Convergence

Let's do a deeper dive on some of these topics. While we understand that Convergence can have different meaning to different people, in broad terms, convergence is happening in four major areas: Applications, Endpoints, Access Networks and Core Networks. Let's take these one at a time.

Applications convergence is easy to understand by an example such as Unified Mailbox where voice, e-mail, fax etc. all arrive in the same e-mail application inbox. Additionally, you would also want to share data that is common, across all these applications. Application convergence has been happening for many years now.

We have also seen Endpoints converge (mostly into cellphones) so that we can use one device to make phone calls, browse the Internet, send e-mails/SMSs and also perform functions traditionally available in PDAs (such as calendars, contact lists, reminders, to do lists, calculators, etc.). With larger and higher resolution displays becoming common on today's cellphones, portable gaming devices have also started converging into cellphones. We also hear about wireless and wireline convergence in the form of Wifi enabled cell phones that will use the home broadband connection for carrying voice when a wifi network is available. This will reduce the opex costs for the wireless service provider and benefit the consumer in the way of lower per minute charges.

Let's talk about the core network convergence from separate TDM, ATM and IP to a multiservice IP/MPLS network. The main drivers for the convergence in the core are: reduced operational costs, faster and cheaper delivery of new services, customer configurable virtual private networks, etc. British Telecom has launched a major initiative called 21CN for an All-IP network.

What is Access convergence? Here I am talking about the evolution in the access network technology that connects end user devices to the service providers. You might think that with all sorts of broadband options available in the last mile, the access network is NOT converging. This is partly true - while the "last mile" part of the access network seems to "diverge" into different technology options, the migration of end-user services is clearly from carrying bearer traffic over {analog, cable, wireless, TDM, ATM, Frame Relay, SONET/SDH} to carrying bearer over IP.

 In other words, instead of having our analog phone carrying analog voice signals to the PSTN network, we are migrating to VoIP. Instead of carrying voice over a GSM/CDMA/TDMA interface, we will be migrating to VoIP over these air interfaces. Instead of analog video carried over cable/FTTx, we are migrating to various forms of Video over IP.

This brings up a fundamental question- why bother to supplant all these well-entrenched technologies with IP? Aren't the traditional technologies we have been using for decades more reliable and cheaper? Aren't IP based devices more expensive and error prone as they have lot more software?

The answer to these questions is beyond our discussion in this tech-talk series but the key takeaway is that with proper encapsulation, many services can be carried over IP. Also, beyond the technologies visible to end users, there is convergence happening in the access network to core network interfaces. So, traditional Remote Terminals with TDM and ATM interfaces are migrating to Ethernet interfaces. Moreover, the traditional wireline access network elements and the cellular network elements are also coming together with IP interfaces into the core network.

Tomorrow, we will talk about the next generation services enabled by the NGN and why service providers plan to spend billions in the coming years to build these NGNs.

Tomorrow: Services and Business Models 
       

P/E atlast....

Lets forget the stock markets for now, and just look at a company,
where you may consider investing. Say, the company has given out 1000
shares. And this company makes a profit of Rs. 10,000. Very simply
put, if this profit had to be distributed to individual shareholders,
how much would each shareholder get? Rs. 10, right? Well, then Rs. 10
becomes the 'earnings per share" or EPS as it is known.

Now if there is someone owning a share of this company, and he wants
to sell it to you. What will be the minimum price that you will be
willing to pay? Well, it has to be Rs. 10 again, as that is the
'earnings per share' and conceptually that amount is yours for the
taking. So indeed the minimum price that you will be willing to pay
for the share is Rs. 10.

However, note that you are going to become a shareholder by purchasing
this share, and you will not just get the fruits of this year's
earnings, but of future earnings of the company as well. So you may be
willing to invest a little more than Rs. 10. How much more will you
invest? That will depend on your perception of how the company is
likely to do in the future. You may believe that the company may
continue to earn the same amount for at least 3 more years, and you
are willing to take your bets up to that period. Then, you may be
willing to purchase that share for Rs. 30, rather than just Rs. 10. On
the other hand, you may have a feeling that the company is not only
going to make profits for future years, but it is poised to increase
its profits substantially, over the next few years. Say, you may
estimate that the profits will be 3 times the next year, 5 times the
year after, and 10 times the year thereafter. In such a case, you may
be willing to pay a much higher sum for that share, say, even Rs. 100
or Rs. 120, as compared to the original Rs. 10. Whether it is Rs. 30
or it is Rs. 100 or it is Rs. 120, what you are paying is a MULTIPLE
of the present "earnings per share". Remember that in the above
example, the present earnings per share were Rs. 10. When you pay Rs.
30 for that share, you are paying a multiple of 3 times the EPS, and
when you are willing to pay Rs. 120 for that share, you are willing to
pay a 12 times multiple of the EPS.

I trust that you have understood the above. As soon as you nod in
confirmation, you have also understood then, the concept of P/E ratio.
Yes, in the P/E ratio, P stands for the price of the share, and E
stands for EPS or earnings per share. And hence, the P/E ratio is
nothing but the multiple to the EPS that the price commands. When you
were willing to pay a PRICE of Rs. 120 for the share, whose EPS was
Rs. 10, the share had a P/E ratio of 12.

In the real world of companies whose shares are listed on the stock
markets, the scenario is same, but at a larger scale. Instead of the
1000 shares that the company in the above example had, most listed
companies will have lakhs of shares that have been issued. But the
principle of EPS and P/E ratio remains the same.

The other thing to appreciate is that out of the two factors in the
P/E ratio, the "E" part, i.e. the EPS, does not change on a day-to-day
basis. Even though the company operates its business daily, it does
not release it's accounting information on a daily basis, so we only
know the EPS based on the last declared financial results. Also in
reality, the earnings of the company generally move as per some
gradual movement that has already been envisaged and predicted. Large
variations in the EPS are unlikely. So in the ratio P/E, the E part
remains largely steady. It is the P part of the price of the share,
which is dynamic and will tend to change daily or even hourly, based
on the perception that investors have, about the company, and where it
is headed. Change in the price, then gives a change in the P/E ratio.
Or knowing some facts about the company, its present P/E ratio, an
investor could hazard a guess as to its likely movement on the P/E
ratio, and then, you can take an educated guess, whether it's a good
time to buy the stock or to sell it, or to just stay put.

How does that happen? Let me give you some idea of this.

1. Typically an industry sector may have an average P/E. Say, for
example, the 2-wheeler industry has a P/E of 15. Which is nothing but
an average of the P/E of the various industry players. Now, if Bajaj
Auto has a P/E of 14 and Hero Honda has a P/E of 16, what does it say?
It would say that for some reason, perhaps due to the future prospects
that the market perceives, they have given a better appreciation to
Hero Honda stock than to Bajaj Auto. Now if Bajaj Auto comes out with
good results, then there is a good chance that its share price may
rise to make its P/E at least 15, if not beyond that. On the other
hand, for Hero Honda to appreciate further, it must come out with
something more outstanding, and substantial, for the market to give it
a multiple even beyond the premium that it has already given to the
stock. Moreover if there is any adverse news about Hero Honda, the
stock is likely to slip sharply to levels where its P/E goes down to
15 or 14 (Bajaj Auto's level) or maybe even lower than that.

2. There is a chance that due to some bad years of performance, in an
industry sector, a particular company has got badly hit, in terms of
its share price. Where the industry average P/E is say, 15, this share
price has been hit so badly, that its P/E is dwindling at 5. Now
suppose there is news that due to some restructuring or whatever, this
company is turning around in its performance. And if it is believed
that it will soon come close to the rest of the industry peers, then
just imagine the room that this stock has to grow. Since its P/E is
only 5 and the industry average is 15, then the price can move
significantly up, before its P/E level reaches somewhere close to
12-15. That may suggest a great buying opportunity then. This, in
fact, is what has happened to many PSU companies whose shares are
quoted on the stock market. PSU banks' stocks are also examples of
this type.

3. The P/E ratio also explains the astronomical rise of some stocks in
the 'new-age' industries like say, IT, Media, Biotech, etc. The market
somehow believes that the earnings of these companies will rise at a
very fast pace, as compared to more traditional old economy companies.
Which means that over the years, the "E" part of the P/E ratio is
going to keep going up rapidly. That being the case, the market
pre-empts the scenario and gives a big premium of the price multiple
today itself, and that results in a high P/E ratio. The IT industry
commands a P/E of more than 50, the pharma industry commands a P/E of
around 32 and the FMCG industry (on account of the expected growth in
this sector due to the large buying power of India's middle class,
perhaps) has a P/E of around 34. This is compared with P/E of 18 for
cement industry, 10 for engineering industry, and 6 for Power sector
companies. You can well see what the market believes about the future
prospects of these industries. By the way, all this information of P/E
for individual company or for an industry sector, is available on the
website of equitymaster.

4. Sometimes when our stocks are rising to great heights, we may
question the logic for the same? Do these stocks justify such a price
level? One way to validate these doubts is to again look at P/E
levels. What is the average P/E in a developed market like the US
stock market? What is the average P/E level in some other emerging
markets, like say, Brazil? What is the P/E level say, for the leading
bank stock on the Wall Street? How does that compare with the P/E
level of India's leading bank stock, State Bank of India? Comparisons
of this nature can give us answers as to whether our markets are
overheated or in fact, they are slowly catching up with the world, in
terms of the P/E multiples that we have given. The latter may point to
a maturing of the markets, in fact. To give you the actual answer,
indeed, our markets are maturing, and our P/E levels on an average
have been lower compared to the better markets of the world, and in
fact, there is still a lot of room to catch up with the world P/E
multiples. Again then, if we believe that the India story is
happening, we should not be surprised that our stock prices are
rising, as we are only closing in to the P/E levels commanded in other
world markets.

5. A note of caution about understanding P/E. Where the above
guidelines are theoretically correct, there is a question of
understanding what data you are seeing. You may see an EPS of a
company today. Do you know clearly, if that EPS is of April 1, 2004
results, or based on quarterly results for quarter ended on December
31, 2004 or in fact, these are the projected EPS for year ending 31st
March 2005? When you compare P/E for different companies or in an
industry sector, are you sure if the EPS taken for comparison is the
same period one, for both? There are times when analysts refer to
"forward P/E", there are times when the P/E is based on last year
ended results, etc. It is important to be clear of the data behind the
P/E ratio to ensure that the correct comparison is made, and action
taken based on the data, is also correct.

Yes, it is a technical issue that we have covered this week. Those of
you who are able to understand and utilize this understanding well,
will have an additional weapon to combat the markets. Those who choose
to let it pass, are also okay, as the earlier discussed principles
which are simpler to understand, will still carry you through the
minefield of the marketplace!

Till next week, then. Take care….
Sanjay Mehta

So, what's really changing?

So, what's really changing? In the past (and true even now), there have been separate networks for voice, data and video. The phone system has carried our voice calls, while the Internet has been used for our data traffic. Video (especially TV) has relied on its own networks - primarily a combination of cable, satellite and terrestrial broadcasting. What is changing now is that the shift is happening from vertically integrated networks to horizontally-integrated networks, which decouples the services from the transport layer.

We are seeing a fascinating evolution in the networks that connect our computers and mobile phones to services. On the wired networks, technologies like VDSL2 have the potential to dramatically increase the connectivity we have available at home and work. In the wired world, 3G networks are starting to get deployed. WiMax is also being touted as an alternative to 3G. For now, technologies like EV-DO offer hundreds of kilobits per second connectivity for the early adopters. Among other technologies, one which is getting increasing recent interest is Broadband over Power Lines (BPL).

In other words, NGN is all set to usher opportunity as disruption as the worlds of mobile and fixed networks collide. At the same time, they will also usher in a new dynamic in network-aware applications.

Web server and Appln server

Hi Fredy, welcome to the WebmasterWorld and that is NOT a stupid question at all, in fact, it's a topic many people don't understand.

A WEB server is software designed to do one thing - serve HTML pages to a browser. Apache, IIS, Xitami all will "serve" pages to be read in a web browser.

an application server is also software, but it takes static HTML pages and activates them, making them dynamic, allowing you to run high level language routines behind them and connect to a database. IIS has a built-in application server called Active server Pages (ASP). Other App servers include TOMCAT (which allows you to run Javaserver Pages), PHP, BEA WebLogic, ColdFusion and IBM's WebSphere.

Generally speaking, they are two separate layers. You can run TOMCAT on a Windows platform or a Unix platform, same with WebLogic, PHP and WebSphere. ASP, which is a Microsoft proprietary format, is native to IIS, but through the Sun ONE products can be run on UNIX platforms as well now.

For the most basic webmastering, PHP/ASP/TOMCAT are the most accessible. For highly advanced applications (hence the name) WebLogic, WebSphere and Cold Fusion are used.

10 for 10

Recently, a few people asked me over lunch: what's next after blogging and podcasting? Jeremy Zawodny is also posing the same question. This has all got me thinking about what technology-driven trends will revolutionize how companies communicate. Here's my list of 10 trends to keep an eye on for the next 10 years. They are in no particular order...

1. The Long Tail - small players can collectively make up a market that rivals the giants. As Seth says, small is the new big. This applies equally for journalism as well as for marketers.

2. The Read Write Web/Web 2.0 – technologies like Ajax will make the web more dynamic, turning it into a full-fledged platform. Wither the desktop.

3. Timeshifting – consumers will increasingly want to devour media on their own time, on the mobile device of their choice and without commercials

4. Collaborative Categorization – consumers, using technology, will create their own taxonomies that make it easier to find information. This is sometimes called tagging, social search or folksonomies. However, this is just the beginning.

5. Citizen Marketing – consumers will organize – either on their own or with the help of companies – to evangelize products they love and vilify those they don’t

6. The Daily Me – it’s finally here; RSS, AI and personal search tools will make it easier for people to seek out only the news they care about and tune out all else

7. It’s All a Conversation – as journalism becomes a conversation, so will marketing - just like Cluetrain said.

8. What’s Inside is Outside – mobile devices and consumer generated media mean that whatever a single eye beholds so can the world.

9. Trust Marketing – people will increasingly use social networking technology to tune in messages from individuals they trust (including citizen journalists) and tune out everyone else

10. Decentralized Communication – armies of individual employees will use technology to become the voice of every company; like it or not. The solo singer is dead. Long live the chorus.

What's on your list?

Searching and Finding

Searching and Finding
By Atanu Dey on The Really Important Small Stuff

Books influence us profoundly, of course. But for a book to work its magic on you, you have to be ready. The Buddhist have a saying that when the student is ready, the teacher appears. Actually, what that means is that when the student is ready, the presence of the teacher becomes known to the student. The teacher has been around all along but the student did not have the faculty to recognize the teacher. The prepared mind is a necessary condition for books to have any impact.

In a sense you cannot learn something that you don’t really already know implicitly, or something that you are not yourself on the verge of discovering. What you read is just the last hint that solves a problem that you have almost solved, or the little nudge that takes you over the edge. You have to have to be very close to the solution yourself for the hint to work; you have to be at the edge for the nudge to work. If you are too far away, hints or nudges are pointless.

Education has something to do with learning, which in turn has a relationship with knowledge and understanding. The raw material for knowledge is information. Somehow in the human brain, information properly processed and internalized results in knowledge. Somehow the whole body of knowledge further gets processed into understanding.

I feel that there is an optimal amount of information that any given brain can process into knowledge, and that this optimal is less than the maximum capable of being absorbed. It is like calories derived from food: the maximum possible is far greater than the healthy amount.

Processing of knowledge for understanding requires time and effort, just as time is needed for internalizing information to acquire knowledge. Since time is a ultimate binding constraint (you cannot release time constraints unlike all other constraints), what time you spend in internalizing information (gaining knowledge), you cannot spend in understanding. Knowing too much is as much of a hindrance to understanding, as having too much information is a barrier to knowing.

It was in Hermann Hesse’s novel Siddhartha that I got a lot of hints about the nature of understanding. For example, in the final chapter called Govinda (here is a handy copy), the relationship between searching and finding is discussed. Govinda says that he has been searching for a long time but has not found the answers. Siddhartha says:

Perhaps that you’re searching far too much? That in all that searching, you don’t find the time for finding?”

“How come?” asked Govinda.

“When someone is searching,” said Siddhartha, “then it might easily happen that the only thing his eyes still see is that what he searches for, that he is unable to find anything, to let anything enter his mind, because he always thinks of nothing but the object of his search, because he has a goal, because he is obsessed by the goal. Searching means: having a goal. But finding means: being free, being open, having no goal. You, oh venerable one, are perhaps indeed a searcher, because, striving for your goal, there are many things you don’t see, which are directly in front of your eyes.”

Later on in the dialog, Govinda presses Siddhartha to tell him what wisdom he has gained from all his years of searching.

Quoth Siddhartha: “I’ve had thoughts, yes, and insight, again and again. Sometimes, for an hour or for an entire day, I have felt knowledge in me, as one would feel life in one’s heart. There have been many thoughts, but it would be hard for me to convey them to you. Look, my dear Govinda, this is one of my thoughts, which I have found: wisdom cannot be passed on. Wisdom which a wise man tries to pass on to someone always sounds like foolishness.”

 

Mobilisation and IMS...

Mobilisation and IMS...
By Paul Golding

There is still a lot of uncertainty about the future of mobile communications. This is easy to explain. Mobile telephony is nothing new. We already had telephones before mobiles and the transition is a very obvious step and mostly a matter of economics (i.e. making it cheap enough to do). However, everything else we are likely to do with mobiles in the future will be new. We tend to think of a progression or evolution from voice-based devices to "data" devices. However, there isn't necessarily a continuum. The future is about mobile computing, which is quite a different paradigm from mobile phoning.

Recently, I wrote a chapter "The Future of Mobile in the 3G Era" for the forthcoming title "Thumb Culture". I have been busy expressing the key themes in a presentation, mostly to provide a vehicle for explaining why, if at all, operators need to switch to using SIP-based signalling in their networks. In other words, "why do operators need IMS?"

Numerous whitepapers and sales presentations about IMS seem to concentrate on the topic of convergence, or seamless mobility. This usually means that you can use any wireless technology to make phone calls from the same phone. Outside, you would use 3G or GSM. Inside, you might use Bluetooth or WiFi.

What's the difference? It's cost. If you can make calls at home using a WiFi access point hanging off your broadband pipe, then the calls should be lower cost as you are paying for the broadband pipe already. Of course, this kind of idea works best if you have one phone number (your mobile number essentially), which works the same whether via GSM or WiFi. This is the promise of converged fixed/wireless services.

Where does IMS come into this? Well, to make a phone call, the phone has to exchange all kinds of signals with the core network that eventually connects one caller with another. A GSM phone only does "GSM signalling". The way signalling works includes how the signals are carried by the underlying radio interface, which is very well defined for GSM, as it is for CDMA and other standards. If we just call that interface "cellular" for a moment, then our mobile phones pass their signals using "GSM-over-cellular", which is all laid out in the GSM specifications. However, there's no such thing as "GSM-over-Bluetooth", or "GSM-over-WiFi" etc.

One company (Kineto) has come up with a "GSM-over-WiFi" system. They have done this using a clever trick. By pretending that your WiFi access point is a mini GSM base-station, your home becomes a cell in the cellular network. Hence, by adding a WiFi radio to the GSM phone and then using the "WiFi-as-cell" trick, they end up with a "GSM-over-WiFi" system, which looks like a "GSM-over-cellular" system.

This system, called UMA, means that your GSM phone will work on your WiFi access point. Instead of paying mobile call rates in the home, you will, in essence, get your calls from home "for free", as you're already paying for the WiFi-broadband bit. BT are about to offer such a service, called Bluephone (they orignally thought Bluetooth would be better than WiFi).

IMS offers an alternative. With IMS, there's a whole new way of doing all the signalling, and it's called Session Initiation Protocol (SIP). The beauty of SIP is that it is one of those wonderful protocols based on Internet Protocol (IP) that doesn't take much effort to understand nor to implement. In fact, there are plenty of free pieces of software out there that can implement SIP. It's the kind of thing a software undergrad could write quite easily. GSM, on the other hand, is not a barrel of laughs when it comes to implementation. Moreover, SIP, like so many IP-based protocols, is highly extensible, unlike so many non-IP protocols in the telecoms world.

SIP then, will run on any device that can connect with an IP network. These days, this includes a lot of devices. Even elevators can - and do - connect with IP networks. Certainly any wireless device, like a PDA or mobile, will have the required piece of software to "talk IP", often called an IP Stack. Naturally, our desktop and laptop PCs also talk IP and can definitely implement SIP.

Therefore, if the core of the mobile network is converted to SIP, instead of GSM (CDMA etc), then overnight the network can handle calls between any SIP-compatible devices, no matter how they implement the IP connection: over Cable, ADSL, WiFi, GPRS, Bluetooth, 3G etc. You can think of SIP like a Hotmail account. You can log-on from anywhere and then get your email. With SIP, you can log-on ("register") from anywhere and get your phone calls, voicemail etc.

From this explanation, it is easy to see why the focal point of SIP-based networks for cellular is often seamless mobility. However, the real power of SIP and IMS lies beyond seamless mobility.

In my opinion, 3G is IMS. What SIP enables is a generic "connecting" protocol. We don't necessarily have to be interested in connecting users to make a voice call. In other words, SIP isn't just a "calling" protocol.

Thus far, mobile networks have been almost exclusively concerned with voice calls. The data model that has emerged so far is WAP, which is essentially "Web-lite". The paradigm is connecting users with information in the form of Web pages (portals etc.)

However, the essential nature of mobile technology is connecting people. This Person-to-Person (P2P) nature will be a dominant feature of mobile computing. We need to grasp what P2P "connecting" is all about. Today, we talk to each other. But, tomorrow, we shall:

Click to play, to share, to view, to update, to invite, to compare, to tag, to consult, to message, to conference
…Click to connect!

GSM only allows "dial to talk", which is why we need SIP. With SIP, we can do all the above things. However, this is a little too abstract possibly. What do we mean by "click to connect"?

Well, with the Web, we might think of HTTP as the fundamental enabling technology. In fact, this isn't really the case. The essence of The Web is the "universal client" paradigm, or the browser. With a browser, we can access all kinds of data from all kinds of sources (courtesy of HTTP of course, and HTML).

What is the equivalent of the browser in the SIP world? Well, there isn't one really, which is why I have pointed out before the problems of the SIP-HTTP analogy. I restate the problem here:

The Web = HTTP + Browser + HTML

SIP = SIP!

Substituting IMS doesn't work either:

IMS = SIP + Some interfaces (e.g. Billing)

What's missing? Well, the crucial component is the user interface.

Language escapes us at this point, because there is no word to describe the forthcoming SIP-based user experience. However, the missing ingredient is something called Presence. If I stick with the view that I started with, then I believe that the future of the 3G era is:

3G = SIP + Presence

or,

3G = IMS + Presence

which is why I said that 3G is IMS, even though a lot of the current obsession about the future is with speed, or something called HSPDA. This means very fast download speeds, but that's not really a paradigm shift: it's not a new engine, just better fuel.

The way to think of this new paradigm is to think of Instant Messaging, specifically the buddy list component. In the buddy list we can see our buddies and their presence condition: online, offline, busy, away, out-to-lunch, etc.

In future, this is how all of our connecting will be driven - via a buddy interface, except that we shall have more than the option to "click to IM". IM will be only one component. We will have all the other options mentioned above, including "click to talk", which will connect as for a voice-call and replace the "dial to talk" mode that we use today.

We could also "push to talk" (like a walkie-talkie), "push to view", "click to play", "click to share" (i.e. contacts, notes etc.) and all manner of other methods of connecting. In fact, the "connecting" paradigm will extend beyond P2P exchange. Machines will begin to appear in our "buddy" icons, such as our home security system. We can imagine a buddy called "Alarm" and we can see its state: "armed", "unarmed", "red alert", "yellow alert" and so on. Another example is a taxi buddy, a flight buddy and so on.

In some cases, the presence state is the information that we require and is a subtle form of communication in itself and one that we shall become increasingly reliant upon as the process of mobilisation marches on. In other cases, the presence information is an aid to connecting thereafter and the two are closely related. Together they still constitute "connecting".

With the personification (reification) of objects (e.g. machines), we might reasonably expect that dialogue-based communications might become a familiar mode of interaction with machines instead of the current transaction-based (e.g. Web-control) modes. For example, we could imagine having a dialogue with our alarm system via IM. It would "speak" to us as if it were human: "The system is currently unarmed, would you like me to arm it?", or "The alarm has been reset, would you like to call your neighbour?" and so on. In many cases, this is a far more efficient mode of communication than messing around with web-based options and all that non-linear navigation that goes with it. However, it is also possible to move from one mode to another.

With all these modes of connection, SIP allows all the underlying connections and signalling to take place, including transfer of presence-state information. Presence, by which I really mean "buddy-centric" communication (people or object), is an essential component of mobile computing, as it really provides the "Universal client" (and metaphor) through which we shall interact with the digital world.

Mobilisation is the name of the process of folding more and more of our daily tasks into the mobile computing realm. This is a two-way process. Technology improves and produces enablers. Circumstances change, economically, socially, psychologically, that lead us to discover how the enablers might be useful to manage aspects of our changing world.

The buddy-driven presence paradigm will play a significant role in the mobilisation process, if only because it provides us with a model of the world ("world view") that we can work with through our mobile computers. Connecting with "buddies" seems a very natural paradigm.

IMS allows operators to build an infrastructure that will support this paradigm. Therefore IMS will become important in the future of the 3G era. 3G is IMS.

 

Search and destroy

http://www.fortune.com/fortune/print/0,15935,1050065,00.html

Ice Breaker

Mr. Toastmaster Fellow members and guests.
It's never easy to squeeze 25 years of one's life in 300 seconds.
Still let me make a small attempt to sketch my bio.

I am born and brought up in a kannada family in Shimoga. A town in the
central part of karnataka.
Father is retired now. He was an Ayurvedic practitioner. Mother a housewife.
We are 5 brothers and three sisters. All in all a cricket team.
I wont go into other family details which is another big chapter other
than saying my elders brothers are carrying on the tradition of my
father who prepared a formula for Diabetic patients and which is now
manufacturing in a small pharmaceutical unit.

OK
Me studied at a kannada medium school till 7th and later shifted to an
english medium.
Those were toughest years to adjust to the new environment.

I was a shy boy and not used to look beyond text books.
But I was lucky few times to participate and win prizes in singing and
quizzing contests.

After 12th my parents wanted me to study engineering staying away from home.
Like any other normal students I had this fascination to study space science.
I could not pursue further because there was on god father in my
family circles to advise.

I joined this engg. College in the northern part of karnataka, a place
called Bagalkot.
Extermely humid and heated weather where the tempearture in summer
raises to 40 + degrees.

I took up electronics and stayed in hostel. One of the best hostel
facilities in Karnataka I should say. Very well maintained in all
respects.
We were wonderful set of friends from different parts of Karnataka and
other states.

I must quote two incidents which are worth mentioning during my stay
at Bagalkot.
Me a very mild and shy boy wanted to get rid of that image.
I was in second year. And there was an election for the post of class
representative.
My friends also encouraged.
On the day of the election we're supposed to give a pre-election
speech asking to vote.
That was my first ever addressing to a group of people.
I prepared the speech and practised all night.
Well the opponent was quite influential and a big guy.
Well, the magic of the prepared speech was so good that the default
assumed winner lost the election by a big margin.
Though I dint manage the post so very well…it gave me some kind of
confidence that I can speak in public.

Then there was in third year. My college computer got this internet connection.
For a college of over 1000 students there were two PCs which were
connected to the internet.
One always used to be occupied by senior faculty and lecturers and
other terminal by me.

Well the awareness and usage of internet was low….
Excitement of using internet was so high that I used to skip classes,
stay late and use the internet.
Computer lab faculties were so bugged with me that they used to
complain about me to the HODs.
And I was banned to use the internet for sometime.

This irritated me a lot.
When the entire planet is hooked to the net, how can they deny me this right?

One day there was this another department adjacent to this computer
lab. I was working till late in the evening.
When they were about to lock the department, I hid behind the tables
and stayed underneath till 7.30 - 8.0 or so with not a movement.
When everything was silent around, I sneaked into that computer lab
and happily browsed all night without any food and controlliing all
the nature calls.
I had list of websites to visit. Wanted to configure an email client.
Wanted to post few queries to the user groups.
I must have browsed till late in 5 in the morning.
And jumped back in to my department and managed to escape….

Believe me I was so obsessed with the internet that at one time I had
created 32 email ids for my name. 32.
I had a home page of mine. And was first to almost any new phenomenon in the
world of internet.
Some of my friends instead of Aravinda, call me as Netvinda.

I became a overnight role model in my college after I was recruited to
a big telecom company called Lucent technologies. This is again
courtesy internet.
It never happened for years to that college which hardly had any
exposure to IT companies that a boy made it into a big telecom
company.

Eventually I ended up as being the best out going student of the college.

I finished college came to bangalore in year 2000. Worked for Lucent
technologies for 2.5 years.
The Business unit got sold out and I moved on to another chinese
company called huawei technologies.
I quit huawei because of their extremely inhumane working conditions.
Joined siemens. Over a year now….

I have resigned at siemens last week and joining another startup next month.
Has been a bumpy road so far. With ups and downs.

Going forward I would like to own an IT company in a wireless domain.
Let's see.

Besides work.
I have done a certificate course in astrophysics from Birla Instt of
fundamental research from weekend classes.
Post graduate diploma in advertising and public relations at an
evening college from jain instt.

My other interests include
Blogging on the net.
Entrepreneurial interests.
Avid reader of Non-fiction and Basic sciences

Over to Mr. Toastmaster.

Why FDI in retail is good news

Even a modest chain of 200 supermarkets, to be set up all over India in selected towns and cities in the next three years, will require an investment of about Rs 2,000 crore (Rs 20 billion), at the rate of Rs 10 crore (Rs 100 million) per supermarket to cover the infrastructure and working capital.

Each supermarket may take 2 or 3 years before it becomes profitable. There is a risk that a few of them may even fail.
How many Indian entrepreneurs will be willing and able to commit this level of investment and undertake the risks involved? That is where the international experience and skills that may come with FDI would provide the confidence and capital.

http://www.rediff.com/money/2005/jul/22spec1.htm

Power of Listening

Boies joins Tom and Kevin for a drink. A few minutes later, Kevin gets
up to make a phone call outside. Boies remains at the bar, talking to
Tom for 30 minutes. "I'd never met Boies before," Tom said. "He didn't
have to hang around the bar talking to me. And I have to tell you, I
wasn't bowled over by his intelligence, or his piercing questions, or
his anecdotes. What impressed me was that when he asked a question, he
waited for the answer. He not only listened, he made me feel like I
was the only person in the room."

20 basic technology skills that all educators should now have

Here are 20 basic technology skills that all educators should now have:

1. Word Processing Skills
2. Spreadsheets Skills
3. Database Skills
4. Electronic Presentation Skills
5. Web Navigation Skills
6. Web Site Design Skills
7. E-Mail Management Skills
8. Digital Cameras
9. Computer Network Knowledge Applicable to your School System
10. File Management & Windows Explorer Skills
11. Downloading Software From the Web (Knowledge including eBooks)
12. Installing Computer Software onto a Computer System
13. WebCT or Blackboard Teaching Skills
14. Videoconferencing skills
15. Computer-Related Storage Devices (Knowledge: disks, CDs, USB drives, zip disks, DVDs, etc.)
16. Scanner Knowledge
17. Knowledge of PDAs
18. Deep Web Knowledge
19. Educational Copyright Knowledge
20. Computer Security Knowledge

Advice for authors

Advice for authors
By Seth Godin

Always beware free advice. It is worth what it costs!

That said, I get a fair number of notes from well respected, intelligent people who are embarking on their first non-fiction book project. They tend to ask very similar questions, so I thought I'd go ahead and put down my five big ideas in one place to make it easier for everyone.

I guarantee you that you won't agree with all of them, but, as they say, your mileage my vary.

1. Please understand that book publishing is an organized hobby, not a business.
The return on equity and return on time for authors and for publishers is horrendous. If you're doing it for the money, you're going to be disappointed.

On the other hand, a book gives you leverage to spread an idea and a brand far and wide. There's a worldview that's quite common that says that people who write books know what they are talking about and that a book confers some sort of authority.

2. The timeframe for the launch of books has gone from silly to unrealistic.
When the world moved more slowly, waiting more than a year for a book to come out was not great, but tolerable. Today, even though all other media has accelerated rapidly, books still take a year or more. You need to consider what the shelf life of your idea is.

3. There is no such thing as effective book promotion by a book publisher.
This isn't true, of course. Harry Potter gets promoted. So did Freakonomics. But out of the 75,000 titles published last year in the US alone, I figure 100 were effectively promoted by the publishers. This leaves a pretty big gap.

This gap is either unfilled, in which case the book fails, or it is filled by the author. Here's the thing: publishing a book is really nothing but a socially acceptable opportunity to promote yourself and your ideas far and wide and often.

If you don't promote it, no one will. If you don't have a better strategy than, "Let's get on Oprah" you should stop now. If you don't have an asset already--a permission base of thousands or tens of thousands of people, a popular blog, thousands of employees, a personal relationship with Willard Scott... then it's too late to start building that asset once you start working on a book.

By the way, blurbs don't sell books. Not really. You can get all the blurbs in the world for your book and it won't help if you haven't done everything else (quick aside: the guy who invented the word "blurb" also wrote the poem Purple Cow).

4. Books cost money and require the user to read them for the idea to spread.
Obvious, sure, but real problems. Real problems because the cost of a book introduces friction to your idea. It makes the idea spread much much more slowly than an online meme because in order for it to spread, someone has to buy it. Add to that the growing (and sad) fact that people hate to read. Too often, people have told me, with pride, that they read three chapters of my book. Just three.

5. Publishing is like venture capital, not like printing.
Printing your own book is very very easy and not particularly expensive. You can hire professional copyeditors and designers and end up with a book that looks just like one from Random House. That's easy stuff.

What Random House and others do is invest. They invest cash in an advance. They invest time in creating the book itself and selling it in and they invest more cash in printing books. Like all VCs, they want a big return.

If you need the advance to live on, then publishers serve an essential function. If, on the other hand, you're like most non-fiction authors and spreading the idea is worth more than the advance, you may not.

So, what's my best advice?

Build an asset. Large numbers of influential people who read your blog or read your emails or watch your TV show or love your restaurant or or or...

Then, put your idea into a format where it will spread fast. That could be an ebook (a free one) or a pamphlet (a cheap one--the Joy of Jello sold millions and millions of copies at a dollar or less).

Then, if your idea catches on, you can sell the souvenir edition. The book. The thing people keep on their shelf or lend out or get from the library. Books are wonderful (I own too many!) but they're not necessarily the best vessel for spreading your idea.

And the punchline, of course, is that if you do all these things, you won't need a publisher. And that's exactly when a publisher will want you! That's the sort of author publishers do the best with.

Key Megatrends related to the digital entertainment industry:

The Key Megatrends related to the digital entertainment industry:
1. The on-demand media lifestyle is here
2. The end of customer sacrifices is near (music !!)
3. Everybody is short of time, and must make choices
4. The end of browsing is near (see Google morph)(This may be controversial though)
5. In media, the traditional scarcity principle of valuation morphs into the ubiquity paradigm
6. Radio is finally unbound (by spectrum or schedule)
7. Consumers are starting to generate their own content
8. A mass of niche markets evolves (lowest common denominator concerns becomes irrelevant)
9. Time-shifting and space-shifting and device shifting become standard
10. Long-tail opportunities are everywhere.

P/E - What is it all about?

P/E – What is it all about?

The most commonly used valuation metric by investors is the price to earnings ratio or commonly referred to as the P/E ratio. Though commonly used, it is also misunderstood for various reasons. Here is an attempt to simplify this valuation metric.

How is P/E calculated?

It is calculated by dividing market price of a stock by EPS (earnings per share). EPS in turn is calculated by dividing the net profit of the company by the number of shares outstanding.

Having calculated the P/E, what does it stand for?

Lets assume a stock is trading at Rs 100 and its EPS is Rs 20. The P/E multiple is 5 (100 upon 20). Assuming that the company’s EPS is likely to be Rs 20 each year, it will take 5 years for the investor to realize Rs 100. Of course, the assumption here is that the company’s EPS is not growing at all.

Now taking the example of commonly traded stocks like Infosys and Tisco. While the former trades at a P/E multiple of 25 times, the latter trades at 7 times. Why is it so? It is believed that the stock price of a company tracks its long-term earnings growth potential. In an economy, some companies (or sectors) are likely to grow at a faster (like say software or pharma) rate. So, the P/E multiple of companies from these sectors are likely to be higher and vice versa. Depending upon growth expectations, the P/E multiple could vary.

There is one crucial factor here i.e. expectations. Though Infosys may be trading at 25 times earnings, if EPS is expected to grow by 25% per annum, the investor could realize the money in four years.

P/E – Is it a discount or a multiple?

There are two ways of quoting P/E valuations:

Tisco is currently trading at Rs 350 discounting its earnings by 5.5 times

Tisco is currently trading at Rs 350 at a P/E multiple of 5.5 times

Which is right? The answer to this lies in the formula for calculating P/E itself.

P/E is Market price divided by EPS. If we were to reverse the formula,

Market price = P/E multiplied by EPS. Stock prices reflect future earnings potential and not past performance. Discounting the current price with historical EPS is not a right way to analyse companies.

Take a hypothetical case. If Tisco’s EPS for the next year is expected at Rs 50 and the growth in EPS is around 15%, the market price is calculated by multiplying Rs 50 with 15 times i.e. Rs 750. When determining the stock price, one does not discount earnings but multiply earnings.

What is the ‘right’ P/E multiple for a stock?

The answer to this question is not easy. In the previous example, we have assigned a P/E multiple of 15 times because EPS is expected to grow by 15% in the immediate year. Is this the right way? Not necessarily. Here, it is important to understand industry characteristics of the company.

For a commodity stock like Tisco, EPS tends to grow at a faster rate when steel prices are recovering or are at the peak and the EPS is likely to decline at a faster rate during downturns. To qualify this statement, if we look at EPS growth of Tisco from 1994 to 2004, the compounded growth in earnings is 17%. However, the CAGR growth in the last three years was 193% (the recovery phase). So, if one believes that steel demand is likely to trace long-term economic growth and that 15% growth is unsustainable, the P/E multiple should be ideally much lower than 15 times. Similarly, the long-term growth prospects for software companies could be much higher than commodities. So, the P/E multiple for software stocks could be at a premium.

Determining the P/E multiple for a stock/sector also depends on:

Historical performance – Why does Infosys trade at a higher P/E multiple compared to Satyam? By historical performance, we mean, focus of the management (without unrelated diversifications), ability to outperform competitors in downturn/upturns and promise vs performance. This can be gauged if one looks at the last three to five year annual reports of a company.

The sector characteristics – Margin profile, whether it is asset intensive and intensity of competition. Less asset intensive sectors (say, FMCG) are considered defensive and therefore, could trade a premium to the overall market.

And more importantly, expectations. Take the case of textile stocks. Expectations of significant growth opportunities post the 2005 quote regime phase out has resulted in upgradation of P/E multiple of the textile sector.

When is P/E not useful?

Economic cycles - In FY02, Tisco was trading at a P/E multiple of 20.5 times its FY02 earnings. Was it expensive? Based on FY05 expected earnings, Tisco is trading at a P/E multiple of 5 times its earnings (at Rs 250). Is it cheap? If one ignored Tisco in FY02 on the basis that it was ‘expensive’ on the P/E multiple in FY02, the opportunity loss is as much as 350%. Businesses operate in cycles. During downturn, EPS will be low but P/E will be inflated and vice versa. At the same time, during expansionary phase, corporates invest in capacities. In this case, high depreciation costs suppress earnings. P/E, in this context, may mislead investors.

Not actively tracked – There are number of companies in the Indian stock market that are not actively tracked by investors, analyst and institutions. For example, Infosys’ average price was Rs 2 in FY94 and the P/E multiple was 17 times. At times, P/E multiple may be lower because some sectors/stocks are not in the limelight.

Expectations – On the downside, some stocks may be trading at a significant premium because earnings expectations are higher. High P/E also does not mean a good stock to buy. What if the expectations are unrealistic? One needs to exercise caution to this extent.

Means little as a standalone number – P/E, as a standalone number, means little. Besides P/E, it is also important to look at margins, return on net worth, cash generating ability and consistency in performance over the years to assign a value to a stock.

Market sentiment – During bear phases or when interest in stocks is low, valuations could be depressed. Since equities are considered less attractive during these periods, valuations are likely to be below historical average or below earnings growth prospects.

When is P/E useful?

A powerful metric – Unlike metrics like discounted cash flow method and so on, P/E is relatively a simple and at the same time, a powerful metric from a retail investor perspective. Though the factors behind determining the ‘right’ P/E multiple are important, a historical perspective of a stock’s P/E could make this exercise less complex.

To conclude, valuation of stocks involves subjectivity. A person X may assign a higher P/E multiple to the stock as compared to a person Y depending on the risk profile and growth expectations. In the end, it all boils down to how the company is likely to perform.

It is not that stock market is always right when it comes to valuing a stock! As Mr. Benjamin Graham puts it “in the short term, the market is a 'voting' machine whereon countless individuals register choices that are product partly of reason and partly of emotion. However, in the long-term, the market is a 'weighing' machine on which the value of each issue (business) is recorded by an exact and impersonal mechanism”. Watch the earnings!

Future of Mobiles

Future of Mobiles
[via Telepocalypse] Tomi Ahonen looks to the future of mobiles:

I argued that in very rough terms and considering the performance and specifications, a mobile phone of today will be like a laptop computer 5 years ago; a desktop PC 10 years ago; a mainframe computer 15 years ago; and a supercomputer 20 years ago. With Moore's Law we can expect those trends to roughly hold true into the next 20 years. So to see roughly what kind of processing power we can expect from top-end "smart phones" of 2025, we can look at a supercomputer today - such as the IBM BlueGene/L, which as 16 Terabytes (=16,000 Gigabytes = 16 million megabytes) of memory and which runs at 70,000 Teraflops (=70 Trillion floating point operations per second) of speed.

But such numbers are rather meaningless without context. I gave trends in the form factor of a typical "fashion phone" ie a small pocketable or smaller phone; and what kind of services and applications will become possible in those technical environments. Here are snippets into the future I imagined:

In 2010 the typical mainstream mobile phone will be 3.5G phone with a 5 Megapixel optical zoom cameraphone with WiFi type speeds and built-in TV tuners, and a gigabyte size hard drive (like today's i-Pods). The smallest phones are the size of a thick credit card. Credit cards merge with the mobile phone. Music and videgaming industries earn more from direct downloads to mobile phones that from sales of CD/DVD/gaming CDs in record stores/video stores. Mobile payments are commonplace for parking, vending machines, public transportation, lotteries, movies.

PCs to Mobiles

Access Devices: PCs to Mobiles
Consider this amazing fact: last year, mobile phones drew nearly a million new users – every day. 2005 will see the global mobile user base cross two billion. In comparison, the installed base of computers is about 700 million. The contrast is even more stark in the emerging markets. By 2005-end, India will have about 16 million computers, and over 60 million mobiles. China has 40 million computers and 350 million mobiles. Any way one slices it, for an increasing majority, the mobile phone will be their first – and only – computing device.

What is interesting is that the mobile is always-on, always-available and a personal device. Never before in our lives have more than two of these conditions been met – and now suddenly, all three are met – simultaneously. This makes possible all kinds of new applications. Consider this view [as mentioned in Business Week] from Qualcomm’s Paul Jacobs about features of the cell phone of the future: smart wireless TV broadcasts, built-in glucometers that help diabetics track blood-sugar levels, restaurant reviews that zap onto the screen as you walk past a joint. "The phone will be your personal alter ego in cyberspace," Paul says. "Whether it's finances, or my music, or my blog, all those kinds of things will happen through my phone."

FW: next wave in information technology and software

Francois Lavaste has a summary and mindmap of his speech given at the Future in Review conference:

The less known challenge for technology is to make information more MEANINGFUL. I believe this is actually the next wave in information technology and software. Companies that will deliver on this benefit will be hugely successful. What I mean by adding meaning to information is composed of:




· Putting the information in context
· Exposing the relationships that exist within the information
· Making the information easy to navigate
· Ensuring the information is concise to enable users to see the big picture
· Leveraging the power of visualization
· Making the information actionable
· Bringing information to life for each individual user and team.

Users need flexible, visual interfaces that have the potential to unlock the data and to enable them to act on it. I believe MindManager actually delivers on this promise better than any other productivity application I am familiar with. This is why Mindjet has a great opportunity to change the way we work and help us be more productive.

Conclusion: The next wave in software will be centered on adding meaning to information; making software applications work the way we think, visually, with our right brain. Mindjet is playing a major role in making that revolution happen and we are just beginning.

The Great Transition:

The Great Transition:

Music Industry (top down) to Peer to Peer (bottom-up)

Scheduled Television to Tivo

Media Publishing to Weblogs

Client-server applications to Web services

Circuit-switched telephony to VOIP

Licensed cellular to Unlicensed wireless

The Key Megatrends related to the digital entertainment industry:
1. The on-demand media lifestyle is here
2. The end of customer sacrifices is near (music !!)
3. Everybody is short of time, and must make choices
4. The end of browsing is near (see Google morph)(This may be controversial though)
5. In media, the traditional scarcity principle of valuation morphs into the ubiquity paradigm
6. Radio is finally unbound (by spectrum or schedule)
7. Consumers are starting to generate their own content
8. A mass of niche markets evolves (lowest common denominator concerns becomes irrelevant)
9. Time-shifting and space-shifting and device shifting become standard
10. Long-tail opportunities are everywhere.