Andreessen on the Future of IT Commoditisation

Netscape founder Marc Andreessen looks at the future of IT, and sees ousourcing big-time. Well he would wouldn't he, his company Opsware (formerely Loudcloud) has selling IT services at its core. But still his argument makes a lot of sense. (My thanks to Brad de Long for putting me on to this one).

Andreessen thinks the reason we're seeing such dramatic across-the-board commoditization now is because of what he calls a "maniac" focus on cost-cutting among customers. "In 1995," he explains, "the reference architecture at companies was Sun/Oracle/EMC/Cisco, or their comparable competitors. That was still true in 2000 when the bubble ended, because people could still afford it. Now they can't."

Now customers are finally taking advantage of the commoditization that had been creeping along largely unnoticed during the boom. All this has created what Andreessen believes to be a one-time "systemic decline" in the cost of tech infrastructure. But of course it costs a heck of a lot more to operate all this stuff than to acquire it. Andreessen says it costs 6 to 8 times more over time. That's why IT staff constitutes, on average, something like 40% of the overall corporate IT budget. Getting rid of all those expensive people is a top corporate priority, because it would be the best way to cut costs.

Meanwhile, customers have been putting an essential task on hold--installing new applications. It's because there's not enough money, and because CIOs feel burned. Says Andreessen: "Most of the software ideas of the late '90s which people tried and failed on--customer relationship management, marketing analytics, supply chain management, B2B procurement--those ideas all made sense and had good business justifications. But the tech wasn't quite there. Many customers who bought early feel bitter. But at some point those things will hit the mainstream and work."
Source: Fortune
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Study Links Rise in Sporadic CJD to BSE

The eating of BSE-infected meat might cause classical CJD in people, as well as variant CJD, a new study using mice suggests. Classical CJD, also called sporadic CJD (sCJD), is generally believed to develop spontaneously and existed before the BSE epidemic in British cattle, while variant CJD (vCJD) is thought to be the human form of mad cow disease. There has been a recent rise in cases of sCJD, in the UK in particular, but it had been thought this was due to better surveillance and diagnosis. The surprising new finding appears to add weight to suggestions that the rise is in fact linked to the BSE epidemic.

The new work involved injecting the BSE infectious agent - a misfolded prion protein - into the brains of mice. The mice had been genetically modified to act as human models of infection and to be susceptible to CJD.

As expected, some of these mice developed symptoms and a molecular subtype of prion protein misfolding associated with vCJD. But others developed a sub-type associated with the most common of three strains of sCJD previously identified in people. "This finding has important potential implications," the team led by John Collinge at the MRC Prion Unit in London, UK, writes in the EMBO Journal. "It raises the possibility that some humans infected with BSE prions may develop a clinical disease indistinguishable from classical CJD."Models predicting the future extent of the human epidemic associated with eating BSE-infected meat are based on the observation of vCJD in the population. But if BSE prions can also cause sCJD, these models will underestimate the ultimate human death toll. To date, 117 people have died in the UK from vCJD.
Source: New Scientist
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Variant Creutzfeldt–Jakob disease (vCJD) has been recognized to date only in individuals homozygous for methionine at PRNP codon 129. Here we show that transgenic mice expressing human PrP methionine 129, inoculated with either bovine spongiform encephalopathy (BSE) or variant CJD prions, may develop the neuropathological and molecular phenotype of vCJD, consistent with these diseases being caused by the same prion strain. Surprisingly, however, BSE transmission to these transgenic mice, in addition to producing a vCJD-like phenotype, can also result in a distinct molecular phenotype that is indistinguishable from that of sporadic CJD with PrPSc type 2. These data suggest that more than one BSE-derived prion strain might infect humans; it is therefore possible that some patients with a phenotype consistent with sporadic CJD may have a disease arising from BSE exposure.
Source: European Molecular Biology Journal
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Japanese Unemployment Continues to Rise

Japan's industrial production fell last month and families cut their spending after unemployment rose to a record high, adding strength to the growing view that Japan's economic recovery may be running out of steam. Of course much of the future for unemployment now depends on what really happens in the wake of the NPL debate.

Production unexpectedly fell 0.3 per cent in October from the previous month, the Ministry of Economy, Trade and Industry (Meti) said on Friday. With the second second consecutive monthly decline, Meti changed its outlook for the index from a "gradual upward trend" to "flat". The data suggested that industrial production, which has been driven by exports, and the economic recovery , probably peaked between July and September, boding ill for Japan's already high unemployment rate.

Unemployment in September revisited Japan's post-war high of 5.5 per cent, matching a record high set last December, according to government data on Friday. Although the ratio of job offers to applicants rose slightly to 0.56 - meaning there were 56 offers for every 100 jobseekers - the data showed the labour market remains weak. "With the expected faster disposal of NPLs, corporate bankruptcy and involuntary job losses will likely increase," said Takehiro Sato, economist at Morgan Stanley. "Our calculation suggests a ¥29,100bn increase in final NPL disposal would lead to 700,000 more job losses and a 6.5 per cent unemployment rate."
Source: Financial Times
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Sweden To Hold Euro Referendum

In what is going to be the first real popular test for the Euro, Sweden has announced plans to hold a referendum on whether to adopt the single European currency on September 14, 2003, Swedish Prime Minister Goeran Persson said on Friday following a meeting of political party leaders. Of course, there's a lot of water to go under the bridge between now and September 2003.

"We have agreed to hold a referendum on the second Sunday in September," Persson said, urging the country's political parties to cooperate across party lines to ensure a "yes" vote. Sweden is a member of the European Union but has joined Denmark and Britain in opting -- so far -- to stay out of the euro zone. Persson said he was optimistic about securing a "yes" vote but acknowledged that the Swedish public was deeply split over the issue. "I believe it will be a yes, but it is far from certain," he said. "We are all a little divided on this issue. That is why we are holding a referendum." Most opinion polls over the past year have indicated Swedes would back swapping their currency, the krona, for the euro, although recent surveys point to more resistance. A Gallup poll published Friday showed 40 percent of Swedes would say "yes" if a referendum were held today, 34 percent would say "no" and 25 percent were undecided. The poll showed however that the "yes" camp's lead had shrunk from 20 percentage points in July to just six points in November.
Source: EU Business
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