Cisco, Juniper & Next Generation Networks

In an April 2005 article titled Cisco and Juniper Joust for Supremacy, noted industry consultant Tom Nolle compares and contrasts Juniper's and Cisco's approach.

From a layered perspective, both schemes appear to have the same decomposition: 3 layers in both prescriptions. The devil, of course, is in the details.

Juniper's Infranet:
A quick summary of the Infranet approach, available on the Infranet web site, describes it in 3 layers: signaling stratum, control stratum and data stratum.

Cisco's NGN:
Cisco describes its solution in terms of application convergence, service convergence and network convergence.

Apart from the innocuous equivalence of the 3 layers in either approach, a fundamental difference between the two approaches seems to be in the use of basic IP connectivity to accomplish future services off the "new Internet", be it Cisco's NGN or Juniper's Infranet. Before any kind of a new service can be provided to a subscriber, basic IP connectivity must be present. (The entire world has now gotten used to the ubiquitous nature of IP connectivity; you are too late if you are thinking differently). Thus, it seems that Cisco's idea is superior, particularly if the new ISP will only provide new services in a "container" that a subscriber has specifically requested through a secure request.

Outsourcing Innovation

The story this blog entry's title's hyperlink is, I believe, the effect of the Internet as a great equalizer. The summary of the article is ably given by one of the last sentences of the article (The print version of the article has greater pictorial content that illustrates that 70% of PDA designs are outsourced, but the design outsourcing of networking equipment is only starting):

"What is clear is that an army of in-house engineers no longer means a company can control its fate. Instead, the winners will be those most adept at marshaling the creativity and skills of workers around the world."

What all of this means is that equality of opportunity, and commensurate (re)distribution of wealth, is taking place across the globe. The purpose of many of the economic systems of the present and past is, in a sense, exactly that: How to produce a society where prosperity is somehow "equally" distributed? But, now, the desirable transformation is taking place, slowly.

Vive l'Internet!

Globalization & Equalization of Culture

When the Internet hit the marketplace in a big way in the 1990s, it was lauded with many different adjectives. John Chambers, CEO of Cisco Systems said, as PCWorld reported in 1999, that the Net will be a great equalizer, an "equalizer between people, companies, and countries."

Today in the San Jose Mercury News, there is a story of an engineer who moved his family to Bangalore, India for a couple of years. (You need a subscription that is free, to access the article on the web). What is interesting about this is that the engineer is an American who chose to live in Bangalore for a couple of years just so that the offshored work would get done effectively. In the process, his entire family moved with him as well, and their presence in Bangalore is a great equalizer of culture.

I recall, before I came to the United States from Bangalore years ago, that my folks in Bangalore were very apprehensive of how I would fare in far away America, who would keep an eye on me, etc. This engineer's presence in Bangalore would be but a step in removing such apprehensions.

There have been any number of stories written up on the loss of American jobs, and something definitely has to be done about that. But the cultural aspect of this story is what is valuable. It is this sort of cross migration that will firmly establish the vedic saying वसुदैव कुटुम्बकम - The whole world is one family - in this world where no day goes by without some sort of violence, terrorism, etc.

The Pleasure of an Alumni Meet

The pleasure in getting together with your past alumni friends is unbelieveable! I had such an experience today at the IISc Alumni Silicon Valley meet in Milpitas, California. (The group operates a Yahoo group web site).

1. A highly nostalgic account of some life as an IISc student was recalled by Prof. A. K. Rao. (He was on the IISc faculty subsequent to his graduation).
2. Dr. N. Balakrishnan of Supercomputer Education and Research Centre (SERC) joined us on the telephone even though it was about 2:15 AM for him! This 20- to 30-minute interaction brought emotional tears in me. You see, unless you think in terms of monetizing any powerful idea, you lost the ability to promote even greater amount of monetizable ideas.
   
3. A rather eye-opening account of volunteering by Dinesh Thirumurthy and his wife immediately after the Tsunami disaster hit the communities in the Indian Ocean in December 2004 was presented. His account was useful in that it made it a little clearer that nearly anyone can provide help of that sort.
4. After lunch, we had a nice presentation of the Tabla by a local maestro Ravi Gutala. (Not that it matters, he is not an alumnus of IISc. He is a close friend and teacher of Murthy Gudipati, a prime mover in the alumni association).

Moral: Don't miss an alumni meet if you can afford to attend it.

Chinese and Indians are Buying.

Many people may not realize the level of globalization that is occurring in the world today. For a perspective of several CEOs from the G7 countries, click here. Basically, the economic growth happening in China and India will, in addition to providing powerful markets for western products, produce economic giants that will dot the global landscape by, for example, making acquisitions of western businesses.

What does this development mean to individual investors? Load up on select Chinese and Indian company stocks.

Google Valuations

It is an interesting exercise for anyone in the industry these days to try to analyze Google evaluation. Today, an interesting article by Mark Hulbert of MarketWatch has one such view. His analysis makes some assumptions on reasonable 5-year return and the P/E ratio that would be necessary in February 2010 to sustain it. For a 20% annualized return and a P/E ratio of 50, his model requires annualized growth rate in earnings. If you read the article, you probably would not want to run out and buy Google stock!

And, of course, there have been others - including myself - that argued that $85 itself was a little high valuation for the stock in August 2004. (See also John Battelle's blog).

On the other hand, Google seems to have created an effective distributed computing technological base that can be monetized in various ways. As a result, it is very conceivable that Google will derive a $20B revenue in 2010 that, for a short term at least, can sustain a valuation of $500B, equivalent to a $1800 stock! Recall that Cisco enjoyed such a valuation for a brief period in 2000. And, Cisco is not a software-only company that can produce outrageous profit margins.

I guess we all will have to wait patiently for the next 5 years to see the truth of these analyses.

The Reformation of the Corporation.

Today, couple of articles caught my attention:

1. IBM investigates the appliance of services science
2. Cisco's Secret Software Strategy

What is interesting in these two articles? That all businesses the world over have to reinvent to deal with the new realities - high-tech manufacturing from China, software outsourcing from India, etc. And, two of the major companies that help transform the business the world over - namely Cisco and IBM, not to speak of Microsoft, Oracle, etc. - are having to reinvent themselves! While doing so, of course, they have to resort to coopetition or else they will step on each other's toes.

What does this reinvention require? Complete modularization of software components that can be stitched together to provide highly customized business process for any enterprise.

Cisco CEO John Chambers said, in January 2004, "We believe that to compete in this environment we're about to go into, with very good competitors from Asia, etc., that our productivity per employee needs to be $700,000," and seems convinced that increasing the productivity of Cisco's workers is the key to Cisco's competing effectively in the global marketplace.

IBM's own services business reinvention is according to, Paul Horn, IBM's Senior Vice President for Research, "If you can think about your company as a collection of components, then you can re-engineer and optimise them. You don't have to have a four-year ERP job with an uncertain return, you can model the pieces in a simple way will make your returns much higher. It is the start of a revolution in how the whole software and services industry is going to deliver value. It is probably the biggest change in the IT industry, maybe ever. ... It's a big change for us and a critical change in the way IBM thinks about itself. We use technology to provide value to customers so that they don't have to outsource their business to the lowest labour cost in the world, because they're generating huge amounts of value."

The upshot of this posting? I wonder how many U.S. companies are thinking this radically?

Happy New Year 2005 to all of you.

Another year has passed us by. And, lots of things have happened in the past year. Stories of what happened in the world at large, you can read by browsing for example. If you measure happiness by the money you own, then I wish you more of what happened to stockholders last year. If you measure happiness by a richer understanding of what the world is all about, then I suggest you browse through sites such as http://www.vedanta.org. On the other hand, I wish none of you will experience the bad side of what happened in South Asia as a result of the tsunami; for a rather up-to-date blogged news on the tsunami, check out http://www.tsunamihelp.blogspot.com/.

What is in a school's motto?

Recently, I had occasion to discuss school motto with my son. He is an 8th grader, and it was difficult to find a motto for his school. After I discussed with him what a motto is and so on, I decided to publish this small note on the mottos of the schools that I went to (in reverse chronological order):

1. University of Southern California: Palmam qui meruit ferat. (Let whoever earns the palm bear it.)
2. Indian Institute of Science, Bangalore, India
3. Bangalore University: ज्ञानं विज्ञान सहितं Jnanam Vignana Sahitam (My interpretation: Knowledge must be accompanied by its rational usage or, equivalently, Knowledge accompanied by rational usage is wisdom, but you can read a scholarly interpretation here).
4. National College: श्रद्दाही परमा गतिःShraddha Hi Parama Gatihi.
   

It seems to me that all institutions ought to have a motto: it makes it easier to channel the human energies of the institutions around the motto.

"The China Price"

If you are a student of globalization of the economy, the December 6, 2004, issue of BusinessWeek is a must read in general and the cover story titled "The China Price", in particular.

Countless economists will prognosticate as to what might happen: What will happen to the overall U.S. economy? If even the so-called white collar jobs move out of the U.S., only service jobs will remain.

It'd seem that the proper way out of this global economic climate for any country is to leverage what can be accomplished elsewhere and build on it. The key word here is 'build'; build on what other nations can produce relatively inexpensively. In other words, be a valuable part of the global ecosystem. Ultimately, the value of any product or service is a function of how the product or service enhances the life of a human being, be it economically or in an aesthetic way.

Biotechnology and Information Technology

It is interesting to note that, on Friday, 1 October 2004, Bill Gates prophesised that biology and information technology would slowly coalesce into one: "If I were a student I would highlight those two areas as the most interesting". You can read more about the story at
http://www.mercurynews.com/mld/mercurynews/business/technology/9818224.htm
The reason, by the way, that this is the case is that the essence of study of life, namely biology, is built on a key primitive, the DNA. It is really amazing that the analog world is so beautifully built by a digital primitive, a sequence, several billions long, of nucleotides drawn from a set of four chemical compounds, Adenine, Cytosine, Guanine and Thymine, commonly abbreviated by the initial letters A, C, G and T.

Salaries of Software Professionals

An interesting analysis of Indian and US salaries for software professionals can be gotten through a paper written by an expatriate professional, Dr. M. Vidyasagar. It uses the concept of Purchasing Power Parity. This paper is very relevant to the hotly-debated topic of outsourcing and offshoring. Ultimately, of course, the free market will triumph as long as the market is kept free.