JimPinto.com - Connections for Growth & Success
No. 17 : September 20, 2000
- Troubled Companies : Invensys, ICS, Rockwell
- Technology Adoption Patterns
- Computer Jewelry
- Cellphone Location Applications
- Internet Growth Numbers
Invensys crunch-time (continued)
The shares of Invensys plummeted by about 50% when their recent press
release warned about poor results. The company, renamed after the merger of
Siebe and BTR, is now under heavy fire. Invensys has made several
acquisitions that have failed to excite investors. Its recent (July '00)
acquisition of Baan, the Dutch enterprise-software company, is clearly
fraught with risk.
Read the Invensys press release that started the stock-slide
The Invensys strategy has been to consolidate similar
companies, divest the dogs and build a pool of cash to make new, attractive
acquisitions. Although Baan is NOT the cause of the immediate problems, it
is the biggest bet and will not produce results fast enough to make a
difference - indeed, it will likely have a negative impact that will mask
gains in other areas.
Invensys CEO, Allen Yurko, is intelligent, ambitious, aggressive and an
excellent manager. Unfortunately, he appears to have been poorly advised,
particularly in the acquisition of BTR, which was a poorly managed
hodge-podge and simply compounded Yurko's problems. It is unlikely that he
will survive the current situation - I give him a few weeks, at best. Pity,
because there is no leadership alternative within the company. Yurko's exit
will simply put Invensys in the hands of an interim CEO who will seek an
acquirer. The current stock-price makes Invensys a clear target for either
Siemens or Emerson.
ICS (UK) - Tritax Takeover
Industrial Control Services (ICS UK) will, for all practical purposes,
cease to exist once Tritrax, the acquisition vehicle backed by venture
capitalist Alchemy, acquires 100% of the group, according to David Keast,
publicity consultant for ICS Triplex and Transmitton. In its place Tritrax
will become the effective holding company, under Alchemy appointed managing
director David Rimmer, but will have a purely financial function, in effect
acting as a bank to the three operating companies. UK-based ICS Triplex and
Transmitton and US-based Max Controls will operate as autonomous wholly
owned subsidiaries under their existing management.
The three companies are too small and precarious to
survive autonomously for long. Look for each or all to be acquired or
merged sooner or later. In the meantime, recalcitrant stockholders are
awaiting resolution of their penny-a-share stock. I predict that Alchemy
will inevitably find a way for them to exit without paying a premium.
Take a look at ICS - The Downhill Debacle here on the web
Shares of Rockwell (ROK) fell 20%, after earnings expectations for the
fiscal year ending Sept. 30 were lowered, citing a softening in U.S.
markets for automation products. Shares of Rockwell International ended
regular trading on Monday 18 September ‘00 at $30.50, down $7.69 on the New
York Stock Exchange. Shares ended at $ 28.75 on Tuesday (19 September '00).
Don Davis, CEO reported: "In particular, automotive related capital
spending projects, which represent approximately 25 percent of Automation's
Control Systems sales, are continuing to be deferred. Parts shortages in
electronic components and displays are also affecting our ability to make
timely deliveries and are increasing our material costs."
Read the Yahoo financial news item
Rockwell has been slipping and sliding for a while
and I predict that it will be acquired within the next year. Take a look at
my article written in the last century (July '99).
Pinto's Pointers : Who will buy Rockwell & Allen-Bradley?
Technology Adoption Patterns
As the introduction of new technology accelerates, it is interesting to
review the patterns of adoption.
The aggressive users are the "Hunters" true technophiles who actively seek
out a new product as soon as it is announced, often before it can even be
acquired through the retail channels. Next are the "Early Adopters" who
typically buy a new product early in its growth stage, when it first
appears on retailers' shelves. Then there is the main market, the Consumer
group, the less aggressive users of technology, the "Wave Riders" who
typically adopt a new product once initial prices have dropped and the
product's concept has been proven. Finally, there are the "Laggards" who
buy when prices have dropped significantly, or when they are forced by
Good Marketing piece : From Hunters to Luddites
Do you remember a few years ago when the Intel Pentium-chip had a slight
math-flaw and was finally recalled? Well, can you guess what happened to
all those recalled Pentium chips? What DO you do with a flawed Pentium?? I
asked my friends at Intel in Albuquerque, New Mexico and got this surprise
: they were sold as junk, and turned up in tie-pins, rings, bracelets,
belt-buckles and necklaces......
The latest trend is not just decorative, but "Active Jewelry". Cameron
Miner, the head of IBM's designLab for Wearable and Pervasive Computing,
"As pervasive computing becomes a reality, and we are able to
access information and services anywhere, anytime, our "access devices"
must be with us everywhere, all-the-time. How can we expect people to do
this? Let people wear them, make them fashionable, make them personal."
Recently, Bill Gates of Microsoft, Andy Grove of Intel and I were having
lunch, right here in San Diego. Suddenly we were interrupted by a beep, and
Bill Gates started talking to his wristwatch and listening to his necktie -
evidently a call from Joel Klein at the Attorney General's office.
Shortly after, there was another tinkling sound and Andy Grove started
speaking into the air; apparently the microphone-chip was in his tooth, and
the speaker built into his ear lobe. A few minutes later, when a rumbling
sound came from my direction, I quickly explained that I had an urgent fax
coming, and needed to go get some paper.....
But seriously, several types of "active jewelry" are already coming on the
market! Samsung's will soon be releasing wristwatch cell phone. Casio is
now selling MP3 and GPS and digital camera wristwatches. And Sony has been
selling an "active MP3 pendent" called the Music Clip. Aesthetically
pleasing, wearable gadgets will soon make technology tools less irritating
than they are today.
Explore IBM designLab ideas
Speaking of communicating computing appliances, several companies are
introducing GPS (Global Positioning System) chips that will locate a mobile
phone or PDA user to "within five yards".
see the Aug. 30 San Jose Mercury News
This type of technology will soon bring new applications to your cell
phone, based on your location. You might expect your cell phone to beep
with the following message on its screen: "It's noon! Have lunch at TGI
Friday's right here in front of you - and you'll get a two-for-one
The potential for a vast range of new position-related services seems
enormous. Auto manufacturers will soon be putting GPS-cellphones into new
cars which will create quite a platform for location-based advertising and
information services. Several position-based services are already showing
how useful these services will become.
The number of Internet connections worldwide is now about 300 million, with
about half of them residing in North America. Japan is in second place,
with about 30 million. European countries, with a combined 82 million
people online, are catching up - led by the UK, followed by Germany and
Italy, which together make up about half of online Europeans.
Take a look at ZDNet News & Nielsen/NetRatings
The Web is currently made up of 6.4 million servers at 4.5 million sites,
and there are more than two billion Web pages. By 2005, forecasts more than
one billion Internet users, at which time 700 million of those users will
be located OUTSIDE North America! We are clearly headed for a
"multicultural, multilingual, and multipolar" Internet.
Take a look at the US Internet Council (USIC) study
More than 90% of those in the 18-34-age bracket will be online by 2004, and
the number of people over 55 will triple, as cyber baby boomers account for
20% of those surfing the Internet. Indeed, the over-55 age-group currently
represents the fastest-growing online segment.
Take a look at this IDC article on changes in online population
Regarding my discussion of the "deep web", Fong Kin Fui from the Centre for
Intelligent Control, National University of Singapore e-wrote:
"The subject of "deep web" is not new. In a talk given by Vinton Cerf, a
founder of the Internet, at our university on 7 Dec 1999, he mentioned the
existence of "dark matter". This analogy comes from astronomy. There is a
theory that says the Universe is bound together by dark matter, as opposed
to white matter which can be seen by telescopes. The proportion of dark
matter greatly exceeds that of white matter. Cerf thinks that information
on the Internet is organized in the same way - the bulk of the information
in the Internet is buried in search engines and company databases. This
type of information is thus not easily accessible and thus not "seen" by
the normal users of the Internet. Go to Cerf on the Net and look
down the list for Cerf.
Cerf on the Net
On the same theme, Mrs. B. Hollander of Omega :
www.omega.com e-wrote :
"We find our problem is quite simple: how do you get listed with the top 5
names on the search engines? I guess some of our offering materials could
be considered "deep web" because we offer so much technical help and yet
someone searching has to know to come to us directly to get it. The search
engines are not picking up our contact connections".
Regarding dot-it-yourself HTML web pages, Eoin O'Riain from Ireland's
award-winning Instrumentation Signpost :
www.read-out.net e-wrote :
"I also do my HTML in the "raw" and enjoy it. Sometimes I make mistakes and
I'm always learning. I got in too early to learn programmes devised for
those lesser souls who can't enjoy the true simplicity of this incredibly
easy system. But I still have problems in trying to program my VCR...."
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