Go Lean…Caribbean

Go Lean Commentary

“Live by the sword, die by the sword” – Matthew 26:52; The Bible 

The history of the Personal Computer (PC) industry is synonymous with change. The product and industry came along and force change everywhere on everything; not just on businesses, but for families and households as well. Just consider this photo here. All of these transformations happened because of the ubiquity of personal computers … and the internet.

The trend of upward mobility in the PC industry started 35 years ago. The IBM PC, running Microsoft’s MS-DOS operating system – was introduced in 1981. In fact, due to the impact of the PC, Time Magazine named the computer as Man of the Year in 1982.

Like most trends, this product has had an arc, a bell-curve per se; but now the curve is trending downward. The PC is being out-maneuvered in transforming society by alternate concepts transforming PC’s. The truth is, businesses and consumers want solutions, more so than technology. So whatever new function or application can perform better than the old function or application will get traction. This aligns with an old business adage:

Build a better mousetrap and the world will beat a path to your door.

This adage has been a “battle cry” since the Industrial Revolution; even more so now in the Information Revolution. The battle is …

• Man versus machine: Man loses!
• Old machine versus new machine: Old machine loses.
• For the jobs of the men (and women) associated with the old machines and old technologies, they continue to lose.

This point also aligns with the book Go Lean…Caribbean which prepares the Caribbean economic, security and governing engines to better anticipate and respond to transformational changes in Internet & Communications Technologies (ICT). The book asserts that the Caribbean region has been losing the battle of globalization and technology. The consequences of our defeat is the abandonment of our people. The assessment of all 30 Caribbean member-states is that every community has lost human capital to emigration; people are moving to where the jobs are; many times the new jobs are tied to innovative companies in the technology industries. This is why so many of our region’s college-educated citizens (more than 70 percent) have fled their homelands for foreign shores.

The below news article asserts that change in the ICT industries goes both ways for the industry players: trends come and go; markets will be up and down. The PC, which has been a great trendsetter is now getting trumped by other trendsetters: mobile devices, tablets and cloud computing. See related stories here:

Title #1: Intel to cut up to 12,000 jobs as PC industry swoons
By: Narottam Medhora
(Reuters) – Intel Corp said on Tuesday it would cut up to 12,000 jobs globally, or 11 percent of its workforce, as it refocuses its business towards making microchips that power data centers and Internet connected devices and away from the declining personal computer industry it helped found.

Tech companies including the former Hewlett Packard Co and Microsoft Corp have reorganized in the face of the PC industry decline. Many new tech users around the world turn to mobile phones for their computing needs, and corporations increasingly rely on big machines rather than desktop models to run their businesses. Global personal computer shipments fell 11.5 percent in the first quarter, tech research company IDC said on Monday.

Intel, the world’s largest chipmaker, lowered its revenue forecast for the year. It now expects revenue to rise in mid-single digits, down from its previous forecast of mid- to high-single digits.

Intel’s shares were down 2.2 percent at $30.90 in extended trading.

Most of Intel’s factories are in the United States, although it did not identify where cuts would be focused geographically. It said it would record a pretax restructuring charge of $1.2 billion in the second quarter and expected annual savings of $1.4 billion per year starting mid-2017. (http://bit.ly/1WDPfBm)

The company also said Chief Financial Officer Stacy Smith will move to a new role leading sales, manufacturing and operations. Intel said it would begin a formal search process for a new CFO.

Smith said that Intel now expects the PC market to decline by a percentage in the high single digits in 2016 versus a prior forecast of a mid single-digit decline. Declines in China and other emerging markets are also leading to greater than anticipated reductions in worldwide PC supply chain inventory, Intel Chief Executive Brian Krzanich said on a conference call.

“PC demand, at least in the eyes of Intel, is expected to be weaker than the industry originally anticipated,” said Angelo Zino, an equity analyst at S&P Capital Global Market Intelligence.

He added that although the industry has already seen some of the weakness experienced by Intel, the company’s comments dashed any hope of recovery.

The Santa Clara, California-based company has been focusing on its higher-margin data center business as it looks to reduce its dependence on the slowing PC market. Intel has also made inroads into the mobile devices market, although competitors Qualcomm Inc and Samsung Electronics Co dominate there.

Intel said in a statement the job cuts would be carried out by mid-2017 and the restructuring would “accelerate its evolution from a PC company to one that powers the cloud and billions of smart, connected computing devices.”

Sales of products for the data center and the Internet of things accounted for 40 percent of revenue and the majority of operating profit, it added.

Raymond James analyst Hans Mosesmann, who rates Intel “under perform” said the problems leading to the job cuts were likely more about Intel than the broader tech industry.

“The bigger issue is the restructuring and will it be enough for the company to properly adapt to a changing environment where cloud and IoT competitive dynamics are quite different,” Mosesmann added.

On a per share basis, the company earned 42 cents per share, in the first quarter, up from 41 cents a year earlier.

Net revenue rose to $13.70 billion from $12.78 billion.

Non-GAAP net revenue came in at $13.80 billion, compared with analysts’ average estimate of $13.83 billion, according to Thomson Reuters I/B/E/S. Adjusted earnings of 54 cents per share topped Wall Street forecasts of 48 cents.

Up to Tuesday’s close, Intel’s shares had fallen 8.4 percent this year, compared with a slight gain in the broader semiconductor index <.SOX>.

(Reporting by Narottam Medhora in Bengaluru and Peter Henderson in San Francisco; Editing by Sriraj Kalluvila and Diane Craft)
Source: Reuters News Service – Retrieved 04-19-2016 from: https://www.yahoo.com/news/intel-cut-12-000-jobs-pc-industry-swoons-001010341–finance.html

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Title #2: Intel and Microsoft face different challenges in shifts to cloud
By: Sarah McBride
SAN FRANCISCO (Reuters) – Financial results from Microsoft Corp and Intel Corp this week brought into sharp relief the challenges the onetime PC partners face as they shift more of their emphasis to cloud computing.

Microsoft has seen strong long-term growth in parts of its cloud business, a combination of services and software catering to corporations moving computing functions to remote data centers run by outside providers.

While revenue for its flagship cloud services business Azure more than doubled last quarter, the company said in Thursday’s earning report, the “intelligent cloud” division that includes it saw just 3 percent revenue growth in the period. And operating profits for the division dropped by 14 percent, in part reflecting non-cloud products included under its umbrella, such as traditional server software.

Chipmaker Intel has a less clear path to growth for its cloud operations, and investors have remained skeptical.

The company’s  share price is down about 1 percent over the last year, as software maker Microsoft’s stock rose about 30 percent. Microsoft’s market capitalization of around $440 billion is almost three times Intel’s at $151 billion, compared to about double five years ago.

“Wintel” computers running Windows on Intel chips dominated the personal-computing era, which is slowly ending as more people turn to mobile phones for computing needs and corporations deemphasize desktops. Both Intel and Microsoft, run by relatively new CEOs Brian Krzanich and Satya Nadella, are betting their businesses on the cloud.

Graphic on Intel and Microsoft market value: http://fingfx.thomsonreuters.com/gfx/rngs/1/1368/2143/e2jq021kfn46.htm

At Intel, in a quarter where the company announced plans to cut 12,000 jobs as it shifts away from the PC, data-center business revenue rose 9 percent to $4 billion. That segment includes the chips powering cloud data centers, where the company says it is doing well.

“There’s this perception that Microsoft is more on the cusp and benefiting from this (cloud) trend,” said Dan Morgan, a fund manager at Synovus Trust Co who holds both companies in his portfolio. “Intel is still more drowned out,” meaning not as high-profile.

Microsoft’s best-known play in the cloud is Azure, a set of services for computing and storage as well as tools for software developers.

Azure is gaining ground on Amazon’s AWS unit, the industry heavyweight in cloud computing services. Azure commands about 10 percent of the $23 billion market, estimates Synergy Research, compared with AWS’ 31 percent.

Intel has done well in its category, dominating the market for processor chips that are the brains of data center computers, but the business faces major pressures.

Much of the difference in the companies’ fortunes boils down to Microsoft’s fundamental business as a software company versus Intel’s as a hardware company, said Nick Sturiale, a venture capitalist at Ignition Partners.

Clients are spending an ever-larger part of their technology budget on software, according to research firm Gartner. And Intel’s customer base for data-center chips is consolidating into a few big companies, including Facebook, Google, Amazon and Microsoft itself, from a much wider group.

“The cloud vendors are brutal price negotiators and have more power over Intel,” said Sturiale. Average prices of data center chips fell 3 percent in the last quarter, although Intel said that reflected the fact that cheaper chips were gaining ground the fastest.

Intel could suffer as big data-center builders like Facebook increasingly design their own data-center hardware. So far, Intel has held its own, but one day its customers could extend their cost-cutting to chips.

In a call this week with analysts, Krzanich said Intel’s “top to bottom” understanding of the cloud-based data center and keen eye on competitors would help it stay ahead.

“Always paranoid about the competition, always driving,” he said.

“And you know that we live or die by the performance of our product.”

Intel makes other promising products, including chips for Internet-connected devices known as the Internet of Things. If a blockbuster consumer or business product in that market comes along, those chips could take off.

And Microsoft may be overemphasizing how far it has come. Much of its “intelligent cloud” business comprises software for traditional on-premises servers and other businesses with little to do with the cloud. A spokeswoman said the segment’s name “is to align to the ambition” of building the cloud.

Microsoft also is good at playing up its cloud business. In its January earnings call with investors, the term “cloud” came up 59 times. In Intel’s call this week, it came up 11 times.

(Reporting by Sarah McBride,; additional reporting by Noel Randewich; editing by Andrew Hay)
Source: Posted April 22, 2016 from: https://www.yahoo.com/news/intel-microsoft-face-different-challenges-shifts-cloud-010342392–finance.html?ref=gs

See VIDEO‘s of both Intel and Microsoft’s “Cloud” offering in the Appendices below.

Considering the trends in the foregoing articles – tablets, mobile and web-enabled virtual devices (cloud computing) – the Go Lean book posits that there is a need for the Caribbean to be agile or lean to optimize to benefits from the ever-changing technology industry-space. This requires the stakeholders in the region to re-focus and re-boot the regional engines of commerce so as to benefit from these innovations – keep pace – and to create jobs. These two assignments are among the missions of the Go Lean book, blogs and movement.

The book Go Lean… Caribbean, serves as a roadmap for the introduction and implementation of the technocratic Caribbean Union Trade Federation (CU) with the charter to facilitate jobs in the region. The book posits that ICT (Internet & Communications Technology) can be a great equalizer for the Caribbean to better compete with the rest of the world. The book thereafter details the prime directives (3) of the roadmap:

• Optimization of economic engines in order to grow the regional economy to $800 Billion and create 2.2 million new jobs.
• Establishment of a security apparatus to protect the resultant economic engines.
• Improve Caribbean governance to support all these engines.

Early in the Go Lean book, the mission to create jobs and keep pace with technology was identified as important functions for the CU with these pronouncements in the Declaration of Interdependence (Pages 14):

xxvi.  Whereas the Caribbean region must have new jobs to empower the engines of the economy and create the income sources for prosperity, and encourage the next generation to forge their dreams right at home, the Federation must therefore foster the development of new industries, like that of ship-building, automobile manufacturing, prefabricated housing, frozen foods, pipelines, call centers, and the prison industrial complex. In addition, the Federation must invigorate the enterprises related to existing industries tourism, fisheries and lotteries – impacting the region with more jobs.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

xxviii. Whereas intellectual property can easily traverse national borders, the rights and privileges of intellectual property must be respected at home and abroad. The Federation must install protections to ensure that no abuse of these rights go with impunity, and to ensure that foreign authorities enforce the rights of the intellectual property registered in our region.

xxx.  Whereas the effects of globalization can be felt in every aspect of Caribbean life, from the acquisition of food and clothing, to the ubiquity of ICT, the region cannot only consume, it is imperative that our lands also produce and add to the international community, even if doing so requires some sacrifice and subsidy.

According to the foregoing articles, changes in computing trends are reshaping the global ICT industry; and the job market is being affected, for better and for worse. The Go Lean book identified that tablet devices must be part-and-parcel to any technology empowerment plan, it detailed the possibilities of deploying low-cost tablets ($35) throughout the Caribbean region.

The Aakash UbiSlate 7Ci is a super-cheap tablet that will attempt to connect every student in India to the Internet. Educators have long hoped that cheap computing devices could bridge the global information divide, but previous attempts have been dogged by disappointing performance, lack of Internet access, and financial barriers. The latest version of India’s $35 tablet comes equipped with WiFi and has an optional upgrade ($64) of a cellular Internet package of $2/month for 2 GB of data… – Go Lean … Caribbean (Page 296).

Likewise, the Go Lean book identified the emergence of cloud computing. The roadmap detailed a strategy of forging a Cyber Caribbean with many outsourcing/in-sourcing deployments, plus the assembly of the Caribbean Postal Union (CPU) to consolidate and integrate the region’s postal operations into a 21st Century model, including all the tenets of ICT: email, social media (www.myCaribbean.com), e-Government, etc.. The roadmap there-in describes the role of Virtual Desktop Infrastructure (VDI) as an alternative to expensive Personal Computer installations for corporate and institutional (government and NGO) applications. See a specific reference from the book here:

Virtual Desktop Infrastructure (VDI) is a desktop-centric service that hosts user desktop environments on remote servers and/or blade PCs, which are accessed over a network using a remote display protocol. A connection brokering service is used to connect users to their assigned desktop sessions. For users, this means they can access their desktop from any location, without being tied to a single client device. Since the resources are centralized, users moving between work locations can still access the same desktop environment with their applications and data. For IT administrators, this means a more centralized, efficient client environment that is easier to maintain and able to respond more quickly to the changing needs of the user and business… – Go Lean … Caribbean (Page 295).

The Go Lean book details how jobs are to be created in this new world of cyclical technology trends and in the new Caribbean. The book asserts that certain industries are better than others for generating multiple indirect jobs down the line for each direct job on a company’s payroll. Industries relating to STEM (Science, Technology, Engineering and Mathematics) fields have demonstrated high job-multiplier rates of 3.0 to 4.1 factors (Page 260). In total, the book details the creation of 2.2 million new jobs for the Caribbean region, many embracing ICT skill-sets, by adopting certain community ethos, plus the executions of key strategies, tactics, implementations and advocacies. The following is a sample from the book:

As depicted in the foregoing news articles, the current trending with ICT innovation nullifies location. The innovations need not come from Silicon Valley – a region just south of San Francisco, California, they can easily come from any beach in the Caribbean.

The Caribbean is arguably the best address on the planet – definitely the best beaches – but jobs are missing. We can fill the void the same way other communities are jockeying to fill the void: innovations for ICT. The Go Lean roadmap posits that we can get the needed innovation from our own people, rather that watching our prospective innovators “take their talents to South Beach”, or South Toronto, or South London or South of San Francisco (Silicon Valley).

The Go Lean/CU roadmap is designed to foster job-creating developments in the Caribbean region. This requires a full-vertical strategy: identifying human resources, developing the skill-sets, incentivizing high-tech start-ups and incubating viable companies. These points have been detailed in many previous Go Lean blog-commentaries; consider this sample:

The primary ingredient for a Caribbean ICT strategy need only be Caribbean people, and the community “will” to engage. This is conceivable, believable and achievable. The Go Lean roadmap describes the need to reform and transform this community “will” as community ethos – national spirit – to spur achievement in this ICT industry space.

We can do this – here at home.

The roadmap goes further and provides the turn-by-turn directions to get “us” to the desired location: a better place to live, work and play. 🙂

Download the book Go Lean…Caribbean now!

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Appendix VIDEO – Why Intel Cloud Technology – https://youtu.be/P5h1KMk-8Qo

Published on Jan 10, 2014 – Customers want to know what is inside their cloud. This animation provides an overview of the Intel Cloud Technology program, which provides users assurances that their cloud service provider is running on the latest Intel Xeon Processor-based servers, which means taking advantage of technologies including Intel Turbo Boost Technology, Intel TXT, Intel AVX, and Intel AES-NI. Intel Cloud Technology helps increase performance, reduce completion time, and enhance security. Learn more at http://intel.ly/1gpFL5PSubscribe now to Intel on YouTube: http://bit.ly/1BZDtpf
About Intel:
Intel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Founded in 1968 to build semiconductor memory products, Intel introduced the world’s first microprocessor in 1971. This decade, our mission is to create and extend computing technology to connect and enrich the lives of every person on earth.
Connect with Intel:

Visit Intel WEBSITE: http://intel.ly/1WXmVMe

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Appendix VIDEO – Microsoft Cloud: Empowering Business – https://youtu.be/HZChlynmtgc

Published on Jan 18, 2016 – See how The Microsoft Cloud is helping businesses around the world scale, connect, transform and reinvent.