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
- 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.
MIT Tech-Review - The Technology of Mega-terror
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
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!
Atlantic Monthly: Barber - Jihad vs. McWorld
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:
Troubled Invensys - Dispose Of Fading Baan
- Microsoft - to move up the corporate ladder.
- Oracle - to get to the shop floor.
- PeopleSoft - to penetrate the European market.
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."
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 :
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.
- Invensys - to start hyping the price;
- One of the potential buyers - to get it on the block; or
- Baan end-users - afraid of getting stuck with a dying platform.
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.
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
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.
Powers of 10 - Interactive Java tutorial
On the subject of Soft Solutions for Hard Problems, Ron Bengtson
"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.
Jim Pinto: Thank you, Ron Bengston! It is people like you who help to
keep the "thought currents" flowing!
"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."
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.
After the recent spate of Honeywell news, culminating in the exit
of Terry Sutter, a Honeyweller sent this:
"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
"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.
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!
Visit the Honeywell weblog
"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."
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