Financial Times, Jan 25 (III)

choi

There is no need to read either.

(1) John Kay, When Capitalism and Corporate Self-Interest Collide. (columnist).

Quote:

"Information and communications technology today is dominated by Microsoft and Intel, Apple, Amazon and Google. The oldest of these, Intel, was founded in 1968; at about that time the British government sponsored a merger of the computer divisions of electrical companies to create a national champion able to compete in world markets. Every big European country put an entrant into the same race. They all fell before the post--and so did IBM.

Content was king, they said: but digital publishing was to be dominated not by Time Warner, EMI or Columbia Pictures, but by Apple and Amazon. Rapid innovation is everywhere associated with market entry. Google occupies the position that only a decade ago people expected would be occupied by Yahoo and AOL, just as Facebook displaced MySpace. What became of Sirius (the Exxon subsidiary that made the first personal computer I ever used) or ComnpuServe (which provided its communications)?

"Joseph Schumpeter applied the term 'creative destruction' to the dynamic of the market economy. Not only does the new technology displace the old: the new company displaces the old. Innovation mostly comes form entrepreneurs outside established businesses, engaged in an endless succession of experiments. Most fail, but not all. Bill Gates, Andy Groves, Jeff Bezos and Steve Jobs were talented people, but most of all they were lucky people.

"Elephants can dance, but rarely well. Exxon did, but bizzarrely, diversify into small computers. Personal computers, and the graphical user interface that enabled them to become ubiquitous, were pioneered at Xeroc Parc. But these ventures did not succeed commercially.

"The established firm often responds by using its market and political power to resist change [within the firm itself and by crushing new entrants, which supposedly is the 'corporate self-interest' in the title].

"But the most illuminating story is that of IBM. Through the 1970s, the personal copmputer was mired in its corporate bureaucracy, which--correctly--perceived a threat to its existing business. The computer that introduced the term PC into everyday language was designed by an off-site team, which bought software from Microsoft and  chips from Intel to avoid dealing with their own colleagues. These engineers changed the world. In the process, they almost destroyed the company that gave them the freedom to do so.

"Schumpeter applauded capitalism as much as Marxists despised it. But he shared the Marxist belief that creative destruction was at the heart of capitalism and its inevitable consequence would be capitalism's demise. Schumpeter feared that the very success of capitalism would give entrenched interests the power to resist the process of innovation that was at the heart of capitalism's success.

Note:
(a) Mr Kay asks rhetorically, "What became of Sirius (the Exxon subsidiary that made the first personal computer I ever used)?"

I suspect his mind fails him.

Sirius is NOT a subsidiary of Exxon (I search the Web thoroughly and am confident about my conclusion), though both Sirius and Exxon once manufactured personal computers.

(i) Sirius Systems Technology
http://en.wikipedia.org/wiki/Sirius_Systems_Technology
(based in Scotts Valley, California[, a city 30 miles south of San Jose]; founded in 1980 by Chuck Peddle and Chris Fish; In 1982 Sirius acquired Victor Business Systems (known for its calculators and cash registers) and changed its name to Victor Technologies; went into bankruptcy in 1984)
(ii) Greg Shultz, Vintage Computer Advertisements from the late 1970s. TechRepublic, Apr 6, 2011.
http://www.techrepublic.com/phot ... -late-1970s/6213154
("On a recent attic cleaning expedition, I encountered a box of Scientific American magazines from the late 70s. Each magazine is full of computer advertisements that provide an interesting peek back at the beginning of the computing industry. In this gallery, I will show you what I found.")

Via thumbs (which lie beneath the main photo), one can jump directly to 18/26 ("image 18 of 26"): "Exxon Information Systems ad from 1979."

(iii) For the computers of Sirius AND Exxon, go to
(A) http://www.old-computers.com
and/or
(B) http://www.computinghistory.org.uk

(b) CompuServe
http://en.wikipedia.org/wiki/CompuServe
(the first major commercial online service in the United States; It dominated the field during the 1980s and remained a major player through the mid-1990s, when it was sidelined by the rise of services such as AOL with monthly subscriptions rather than hourly rates; AOL, however, introduced a far cheaper flat-rate, unlimited-time, advertisement-supported price plan in the US to compete with CompuServe's hourly charges. In conjunction with AOL's marketing campaigns, this caused a significant loss of customers until CompuServe responded with a similar plan of its own at $24.95 per month in late 1997.)

(c) The author states, "Personal computers, and the graphical user interface that enabled them to become ubiquitous, were pioneered at Xeroc Parc. But these ventures did not succeed commercially."

(i) PARC (company)
http://en.wikipedia.org/wiki/PARC_(company)
(PARC (Palo Alto Research Center Incorporated), formerly Xerox PARC; Founded in 1970 as a division of Xerox Corporation; Incorporated as an independent but wholly owned subsidiary of Xerox in 2002; section 3.1 The Alto)
(ii) History of personal computers
http://en.wikipedia.org/wiki/History_of_personal_computers
The Xerox Alto, developed at Xerox PARC in 1973, was the first computer to use a mouse, the desktop metaphor, and a graphical user interface (GUI), concepts first introduced by Douglas Engelbart while at SRI International. It was the first example of what would today be recognized as a complete personal computer.

(d) I dissent from the verdict Mr Kay delivers on IBM personal computers.
(i) When IBM first made PC, that market had already been occupied by pioneers, such as Tandy and Apple. Wiki says IBM wanted to move in swiftly, which implies that IBM's PC endeavors (off-site, purchased Microsoft software and Intel chips rather than in-house) were not meant to be against its own (allegedly ossified) corporate culture.   

(A) IBM Personal Computer
http://en.wikipedia.org/wiki/IBM_Personal_Computer
(IBM model number 5150; introduced on Aug 12, 1981; created by a team of engineers and designers under the direction of Don Estridge of the IBM Entry Systems Division in Boca Raton, Florida; section 1 Origins)   

Quote: "Alongside "microcomputer" and "home computer", the term "personal computer" was already in use before 1981. It was used as early as 1972 to characterize Xerox PARC's Alto. However, because of the success of the IBM Personal Computer, the term PC came to mean more specifically a microcomputer compatible with IBM's PC products.

(B) RadioShack
http://en.wikipedia.org/wiki/RadioShack
(section 1.2 Tandy Corporation: In 1977, two years after the famous MITS Altair, Radio Shack introduced the TRS-80, one of the first mass-produced personal computers that became a big hit. This was followed by the TRS-80 Color Computer designed to attach to a television for use as a monitor. In the late 1980s, Radio Shack made the transition from its proprietary 8-bit computers to its proprietary IBM-PC-compatible Tandy computers; however, shrinking margins and a lack of economies of scale led Radio Shack to exit the computer-manufacturing market by the mid-1990s.)

(e) It is conceivable that IBM, like the rest of us (including Wang Laboratories and Digital Equipment Corporation, two outstanding minicomputer makers based in Boston suburb), did not foresee the advent of powerful PCs. In 1988 when I wrote my doctoral dissertation at University of Illinois (whose engineering college was ranked among the top), IBM Mainframe was used. I learned code like themselves. A classmate was using a PC to write the thesis, but she was an exception. I learned the pitfall when I was doing postdoctoral fellowship at Columbia University and needed to revise my thesis. No go, because a Mainframe file was not portable (and Columbia did not own a Mainframe), unlike that of a PC.

Eventually the hemorraging PC division of IBM--eviscerated by HP, Dell and Acer and in IBM's refocusing on the IT services business--was sold to Lenovo in 2005. But the move should be deemed smart, as the PC industry has been in a long decline, the latest being netbook and now tablets.   


(2) Andrew Bounds, A Cross-Cultural Partnership; Entrepreneurship; Richard Kaye and his protege Chris Chan are building links between the UK and Chinese sides of their business.

"Mr Kaye is a British industrialist who decided not simply to move some of th eproduction of his company, Fired Up Corporation, to low-cost China but to sell the products to the emerging Chinese middle class. Fired Up's range of domestic appliances for sale in China includes kettles, yoghurt-makers and even rice cookers--possibly a modern-day equivalent of sending coals to Newcastle.

"Fired Up aims to reach profits of £1m this year on turnover of £13m. About £300,000 comes from Endeva, which was set up in China in September 2010.

"It was after the gloabl recession led to spare capacity in Fired UP's Chinese factory in 2008 that Mr Kaye decided to make products for the expanding Chinese market under the brand. The word translates very loosely, says Mr Kaye, as 'Enhlish Foundation.' And in an attempt to emphasize the British heritage, 'we put my head on the side of the box'--establishing Mr Kaye's European visage as part of the branded packaging. 'It's a rather innovative way of protecting your IP [intellectual property], isn't it?' he says.

"Chris Chan [] runs Fired Up's Chinese operations. * * * It was a meeting in 2005 arranged by a mutual friend at a Huddersfield Chinese restaurant between Mr Kaye, 44, and Mr Chan, now 30 and then a student at Huddersfield University, that led to their partnership. Mr Kaye took Mr Chan under his wing.

"They are all made in a factory in Nantou, China, that now employs 230. Employees have free housing and meals and are paid about Rmb500 ($79) a week, higher than the average. Fired Up sponsorsthe local football team, the league and a company basketball team. 'This is not done out of altruistic or naive idealism,it's done out of a need to overcome some of the recruitment and retention problems that exists in China,' says Mr Kaye.

"Liang Ling An, the local communist party secretary in Nantou, is a key contact. Mr Kaye plays golf with him in China and they [Kaye and Chan] encouraged Mr Liangnephew to attend Huddersfield University. 'We're trying to build as many links as we can with Huddersfield and Nantou,' says Mr Kaye.

My comment:
(a) Fired Up Corporation
www.firedupgroup.co.uk

Click "Brands" in the top horizontal bar to see its ware.
(b) Huddersfield
http://en.wikipedia.org/wiki/Huddersfield
(a market town in the couonty of West Yorkshire)
() University of Huddersfield
http://en.wikipedia.org/wiki/University_of_Huddersfield
(public; Established 1825)
(c) Nantou is a town in City of Zhongshan, Guangdong.
(d) Electric appliances no longer make money. Just look at those divisions at GE and Samsung. In any event, Fired Up's sale and profit are pittances.