~ Archive for June 7, 2003 ~

Only 3 computer companies in this decade (Oracle/PeopleSoft)

6

If you’ve been reading the business news you might have noticed that Oracle has been trying to buy PeopleSoft, one of its competitors in the enterprise software toolkits market, in which the German company SAP is the leader.  With either SAP, Oracle Applications (not to be confused with the Oracle Database Server), or PeopleSoft you can build a corporate accounting system without having to start from scratch.


My theory of the market for IT products…


1960s: lots of innovation, many vendors


1970: customers realize that most of their innovative smaller vendors have gone bankrupt, vow to buy only from IBM


1988ish: customers realize that the computer they bought this year from IBM was almost exactly the same as the one they bought from IBM in 1969; they begin to demand innovation


1988-2000:  lots of innovation; small companies such as Microsoft and Oracle are able to grow into big companies


2001: customers realize that most of their innovative smaller vendors have gone bankrupt and vow to buy IT from only three vendors:  Microsoft for software, Oracle for big database management software, IBM for mainframes.


2010?:  customers realize that Windows/Office 2010 is more or less the same as Windows/Office 2000 and begin to look at new products from new companies again


Currently therefore it makes a lot of sense for all the medium-sized software companies either to fold or be purchased by Microsoft, Oracle, or IBM.  When customers will only buy from one of the Big Three the business is worth a lot more to the Big Three than to anyone else.


[Of course PeopleSoft may not be sold at all.  Oracle has offered $5.1 billion, which the shareholders would be incredibly lucky to get considering that the long-run viability of the business is questionable.  Craig Conway, the CEO of PeopleSoft, however, states that “I could imagine no price nor combination of price and other conditions to recommend accepting the offer to our shareholders”.  I.e., if Oracle offered to give his shareholders a Dr. Evil-esque $100 billion he would turn it down because the acquisition would mean the end of his CEO job.  Mr. Conway earned $17.6 million last year, during which revenue and profit declined and his shareholders got creamed.]


 

Our Earth: Spinning faster, covered in filth

4

Back home in Boston now after enjoying the magic of big airplanes:departed Tel Aviv on Lufthansa at 0530, slammed down at Frankfurt four hours later (European airports charge a landing fee for every practice touch and go and therefore most European pilots have much less experience with landings than their American counterparts), got into a 747 at Frankfurt and climbed over scary-looking cumulus clouds that topped out at 20,000′.  Seven hours later we broke through a 5000′ cloud layer to touch down (smoothly) on 22L, exiting the runway with 2000′ to spare out of 10,000.  Would have been several months of planning and fitting extra fuel tanks and one week of flying/waiting for weather in a light airplane.  One of my hosts in Israel was a retired air traffic controller from Ben Gurion airport.  He said that it never ceased to amaze him that a 747 could get off the ground and deliver hundreds of people to the other side of the planet in a fraction of a day.


Up above the clouds it is easy to start reflecting on the state of the planet…


Flying out of Boston to Nantucket you can take a short detour over the
famous dunes of Provincetown and eastern Cape Cod.  These natural
treasures are protected by Federal law as a National Seashore.  Just
how ancient are these dunes?  They go back to just after 1600 when the
Pilgrims arrived and cut down all the trees, thus allowing the soil to
turn into pure sand and blow around.


Wales and Scotland are the “wild” portions of the United Kingdom.  The
collision of Scotland with England way back generated a collection of
mountains that have eroded into rolling hills, typically rising to
2000′ or 3000′.  From any town, trail, or road you have unobstructed
views because the island was deforested by humans many years ago,
perhaps during Roman times.  You’d expect it to look a bit like
Vermont, with pastures in the valleys and large areas of tree cover,
especially near the ridges.  Without trees, however, it looks like,
well, England.  The remotest parts of the UK are incredibly crowded by
rural and small-town American standards.  No matter how minor the road
that you’re on, there is always one car behind you and another visible
coming in the opposite direction.


The crowding seems to be irritating the people who live in the UK.
Buildings and parks are festooned with signs asking people not to do
this or that.  You are threatened with heavy fines should you park for
more than 2 hours at a motorway rest stop or park sloppily and take up
two spaces in a 500-person village’s central car park.  If you own a farm, it is very difficult to get permission from
neighbors to land your airplane in your backyard.  People even attack public airports in the UK, something that is almost impossible in the U.S. due to the fact that nearly all regulation of airports is federal.  For example, Madonna, the pop singer, bought a big estate in southern England.  She travels there by private jet to a big airport and then a turbine-powered helicopter (Mother of All Noise) to her backyard.  A few miles away is a public airport, Compton Abbas, with a short grass runway and a bunch of Brits goofing off in ultralights and Cessna-style airplanes.  Madonna has been trying to get them shut down because, after her private helicopter roars away, she wants a little more peace and quiet.


Perhaps some of the violence in Africa can be explained by overcrowding.  The Congo, for example, has about 25 people per square kilometer, roughly the same density as the U.S.  But their percentage of arable land is 3 percent versus 19 percent for the U.S.  Thus they have something like 6 times as many people per acre of farmland and, due to a lack of education and infrastructure, many fewer opportunities to survive via non-agricultural pursuits.


Let’s move on to Man’s effect on the environment…


Looking up into the UK sky one occasionally sees a blue patch.  The
air seems clean through the vertical slice that you’re seeing.  Get up
into an airplane, however, and you look through horizontal layers of
air.  It is the same brown color that strikes one when returning in an
airplane from Alaska or the Caribbean into the Continental U.S.


Israel from a small airplane looks rather like Los Angeles without the
big mountains.  One side bordered is by the sea.  Development sprawls
in all directions from Tel Aviv, mostly high-rise apartment buildings
rather than the single-family houses you see in less densely populated
L.A.  Old citrus groves surround new exurbs.  Occasional undeveloped
scraps of dry scubby land poke through the buildings.  The air, seen
sideways from a plane, is tinged brown with pollution.


Traveling out of North America, with its vast wilderness areas, one is struck by how atypical North America is.  The UK and Israel are representative of the human experience on this planet:  most people will never see even one tiny corner of the Earth in anything like its natural state.


If one is not a professional ecologist and one has grown up in North America it is tough to appreciate at a gut level that humans are able to have any significant effect on the Earth.  Our planet seems like an infinitely huge and forbidding wilderness punctuated by the occasional human settlement.  According to Understanding Earth (a very interesting book but a new edition is coming out within a year or so), our planet’s mass is 5.976×10^27 grams, i.e., much heavier even than the biggest S.U.V.  Yet we humans have managed to speed up the Earth’s rotation enough to shorten each day by 10 microseconds by impounding water behind dams in rich countries, which tend be at high latitudes.  The dams pull water away from the the equator, where it was spinning with a high linear velocity.  By conservation of angular momentum the Earth is forced to spin a little bit faster when the mass of water is pulled inwards, just as ice skaters spin faster when they pull their arms in.

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