Did you hear? Apple rules the world!

This week we saw arguably the biggest music group in the world break to the power of Apple. The Beatles held off for nine years. Refusing to agree to Apple's restrictive rules. So, After nine years what do The Beatles have to show for it? Nothing! They held out for nine years, losing millions in revenue, to make a statement they ended up not making.

This is just an example, but it makes you think. Will anybody ever really be able to successfully stand up to Apple? I don not think it will happen in the foreseeable future. Apple has a ridiculous amount of power in the market place. They can make their own rules and force people to follow them. It will take someone to enter the market with a huge backing from a multi-billion dollar company that can survive the war. Microsoft? That's the only company I can think of. The new windows phone is on the horizon and could be a game changer. But Microsoft needs to be better than Apple to get people to switch. They need to offer lower prices and they need to offer a system and distribution method that is smoother and more efficient than Apple's.

Lucky Millionaires

Some people see people that started Internet business and they get angry and say, "those lucky bastards." People think that just because they start an Internet business it requires less skill or less effort. This is entirely incorrect. Maybe they are lucky in the fact that they get their idea to market before someone who is trying to do the same. In general the public does not give enough credit to the masterminds that build amazing websites and make millions. Their is a lot of work and planning that goes into the creation of these websites. Is it fair to say that luck does not play a part? No. Luck does play a part in a lot of businesses, but a lot of times the way the luck happens is not the way we conventionally think of it. The luck will usually be in a small way, like we walked in a bought the rest of a stock before someone else, or we just happened to be in the right place at the right time and made a huge sale. This is the way that luck appears in business today. A business can not survive without planning, but luck can definitely help.

The Law to End Off-shoring.

Most people associate outsourcing with off-shoring. This is mainly due to a labor arbitrage story that was available when off shoring first became popular. This caused many people to hate outsourcing because they believed it was causing the lost of american jobs. Today the view of outsourcing is different, although some people still get the two confused. Even though, lawmakers are moving to end off shoring. They want to make sure that no American jobs are lost with bill S. 3816.

Sure the main purpose of the bill is noble, but what are the consequences? How will the prices of our favorite electronics changes when they are forced to be moved back to America? i.e. Apple uses fox-conn in China. If this were to happen, Apple's cost to manufacturer an iPhone would sky rockets, causing the price of an iPhone to also sky rocket.

For every action there is an reaction. Congress needs to fully examine the reactions of their bill before they pass it.

The Challenges Your IT Staff Will Face During Outsourcing.

This article highlights one of the unexpected results of outsourcing. After you close an outsourcing deal and downsize your IT staff, your remaining staff may have identity crisis. The is mainly do to their inability to let go of the control over task they have become accustomed too. Burger king found this transition so complex they has to implement a special management team just to guide the process. Just like we learned in class, outsourcing makes since because it allows "the company  the opportunity to focus internal resources on strategic projects that help differentiate the business." 


Different Companies will handle the transition differently; however, I think a company should be very careful when they outsource not to upset employees that will lose their job. The last thing a company would want is negatively publicity that affects sales to the point that it offsets any increases in sales. 

Is Foxconn’s Working Conditions Hurting Apple’s Image?

There have been a string of suicides at the Foxconn industrial complex in China where products such as Apple’s iPhone and iPad are made. Why? This is because the average salary of a Chinese person is just over $4,000 a year and the workers in the Foxconn factory make 51 cents an hour while working 60 hours a week. Disturbing? Indeed.

What effects does this have on Apple’s image? To know their very pricey products are made in factories with regulation so tight that people are killing themselves. A few year back Nike ran into a similar debacle with their factories and they were labeled for exploiting cheap labor. Yet, their company still strives very strong. Is there going to be an Apple boycott in the near future? I highly doubt it. Americans thirst for consumption with little thought of what goes into making them. This does not cause a problem. At the same time Americans thirst for consumption at a cheaper price. This is passed to management and in their decision to outsource where they can exploit cheap labor as Apple does in China. What is shocking is that Foxconn’s CEO is worth 5.5 billion compared to Steve Jobs who is worth 6.1 billion. This is just a clear example of the disparities in wealth in China and their implications.

Will Apple’s image suffer? Not yet, but if things continue to get worse Apple will need to think wisely about who they outsource to. In the end, it could cost them a lot more in image diminishment than they save from cheaper labor.

Cloud Computing = No Thought Disaster Recovery Plan

I just finished reading a very interesting article over at Forbes.com. The article is mainly about how small business cope with the expense of disaster recovery on a small business budget. One of the interesting point the author brought up was that by moving to cloud computing and to web based services like Microsoft exchange, a company could have it main office burn down and move to a building a block down the road and be up and running again by simply hooking back up to the Internet with another PC.

I think that this might be a future move many small business will make. There are companies that are popping up that you can outsource all of your it needs. Imagine only having to pay one bundled price for your email, phone, applications, and server services to all be accessible over the Internet. Companies could access these services over the Internet from anywhere in the world while still being protected against any disaster.

Hello, Please open your laptop and feel free to browse.....

Most of us are use to the age of ritual of turning off all electronic devices when we board the 1980 contraptions that most airlines still use today. But this may all be changing soon. Jet Blue and Southwest have both announced plan to have in-flight wireless available to customers beginning in 2012. I think this is a smart move that is essential for today environment. People are becoming ever more "connected" and the time they lose in the air can actually cost them. With Jet Blue and Southwest making these moves, expect their business travel to sky-rocket until other competitors catch on. I know if I am flying I want to stay connected and will subsequently be choosing to fly with one of these airlines.

Google Instant Search: Why?

Google Instant Search is a daring new innovative attempt by Google to stay at the forefront of the IT world. With everything we have learned in class we have to wonder if Instant Search is worth the risk. Here is the facts. Google controls over 70% of all searches over the Internet. Yahoo and Bing combined only account for 25% of the market. One has to wonder, with Google controlling its market, was it a smart move for Google to implement this new technology. Was their competitive pressure for Google to innovate? Not really. Is Google losing market share? No. Does Google have more to lose than to gain from Instant Search? I think so. Google has a dominating position in the market with no contender within reach. If Google Instant Search is a big success than they might gain maybe 5% to 10% market share before their competitors imitate them. If Google Instant search is a failure, Google could lose its position as a market leader before they can rebound from the implementation of Instant Search.

Personally I like Google Instant Search; however, I think the risk of adding this technology out weighs any possible benefit they could gain. I think it would have made more sense for a competitor to implement an innovative technology. Although maybe this is the reason that Google is the leader in the industry.

Will the Cloud Kill Modern Outsourcing?

The times are coming to an end when a company could simply uproot its current IT operations and transplant them into a emerging country such as India and cut cost simply from the benefits of labor arbitrage. Why is this? A recent article in Businessweek by Arjun Sethi, outlined how this will happen.

How do I feel about this? I feel that economically and socially it makes perfect since. Google and Amazon are household names that the generation of tomorrow already trust. They are also technology behemoths that have the know how and financial strength to incorporate these technologies. As mentioned Google already processes transaction for Pfizer, which is by no means a small company.

In the end, economies of scale will declare the winner. Outsourcing benefits is shifting from a physical location to a efficient and reliable resource based service. This is where cloud computing comes in. It allows companyies to outsource their in house computing needs to large behemoths like Google and Amazon that will be able to handle large amounts of data at a lower cost per byte than in house operations or current Indian based companies.

From a managers perspective I see this as a good move. Besides the cost savings that economies of scale will offer, managers are going to be able to improve effeciences by having their data processed faster. Their are also inherent advantages when you deal with an industry leader, they know the industry. They are able to tell you how to use your data to gain the most knowledge, and in the end, the company with the best knowledge wins.

Note: This doesn't necessarily mean the end of tech jobs in India. This economies of scale will come through consolidation in the tech industry. In the long run the behemoths will buy up the Indian companies and transplant their model and efficiencies to these locations. True, some jobs will appear in the states; however, do not expect all of the Indian jobs that were once American to come back.

Is Apple's Control Strategy Sustainable?

I think something very unique about Apple is their ability to exercise such a high level of control over their customers. Most tech companies operate by providing either a hardware device or software technology. These devices and technologies are than combined into products such as mobile devices and computers that are sold on the market. Companies such as Dell, Hp, Microsoft, and Google all follow this strategy. These companies also believe in allowing the end user more control in how they use their products. Apple has always been known for exercising excessive control of their customers. Apple has control over every step of the process of the design and production of their devices. Apple makes their computers, monitor, operating systems, etc. Is this good? This is debatable.

Some argue it is a quality control issue. As i've said Apple controls every bit of its design and production. Take for example the iPhone. People have to submit and have their application approved. This allows Apple to watch over goes onto their products to ensure that their products run smoothly; however, this also allows Apple to censor whatever it deems inappropriate. Is this really good? For example, HTC's 4G phone supported by sprint allows users to use a feature similar to FaceTime over 3G networks. This feature does not work as good as it would over wifi but it still works. Apple has incorporated this feature on the phone, but only allows users to use it on wifi. From here one has to wonder. If someone would develop an Application that would allow users to use video chat over 3G instead just over wifi, would Apple allow it or deny it? I have to believe they would deny it to avoid the risk of making their company look bad. Is this in the best interest of the company? This is only one example of Apple flexing its are of control. Is this a sustainable model? As of right now Apple is a Goliath; however, an open source, free flowing David-like company could come in an dethrone Apple.

It is my belieth that knowledge, especially in the tech industry, can not be constrained. I think Apple may still have some room to grow; however, companies like SunMicrosystems with OpenOffice and Google with Google Chrome may bring down Apple. Technology is moving in the opposite direction of Apple. Will their current business model hold with this shift or fall?