JimPinto.com - Connections for Growth & Success™
No. 97 : September 5, 2002

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

  • The Technology of Mega-terror
  • Tribalism vs. McWorld
  • Automation Update - Will Invensys sell Baan?
  • Automation - old dead-ends, new directions
  • Powers of 10
  • eFeedback:
    • Thought currents
    • Technology & the population boom
    • Honeywell censorship causes weblog traffic increase

The technology of mega-terror

The events of 9/11 brought to many Americans the sudden recognition that their country was no longer leading a charmed life. As we approach the first anniversary of 9/11, some of us agonize again with memories of the horrific events, while others agonize about the repetitious and graphic reminders and simply wish that the world could get safely beyond. But we know that we must find ways to ensure that this kind of terrorism can never happen again.

The concept of mega terrorism was well known. The warnings were there. Many security experts had seen it coming. In 1999, for example, a commission led by Senators Gary Hart and Warren Rudman examined US security policies and, in a report published 2 years before the 9/11 attack, concluded, "There will be a greater probability of catastrophic terrorism in the next millennium. Future terrorists will probably be even less hierarchically organized, and yet better networked, than they are today. Their diffuse nature will make them more anonymous, yet their ability to coordinate mass effects on a global basis will increase. The US should assume that it will be a target of terrorist attacks against its homeland using weapons of mass destruction. The US will be vulnerable to such strikes."

In the latest issue of MIT Tech-Review, Richard Garwin, a nuclear weapons scientist and veteran presidential science advisor examines bioterrorism, dirty bombs and smuggled nukes, and details how to stop them. Though the 9/11 catastrophe was not caused by "weapons of mass destruction", Garwin believes that the biggest threats we face are two types of such weapons: biological and nuclear devices.

What to do next? Read this excellent article to see how we must plan constructively to build a better future in the new century.

Click MIT Tech-Review - The Technology of Mega-terror

Click What to do? Discussion on the topic of Mega-terror

Tribalism vs. McWorld

In a discussion on the topic of "Soft Solutions for Hard problems", Ron Bengtson (see eFeedback below) sent me this March '92 article by Benjamin Barber, Whitman Professor of Political Science and director of the Whitman Center at Rutgers University.

Barber's thesis: Just beyond the horizon of current events lie two possible political futures - both bleak, neither democratic.

The first is a retribalization of large swaths of humankind by war and bloodshed: a threatened Palestine-like predicament of national states in which culture is pitted against culture, people against people, tribe against tribe - a Jihad in the name of a hundred narrowly conceived faiths against every kind of interdependence, every kind of artificial social cooperation and civic mutuality.

The second is being borne in on us by the onrush of economic and ecological forces that demand integration and uniformity and that mesmerize the world with fast music, fast computers, and fast food - with MTV, Macintosh, and McDonald's, pressing nations into one commercially homogenous global network: one McWorld tied together by technology, ecology, communications, and commerce. The planet is falling into fragments AND coming reluctantly together at the very same moment.

The tendencies of tribalism (what Barber prophetically called the forces of Jihad) and the forces of McWorld operate with equal strength in opposite directions, the one driven by parochial hatreds, the other by universalizing markets; the one re-creating ancient sub national and ethnic borders from within, the other making national borders porous from without. They have one thing in common: neither offers much hope to citizens looking for practical ways to govern themselves democratically. If the global future is to pit Jihad's centrifugal whirlwind against McWorld's centripetal black hole, Barber argues that the outcome is unlikely to be democratic.

In my own opinion, the world is heading for a median, probably somewhere in between the extremes. The problem with tribalism is that most of its adherents are not educated, highly controlled and dominated by religious leaders, have little or no access to mass communications.

I think that Communications (all forms) will foster universal thinking, without mindless, unthinking McWorld consumerism. The businesses that succeed will be the ones that cater to the narrower tastes of local "tribes": "Go global, think local".

The Atlantic Monthly published Barber's article in March 1992, but it seems to offer very current insight into the problems facing us today. It makes excellent reading, and provides powerful insights - read it!

Click Atlantic Monthly: Barber - Jihad vs. McWorld

Click Barber ideas in his book published in 1996

Will Invensys sell Baan?

As the Invensys saga continues, Forrester Research recently (Aug.02) published an interesting research report, summary here:

More than 6,000 manufacturing firms license Baan's supply chain software but, despite Baan's innovative products, Invensys lacks the focus to make a success of Baan. Forrester Research believes that heavyweight, cash-rich vendors like Microsoft, PeopleSoft and Oracle will eventually acquire Baan - for relatively small change.

Invensys continues to struggle with 41% decline in operating profits and lacks the financial resources, the management muscle, or the time, to create a single integrated suite with the software solutions it owns: iBaan, PRISM, Protean, Wonderware, and Xebic. As a result, users suffer from a ragbag collection of software with high operating costs and nonstandard user interfaces.

Under Invensys' ownership, Baan survives on maintenance fees from existing contracts: Just 32% percent of its revenue comes from new software license sales, compared with an average of 41% for its competitors SAP, i2 Technologies, and Manugistics. Two years after its acquisition by Invensys, Baan has added just 350 new customers - a meager 3 percent annual growth rate.

Instead of waiting for Invensys to make a move, Forrester believes that Baan should create a sell-off task force that will enhance Baan's prospects for sale. Few vendors have the cash or the stomach to buy Baan. Forrester suggests that the primary possibilities are:

  • Microsoft - to move up the corporate ladder.
  • Oracle - to get to the shop floor.
  • PeopleSoft - to penetrate the European market.

Click Troubled Invensys - Dispose Of Fading Baan

Just recently, Victoria Scarth (Invensys senior VP, corporate marketing and communications) was asked directly about Baan being for sale. Ms Scarth, who insisted that she was one of just 3 people at Invensys (the other two are the CEO and CFO) who speak to the press about financial matters, responded as follows (summary here):

    "Baan is a $400 million company, but only 4% of $10b Invensys (true at the time of the acquisition of Baan, but after the divestures, Invensys will only be about $5b or $6b). We admit that when Rick Haythornthwaite came in, he was not a Baan convert. But Baan is now on solid ground and definitely not for sale; it is $400m now and has the potential to double to $800m. Baan has 6000 installations including the world's largest manufacturers (Boeing, etc) The new link up with Wonderware for real-time control in manufacturing will be a killer-app."
Pinto Points:
Baan was once Europe's second largest software company, just behind Germany's SAP. Once valued at about $10b, Baan had financial difficulties in mid-2000, which dropped its value to about $600m. Invensys, which then had a market-cap of about $14b, was itself in trouble after the merger with 'pig-in-a-poke' BTR. The BTR merger was engineered by CEO Allen Yurko and the pompous xenophobe Lord Marshall who was the part of the baggage that came with BTR and is still Chairman a year after Yurko was booted. In an attempt to muddy the already murky water, Yurko stubbornly bought Baan with a cash offer of about $725m. This proved to be Yurko's downfall and gave Invensys cash-flow problems from which it is still suffering.

The Forrester article is correct - Baan is going nowhere as part of Invensys. An industry insider suggests that Forrester was paid to develop this material by :

  1. Invensys - to start hyping the price;
  2. One of the potential buyers - to get it on the block; or
  3. Baan end-users - afraid of getting stuck with a dying platform.
Invensys is now in the unenviable position of needing to sell desirable, profitable parts to generate cash for the remaining dogs, pretending that the remaining "core companies" are part of its strategy. By any definition, Baan is a dog and any sell price (despite the Forrester fantasy) would be far below the Invensys book value. Hence, in my opinion, Baan is not for sale.

Regarding the Invensys strategy, this weblog came just recently from a high-level Invensys insider (summarized here):

    "Haythornthwaite is creating a 'core business' strategy to get buyers to think that Invensys is much stronger than it is. Otherwise, they would offer 'knacker's yard' prices. This plan is code named 'Operation Quicksand'. The strategy will fold once the disposal program is done. The idea is to make the best deals they can and salvage as much of the creditors' money as possible; the creditors are calling the shots, not the stockholders."
For more complete details of the press interview with Victoria Scarth, and the insider's discussion of the Invensys 'core strategy', go to the JimPinto.com Invensys weblog.

Click Invensys weblog

Click How Invensys bought Baan

Automation - old dead-ends, new directions

The consistent stream of industrial automation mergers, acquisitions, consolidations, re-organizations and layoffs is happening because US industrial automation markets have been declining for the past several years. Organic growth has been simply non-existent and margins have been shrinking.

The automation market shrinkage is beyond the recent across-the-board recession in financial markets. To understand the automation decline, we must recognize that several important strategic factors that have changed over the past decade.

My Sept. 2002 article on this subject is on the AutomationTechies.com website.

Click AutomationTechies.com

Click Automation: Old dead-ends, new directions

Powers of 10

You must take a look at this website! It provides a wonderful view of the universe, zooming in with powers of 10.

View the Milky Way at 10 million light years from the Earth. Then move through space towards the Earth in successive orders of magnitude until you reach a tall oak tree just outside the buildings of the National High Magnetic Field Laboratory in Tallahassee, Florida. After that, begin to move from the actual size of a leaf into a microscopic world that reveals leaf cell walls, cell nucleus, DNA and finally, into the subatomic universe of electrons and protons.

Let the pictures zoom automatically, or do it yourself, to spend as much time as you wish enjoying each picture.

Click Powers of 10 - Interactive Java tutorial


On the subject of Soft Solutions for Hard Problems, Ron Bengtson [ron2010@pacbell.net] wrote:
    "You have said, very well, what I have been feeling. I want to encourage you to continue writing on this subject. You seem to find the right words, and challenge people to think in new ways.

    "Many years ago I was introduced to the idea of 'thought currents'. The man describing the idea to me said that he believed there are thought currents that are much like wind currents that move around the globe. And, that like minded people meet each other because they are traveling mentally within the same thought currents. When I read your article, I was reminded of this idea. I felt that I had meet someone who thinks like I do."

Jim Pinto: Thank you, Ron Bengston! It is people like you who help to keep the "thought currents" flowing!

On the subject of the effects of the population boom being countered by technology, Lou Heavner[Lou.Heavner@EmersonProcess.com] wrote:

    "Population growth is a good thing. There will be more people to solve problems and discover/invent new things. I think that is a key point that Tom Peters and other business consultants make when advocating things like workforce diversity.

    "We all know that quality is premised on reducing scrap and rework. Deming, Crosby, etc have drilled that into us. The benefits of quality can be a much more important motivator than environmental regulations for reducing waste, in manufacturing particularly and our lives in general. Improved technology makes it feasible to improve quality."

After the recent spate of Honeywell news, culminating in the exit of Terry Sutter, a Honeyweller sent this:
    "I have been a Honeywell IS employee for many years (26+), and really enjoy reading your articles and insights. Usually I access your web site from my honeywell.com domain (at work - during lunchtime). There are many of us who view your web site and appreciate the forum and your weblogs.

    "I guess your challenge to outgoing Terry Sutter has really gotten under Gilligan's skin to such an extent that they have censored you! Today when I attempted to view your web site, I was red-screened, meaning that any access to your web site from work is now denied. Honeywell ACS has placed your web site on the "non-business list". Most of us are indeed surprised, because we think you provide some good inputs about the automation industry. What you write about is not available elsewhere. This Honeywell "censorship" has simply caused more people to log on privately."

Pinto Comment : When this news was weblogged, several Honeywell employees reported that they still have access to JimPinto.com at work. I've got to tell you, the Honeywell weblog traffic has more than doubled recently!

Click Visit the Honeywell weblog

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