IT bubble coming?

Submitted by acohill on Fri, 05/21/2004 - 11:17

Cnet discusses a Gartner Group report that says all those computers purchased in 1999-2000 are going to be replaced soon, and that the number of new machines going out the doors of manufacturers will actually exceed the number sold to fix Y2K problems.

With demand increasing, we'll see fewer price cuts, and some modest price increases. But it also represents an opportunity for local computer manufacturing operations that imitate the very successful Hornet Technologies model. For a rural community, the Hornet model makes a lot of sense--it's a much better idea than putting hundreds of thousands of dollars in envelopes and mailing that money to Texas and California.

Nintendo handheld will drive WiFi

Submitted by acohill on Fri, 05/21/2004 - 08:21

Nintendo's new DS handheld will include WiFi. The successor to the wildly successful GameBoy will allow DS owners to play games with other nearby DS users and/or access the Internet via a WiFi hotspot.

That may sound ho-hum, but kids with WiFi devices will change the way we think about WiFi. Kids will want it at the candy store, at the gas station (download some new games while Dad is gassing up), at parks and recreation centers--in short, everywhere.

Communities should start thinking now about WiFi zones and WiFi blankets (collections of hotspots). And guess what? Whole families will want WiFi access, and many will happily pay for a family subscription.

Anything that expands the marketplace for services is a good thing. Along with that, we've also got to think about the implications of kids being connected to the Internet anywhere they go, and in many places where Mom and Dad can't supervise. It's a whole problem itself, and we need to think in parallel. We can't stop this new technology, but we do have an obligation, to our own families and children, and to the community at large, to make sure we use it sensibly, and that our kids are prepared to use these new information portals appropriately.

Where the spam comes from (and goes to...)

Submitted by acohill on Fri, 05/21/2004 - 07:34

Here is an interesting little report on where email spam originates, and where all those Web sites in the spam are located.

As it turns out, most email spam originates in the United States, but most of the Web server links that the spammers want you to click on are in....China.

Why, you ask? The email starts in the U.S. because we Americans have this terrific entrepreneurial spirit. In other words, it is easy to start a spam business here. In most other parts of the world, it takes months and months and a ton of red tape.

The servers, though, are located in China because that country still has a pretty sturdy Cold War attitude toward certain kinds of international law. What I mean is that even if you can identify the Web site selling enlargement products, you are not likely to have much success prosecuting the site or shutting it down if it is in Communist China.

China also happens to be the worst copyright violator in the world.

Just another example of the global economy at work.

Number portability reaches rural areas

Submitted by acohill on Thu, 05/20/2004 - 08:52

CNN reports that cellphone number portability is about to reach rural and less populous areas of the country. The introduction of the service has been phased in, with the 100 most populous parts of the country getting it first. Customers will be able to move their cellphone number from one company to another, and will also be able to move a landline number to a cellphone, with certain restrictions on area codes.

All in all, this is a small but important step to making the telephone network more like the Internet. Domain names belong to you, not your Web hosting company, and you can move your domain name from one provider to another, based on price and quality of service, etc. We want the same kind of flexibility with phone numbers. The current situation is particularly difficult for businesses, who can't easily change phone numbers without disrupting customer service.

In the old days (pre-Internet), phone number truly did have to be tied to infrastructure. But not anymore. We will all benefit in the coming years from increased competition for dial tone services, which is already bringing lower priceas and more/better services.

WiFi startup stops

Submitted by acohill on Thu, 05/20/2004 - 07:15

Cometa, a startup national WiFi hotspot firm, has shut down. Cometa was bankrolled by Intel, AT&T, and IBM, and planned to create 20,000 hotspots nationwide and wholesale them to other companies who would actually provide the end user service.

It was a good plan, but apparently poorly executed. No doubt the company was stuffed with execs from Intel, AT&T, and IBM, who apparently acted arrogantly and spent too much money too soon.

The problem with all of the firms planning national networks is twofold. First, WiFi will not take off, really take off, until there are widespread roaming agreements in place. Right now, if I'm at O'Hare in Chicago and want to check my mail via WiFi, I probably have to spend $10 for 15 minutes of access. Two hours later, in Omaha, some other company will want $10 for another 15 minutes. Even dumber, T-Mobile thinks I'll happily pay yet another $10 two days later as I pass back through o'Hare.

That's the state of WiFi right now. National roaming agreements, just the way cellphones can roam, where you pay a fixed monthly subscription, is the only thing that makes sense. Why are so many firms in the market despite the lack of roaming? Because WiFi is in a growth phase; for every customer who stops paying T-Mobile $10/day, two new ones pop up. It's exactly like the early days of dial-up modem access. But it won't last. Cometa is the first of many firms that will go out of business after wasting a lot of investor funds.

But I said there were two problems. The second is local, rather than national. Communities need ubiquitous WiFi to make it really useful, and just putting hotspots in hotels and McDonald's is not enough. Rural communities are especially unlikely to get much attention from the big national firms. The sensible approach is for communities to get involved in identifying appropriate antenna locations, mapping out a hotspot grid so that everyone in the community can get service, and in that fashion creating the incentives that will attract local and regional wireless providers to come into the market and sell services.

VoIP gets cheaper

Submitted by acohill on Tue, 05/18/2004 - 07:51

Forbes reports that Vonage, the start-up Voice over IP company, has dropped prices while adding new customers at a furious rate.

Forbes speculates that pressure from AT&T's VoIP offering (six months of unlimited local and long distance service for $20) has forced Vonage to adjust their prices. Competition is a wonderful thing. Vonage now has 155,000 customers and is adding new ones at a rate of 666 per day.

Where the jobs are

Submitted by acohill on Mon, 05/17/2004 - 09:49

The Thursday New York Times had a fascinating article on the op-ed page (page A27) that is worth chasing down if you can snag a copy. It's a graphic and a couple of paragraphs on data from the Federal Reserve Bank about where the jobs are and are not. The bar graph really helps clarify and make understandable the changes we have been seeing in the job market over the past several years. It's no surprise that in the "Manual Dexterity," "Muscle Power," and "Formulaic Intelligence" categories, steep declines are being registered (Formulaic Intelligence includes jobs like bookkeepers, clerks, and typists--work that technology is shifting).

Steep increases have been registered in "People Skills and Emotional Intelligence" (financial services sales, nurses, recreation workers, lawyers), "Imagination and Creativity" (actors, architects, designers, photographers, cosmetologists), and "Analytic Reasoning" (legal assistants, scientists, engineers).

The authors, who include the chief economist at the Federal Reserve, note that Americans have, many times in the past, adjusted to changing economic conditions and have learned new skills. They also note that whenever these shifts take place, in the long run, people end up with better jobs that pay more. Finally, they note that "trying to preserve existing jobs will prove futile."

Communities need to learn what the jobs of the future are and make sure the training is available for them. The best thing about this--many of these jobs do NOT require four years of college. Two year colleges and trade institutes can pro

India market crash not a surprise...

Submitted by acohill on Mon, 05/17/2004 - 09:38

If you had read our recent book of the month Adventure Capitalist, you would not have been surprised by the market crash and unrest in India following elections. The author, Jim Rogers, predicted that India's rise in economic status would be bumpy because of the huge disparity between the rising middle class that has been fueling the economic development there and the desperately poor in rural areas, who represent a majority.

India potentially has a very bright future, but the country has to create economic conditions that most people can access, not just a few. America has, by and large, done a good job providing opportunities for people that are willing to work hard. That's why so many people want to migrate here.

Closer to home, our rural communities also face some challenges, but unfortunately, the population of U.S. rural areas is a minority, making it more difficult to influence politics and state and Federal spending. That's why I think rural communities need to look to the future, set a vision, and execute--with whatever resources can be mustered.

A la carte cable television?

Submitted by acohill on Sun, 05/16/2004 - 08:20

An article in the business section of the Sunday Roanoke Times talks about cable TV and the growing clamor for a la carte rates--in other words, instead of paying for 60,70, or 200 channels at a flat rate, you could pick and choose which channels you want to watch, and pay only for those.

I see two problems with that approach. The first is that it probably would not lower rates. It would increase the cost of billing, and since we are already paying fifty cents a month per channel (or less) now, just the cost of tracking which channels a household watches and billing for that would probably result in a net increase in the cost of programming. It would also probably reduce the number of channels available, but it's debatable whether that is a good thing or a bad thing.

My real objection is this: Why bother trying to force more rules and regulation on a dying medium? Cable TV is based on forty year old copper technology, and the current rate structure is based on what was technically possible in 1960 or so.

We already have a new, completely unregulated medium that is technologically ready for pay by the drink, consumer-choice driven television programming. It's called the Internet. Affordable, high capacity broadband (which we will all have in the next decade) is technologically able to deliver HDTV quality TV programming right now.

Let the cable companies continue to tinker with a dying and obsolete model. We don't need to waste time and effort at the local, state, and national level fussing with something that will be gone in ten years.

Metal rubber bounces out of Blacksburg

Submitted by acohill on Thu, 05/13/2004 - 05:44

A small, privately held company in Blacksburg called NanoSonic has begun marketing what it calls "metal rubber." An article in the Roanoke Times indicated the nanomaterials company has been developing the product for several years. The material has the ability to conduct electricty while being stretched, and has been mentioned as a possible new material for use in "morphing" aircraft wings which could change shape during flight.

AT&T saves $250 million by using VoIP

Submitted by acohill on Wed, 05/12/2004 - 12:13

Om Malik reports that AT&T has saved more than $250 million dollars in the past four years by routing phone calls over the Internet instead of the switched telephone network. In a classic counter-attack, the phone companies that did not get to switch AT&T's calls are suing the company for lost revenue--apparently they think they have a "right" to make other companies use their antiquated systems.

Motorola to offer WiFi phones

Submitted by acohill on Wed, 05/12/2004 - 07:55

Following Nokia's initial foray into dual mode cellular/WiFi phones, phone giant Motorola is entering the marketplace. Motorola's phone automatically switches to WiFi mode if you enter a WiFi hotspot, meaning that you save your cellular minutes and your cost of calling will be lower overall.

WiFi "communicators" are entering the marketplace, and are being used in large institutions like hospitals and city libraries, where staff have to be in constant communications. Traditional walkie-talkies and radios don't work well in those situations, but WiFi provides crisp, clear voice messaging. One hospital has saved time and money by giving staff WiFi communicators they wear around their neck.

Does it sound like something out of Star Trek? Well, it is. But this is not science fiction, it's a reliable commercial product that is saving time and money. Does your community have a WiFi hotspot plan? Without ubiquitous WiFi, these new devices won't work reliably.

Southwest Regional Spaceport to host X Prize Cup

Submitted by acohill on Wed, 05/12/2004 - 07:46

The Southwest Regional Spaceport in New Mexico has been chosen to host the two week long X Cup competition. The X Cup is a $10 million prize that will given to the team that successfully launches a suborbital spacecraft twice in two weeks.

Regular readers know that I am very bullish on the emerging Space Economy, which will hit full stride in about twenty years. New Mexico, which by many measures, is one of the poorest and most disadvantaged states in the U.S., has its eyes firmly on the future. Does your state have an Office of Space Commercialization? New Mexico does, and won in the bidding against Florida, which would appear to have all the advantages.

Is the Space Economy going to be the salvation of rural communities everywhere? Of course not. But New Mexico has created a vision of what it wants to be in the future and the kinds of opportunities it wants to create for its citizens, and is acting on it. I think it will succeed.

Offshoring jobs and local effects

Submitted by acohill on Tue, 05/11/2004 - 08:40

A short guest op-ed piece in today's Wall Street Journal (David Sikora, B2) provides another data point in the largely politics-driven debate about offshoring. Sikora is CEO of Pervasive Software, a medium-sized software company that began doing some development work in India last year. He makes two points worth considering.

First, he indicates that India is turning out world class programmers and software developers who are willing to work hard. Second, he says that by saving money on some company work in India, he has been able to create additional jobs in other parts of the company in the United States, expand the customer base, increase shareholder value (who are mostly Americans), and remain competitive in a global economy.

I am most concerned about Sikora's first point--that India is turning out high quality engineers and programmers. U.S. output of engineers and programmers has been falling for years. Somehow, our kids are not getting the message that working hard, getting good grades in math and science, and going to college for the "hard" degrees is worth it.

The collapse of the dot-com bubble did not help. For a couple of years, the newspapers were full of articles about technology workers losing their jobs. But the stories were often lopsidedly negative, and did not provide a balanced look at all the tech workers who did not lose their jobs. Most tech workers, outside of hyperinflated tech cities like Austin and Silicon Valley, did NOT lose their jobs.

This is not a problem that Federal or state governments are going to solve. Communities need to start working locally, revamping high school curriculums as much as possible to make sure kids leave with positive attitudes about math and science and with the skills they need to qualify for college engineering and science degree programs. Community colleges are going to be particularly important, as they can train students in tech specialties more quickly and more effectively than their more slow-changing four year college cousins.

IBM to offer Web-based office applications

Submitted by acohill on Mon, 05/10/2004 - 09:33

Cnet reports that IBM is going to announce a new suite of Web-based applications that will directly challenge Microsoft Office. Based on the very mature Lotus Notes system, it will run on Web servers, provide functionality similar to Microsoft Office applications like Word and Excel, and be priced at a very reasonable $2/month per user.

Of course, there is always a catch. This will only work well if you have good broadband networks in your work space (in the building) and excellent, affordable broadband access.

FCC Chairman says VoIP "biggest breakthrough...ever"

Submitted by acohill on Mon, 05/10/2004 - 08:45

FCC Chairman Michael Powell has it exactly right in an article in the Business section of the Rocky Mountain News. At a speech in New Orleans to the National Cable & Telecommunications Association, Powell said, "I think it's going to be the very, very best and biggest breakthrough in our ambitions and dreams about competition ever."

Exaggeration? I don't think so.

VoIP is the killer app for broadband. It's what all those enormous dot-com investments in infrastructure were hoping for back in 1999 and 2000. It is the trifecta--it will lower prices for current voice services, it will introduce valuable new voice services at little or no additional cost, and the use of VoIP will spur competition and attract new and other kinds of services.

What's the catch? You have to have reliable, high capacity, affordable broadband. DSL and cable modems will only carry us part of the way. This is a core economic development issue, and rural communities, suburbs, and any part of the country that does not have a community-based telecommunications master plan is going to be in trouble from a jobs perspective in the next decade.

Estonia going wireless in a big way

Submitted by acohill on Thu, 05/06/2004 - 07:24

The former Soviet satellite Estonia has embraced WiFi, according to a BBC report. Admittedly, Estonia is small--smaller than some larger counties in this country, but that's a clue that this is can be done at the local level.

The country has more than 280 WiFi hotspots (how many does your county have?) covering more than two-thirds of the country, and every hotspot has an attractive and easily identifiable blue and orange sign. Here in the United States, you find hotspots in urban areas by looking for chalkmarks on the sides of buildings--not exactly a well-organized economic development strategy.

As entrepreneurs, business owners, tourists, and families drive through your community, can they easily find WiFi hotspots? Good signage is good marketing, as the signs effectively shout out, "We're connected here....we get it."

But the article gets better. Estonia's government has wholeheartedly embraced technology, with government meeting rooms fully wired and broadband enabled (again, can you say the same about your town or county supervisors?). And here is the money quote that should send chills down the spines of economic developers who still think their job is bricks and mortar:

...."You don't need to invest in an office anymore," Haamer says. "You have an idea, a computer with a wireless card, and a space to work (at a cafe with wireless). You can use your time more efficiently."

So if there is a trend (and there is clearly a trend in Estonia) to move away from bricks and mortar offices for business, how do you measure business activity in your community? It's a conversation you need to have.

A Model Technology Council

Submitted by acohill on Tue, 05/04/2004 - 07:33

The Redwood Technology Council may well be the best example of a successful Tech Council in the United States. The work that the RTC is doing gives me hope that it is possible to develop, run, and sustain a regional tech council. Located in the Eureka/Arcata area of northern California, the RTC is trying to overcome rural isolation, create jobs, and get more fiber and broadband options into the region.

I had the privilege of giving some workshops at their annual Tech Expo, and while I was visiting I learned a lot about their activities. The RTC's most significant achievement was to break a permitting logjam that had prevented the phone company from bringing fiber to the region. The Tech Expo, a two day technology fair that showcases the products and services of local firms, attracts thousands, and is especially notable because they offer workshops and seminars to the public throughout the event. And it's practical, useful stuff, like how to use Photoshop, which was jammed. The number and variety of booths was terrific, and I found two vendors that had products I had never seen and am likely to buy.

In fact, the RTC is doing many of the things that community networks do, and the group is well-positioned to do much more.

Technology and grape tomatoes

Submitted by acohill on Mon, 05/03/2004 - 13:02

I may sometime seem a bit negative about the challenges we face in the United States and the urgency of learning to compete not with the next county or the next state, but the next country. This article on the difficulties Europe faces may provide a bit of balance.

Briefly, the author describes the potential difficulties a European businessperson would face (in this case, introducing a new kind of tomato) in getting a new product to market. We're still better than anyone else in the world in changing course, making corrections, identifying the right feedback, and zeroing in what needs to be done.

U.S. is falling behind in science education

Submitted by acohill on Mon, 05/03/2004 - 08:36

A widely covered story in the New York Times (registration required) talks about how the U.S. has already lost its dominance in science and engineering research, publishing, and patents.

Like it or not, K12 education is becoming an economic development issue. What keeps coming up over and over again in business attraction and retention (especially in rural areas) is workforce development and the need for workers with appropriate Knowledge Economy skills.

Like so many other problems, waiting for the Federal (or state) government to solve this, is, I think, futile. We simply need to start doing what needs to be done on a local level, where we can actually plan and implement changes in a reasonable period of time.

Great examples of what is possible includes Terry McGhee's terrific Growing Digital program at Danville Community College, and Orange County's nonprofit Hornet Technologies. The Hornet Technologies program led to a business incubator project and more jobs in an otherwise rural and isolated area of Virginia. Both were started on a shoestring by brilliant individuals who had the support and trust of higher ups. That's all it takes.

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