Discrepancy in the Industry Prognosis and Reality

Microsoft and Intel executives complained at the last week technology conference that U.S. could soon cede its technological leadership. "Maybe we are headed for becoming a second-class citizen in the world of IT" said Pat Gelsinger, Intel's chief technology officer and head of research. It was shocking enough to many in the audience to hear such a worry. The cause of the eventual loss is estimated to be due to the lessened sponsored spending on the government-funded R&D. The second problem, according to Ray Bingham, CEO of the U.S.-based Cadence Design Systems is the ratio and numbers of the engineer graduates in China and U.S. Respectively 600,000 engineers a year and 200,000 of them are electrical engineers compared to 70,000 undergraduate degrees in electrical engineering granted and 37,000 graduate and doctoral ones in the U.S.

Meanwhile on the industry stage happened several amazingly different and in some way contradicting to the above events. On the one hand Microsoft Corp. launched new version of its MSN Internet browser and services. Bob Visse, director of MSN marketing announced that the promotional campaign of the product will be aggressive. Microsoft said it will spend $300 million on the advertising campaign for MSN 8, which features new tools to make it easier for users to manage e-mail.

In between, Hewlett-Packard announced that beginning in 2004 it will pair up future Itanium chips so twice the number can be shoehorned into a computer. The double-whammy chips will enable HP processors to leapfrog the performance of IBM's Power processor family.

In the hosting industry it is rumoured that Cable & Wireless may pull out of U.S. Cable & Wireless is a global business telecommunications provider with customers in 70 countries. Cable & Wireless now has 2,500 Web hosting customers, and emphasizes that its client base includes large corporations focused around three "core market segments" of financial services, media and technology - typically stable customers when compared to dot-coms. The assumption came from the services policy of the company. C&W tries to leveraging a balance between front and back-end services, to adjust its business models, making them more effective, efficient, inexpensive and adverse to risk. It seems that the aim of Cable & Wireless is to provide total service provision rather than fragmenting services across multiple business lines. "Organizations that sell services in isolation will not survive," predicts Duncan Black, Director of Corporate Networking Strategy, Cable & Wireless.

While the many others are in threat, the online bookseller Amazon.com has narrowed its losses and turned in sharply higher sales. It is aftereffect from the new policy line oriented towards crediting a free delivery scheme. The company said on Thursday that losses for the three months to September came in at $35m, down from $170m during the same period last year. Amazon's results were also buoyed by strong sales growth in western Europe and Japan.

The e-commerce sites are in a good position today, presuming that computer related products undoubtedly can be perceived as a wonderful gift. This is based primarily on "what my colleagues and valued sources think is cool" but has also its statistical logics. The estimated share of the e-commerce vs. traditional one is moving in an advantage to the first one and it looks to be a stable tendency.