A View on VMware.

The stock of the company VMware has been on a tear ever since its IPO earlier this year. Usual metrics - e.g., P/E ratio - for evaluating stocks will tell you that it is expensive today.

However, if we look at the essential value that it adds to the computing environment, it seems to have some properties that are very perpetual. End nodes - namely, desktops, laptops, servers, etc. - now can be very versatile, thanks to the software VMware.

In other words, the ubiquity of VMware seems to be very assured. Thus, the company VMware seems to have the strength to remain alongside Google, Microsoft, Oracle, etc., in a permanent lineup. With the cash the company is generating, it has the wherewithal to enter adjacent markets.

I'll wait for some pull back in the stock to take a long position.

China, India and U.S. Immigration Policy

Globalization has been occurring briskly while the U.S. debates on immigration reforms. It seems to me that the U.S. lawmakers have not quite comprehended the magnitude and speed of the change that has occurred so far, and will continue to occur for the foreseeable future. There is a definite need within the U.S. to create an immigration policy that encourages talented minds to migrate to the United States; otherwise, America's competitiveness is going to be compromised. The future will be more and more influenced by the knowledge economy, and countries are going to need educated and talented minds to keep the economy vibrant and growing.

These thoughts are on my first visit to China; a travelogue can be found elsewhere. The hard work that I see occurring everywhere in China and the comparable benefits that are available to anyone that can afford it are signs that China can compete very effectively with U.S. and other multinational businesses worldwide. If English language is a handicap at all now for China, it is just a matter of time before the language arbitrage is reduced to nothing.

The good news is that all of this globalization is a way to unify humanity. After all, country demarcations are nothing but man-made devices to manage the population in some orderly manner.

The World is Getting Flatter

Today, I came across a new service that Google has introduced. Free. Google 411. Yes, a directory service that is free (and only costs what you have already paid for the telephone company). I tried it out and it works! Granted it has some constraints for now ... but that will be easily remedied, given that Google has a large army of talented software engineers.

Tom Friedman has earned himself a place in the history books by writing the book The World is Flat. The implication of Google 411 is enormous. Anyone in the world can find out, for a relative pittance, this kind of local information. Even though most of this information is already available through Google Local and such, the simplicity of the man-machine interface of the telephone service is what will make this usable by many more.

If someone - Larry Page or Sergey Brin or, even, Eric Schmidt- were to take the trouble to describe in a book how they have built Google so far, that will be immensely valuable to entrepreneurs!

Cisco and WebEx - Part II

What Cisco has bought, by spending $3.2B, is a powerful operating network that can be enhanced endlessly by adding more value to the users of the network.

WebEx calls their network MediaTone Network and has been successfully using it to conduct real-time collaboration for their subscribers. (I have been a participant on several such collaboration sessions although I have used only solutions where audio was networked through a 800-number network rather than over the IP network). MediaTone Network is accessed over the Internet; however, once on the MediaTone Network, the collaboration information traverses primarily the MediaTone Network except, of course, the first and the last miles.

Now, just imagine any new kind of software as a service (SaaS); this powerful private network need only be programmed with additional applications to provide this new service; if necessary, of course, you can throw more hardware at the problem. And, if you take a look a the WebEx financials, you'll find that their gross margins are significantly higher than the 65% we are accustomed to from Cisco. This is a win-win situation for both Cisco and WebEx. (Actually, it has already been a win for WebEx in their recent stock price). I wish that this merger goes through. (I own some shares of Cisco).

Cisco and WebEx

This morning's announcement that Cisco has agreed to acquire WebEx makes it a bit clearer as to the direction Cisco is taking for its evolution. Web-based online meetings are what WebEx has been serving up to its customers, mainly small & medium businesses (SMBs), and this acquisition has a potential to turn small businesses completely online. The advent of Google Apps is but a modest start, also in that direction. And, Microsoft Live has been online for quite some time now.

Makes you also wonder about the kind of value-added applications that would succeed 20-25 years from now.