Month: December 2012

In the technology sector this issue has been on the forefront for at least 15 years, perhaps longer.  the ability to hire talent.  A tech company is only as good as the engineers, software developers, mathematicians computer scientists etc that they can hire.  The big problem being that the US simply cannot graduate  enough qualified people with these desired degrees to fill the demand.  So companies are forced to look abroad for the necessary talent and it is there that the problems begin.  In order to get these people into the country they need to be granted visa’s, specifically a H1-B visa.  This is not an infinite number, but a highly regulated one. The H1-B visa is covered under what is known as the  Immigration and Nationality Act.  This sets the guidelines as to who can be permitted and what type of qualifications they must have to enter the country and work.  This, to be clear, is all fine.  I could type out everything and it would be a fine education for myself and those that read my blog, but the act itself is not the primary concern.  The section that covers how many visa may be provided is of concern.  Each year the US government grants 65,000 of these visa’s which are sucked up very quickly by the tech sector, many by off shore companies such as WiPro and Infosys.  Through some loopholes etc..the number rises to above 100,000.  These visa’s are usually all gone within 4 months of their availability.  Depending on where you as an employer are in the hiring process you may find and interview someone only to be denied a visa as they are all gone.  It strikes me as  a simple solution to double or triple the number for H1-B visas and increase the number of jobs created in the US for high paying US-based jobs.  But as is typical in the US congress these types of simple solutions get caught up in complex issues like immigration reform. An issue that  I find personally important is both rising cost of higher education and the increase in enrollment by foreign nationals in our university system.  When I say this I do not mean it to sound like I am being racist, that is not my intent, but when we educate a workforce it is with the idea of those graduates getting jobs and contributing to the growth of the US economy.  Two things are causing this not to happen in my view.

1. While the cost of tuition is increasing in the US making a college education ever more expensive, but the dollar rate is low making it attractive for foreign nationals to attend US institutions
2. Globalization provides an avenue for graduates to return home

AOL Founder and now venture capitalist, Steve Case had this to say about current immigration reform, specifically STEM jobs act of 2012 “My view is if there is a way to come together around broader immigration reform quickly, that would be great. But if that doesn’t happen, then we shouldn’t delay the issue because every year — and again it will happen in May and June next year — 40,000 to 50,000 people will be graduating with Ph.D.s and masters’ degrees, and half or so will end up having to leave. Some of those people will go back to their countries and start companies that could end up being the next Googles or Facebooks.” Go to any university campus in America and you will see in engineering and computer science departments a large number of foreign nationals.  Is this a bad thing? No.  But as institutions shed some of the weight of government funding and embrace a more capitalistic side of education they have to embrace the concept of what drives the most revenue.  If you have good grades and can pay a premium you are in.  This is all wonderful until you realize the work force you are educating, America is not benefiting from.

It is a compliment to the American higher education system that we have so many great institutions.  If you look at any list of the top 100 or 400 universities in the world you will find a large percentage on the list are higher education institutions located in the United States.  There are the ones you would expect like Harvard, Yale and Stanford.  To lesser known schools including my Alma mater, Washington State University.  It is a great sign that people from humble origins can attend a university and without knowing anything accidentally receive an education from one of the top academic institutions on planet earth.  Thus the frustrations of the tech sector. They are sitting on a gold mine but can not mine their rewards as either students are not opting into the programs with the desired skill sets they need or those that do attend are either going home to their birth place or cannot get the appropriate visa to stay in the country and work.

While all this is going on keep in mind the world in the emerging markets has changed drastically over the last 25 years.  Those markets are starting to create their own very strong and vibrant economies.  Their own strong higher academia institutions. Their own vibrant technology sectors.  I think in the United States we are guilty sometimes of thinking our way of life is desired by everyone and this view will last forever.  The world is changing very fast and some of those markets will change and be vibrant economies and societies on their own, enjoying many of the same opportunities and freedoms that we enjoy here.   We have a window of opportunity to bring talent into the United States.  However that window will not stay open forever.

At a time where our country has gone through a financial upheaval this seems a rather simple concept for job creation.  That he jobs are there, they are posted on many websites in some of America’s biggest technology names, which includes Microsoft,  Google, Facebook, Apple. Twitter etc..To be honest the tech sector is a shining star to the American get rich mentality, to our history of innovation and success.  If you started to fill these positions, which are really well-paying jobs many in the six figure category it will spill over into real estate and retail.  They will need transportation so the automotive sector will grow and all we need to do is have some congress person put a 2 or 3 on front of the 65 and we have directly created 200,000 or more jobs, not to mention the trickle down effects it has on local communities.  It’s a simple move with little risk, so lets take the dive, let’s take a chance and do the right thing.

Good Night and Good Luck

Hans Henrik Hoffmann December 17, 2012

For those consumers of fine film I shall take you back in time to the James Cameron classic “Terminator”. Where Arnold Schwarzenegger  first graced our screen (Conan was first but that was so-so bad) and was single. OK sarcasm aside it was a good film in the sci-fi genre. It had Arnold at his finest, big, buff and with very few lines to say. It was a rather dark film in portraying the future of mankind. Is the future ever shown as happy or is it always glib?  If you remember the movie you will remember the main character, Reece, explaining how the future came to be to Sara Conner (whom Arnold was supposed to come back in time and murder), he  discussed the government defense network (DARPA?) and how at some point the network “got smart” and decided the future of mankind in a nanosecond.  Extermination.  It may seem a bit far fetched but if you think about what was being described,it was a future with a convergence of technologies.  A ubiquitous network, artificial intelligence, robotics, nano technology all running really high end and effective software.  I am not sure James Cameron thought of all these things when he wrote and directed the screen play for the movie.  But if you look at where we are today a lot of those technologies either exist or are being developed.  The idea of a truly smart network is becoming more real with each passing day, with each passing hour, with each passing “nano” second.

Starting with the idea of a ubiquitous network, this piece is not that far-fetched.  In today’s society that is all we are striving for.  The ability to be connected all the time and any time.  Like the movie this is something that we are moving towards and will become a reality.  It all started of course with the internet.   It’s the smart piece that we are missing.. or are we?  The intelligence is a simple term, it’s software.  Software is what made the internet cool.  It was a small company called Netscape that really launched software  to the internet. Software is becoming pervasive in nearly every device we touch today so why not the network?  The reality is it already is.  It always has been in nearly every bit of hardware equipment in the network is running more and more software to provide higher levels if intelligence in how information is routed and delivered

Recently AT&T launched and turned on its 4g LTE (Long Term Evolution) network in Washington State and other parts of the United States.  It provides you a 20mb/s pipe.  To put that in perspective your home wi-fi network only provides 10mb/s.  The US carriers have gotten very good at increasing the capacity of their networks to deliver higher speeds and more content to the device.  It means we can send more and more information across the network.  We can issue commands across the computer,  We tell devices to turn “on” and to turn “off”.  But to date we have limited that to a lot of data center hardware.  More and more we see that capability entering the home.  It also means that the idea of a network is moving away from the physical way we have traditionally viewed networks.  Yes there is and will continue to be lots of fiber in the ground, but increasing amounts of data shall simply pass through the air.  In the not so distant future gigabytes will be replaced by terabytes.

Cloud Computing is on everyone’s mind these days, but that is just yet another example of more intelligence being moved to the network.  As more and more data is moved from company hard drives located in internal data centers to cloud based data centers.  The applications customers run live in the cloud and are accessed via a browser.  Even consumers are moving into the cloud as their digital content does need to reside on local hard drives in an office, but sit in iCloud or on Facebook.  However it is no longer traditional software applications that are being moved to the cloud, but entire network infrastructures are moving to software driven models.  Cisco has a software based router.  Traditional gateway appliances are moving from a hardware based appliance to software.  Load Balancers? Moving to a software based model.

A term we see increasing is machine to machine technology.  The concept is simple which is machines communicating (usually sharing data between one another).  we have companies like Nest and their founder Tony Fadell (one of the men behind Apple’s iPod)talking about the idea of M2M .  Nest today is working ion next generation thermostats.  But down the road the idea of a smarter thermostat will increasing play across all appliances.  Including stronger communications and integration withe the internet.  We see this type of technology being discussed in aviation   When a plane is in flight it can communicate information via wireless network back to a hub for collection and to be analyzed.  Cars can transmit information about driving habits back to your insurance company and be billed based on usage patterns.  These scenarios can and will be done  with n human intervention.  Just machines talking to one another.

We see increasing activity in the robotics industry as they come out with new robots  such as  vacuum cleaners, pool cleaning robots, gutter cleaning robots etc..as they become more pervasive how hard would it be to connect them to the “new” smart network?  Recently Google founders Sergey Brin stated we will be driving robotic vehicles within five years.  Having recently gotten a photo ticket I look forward to this development as a robotic car could actually receive information about motor ways from a smart network and automatically adjust the driving pattern of the vehicle so I can avoid a lovely ticket from local police force.  As Bill Ford of Ford motor stated, the automobile is becoming a platform, it is no longer a mechanical device.

There has already been work done where chips are inserted into humans.  These chips in the future could collect data on the daily activities.  Even Steve Wozniak is getting in on the act.  In a recent trip he talked about the iPhone 45, something so intelligent it will have more data about him than other humans do.  He won’t need friends.  Having read his book “iWoz”, this does not surprise me.  He seems to have an aversion to people.  Woz goes farther saying in 40 years we will have computers with impulses, with feelings.  This is starting to sound like Steven Spielberg’s film “AI”.  In this future that humanoid will be connected to the smart network.  Not to be out done Microsoft founder Paul Allen is funding work to map the human brain.  To understand each pulse and how it creates a human thought or reaction.  Understanding how the human mind works has long been a dream and a goal of science.  Today though it is more a goal and not so much a dream.

Do humans desires to move forward at an ever-increasing pace cause room for concern?  Could the smart network make decisions on our behalf?  Some for us, but some against us?  At this point it seems like fantasy, but had this been written 50 years ago could it have had as much current supporting evidence?   If I come back to this article in 10 years how much further will we have come?  Don’t worry there can be positives that come out of all this.  Our cars will be managed more efficiently as a result of the move to robotic driven auto’s.  Provided we can get alternative energies to scale we should have a cleaner healthier environment.  Our ability to readily and easily communicate across boarders and across cultures will be seamless. We could enter a world where there is no need to learn a foreign language.

Lastly the big question.  As this network grows in size and intelligence, what happens if it learns to reason?  To make its own decisions based on information it receives about the world around it?  That after all has been the goal of man since the inception of science.  The grand experiment started by Galileo in “The Dialog”.  Where science challenged faith.  To not just understand mankind, but to replicate it.  This is not going to happen in the next 5 years or even ten years but it will happen.  The simple reason being technology cannot help itself.  Technology is about ever-increasing pursuit of learning and doing it with ever-increasing speed.  Thirty years ago computing was done on mainframes. Twenty years ago most people did not have a PC. Ten years ago almost no one had a smartphone.  We used to talk about information at your fingertips less than twenty years ago and now we have it, whenever and wherever we want.  All because we are connected in new and exciting ways.  We now are talking about the ubiquitous network.  Being connected by high bandwidth everywhere we walk.

Will the network at some point flicker ever so slightly and start to have its own ideas .  How will it view humanity?  Will it discriminate between good and evil?   Will it even understand the concept which is tied more to human emotion than reason. From a stand point of logic can it comprehend the complexity of what makes us human?  The excitement or horror here is not what a “smart-network” will or will not judge, but the fact that technology is moving so fast that we can even contemplate and have such a discussion.   Whatever your thoughts you cannot stop this high-speed train as it left the station long ago and is whisking on into the future, with or without us.  In the end it may decide our fate.

Good Night and Good Luck

Hans Henrik Hoffmann Dec 4, 2012

Not that long ago a headline like this would have been an obvious April fool’s joke.  To be honest only a real idiot would have fallen for it.  But in his recent letter to shareholders that is basically what Steve Ballmer said.   Sounds Odd. Worlds largest software provider fearing for its life turns to a company it could have killed but instead invested a ton of money into. The circle of life.  With that being said it is a very interesting and historical moment in Microsoft’s history.  With all the talk of Windows 8, tablets and smartphones, in my view this is the biggest gamble Microsoft has taken since it decided to part ways with IBM in the 80’s and ditch OS/2 in favor of something called Windows.

There was a time when the mantra at Microsoft driven by Bill Gates was “You are either a hardware company or a software company, but you cannot be successful at both”.  It held true for quite some time. That certainly seemed to be true up until the iPod.  The iPod was truly the first device I remember where Apple got it right and the Microsoft partner system seemed very weak.  It was literally the thumb wheel, but it was so much better than anything else on the market for music devices.  In addition Apple created the software  Eco system with iTunes around the iPod.  The second of course was the launch of the iPhone in 2007, which launched a device that had great software and great performance.  Even the battery life was much better than anything else on the market.  Not just its longevity but it seemed to charge very quickly as well.  Microsoft was dumbfounded when this happened and stuck to its old mantra of trusting partners to come up with the “iPhone killer”.  It has not happened, despite significant improvements in the software.  Apple is now valued more than twice of Microsoft’s market capitalization.  Microsoft needed to change something.

However pas quarter at the shareholders meeting that need for change has seemed to finally happened.  To be clear it first came to light earlier in the year as Microsoft announced it was creating its own line of hardware under the brand name Surface.  Steve talked extensively about possible missteps and the desire to bring hardware and software closer together.  He was quoted as follows:

“Bill did hold up a tablet a number of years ago,” Ballmer said. “And, not that we don’t have good hardware partners, but sometimes getting the innovation right across the seam of hardware and software is difficult unless you do both of them,” Ballmer said at the meeting, held Wednesday in Bellevue, Wash.

Referring to the company’s new strategy of building its ownWindows 8 tablets under the Surface brand, Ballmer said “maybe we should have done that earlier, maybe [Gates’] tablet would have shipped sooner.”

I think the sooner comment goes without saying.  However it does not come without significant risk to the Microsoft partner Eco-system.  Unlike in times past there are alternatives to the Windows paradise.  You have Google promoting Chrome Books as well as Android devices.  Apple continues to grow, not just in mobile devices but on the laptop as well.  However it has been apparent for some time that this was a route that Microsoft had to consider,now the question will be how committed are they?  We don’t want or need another Zune fiasco on our hands.  How far will Microsoft be willing to go?  Already the upcoming Surface Pro is not being called a tablet but an ultra book.  Is that what the market and shareholders want to hear?

Who are the partners?  They are not small players in their own right.  You have Dell, HP, Lenovo, Acer, Samsung, HTC and Nokia.  Some were literally created by Microsoft, like Dell.  HP is a legendary tech company going through some very significant challenges due to poor leadership.  Acer has been very vocal in their opposition to Microsoft’s change in its OEM strategy   Then there are mobile players like Samsung.  Samsung is like the IBM or GE of Korea, but unlike those two old stodgy companies, of late they have shown a great ability to innovate.  They are, depending on what report you read, the number one provider of smartphones globally and it is not with a Windows Phone but with the S3 built with Android.  Finally you have Nokia, who are cranking out some beautiful Windows Phones, but so far sales are still slow.  Would Microsoft consider creating its own phone?  Buying Nokia?  One thing is evident is that Microsoft is having to play a delicate balance with its partners.  One might say “Hey Microsoft is leaving the Desktop, Laptop and net book business to its partners”, true but what is the fastest growing segment?

This is without a doubt the biggest risk Microsoft has taken in thirty years.  Was it one they had to take?  I think most would argue they had to do this.  Will they succeed?  It is still way t0o early to tell and it is apparent this will take time, at least three years in my opinion.   That in of itself is frightening as the industry changes quickly.    One day a Windows Phone is successful and then an iPhone crushes it over night.  It begs the question can Microsoft hardware change the industry?  What if Microsoft decides to build its own phone?  That would destroy Nokia.  But probably the most important thing said here is about :risk:, not little risk but great risk.  The tech industry is driven by dramatic change and you cannot succeed unless you take those risks.  Right now when it comes to hardware and how far it is willing to go at the expense of its partner channel is in the realm of the unknown.

Bill Gates used to talk about competition a lot in the early days .  The fear that a younger and hungrier company would come along and clean Microsoft’s clock.  Today that is more evident than ever.  There are a lot of sharks in the water.  What is clearer now is that the reason every large company should be afraid of these younger companies is that they have no track record of revenues.  While large companies fear them, smaller companies have no fear.  They are forced to take risks.  They throw caution to the wind as they have no choice in the search for steady cash flows.  Microsoft is finding itself being pushed into a corner.  Despite their revenues they are viewed as old school and not relevant.  Steve i spitting himself and Microsoft on the line, he may not be around to see its conclusion.  Microsoft is being forced to do the one thing they have yearned for and that is a necessary ingredient to succeed, they are taking risks and what ever the outcome we will all be better for it.  Good luck Microsoft.

Good Night and Good Luck,

Hans Henrik Hoffmann Dec 2, 2012