largely unaffected. Those were the ones that use Linux or other Unixes.

    "Not an option? And losing $2 billion to the Blaster/SoBig.F double whammy is? Don't forget that both Blaster II and SoBig.G are pretty much expected any day now. Microsoft has had years to prepare: Word macro and Outlook e-mail viruses started in March 1999 - almost four and a half years ago - and buffer overruns are ancient. In this, Microsoft has failed. Not just slow - they have failed outright.

    "For the cost of a couple of these clean-ups, one would be migrated to Linux, users re-trained, VB apps re-written, and still have change left over.

    "That's not even mentioning the "normal" costs of MS Windows, such as the incredible churn. People have only just managed mostly to migrate to XP, and already there is Win2003 on the horizon and people will be encouraged to migrate to it over the next few years - including rewriting all their VB apps in VB.NET. Why not just rewrite them for Linux or Unix and be done, once and for all?"

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The Wiz - Dennis Wisnosky [dwiz@wizdom.com] had some sensible solutions to stem the corruption of capitalism:
    "Somehow, while maintaining the concept of capitalism, the imbalance has to be arrested. Arrest more the law breakers and put them away along with their accomplices. What about considering the lives ruined by a Skilling and a Lay in the same light as a Malvo? That would be a start.

    "The next tier are the Jack Welch's. Let's hold part of their fortunes in escrow for at least a decade, until we learn the real results of their corporate building."

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