The People Have Spoken, the Bastards!

After being totally absorbed in the last election cycle (this time it was personal for me), it’s time for me to disconnect a bit and focus on other areas that need attention.

But not before a parting shot.

I’ll start with Peggy Noonan’s excellent article from which I stole this headline. Noonan’s posits that American voters are adults, they rejected the Democratic party’s liberal agenda, but also the more extreme Republicans candidates. A good message needs a good messenger. Good for us.

I laugh as the losing party starts to talk about our ‘broken system’ where nothing ever gets done. You know what: we adult voters like the system the way it is. Since everyone agrees that, by and large, politicians are crooks. So why do we want to give them more power over our lives?

<sidebar2> Similarly, I always wondered why liberals who think that cops are all fascist pigs, insist that they should be the only ones allowed to have guns. Someone ‘splain it to me please. </sidebar2>

But what was proven this year, yet again, is the amazing political system that was put in place by our founding fathers. A unique system that has no equal anywhere else in the world. A system that diffuse power greatly and puts the individual in charge.

Nothing illustrates this more that the primary system. Pundits complain that it polarizes the dialogue since only diehard partisans vote in primaries. But the flip side is that in every other place on this planet, party bosses pick the slate of candidate and voters are permitted to pick from one or more piles of feces. No other country in the world would have produced a Marco Rubio, Rand Paul, or even a Christine O’Donnell.

Even when we’re scared and cannot think straight, the wisdom of the crowd reasserts itself.

Waiting for Superman? Don’t hold your breath

I often refrain from blogging about the education space because the business I run is education related and there is such a uniform, embedded, world-view it’s hard to have reasoned dialogue. “Waiting for Superman”, because it’s produced by a liberal, seem to, at last, lift the taboo on this subject. So here goes.

This industry seems to have a singular focus on money as the prime lever for good education. The graph below shows the results of this policy.

In the last 40 years the cost of education has gone up 375%, that’s almost 100% per decade, with no improvement in student achievement whatever. Is there any stronger repudiation of the spending argument?

Yet the teacher’s unions have convinced this country that any attempts at controlling cost will have a disastrous effect on the education of children and the future of this country.

Over the same period, student population grew by 10% the teacher population grew by 100%. Class size did not change much, for all of these resources are now deployed as ‘layers of experts’ adding overhead and reducing accountability. Who’s at fault if a student fails? The classroom teacher? The reading specialist? The curriculum coordinator? Special Ed? Lunch lady? Overlay of responsibility equals plausible deniability.

Here’s a simple mind experiment: If the growth in teacher population kept pace with the growth of student population, the average teacher would be making $150K per year. That would attract a completely different type of individual to the teaching profession, and we wouldn’t be arguing about class size.

The only way to fix this system is to bring accountability back. I say this as Michelle Rhee exits her position of Chancellor of the DC school district, her attempts at reform thwarted by an uncooperative Democratic congress, an unsympathetic populace that voted the reformist mayor Adrian Fenty out, and overly powerful teacher’s union.

You can wait for Superman; just don’t hold your breath

The 21st Century: Libertarianism and the rise of the individual

For a measly $1, I was lured into buying a collection of old science fiction books for my Kindle (I guess the Long Tail really works). A collection that spans more than a century and half of popular SciFi and fantasy fiction.

As I read through the 22 books, a curious pattern emerged: Prior to 1920, the heroes, movers and shakers that the worlds turned to in times of crisis were inevitably strong individuals and entrepreneurs. These industry scions harnessed and focused capital and resources in the defense of earth from evil invaders.

Then, somehow, in the popular psyche government was handed that job: they became our protectors, the fountainhead of power and resources. The individual faded into the background to become a small part of a larger machine. This world view persisted throughout the 20^th century: Big government and big business took center stage as the need for scale drove the concentration of capital and power.

More recently, in curious way, the pendulum shifted. Government and institution formed the first line of defense. The protagonist/hero, however, almost always was an individual that bucked the system and, singlehandedly achieved what a whole country couldn’t.

As we close the first decade of the 21^st century, recent events, and there are so many, have shown how impotent government is at dealing with systemic problems. After a century of placing our full trust in them, we are now reevaluating our options.

The rise of the Tea Party in America, the lurch to the right in Europe are all signs that the populace understand the choice at hand: double down on Big and move towards a more centralized, command and control government, or we can go the other way and allow the individual to flourish again.

As Gen-X start to replace baby boomers in positions of power and influence, they bring with them a different, more individualistic world-view. I won’t be around to see it, but I’m betting historians will label 21^st as the Libertarian Century.

Public Libraries: the lasting dinosaur

Even if you’re not involved in the publishing industry you cannot help but notice seismic changes the industry is experiencing: Business models are being reinvented, new entrants are redefining the value chain, and technology is changing how information is created, distributed and consumed. Mighty scions are quaking in their boots as they face aggressive barbarians at their gates.

Yet in the midst of this pitches battle is an island of serenity, and oasis of calmness, a Shangri-La of stability: the public library.

Unfazed by the realities, local governments continue to spend on public libraries stuck in the 18^th century model of how knowledge is transferred: books are so scarce that they need to be housed in a central location and shared amongst readers.

My small town of Monroe, Connecticut, recently rebuilt the public library at a cost of $6 million dollars, and spends annually about $750 thousand dollars on the operation of our public library; only $73 thousand of which goes towards the purchase of books. For the same money Monroe could have bought its 19000 residents a Kindle DX and 10 books a year.

Amazon, B&N and others have made books cheap, accessible and ubiquitous. It will take Government a century before it catches up with this fact. In the interim, they spend gobs of money and get no discernable outcome.

I guess nostalgia has a price.

Revenge of the Mainframe, Part Deux

The biggest news of the week is Apple’s market cap surpassing Microsoft’s. I’m not impressed.

It’s “Big News” only in how it signals the ebb and flow of companies. A while back, accused of monopolistic practices, AT&T sought a consent decree from the FTC by jettisoning the 5 baby-bells. AT&T kept the long distance business, and got rid of the messy ‘last-mile’. The thinking at the time was that all action was going to be in the long distance business; after all it was the only profitable part of Ma-Bell’s.

Long distance is now a commodity, and the last mile of cabling, a conduit for broadband, is where all the action is (for now). If only those smart AT&T executives can call a mulligan…

Cloud computing is changing the value of assets and brands in the technology space, its creating new winners, new losers and many opportunities for new entrant to occupy new niches in the ecosystem. And it surely is changing what matters:

• Intel’s competitive advantage is no longer the IA-32/64 architecture; it’s their manufacturing capabilities that count.
• Windows is no longer Microsoft’s competitive advantage, it fact it’s now irrelevant. Servers migrating to the cloud as services, Office morphing into Office Live, and Xbox Live will drive future growth. More than any other player, Microsoft needs to reinvent itself. And quick.
• Apple is no longer a technology company, it’s a design shop. Think Gucci with restrictive EULA (hey lady you cannot take this bag to Walmart! And no, you cannot keep your pink LCP in it either).
• Google is now the leading force in Cloud Computer. But is poised to become the most hated company on earth. Replacing Microsoft, which replaced IBM, which replaced…. Ironic that Google’s motto is “do no evil”.
• Most blood will be spilled in the mobile market where competition will drive innovation, while eroding margins. It will be fun to watch.

The good news is that new landscape will be more forgiving: No more zero-sum games played in a Thunderdome-like environment. And that is a good thing for the industry.

The Failed Fourth Estate

Helen Thomas retired today, having outlived many of the news organizations she worked for, Helen’s career was cut short by a slip of the tongue that revealed a bias she’s held for many decades. Maybe, at 90, one stops caring about what people think, maybe senility finally got the upper hand.

Either way, one can be sure of two things: Helen’s views of the Israeli-Palestinian conflict have long inspired her reporting, and that she’s not the only one that carries a deep bias, nay, an unshakable world-view.

The concept that the press, the fourth estate, is the selfless, neutral, self-anointed watchdog that keeps the powerful in check on behalf the little guy is as fictional as a cost-cutting, budget-balancing, pay-go congress.

Each of them is, after all, an individual. All of them followed the same track, studied in the same schools, listened to the same professors, worked in the same newsrooms. They know less than most about what’s going on and so weave a story consistent with how they perceive the world. Even more than politicians, they live in a bubble insulated from the consequences of their decisions, secure in their holier-than-thou mission to inform the universe of a singularly uniform view of how said universe is supposed to act and what it’s supposed to know.

Not for long sister: as the monolithic news organizations decline, an army of citizen journalists are filling the void. Providing a spectrum of views on every issue – not one truth, but all truths are told. You decide.

Sure the burden is now on you. You must care enough about something to pay attention to it. To listen to the many voices and make up your own mind.

Mark Twain (or is it Oscar Wilde?) once said: “never pick a fight with someone that buys ink by the barrel”, luckily ink is now free.

Revenge of the Mainframe

My first exposure to computers (aptly named at the time) was to a Dec PDP-10 36-bit machine with punch card. Processors were so expensive than my university owned 2 of them, everyone had to share. Storage was expensive, so you kept your programs on punch cards, your data on mag-tapes.

A few years later, timesharing was allowed, and all your programs and data was stored on the mainframe accessed remotely by dumb terminals some terminals were converted printed, others displayed 80x25 characters on a black and white screen (I remember lusting after a Heathkit H-19 with an external 300 baud modem), other had built in graphics capabilities such as the RamTek terminals.

Still all connected over slow RS232 serial links, limiting what can be done. That was 1979.

Then in 1981 IBM introduced the IBM PC 5150 and things changed for a couple of decades. The personal computer ushered in the era of disconnected computing, data & programs resided in a little beige box in your den.

By 1999, the internet had connected most of these machines into a global network usurping the then dominant client-server metaphor.

So here we are a decade later and a new model is about to take hold, a model quite similar to my original PDP-10 experience: Cloud Computing.

Data (now called “content”) and programs (now called “Services) reside in the Internet “Cloud” accessible via a broadband connection from anywhere in the world using a multitude of devices. Granted these devices are smarter, more colorful, and easier to use than their predecessor, but the fact remains: the Cloud, is the biggest mainframe ever made, it’s just happens to be made of a number of smaller components called servers.

The cloud is the ultimate virtualization of computing: it, in effect, commoditizes not only processor, programming languages, storage, but content as well.

In the next installment I will examine the impact this will have on the existing technology landscape and how it’s changing corporate value propositions.

Where is Greece?

A lot has transpired since my February demographics blog. A few readers have asked: Where does Greece fall on the chart? Well... Right there.





I also said that the move away from the welfare state is not a question of "if", but of "when".

I think we have our answer. Nuff said.

Three Ways Out

In a great article entitled “The Case for Economic Doom and Gloom”, John B. Judis argues that the reason for the present malaise in the world economic order is due to, as he puts it, the “global overcapacity in tradable goods production”. In making his argument Mr. Judis focuses on the production side of the equation: as more countries develop, they put on the market additional production capacity that must compete with existing capacity. Driving down prices, lowering profits and hence investments. Capital in search of good returns then flows to real estate or government bonds and feed an unsustainable Keynesian cycle.

Though I’m in overall agreement with this model and its underlying dynamics, I think he is a ignoring the second part of the equation: Demographics. As Western populations age, their consumption patterns slows, further aggravating the overcapacity problem.

There are only three ways outs (in decreasing rosiness) that I can see:

1. Technological breakthrough: As the microprocessor drove the Reagan recovery and the Internet Clinton’s, a new technological breakthrough will drive productivity and consumption and restore growth.
2. Rise of Asian Consumerism: Aging Western consumers are replaced by younger Asian and African ones driving up the demand curve and restoring growth
3. World War III: a major world war manages to destroy significant production capacity all around the world. (This is not an unlikely scenario: as the Great Depression gave rise to Fascism and Communism, a prolonged economic downturn coupled with Islamic Jihadist can yield the same result)

None of these scenarios bode well for environmentalist: it is clear that, as a race, we need to expand or wither. We Simply cannot stand still.

For the sake of everyone, I'm rooting for #1.

The iPad's titillating promise

Titillating promises of what can be are often more interesting than the real experience.

Like all Apple products, the lovable iPad turns heads. Just because. The guy next to me on the plane felt compelled to open a conversation when he spotted me using it. In fact, you take it into public place to elicit just such a response.

Conspicuous consumption of the 60s and 70s turned to conspicuous morality of the ‘90 and ’00 and now we have graduated to conspicuous coolness, brought on not by a 350hp all wheel drive red coupe, but by a small 8x10 piece of electronics.

The problem is that the iPad’s hipness is not backed by its utility: it simply does not know what it wants to be: Too big for a phone, too small for a computer, too heavy for a book, too fragile for casual handling.

The screen is brilliant except outdoors where thumbprints overpower the content.

It’s too heavy to hold with one hand without your thumb wandering into the active matrix area and causing presses you did not intend. I keep swishing for 3 finger holes in the back (like a bowling ball), so I can hold it with one hand and operate it with the other.

It will not charge from most USB ports, and the battery life is so-so. Wifi reception is mediocre, unable to connect where other devices can.

Love seeing the NYT, WSJ and Bloomberg on that brilliant screen. Kindle app, iBook look great, but the device is simply too heavy to sustained reading. I found myself too preoccupied with how to hold the device that with reading.

Google Map is just the bomb! Intuitive, speedy, accurate, just brilliant!

Where the iPad really shines is web browsing. I miss flash, but the web experience is good and intuitive.

But the iPad’s biggest problem is that it simply cannot be used standing up or lying down. It cannot be used on a desk and it cannot be used on a recliner. It’s just too heavy and fragile for that.

So here’s my recommendation: if you’re the kind of person that sits up straight 80% of the time, buy an iPad, otherwise a combo laptop/smartphone is still the best way to go.

Unless you want to look cool. They hurry up and buy one before the charm fades.

As for me, I will continue to use this darned thing for the next couple of weeks and a few business trips. Maybe I’ll finally learn to sit up straight.