Microsoft Unveils Multi-Touch Technology For Windows 7

A couple of days ago Microsoft showed a limited demo of multi-touch technology for their upcoming Windows 7 operating system. Microsoft's next operating system with built-in multi-touch technology is expected to enable a whole new set of host of touch-screen applications. Microsoft Chairman Bill Gates said, "Today almost all the interaction is keyboard-mouse. Over years to come, the role of speech, vision, ink - all of those things - will be huge." The news has a lot of people excited for the future of multi-touch technology, if not for Microsoft itself!

Touch the future

Touch-screen technologies have been in development for a couple of decades now. They are already in use in ATMs, retail outlets, check-in kiosks, tablet PCs, cell phones, GPS devices etc. iSuppli, a market research firm predicts that touch-screen technology market will double to $4.4B by 2012. The roaring success of iPhone validated consumers’ appetite for new, easy and intuitive ways of interaction. Its mass adoption is also testament to the fact that touch-screen technologies are now becoming main stream.

It is not new. Then, why is this development significant?

Most of the current applications of touch-screen technologies have been around the hardware - screens, touch pads, tablets, cell phones etc. This development is significant in the sense that Microsoft is now proposing the integration of these technologies into the operating system. Well, Microsoft is not blazing an altogether new trail. While Apple & Microsoft tried to put in multi-touch support in their previous operating systems to some extent, they haven't really taken to fundamentally building an operating system with strong support for these technologies.

Who is going to be the winner?

It is a moot point whether Microsoft can deliver Windows 7 as promised. Apple having already had experience with these technologies, can't be far behind. In fact, it may even beat Microsoft in this race. However, Microsoft has the lion's share of the current PC market with its Windows operating system. With internet platforms and online software applications such as Google Docs already eating into its Windows pie, Microsoft needs to exploit this technology which could potentially resurrect its position in personal computing software market.

With its impressive ecosystem of partners and relentless marketing arm, Microsoft can propel this technology to the next level and hasten its mass adoption in personal computing space. The key is whether Microsoft can do a half decent job with this new operating system.

My fingers are crossed.

Is Microsoft's Live Search Cashback Doomed? Not so fast.

(Also posted here)
There has been a lot of buzz around Microsoft's Live Search Cashback program that was announced recently. Most of the commentary has been along the expected lines - Microsoft is the perennial villain and anything it does has to be ridiculed. Consequently, there are very few positive reactions to this move from Microsoft. If the roles between Google and Microsoft were reversed, everybody would be bending over backwards to shower Google with praises like "paradigm shift", "out-of-the-box thinking", "game-changing" the dreaded "innovation" etc.

While I don't have any extra love for Microsoft, I do think that Microsoft has not been given enough credit for this great move. Google has been dominating the search market for a while now. Microsoft needed to do something drastic to be competitive in this area and I personally believe this offering will allow Microsoft to take the fight to Google.

Disruptive Model

While there is no doubt that Microsoft needs to innovate in search technology, this is still a brilliant innovation in the model. At the same time, I concede that there is no single silver-bullet that Microsoft can come up with to challenge Google. Microsoft will need a series of such disruptive innovations - either in technology or in search models to take the fight forward.

Microsoft can withstand the losses

As has been analyzed to death, this program is not going to generate immediate returns for Microsoft. It may even be difficult to keep it profitable for a long time. Nonetheless, Microsoft is sitting on a pile of cash and it can afford to lose some revenue if it means it can attract more traffic. Remember, search is bread-and-butter for Google. Microsoft has other strong revenue streams apart from ad-revenue from search. Microsoft can bleed a little in this secondary revenue stream if it means it can make Google bleed more in their primary market. Hasn't Google been trying to do the same to Microsoft with their web-based software?

Will Google and Yahoo sit idle? Absolutely not. Is this initiative a winner? Can't say. It may still end up a flop. In any case, the search market is about to get competitive again. As most would agree, that will only benefit the users, consumers and advertisers.

Telepresence - Can It Transform Offshore Delivery Model?

(Original post here)
We have been hearing about Telepresence for some time now. Its primitive form, video-conferencing, has been around for a while. Now I think we are at an inflection point in the technology maturity level. Admittedly, Telepresence technology has a better use in other industries than in IT Services/BPO.

New Opportunities
Indian IT companies have hit a slow growth path due to a variety of factors such as rupee appreciation, slow economy, and increased competition in outsourcing. It is true that Indian IT companies arguably pioneered the offshore model. However, US-based IT services companies have quickly learned to play the same game. The current traditional Global Delivery Model has matured and is no more a key differentiator. Onshore, Offshore, Nearshore, Right Shore, Anyshore are passé. It is time to have a "shore-proof" delivery model.

I personally feel that the Telepresence technology is one that has the potential to trigger some innovation in the offshore service delivery models. Of course, technology alone can't provide a competitive advantage if commoditized - an exception being early adoption. It is how one uses the technology that brings out the differentiation.

Current Offshore Delivery Model and Challenges
By its nature, global delivery model involves people from different geographies, cultures and social backgrounds. Most of the communication in the current model happens over e-mails, long early-morning or late-evening telecons, web conferences, instant messages etc. Videoconference is very rarely used in most offshore companies. Talk to anybody that works in a global delivery model, and they are sure to blame the "other-shore" team for any problems in the projects/programs/products.

Can Telepresence Improve It?
Most of the current challenges are related to communicating with e-mail or phones. Teams miss precious non-verbal clues such as body language, moods, and cultural nuances when communicating over these traditional channels.

Some of the immediate effects with the adoption of telepresence technology could be:

• More effective communication between the teams leading to better execution and improved team dynamics


• Reduced travel costs - Initial knowledge transition or requirements gathering phase can happen without the teams traveling; Project/Program/Customer Reviews; Sales presentations; Conceivable elimination or reduction of the role of a pure onsite "coordinator"


• Team meetings - Brain-storming with customer, onsite, offshore teams

Prohibitive Cost
No doubt that these systems are expensive at $200K-400K and upwards, not to mention the maintenance costs. Connecting key development centers in different geographies may be the first step. These can act as hubs servicing multiple customers, projects and teams. An account review where 2-3 executives from an offshoring company travel across the globe for a day or two, will cost about $20,000. I think a basic telepresence pays for itself after 15-20 such virtual meetings.

Indian IT industry uses a convenient the excuse that they have competitive edge over China and other alternative offshoring destinations because of its large pool of English-speaking engineers. While it is true to some extent, that gap is narrowing very quickly. If you add technologies like this to the mix, communication becomes less of a hassle. China or Vietnam or Malaysia could see this as a disruptive technology to challenge Indian IT companies.

Should Indian IT companies such as TCS or Wipro or Infosys seriously consider it or is it too soon to think about it?

HP Poised For Further Growth

(Original post at my other blog)

HP on May 20th reported slightly-better than expected 2008 second-quarter numbers.   Revenue at $28.3 billion grew up 11% from year-on-year.   It also raised the year-end revenue guidance from $114.2 billion to $114.4 billion.   More financial details are available here.

EDS, Emerging Markets, Cost-Cutting – Great Confluence!
I believe that HP is on a solid ground to move to the next stage of sustained growth in the long term.    For me the confluence of the three themes - EDS, Emerging markets and HP's (or Mark Hurd's) track record in cost-cutting initiatives - looks particularly promising.

If, and that is an important if, HP can integrate EDS without a lot of indigestion, it is going to be a key growth driver for HP in the next decade or so.   With one swoop, HP not only added new expertise in Technology Services (specifically in Infrastructure Services) but also positioned itself very strongly in emerging markets.   At $14B EDS WAS a decent bargain.

Another reason I think HP will succeed in building much more in emerging markets like India, China etc is that these aren't new markets for them as such.   HP has already been in the market for a while, so there is enough local sales, service and cultural know-how.   Now with the purchase of EDS and the potential of bundling related services with its products, HP will be able to consolidate its position.   Also, the domestic IT market in countries like India and China is now growing at a faster pace than in developed countries.   Infrastructure Services is one area where IBM has won lot of large deals in the recent times in these markets.   With EDS' USP being Infrastructure Services, HP is in a much more solid ground to directly take on IBM in these markets.

Last but not the least - the cost-cutting opportunity is real.   EDS, as most people agree, has a lot of fat that can be trimmed.   Who better than Mark to turn it into a lean and mean machine again?   Cost-cutting goes very well with the strengthening of "offshore" presence where less-expensive labor will add to the profitability.   EDS already has a strong India presence.

While the next few quarters may not bring in ground-breaking revenues, HP does look very strong for the long term investments.   It is no-brainer that how HP integrates EDS will define its future for the next 5-7 years.

HP-EDS Merger - Effect on Indian IT Companies

(Posted first at my other blog.)

HP's plan to buy EDS for $13.9B is one of the bigger news of last day or so and it obviously has everybody's attention.   Analysts, bloggers and just about anyone in IT has already commented on this development with much more insight than I would have.   A lot of strong theories are floating around as to why this deal happened (cloud computing, scale in services, profitability etc).   While its hard not to connect EDS' strength in data centers with HP's core hardware skills and chalk it up as a huge investment in infrastructure/cloud computing space, I want to quickly focus my comment on a few things concerning Indian IT industry.

Indian IT providers (SWITCH companies) will definitely be viewing this development with a hint of worry.   These companies are investing a lot in their infrastructure offerings now that the bread-and-butter IT services such as ADM, BPO have hit a maturity level.   They have just started winning big in this space and are now able put up a fight against an IBM or Accenture.   They also have their sights on Indian domestic market where IBM has done well.   Now they will have another titan to compete with.   Both IBM & HP can provide a more integrated service offering - hardware, software and services - than these companies.   Added to that, HP will now have a strong positioning in government-related deals which typically are more stable and run longer.   Thus, HP will have its hand on the handle of the entrance door in such deals.

While HP covers some ground (infrastructure that is), it remains to be seen if it can effectively compete with IBM at all levels.   If only HP can pick up a strong business consulting organization.   Game on, then.

Coming to SWITCH companies - unless they evolve from a single-dimensional (Services) to multi-dimensional (H/W, S/W, Services), they will have tough time ahead.   I think the easy ride of offshoring is over. Execution and process excellence which these companies pride in are as important as strategy but it alone can't provide competitive advantage.   Time to plan for future is now since HP will saddled with integration issues with EDS deal.

A final thought.   Some have said that HP wants to get on to outsourcing/offshoring bandwagon.   If HP was looking purely at that, it would have considered buying an Indian IT company with better margins.   Obviously, Mark Hurd has a bigger plan.   Does he have one more integration/turn-around in him?   It will be interesting to watch how this plays out.

Indian IT Outsourcing - Changing Gears

(Published earlier at my other blog. )
A recent BusinessWeek article "Indian IT Companies Eye New Strategies" talks about the non-linear growth models that the Indian IT services companies are working on. It comes at a right time and I echoed similar thoughts in my earlier comment as well.

Necessity of the mother of innovation
Potential US Recession or not, organic growth models of the Indian IT service companies are providing diminishing returns as the revenue base grows. Companies are always trying to figure out where their next $1B is coming from. While we have been hearing about the companies moving up the value chain for a long time, it seems that the urgency has increased in recent times.

Looking for new or more efficient revenue streams
Companies have evolved from traditional revenue streams to innovative models.

Fixed revenue - Basic services supported fixed revenue stream. Revenue was directly tied to manpower.

Incremental revenue - Incremental revenues were addressed with the process improvements (CMMI) and basic productivity enhancements.

Exponential revenue - It is possible with the de-coupling of growth and manpower. With the creation of automation processes & tools, frameworks, solution accelerators etc is the key. Selling products such as Infosys' Finacle, TCS' BaNCS are some examples. Creation of Solution Accelerators that dramatically reduce the amount of work. While it isn't a new idea what with re-usability having been a key focus for these firms all these times. It just happens that it is now moving from operational level (productivity enhancements) to strategic level (key differentiator).

Another example is the trend of platform-based BPO - moving away from the traditional BPO of managing customer's processes and systems.

Self-perpetuating revenue stream
This is an interesting prospect going forward. How can the IT service firms create something once (one-time SG&A) and generate value/revenue repeatedly with minimum effort and overhead? This goes beyond the platform-based BPO where the expertise is productized and sold to multiple customers with required customizations. Another idea could be royalty-based revenue - create a product/service for the client and get into a royalty agreement to get a recurring revenue. This already happens with OEM software but it will be interesting to see how IT firms can take it apply it to services.

New Growth Markets - OPD
Another market that is getting a lot of attention is Outsourced Product Development (OPD). This space is currently dominated by smaller and niche players. While tier-1 IT companies have product engineering groups that support bigger ISVs (Independent Software Vendors), the relatively smaller deal sizes compared to generic IT services are the reason for lack of serious attention so far from these big players. However that may be changing because of the potential for this market coupled with the slowdown elsewhere.

Outsourcing has matured!
The first phase of outsourcing where cost/location arbitrage ruled the roost is almost over. Now come the exciting, perhaps tumultuous even, times for the Indian IT industry. Some will survive while others fall wayside or get acquired. The stage is set for the next IBM from India. Who will grab the chance?