:::renaissance chambara:::

Posts on quality, life, culture, the media, news & tech with a twist & a slice of Limey. I moved my blog to http://renaissancehambara.jp in December 2006, go there for the latest content.

Monday, April 11, 2005

Silicon Valley Resurrection

Peter Cochrane in his column for Silicon.com Valley Lessons visits the new shoots of innovation that are starting to bud in Silicon Valley. Cochrane proposes that the traditional way of working in the valley and traditional IT innovation has been lost, unwittingly exported as immigrant engineers went back home away from the last bust with valley knowhow and networking skills. This may be true and there are challenges to the valley from India, China and Taiwan.

Peter's argument has some merits, with the exception of RFID and wireless-orientated applications the enterprise software market is not the ever expanding pie it once was. Slow growth and long buying cycles will mean that growth is likely to come from consolidation rather than innovation. Unless someone comes up with an application that has as much an impact on business life as the mobile phone, the market for enterprise applications is going to be very slow in penetrating small and medium-sized enterprises.

Many successful wireless applications such as RIM Blackberry devices are likely to have their wings crimped by compliance related issues requiring tracebility of emails and back-up.

Web services have the potential to be a bright spot, the biggest issue is that outside of the United States you cannot patent a business process like Amazon's 'One-Click', so the idea can be copied in the high-growth markets of Asia.

However, I think that the picture is brighter than Peter suspects.

Peter thinks that VCs are and will be too cautious, and that they will not have so much money to invest. OK consider this, the Western world's population are getting older, pension funds and investors are having to turn to devices like hedge funds and exotic markets to invest all their money. This was one of the factors that inflated the technology investment boom in the first place. At the present time VCs in Silicon Valley are sitting on some 25 billion USD in uninvested funds due to be handed back by venture capitalists to their investors in the next year to 18 months. If the funds are handed back the VCs have to also refund their two per cent annual management fee, that equates to some three billion USD in lost fees. VCs have a powerful reason to bank on the valley again.

Secondly, although the Silicon Valley engine is run by an army of programmers and engineers, what makes it special is the dreamers like Trip Hawkins and Steve Jobs. In the same way that China, Korea and Japan have become hot beds for mobile services due to the nature of their ideogram-based languages being much more expressive in a small screen area, so Western culture offers opportunities with its more individual-based approach and world view.

Thirdly, much as I hate to agree Bill Gates, there is a lot of challenges out there that will provide opportunities for businesses. In the same way that a rapidly expanding Internet in the 1990s, created a need for Yahoo! directory and search, so the mass of, still images, audio, multimedia content, video, IP television and languages create new challenges to be met.

Create Social Bookmark Links

Links to this post:

Create a Link

<< Home


03/2004   04/2004   05/2004   06/2004   07/2004   08/2004   09/2004   10/2004   11/2004   12/2004   01/2005   02/2005   03/2005   04/2005   05/2005   06/2005   07/2005   08/2005   09/2005   10/2005   11/2005   12/2005   01/2006   02/2006   03/2006   04/2006   05/2006   06/2006   07/2006   08/2006   09/2006   10/2006   11/2006   12/2006  

Welcome, thanks for visiting and a bit about this blog (:::renaissance chambara::: all in lower case just like UNIX)
Got something to bitch about? Trying to legal the author or want to send scary fan mail? Click here for more details
Want to leave a comment? Feel free, but please take account of the guidelines
The blogroll (there's some missing that Bloglines can't read, if you're not in sort your feeds out)
Subscribe via RSS to :::: renaissance chambara ::::
The grooves that drive :::: renaissance chambara :::: (see what's on our iTunes)
This work is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 License.

Blogger rox nuffsaid.