Thursday, April 14, 2016

Odd-Even : Fortnightly Release for Dilliwallas

Just the other day one more 'innovative initiative' was announced by our Yugpurush. Christened as odd-even scheme, it was proclaimed highly successful (successful part is debatable). Now again he is back with the same scheme and there are debates running on every damn news channel around its pros and cons. Of course after much shouting and cross charges debates were inconclusive as is always the case. However one thing stuck me quite strongly and my grey cells became active. What was quite prominent is the limelight AAP has hogged because of this idea. This topic since highly contentious will be debated to maximum and it will always give prime time space to AAP without any expenditure. Mind it, with elections in Punjab next year, any publicity (good or bad) is welcome. In fact Yugpurush already had got international recognition and appreciation for implementing this in January.

One more innovation in this 'innovative initiative' is that scheme make a comeback every 15 days. Had it been implemented without break, this topic would have died its natural death. But with this uniqueness, same reel can be played over and over every fortnight. So much so that our 'party with a difference' will continue to appear on front page providing ample bread and butter to so many media houses. Just to add some spice, AAP is already paying 'kickbacks' in white money with a planned allocation of 500 crores at taxpayer's expense. Interesting to note is that not many print or news media have annual revenue > 500 crores. So AAP is a prime customer always getting positive coverage.

Now coming to idea itself. I would call it a completely absurd and rubbish. Those who do not agree with me should go back in time and present their views on forced sterilization led by Sanjay Gandhi. Whether it was 1976 or 2016, you cannot force such ideas in a democracy. Also it borders on 'Divide and Rule' policy. By including only the petrol/diesel cars, with so many exemptions and if I add those who already have multiple vehicles to bypass this scheme, it might leave me not even with 10% (even 5% would be expansive estimate) of the population and that will comprise mainly middle class. From the highlights of survey in favor of re-implementation - 80% want the plan back on roads. You can do the maths.

One big assumption which this idea is that Dilliwallas do not go for car-pooling. This idea will force everyone to scout for car pools and that will be the biggest benefit. However, I can still recall, 15-20 years back, my Dad was car pooling because of parking problems in his Old Delhi. I was car pooling while going to my office in Gurgaon. For the families where both husband/wife are working, they mainly use one car. Now they might buy another one as EMIs will be cheaper than paying for a cab. Delhi by itself has loads of businessman that travel throughout everyday and for those whom time is money, they will not wait for public transport etc.

So I doubt Yugpurush will deliver any benefit other than troubling that small minority whose votes anyways will not come to him because of his frequent drama. And he seem to be biggest beneficiary, putting him on path to replace 'Pappu' as challenger for biggest post. On a lighter note, it will be interesting to see some FB/Twitter posts from Delhi cabinet using cycles to reach  office in this not-so enormous heat - more so in month of May, June or rainy July and August.

Friday, November 21, 2014

Cloud as a Product - An option to consider

When everyone is talking about the SaaS, and everyone seems to be so much fascinated by it that it seems that whole world is moving towards this new offering. But we as well know that nothing works in isolation for long. I believe in time to come, we are going to see some sort of convergence of Cloud and Productization. The success of XaaS and adoption of Cloud by various organizations (big or small) will drive a new business model in future. We have to be aware that SaaS, PaaS, IaaS are definitely going to have adverse business impact on most IT service or infrastructure providers and they are not gong to sit with folded hands. I would not be surprised if we see following business models in future as a result of Cloud Adoption:

-  Cloud as a Product (CaaP) – As of now we have XaaS which are primarily elastic and chargeable on per use basis. However, as the usage increases and demand stabilizes, we will very well see Cloud being offered as a Product. What this essentially means that there will be business opportunities when a company want to move its IT infrastructure to a Cloud in some distant location, but would like to own the complete Infrastructure, which might include different levels of engagement by service providers. In other words, managed services over Cloud.

- IT services as a product (ITsaP) – As of today, a company purchases IT infrastructure and related licensing, which at times remains unutilized. As Cloud usage tends to grow, we might see the IT infrastructure providing companies to come up with a different pricing model. They can also start offering to turn CAPEX into OPEX and charge on usage basis. It does not mean that a company necessarily have to move to Cloud to take benefit of flexi pricing. Darwin’s law will follow and each one will have to adapt to survive.

- Use-based licensing by product companies like Oracle or IBM or BEA – As of now they are charging per blade which means people using public cloud can take benefit of flexi pricing. It is only a matter of time, when the licenses will be made available on usage basis which will increase the cost of service for Cloud providers. This will be essentially driven by point above that instead of fixed pricing, charging will be based on consumption which will drive-up the cost of services.

Tuesday, September 02, 2014

Cloud - the buzz word

Lot of buzz around 'cloud' these days. It is being touted as the next big thing and seems everyone is rushing towards it to grab their share of pie. For the uninitiated, cloud is anything where IT services are available as a 'service' rather than in a conventional mode. In other words instead of purchasing IT products, you pay for what you use. Crude analogy would be instead of purchasing a car, take it on lease. Lets look at some of the benefits which cloud claims to offer:

1. No upfront Investment - It helps in turning my CAPEX into OPEX. I need not invest into the IT infrastructure which comes at huge cost and rather I would be happy paying for it as per my usage. As most of us know, it is a IT is highly depreciating asset - be it software product or be it infrastructure.

2. Focus on Business - I do not have any expertise in managing IT. So if I set-up IT, I will have to spend lot of energy and time towards it. Cloud providers are taking away this pain and I can focus on my core business.

3. Save Space - I need to allocate premium real estate space for the infrastructure. With each passing year, IT assets depreciate while the cost of real estate goes up. In other words, my cost of ownership is increasing two-fold. I need not worry about this when moving my IT to a cloud.

4. Experts for job- I can be assured that an expert is managing my IT. Much better than a novice who is preparing his resume for next job while sitting in my office.

5. Data anywhere: I can access my data anytime anywhere if I have Internet connectivity. Recently we went on a trip and we all left our phone in the cab. Unfortunately, the cab driver number was in the phone and there was no mean to get the number. Fortunately, my friend had his address book stored on iCloud and he accessed his address book from a nearby cafĂ© and called the guy. It was pretty simple.

Recent reports by Gartner suggests that in India, cloud services are expected to grow at CAGR of 33% till 2017. And the above benefits are the reasons for it. The fears around cloud have been Security, Reliability and Speed are being addressed by Telcos. As these concerns would be addressed, we would see more and more adoption. Cloud indeed provides a lot more than what is mentioned above and is the next big thing for IT revolution. It is no surprise that we see everyone moving towards cloud adoption. And over this adoption journey, there are bound to be lot of fall guys. What will be interesting to see how other services evolve with the challenges posed by cloud adoption....

Wednesday, August 27, 2014

Standing Instruction or Unfair Trade Practice?

Each one of us have invested in recurring deposits (RD) at some stage. And the process is very simple, the instalments are made on a fixed date every month and the principal amount along with applicable interest is paid back exactly one month after the last instalment. I never bothered to check the interest as the amount is very less. However it helps me in generating some handy cash for big purchases. Can anyone manipulate the interest calculation? Very difficult, right? But what if a big bank like ICICI (which pioneered Internet Banking revolution in India) comes up with innovative way of cheating customer and siphons off small portion of interest from your RD. The amount is so miniscule that we will not even be aware of any manipulation. The interest on RD itself is something which we never care, what difference does it make if few percentage points are siphoned off. It is like taking off couple of cents (or paisa) from every transaction. It does not make any visible difference but banks can make millions from transaction worth trillions.
Interest Accrued as per Bank

ICICI Bank has a very interesting feature called 'Standing Instruction', whereby a request is executed on scheduled date. I placed request for Recurring Deposit for 15 months using this facility on 23rd July with instruction for instalment on 2nd of every month. The first instalment was deducted immediately from my savings account on 23rd of July and the next instalment was deducted on 2nd Aug (and scheduled for 2nd every subsequent month). Now, this is strange! This is not what I learnt about RD all through my life. I did went through the pain of calling up customer care, sending mails, escalating to grievance forum and even sending mail to their senior management and received this sheet for interest calculation. As you can see clearly, this sheet for calculation of interest does not conform to the instalment schedule. I modified the sheet to account for the way instalment is being debited and (surprise surprise), found that I am being cheated for Rs 150/-. 

Actual Interest Accrued
Rs 150/- on a investment of Rs 30000, is that something one should be bothered? It does not even fit bill for one day commute to office. But it is more than 8% of the total interest on RD which bank is paying to me. Moreover, I am not the only one impacted, but it is every customer of ICICI who is placing standing instruction. Actually ICICI does not provide the option for a regular RD, but the only option is through Standing Instruction. On an average it translates to ~6% interest loss to customer on every RD being opened with ICICI. This loss for customer translates into profit for bank. Last year ICICI generated new deposits of ~INR 400 billion. It is not clear how much proportion of it was through RD, but even if it is 0.1%, this translates to couple of millions in free cash. Approximation might be way-off either side, but it is clearly visible that ICICI bank is indulging in Unfair Trade Practice and cheating the customer on the pretext of providing a facility to customer.

Sharing some of the response from ICICI when raised this issue to them.
Reply from Customer Care
On the basis of our telephonic conversation on August 10, 2014 at 10:30 a.m., we inform you that, for every Recurring Deposit(RD) the first instalment amount will be debited on the account opening date and the next instalments will be debited as per the standing instruction date set by you. If the resolution provided does not meet your expectations, you may escalate the issue to the next level.
Reply from Senior Management Desk
We would like to inform you that the standing instruction is a facility offered to the customer as a means of payment of monthly instalment. The date and medium through which the instalment is paid in a calendar month has no bearing on the interest to be paid on the Recurring Deposit for that month.

Take the case of a customer who places a request on 1st day of month for instalment to be debited on 2nd day assuming that RD will start from 2nd of month. He will actually end up paying two instalments within 2 days. That amounts to loss of interest on one instalment for the whole period!!! Clearly I do not see any facility to customer, rather he is on receiving end. The only one who is being benefitted through this feature is the Bank. As of now, I am still following up the issue with the Bank and they have requested one more week to respond. Next step is Banking Ombudsman, however suggestion from any quarter will be appreciated.

Wednesday, August 06, 2014

Meet the CEO - 'Shikshu' @ IIMB

"IIM B has come up with a programme called ‘Shikshu’ (apprentice in Sanskrit) specially for the one-year MBA participants at the B-school. As per the B-school, Shikshu, which is now in its second year, is a unique engagement initiative, between IIM B Alumni & IIM B’s one-year full time MBA (Executive Post Graduate Programme) students.
The programme gives EPGP students an opportunity to experience first-hand how a CEO’s office works..... "
More information on this initiative available here:

Sunday, August 03, 2014

SpiceJet waging interesting battle

So again SpiceJet has come back with super sale, that too for travel as early as next month. It made sense when such offer was launched initially. But now every other day there is a super sale offer that I am tempted to equate it with road-side sales which run throughout the year. The mode for them is simple - put the price tag to an exorbitant amount and then offer discount to tempt the buyer. Simply put, Airline fares are probably only 20% cheaper in these super sale. They appear much cheaper as fare is artificially inflated during non-sale period. During last one year, the aviation fuel has not got any costlier. Though it was costliest in Sep 2013 when it crossed the last peak of August 2008 for the first time, the price has remained subdued in last year on account of global price movement. As projected by Airlines, aviation fuel constitutes close to 50% of running costs, so there is no genuine reason for airlines to increase price by 30% during non-sale season of off-peak season.

I did mentioned earlier that such discounts do make sense at end of the year as it makes balance sheet healthy and gives access to easy cash. However discounts everyday and even for period till Oct next year smells bad. For Indigo which is probably only airline in black, it has been a catch-up game as it is a market leader and is planning to come-up with an IPO soon. It simply cannot afford to loose any market share to SpiceJet as it will have impact on its valuations. Though such strategy might not bode well if IPO is delayed as the revenues will take a hit with such discounted fares for immediate travel (of course for trips beyond 4-5 months, I can bet its a good strategy).

But what of SpiceJet which has reported losses in excess of Rs 1000 cr in last fiscal. It is in hard need of cash to run operations. To keep the flag high, it is selling tickets till October 2015, more than a year later. It is a fool's guess if someone will buy a ticket for next October, but whatever small percentage it manages to sell, it still brings in liquidity. It will be difficult for it to sustain operations with such discounted fares and I am afraid it is going Kingfisher way. Just scared with the thought if this airline gets grounded or taken over in near future.

SpiceJet must be hoping that with economy reviving, people will start flying again and that will help it tide over this crisis. But it is hoping against hope. Since the slowdown of 2008 that led to travel freeze in most companies, people have learnt to work though audio and video conferencing. With economy reviving, this trend is not going to reverse as now even any infrastructure is not needed for video conferencing. In addition to downturn in Business Travel, baggage allowance restrictions turned away the family traveler. Cheap tickets for foreign destinations and new domestic airlines is not helping either. Recent incidents with airlines made matters worse.

So what this means is that SpiceJet is overburdened with over capacity. When everyone is offering discount, it is probably to lure passenger from other segment, but it is surely not a planned strategy or work of cartel. With all airlines offering discounts in response confirms the fact that supply is more and it is more of action and reaction.  Hoping for an revival in flying habits of passengers might hit them below the belt. Such frequent discounts is only going to harm the sector as a whole and someone should put in serious thoughts that working like a frenzied strategist. Probably some of my EPGP mates can help these guys ;).

Saturday, July 26, 2014

Cloud - What it might mean for laptops?

One Device Fits All
Few years back if someone would have told me that we will see the end of laptop soon, I would have laughed at it. Laptop can be considered a natural descendent to desktop in terms of innovation. As laptop started providing more storage and RAM, and that too by occupying very little space, Desktop computer became thing of past. From big desktop machines to heavy laptops to light weight machines -they just kept on getting lighter and better. Next level of innovation was flexi screens, probably rollable screens as well. Laptop designers kept on doing away with once considered necessities like CD Drive, huge storage space etc all result of technical innovations like pen drive or portable hard disk. Continuous innovation did managed to impress the old timers like me who has grown up booting desktop through 4" floppy drive. However Gen 'Y' who is growing up on smartphones is giving it a miss. They are so used to working with smartphones that I doubt they will ever need laptop for their work.

I wrote an article few months back that this generational shift and preference for tabets and phablets will break WINTEL 'cartel' (if I may say). Little did I realized that this erosion is faster than I anticipated leading to its death and number of new technological breakthroughs are contributing big time. Key among them is evolution of Cloud. Everyone keeps on talking about it, but once its full potential is realized, I would not hesitate in chucking laptop on the ground. The biggest challenge for any cloud computing solution is reliability, security and speed. Even though I am a fan of dropbox, google drive etc but that is only to ensure availability of documents anytime, anywhere. I still have thick client installed and keep a local copy. The simple reason is ease of use and updating.

If technological breakthroughs are to go by, these challenges with Cloud computing will disappear very soon. Private clouds are the solution to security and cloud providers are investing heavily to pacify nerves here. Fibre optics have led to speeds unimaginable only couple of years back. A normal retail customer can get speed in excess of 15 MBps (in India) and in excess of 100MBps in matured markets which makes it indifferential to access data on cloud. The network connections are getting more and more reliable with 24*7 access QoS. Telcos are investing heavily to augment cloud computing and are coming up with special offerings for this solution which will make market more mature. With cloud access through Internet, it does away with need of VPN too.

If we take away the storage feature, there is very little ground left for smartphones to cover. Available RAM has already crossed 2GB and storage has already reached 64GB. Of course it is in high-end smartphone, but laptop does not come cheap either. In the excitement to make laptops lighter, one of the thing was to remove the burden of excess storage and providing it over cloud. That actually became its bane. If I can get a smartphone which has a port to connect to a screen and a keyboard, I would not require a laptop. And I don't think that day is quite far.

So what does it exactly mean? In simple terms, laptop could be thing of past. Users are comfortable with one device rather than carrying multiple devices performing similar functions. With dwindling user base, there would not be money to invest in innovations and it will be stucked at this level itself. No doubt, laptop manufacturers like Dell and Lenovo has seen the writing on the wall and are trying their hand at smartphones. It will be very sad to see a marvelous product dying but that's the crux of innovations and it will not be wrong to say that laptop has scored self-goal by pushing cloud computing forward!!!

Sunday, March 09, 2014

Disruptive Innovation leading to Convergence of Services

Couple of days back, read about a bunch of students from Bangalore offering free calling services. The catch is that users will have to listen to advertisements during the conversation. At onset my reaction was like 'what the heck',  I don't want any silly advertisement to disrupt my conversation. But the response to this service has been phenomenal, more than 4 lakh calls within 5 days of beta testing. On similar lines, in January, Micromax launched a app on its smart phones to reward users for watching ads and similar scheme was launched by Tata DoCoMo where free airtime was offered. There are many such variations being launched where users get freebies for simply watching advertisements.

This got my grey cells ticking. Who could be the users of such services, who would not mind small disruptions for the sake of talking free. Of course not those people who are always pressed for time and won't mind shelling extra pennies to save the time. Had it been 5 years back, these innovations could have targeted college going crowd. But with calling rates already at the floor and with numerous free options available like voice chats, whatsapp, viber etc., it makes no sense. To me, it looks like these strategies are searching fortune at the bottom of pyramid.

So is there a pattern or trend which is emerging? Though some sort of targeting was seen earlier when companies provided free billboards to shop owners, but it never benefited actual customer which we are seeing now. People are getting those services free which they have always assumed to be paid. No one would have imagined that they would get to make free calls or would get paid to watch advertisement. On the other extreme we see emergence of paid services which were always assumed to be free. Gone are the days of free broadcast by Doordarshan when advertisers used to fund the content. People are now paying to watch TV and even going to the extent of paying more for On-Demand channels or ad free channels.

So what should we call it. To me it seems more like convergence of services to target specific segments. One section getting paid for watching advertisement while the other paying extra to get rid of commercials. Both the target segment is different. And the type of commercials will be different. So you can expect those free services targeting poorest socio-economic group or a shade higher. Ads will be more like for products like Nirma, Wheel, soaps, Re 1 shampoos etc. I am expecting, we will soon see this disruptive innovation in number of other areas like transport where one can travel free or cinema halls screening movies free while generating revenues through advertisements. On the whole, it makes a win-win situation as everyone, from advertisers to customers, will be benefiting from this convergence!!!

Wednesday, January 22, 2014

Economics of Advance Booking of Airline Tickets

Starting December, the airlines ticket prices started going up. It was understandable considering that holiday season is the best chance to make some profits and demand outstrips the supply. What was surprising that the price of tickets for non-holiday season also displayed increasing fares. Bangalore-Delhi round trip which used to cost 9k-11k with 15-30 days advance booking, was costing 15k for month of February. Now suddenly we see 30-day advance booking fares reduced to as low as Rs 8000 for round trip Bangalore-Delhi. It seems to be a great deal which ideally should not be missed and that is why everyone is gung-ho about this scheme. But what is the benefit in this for airlines and on the surface it does seem that airlines will be making a loss with such schemes when they are already bleeding(?).

First of all, such schemes are being launched close to the financial year end. This scheme brings huge cash to the airlines and also make their cash flow statements a bit healthy. The revenue is still considered unrecognized and shown as liability in Balance Sheet till the time customer take a flight, but if it is cancelled with such revenue recognized the previous year and only balance is shown as unrecognized (same scheme was launched last year). Minimum of 40% of this revenue will stay with the company as that is the cancellation fees for tickets, if all customers decide to cancel their tickets. It can be assumed that now started, these schemes will come every year as otherwise operating cash flow will take a hit.

Economics of it: Lets consider the Delhi-Bangalore sector. Regular advance fare on this sector are Rs 4500-Rs 4900. During this scheme, the tickets are priced at Rs 3900. If the cost of capital for airlines is 16%, averaging for an half year to keep it simple @8%, airlines would have paid Rs 312 as interest to get this revenue. Since no one is sure of plans 6 months in advance, lets say 15% of tickets are cancelled and 15% are schedule changes. It brings in additional Rs 474 (Rs 1580 as cancellation/change charges). Airlines do consider these cancellation/schedule changes and overbook factor @20% brings in additional Rs 780. In total, a seat which is being sold as Rs 3900 is actually bringing in Rs 5446 as revenue to airlines companies. This is much better than the regular advance fares which used to be sold at Rs 4500-Rs4800. It is actually a good strategy.

So does this mean are we being cheated? Not exactly, because it is working more like insurance, as you do get cheap fare if you actually take the flight. For travelers, cost of capital is not more than 8%, which averages to Rs 156 for 6 months. So your total cost for flight is only Rs 4050. The only catch is premium for this insurance is very high. It would be a good entrepreneur opportunity for someone to start such exciting insurance schemes. However, airlines have resorted to gimmicks to make this scheme attractive. Like artificially inflating advance fares by 20-30% a month earlier. There has been no recent developments to justify this rise.

But is that reason to complain. I do not think so, as it still works in benefit of customer. In addition, this adds to load factor of airlines and brings in some new customers. Not to ignore huge sum of cash as revenue and not borrowings, that makes their life easier. To me, it is more like a win-win combination and those gimmicks can be termed nothing but Corporate Strategy!!!

Wednesday, December 04, 2013

Assembly election results will set the course

With final phase of polling to end with Delhi tonight, now the focus shifts to election results that will be out on 8th December. Assembly elections very close of general elections do give some indication on which party will have edge but more or less the bearing is governed by local issues, incumbency factor or how regional parties are performing. But this election is special. It has been 3 months NaMo was declared prime Ministerial candidate by BJP. In doing so, it has to loose support of its long term ally Janata Dal (U) and many other political supporters. It was a well calculated risk taken by a party that has been affected by its internal problems more than what is happening outside.

Since he took over the charge, Modi has been rallying all over the country and commanding an unprecedented crowd that has been the envy of Rahul Gandhi in whose rally pleas are being made to people to stay. NaMo has got support coming all over from Singapore to United States with even Goldman Sachs bringing report in his favor and Times magazine nominating him for 'Person of the Year' award. With such support, everyone expects him to make huge impact on these state elections. You read social media and you would tend to believe that solution to all of our country's problem is NaMo.

So what can go wrong? If BJP does not win the assembly elections is it because people do not believe in development agenda of NaMo or is it the anti-incumbency wave in MP and Chattisgarh or will it be because of presence of AAP in Delhi elections? You would not mind forgiving Modi if that happens as these elections are being fought on local agenda and issues and NaMo is certainly not expected to make a difference. After all, he has just arrived on national scene and his litmus test will be Lok Sabha elections and not this one.

So why is everyone following these elections? I strongly believe that this election will actually set the stage that whether people have started believing in BJP or whether this one person can bring the change or not? The BJP win despite all the odds mentioned above will indicate whether we have the possibility of decisive government at the centre after the elections or is it going to be politics of opportunistic people standing on a slippery surface. A clear decisive victory will give the companies this hope and they can actually start investing in future plans rather than waiting for general election results in early 2013. Otherwise, it will only delay the process which will slow down the progress.

On a side note, I also believe that we are going to see some impact on our campus recruitment process as it is in someway related with the expansion plans of corporates. We have to wait till 8th Dec to see if there is some positive for us in the results or not!!!

Wednesday, November 27, 2013

Why I think WINTEL is under pressure

For last many years, Microsoft and Intel have sort of monopoly in the PC (laptop and desktop) despite markets being allowed freely competitive. This kind of monopoly in a consumer industry is rarely seen. Few years back, Unix was gaining popularity, Java-based applications were on a roll and it seemed that Microsoft is under attack. Hard-core developers are still fans of Unix OS. But over last couple of years, I have experienced that Microsoft has come up with large integrated suite of applications with tons of features that makes it easier to work with its operating system. I am not considering iOS as it caters to niche segment and has its own share of limited supporters. In micro-processor space, Intel hardly faced any challenge from any chip manufacturer. In terms of performance, AMD is way behind Intel. Market leadership and monopoly of these two leading companies is popularly known as WINTEL.

So what can go wrong? There is no indication of any competition surfacing even in distant future for these two companies. So why I feel that they would soon be under threat or they would be under fire soon? In my view, they are under pressure from a category which was not perceived as a threat initially and that can change the complexion of the game. Tablet and Smartphones are getting popular day-by-day. The sales are increasing exponentially for these products while for PCs (laptop and desktop), it has been negative in 2013. It is expected that in 2014, the sales for smartphones and tablets will be more than PCs. According to a research report by IDC, by 2017 87% of the connected devices will be smartphones and tablets with only 13% accounted by PCs.

The latest report by Cisco mentioned that there will be more than 3.6 billion internet users by 2017. A couple of years back, most of this traffic was expected to be routed through PCs. In addition, most of this growth was expected to be in emerging markets like India, China. So why PC manufacturers under pressure? Probably the experience or expectation that emerging economies will follow developed world. When smartphones were launched in Europe or US, the PC market was more or less matured and most of the users brought these as add-on devices. Even then users were still comfortable with PCs and there were limitations with iPhone or Blackberry. But things changed drastically with launch of iPad in early 2010. It brought in portability that was not experienced earlier. With launch of Nexus series using Android OS in 2010 and then series of launches by different manufacturers using Android OS, devices became affordable too. Cloud computing has also taken care of the big limitation of storage capacity on smartphones and tablets.

What this all mean that now you do not need a $1000 instrument to just stay connected with your friends or to store your data like music or pictures. Though PC sales are heavily impacted in developed world, it is going to hit PC manufacturers more in emerging countries as it is considered big market. The 'junta' is more than happy with the connectivity provided by 2G and 3G data connection. A single sub-Rs 15000 or $300 price tag for a device that does most of the functions you need. Besides the flexibility of carrying it in your pocket and you do not need to run around searching for internet connection wherever you go. For those who need slightly bigger screens, Phablets do the trick. And in this space, we have large number of OS and chip manufacturers and WINTEL has not even started to capture the ground. Even the Ultrabooks are not catching fascination as was expected.

So where does this leave WINTEL? The sales of PC will still continue in corporate world. I will still need MS office to do my work faster and better on a laptop. But instead of buying a personal laptop outside the one which office will give, I would probably buy a Phablet. There have been launch of OS for mobile by Microsoft but it is to create a space for itself and to garner some market share from iOS and Android. Similarly Intel has started focusing on mobile microprocessor but Qualcomm or ARM has already occupied the market share. Both have missed the bus, especially Microsoft and I believe that the days of WINTEL supremacy are numbered. I do not see any trick up their sleeve, and many laptop manufacturers have already started selling smartphones (like Lenovo, Dell etc). I think it is going to meet fate like Blackberry. Just as smartphones killed camera, it is also going to deliver similar blows to PCs. Till then, Wintel can just hope to make as much money as they can.

Wednesday, November 20, 2013

Fed Tapering - Good or Bad for India?

Stock markets goes into a swing as and when there is a news on 'tapering' by US. If there is a news on push back, the markets react positively but the moment there is an news on 'tapering' being implemented, the market goes onto a tailspin. Lets first understand what actually is 'tapering' that is generating so much instability in markets world over. 

We know that short-term interest rates are reduced whenever a need is there to stimulate growth. But in the process, Fed reduced the rate effectively to zero which means that there was no scope further to stimulate growth. US Fed used Quantitative Easing to fuel growth that meant it started buying long term financial assets or bonds from commercial banks and private institutions that was aimed at reducing the yield on bonds that would have led to lowering of borrowing costs ultimately fueling growth. There has been so far three round of QEs popularly known as QE1, QE2 and QE3 through 2008 to 2013. Recently there was a news that the US would gradually reduce funding to this bond purchase program that is commonly known as 'tapering'.

From 2008 to 2010, Fed pumped in more than $2 trillions in the financial markets and kept in pumping more money as we can see. However, it did not translated into growth in US markets as was expected. The growth normally is realized if the money available with banks through this program is lend to local borrowers. Then where did this money go? On one hand, when the growth was stagnated in US and European markets, Asian economies like China, Singapore, India were not effected by this global downturn. Even though business were experiencing slow growth, property market and stock market was booming. To think of it, ideally 'tapering' should not have any effect on global market as Fed stimulus was aimed at reviving US economy and as it seems reviving, Fed is withdrawing the stimulus. It should be a local phenomenon .

So it can be safely assumed that Fed stimulus has actually made way to these emerging economies. Financial and private Institutions of US have been investing the Asian countries particularly India  and China. Between 2009-2012, property prices in India have more than doubled, inflation has assumed alarming proportions with no sight of it slowing down, and most of the stocks returning more than 20% despite no growth signs. Though exchange rate fell from over 50 in 2009 to 45 in 2010, it was almost stagnant at 45 rupees a dollar till mid 2012. My guess is that to keep the exchange rate competitive, Central Bank pumped more rupees into the Indian economy. Ideally this should have translated into investments for future growth of the economy, but that was not the case.

Is QE responsible for this?
So where did all this extra money go? Most of the money made its way into the property market. That probably was reason for such high appreciation in property markets.  I know many a friends of mine who have shifted their focus from their industries to real estate. Also as more and more money was available into the hands of public, this was also one reason for high inflation during this period. In last five years, average inflation rate was also high at around 9% over last 5 years, and  unfortunately for us, it did not translated into growth of Indian economy.

With tapering, financial institutions in US would need the money for paying for bonds on maturity and they would be taking back the money pumped into emerging economies like India. With no buyers and large number of sellers, this could actually led to collapse of stock markets and property bubble burst in India (and other economies). Though Us government has been giving mixed signals on tapering, there is a huge risk of this happening. RBI governor is aware of this and probably the reason for tightening of monetary policy since he took charge. But the risk still looms and we all should be prepared for this plunge.

But I also have a view is that though tapering is going to impact us in short term, it will be beneficial in long term as the recent inflation was not growth-led. This might actually turn out to be blessing in disguise and may led to revival of Indian economy. It might also bring back local investors to stock market who have been shying away because of prevailing uncertainty. Property market might bring in actual buyers rather that speculative investors. It is a hope for now that can turn into an opportunity by effective fiscal and monetary policy and efforts from the government. Hoping for it to happen!

Tuesday, October 29, 2013

Prayaas Day - We tried and made the Difference

Jaipur Foot Camp at Work

Nine-year old girl Ayesha has come from Bijapur with her parents to this camp. As she was walking back after getting the calipers, she was literally running. I saw glitter in her eye and her happiness was there to see. Alternatively, take the case of 30-year-old Rajanna from Tumkur who went with a belief that now he can go back and support his family again. At the eye camp on other corner, many patients would get treatment for cataract soon and would be able to work. These are some of the moments that made us believe that we did our bit and made the difference.

Lets do our bit
EPGP students at IIMB started Prayaas initiative 4–years ago and its activities are synonymous with its tagline, let’s do our bit. As part of its annual event, Prayaas Day, it organized two medical camps in the institute on 27th Oct 2013. One camp was to provide artificial limb or the famed Jaipur Foot for amputees and callipers for Polio ridden patients or those with weak limbs. The other was to diagnose and treat eye related ailments ranging from simple vision defects such as refractive problems to cataract and optical nerve damages. The camp was a major success and attracted participants from people as far as Bellary. Fifty patients will get benefit from Jaipur Foot Camp of which 41 were beneficiary on the spot. The daylong eye camp benefited 130 patients of which 26 patients will be treated for cataract and 31 will be provided glasses. The complete cost for camp and treatment will be borne by Prayaas (T) that runs mainly with contributions from EPGP students.

Camp Inauguration
Our Director and Dean (Academic) Professor Devanath Tirupati inaugurated the event
in atraditional way by lighting the lamp and handing over the first Jaipur Foot, calipers and crutches. He congratulated the EPGP students for continuing with the tradition and finding ways to expand the volume and scope of its activities in providing ground level help to the needy.  
T S Guruprasad visited the camp from Bellary; he had lost his limb in an accident 2 years back and he had come to the camp back for a limb replacement. Story of his will power and the transformation in life brought by prosthetic limb was a source of inspiration to the students as well as other patients.

Lending a helping hand

Complete IIMB community supported the camp with volunteers from every program of the Institute. Everyone including Professors, students of EPGP, PGP, FPM, PGPPM, exchange-program, spouses of students, EPGP office and staff, contributed towards making this camp hugely successful. Kajal, wife of an EPGP student and a physiotherapist, helped lot of people with medical advice.
PGP students said that it is a small industry that has been set-up in campus for this camp and was a good learning experience too. For Valentin, Alice and Johanna, who are here from universities in Europe on exchange-program, this was a unique experience. Alice, student from Italy, was amazed with scale of camp and said, “It’s good to see people walking on new leg and the way you are putting effort to provide this for free to them”. In my words, “The joy and satisfaction you get when you bring smile to someone cannot be expressed through words. You have to feel it when people who came to camp on wheelchair, walk back on their own”.

Truly, sometimes the little tears of joy make a difference.  

Eye Camp

Tuesday, September 17, 2013

Singapore Diary - Part V (and last)

Merlion Statue
Day 11 at NUS revolved around Real estate market and Prof Lum Sau Kim from NUS gave insights to the real estate is market growth in APAC which is expected to be twice the size of Europe market by 2031. Singapore government is a major player in providing housing to most of the population. Most of the people just buy property here and keep it as safe investment rather than putting it out on rent. On a side note, the estate brokers or developers make the money the same way as they do in India (by offering attractive interest rate at appreciated property price).

Next session was on Integrated Media Communications by Prof May Lwin, NUS. I was always amused how a child identifies chocolates so quickly and here I learnt that children have 200% more identification and sensory powers than normal adults which explains the behavior.

The last session of day was quite interesting where Mr. David Shaw talked about the challenges in marketing communications, how things can go wrong and how simple mistakes can lead to major implications. He revealed interesting marketing campaigns which went wrong and what should be done to prevent it. For example, an advertisement on Van for 'STARBUCKS' is displayed as 'SUCKS' when the van door is open :) or a Turkish Airlines advertisement on escalator looked like a plane falling down or how taking the customer for granted lead to loss of millions of dollars when that customer released a music album highlighting the incident on YOUTUBE.

Day 12 began with talk by My Anshuman Gupta, CEO, Strontium who talked about his journey, the challenges he faced in setting up a company, and how he created a space for himself in a market dominated by big players. He talked about some innovative marketing like putting logo instead of brand name, packaging in yellow color, targeting products for cars etc. Lesson for any start-up is to find fortune at bottom of pyramid. Next we had interaction with Prof Nitin Pangarkar who talked about strategies of Asian companies. How Kodak failed to capitalize on its competency with the introduction of digital cameras or how FAVNE has captured more than 60% of market in Robotics. In the evening we had meeting with Prof Sekhar for delivery of Smart City Project and he was very impressed with the work done by us. He also put forward the opportunity to continue working on this project after the immersion program and we gladly accepted the proposal.

Day 13

EPGP V Cohort

All Smiles
Last day of our exciting international immersion trip began with a photo shoot (required for brochure ;)) for the whole batch at NUS campus. Afterwards we had an interesting chat with Mr. Cecil Leong on challenges in business Environment and strategies which should be adopted to mitigate them. We also had pep talk by Mr. Ajay Jaiswal on wealth management and Christina Lim from Ocean Health on her journey to entrepreneurship. Our journey at NUS culminated with certificate presentations and a small gift by NUS. Afterwards, we went to Siemens building to see the advancement and research they have made in smart cities. We also had some fun with a working model towards building Smart sustainable city.

With this our journey to this interesting land of opportunities came to an end. It is really a wonderful country with so many opportunities and which has become a financial center without any natural resources or good weather. They do face challenges but those are anticipated and are dealt well. During the night went for shopping for some toys at Mustafa center, which is only place in Singapore which run 24*7. Its journey towards becoming shopping hub for locals is one of the many success stories hidden in streets of Singapore.

Some memories....

Ice Kachang - Expression says it all :)
Let the race begin
The tour ends

Saturday, September 14, 2013

Singapore Diary - Part IV

Alum Meet
Our only weekend
IIMB Alumni meet has been organized over the weekend so as to explore the business environment and opportunities and learn from their experiences. The alums first mentioned important takeaways from their career journey and there was 45 minutes of Q&A session. An important part of this meet was that we were divided into groups of 4-5 to have informal chat for 1 hour. I was particularly impressed with the humility and frankness of alums.

In the evening, we went to marina bay Sands to try our luck at Casino and I was surprised to learn that locals actually have to pay fees of S$ 100 for getting entry, and entry was free for the tourists.
We have heard a lot about Sentosa Island and one of the must visit places in Singapore. It is an artificial man-made beach and fun park and is frequented by everyone who comes to Singapore. No wonder a small country like Singapore is having so many tourists. It has worked very well within the constraints it had and developed its economy.

Day 9

Smart Cities, Siemens perspective
For week 2, the primary focus was on the industry and to learn about new developments here. One of the interesting concepts we learnt on this trip is about Smart Cities. As part of our international project, we are working with Prof Sekhar Kondepudi on defining Smart Cities and the work done so far on this. Monday was an interesting day with senior people from Siemens, Cisco, IBM discussed in detail on Smart City work, progress being made, lessons learnt so far and the opportunities it presents in future. Prof Sekhar discussed about the need for Smart Cities. He revealed mind boggling numbers on the data lying around and how most of it is unstructured. The way we are using the natural resources, there will be need to work on concepts of smart sustainable cities. We also had a chat with Mr. Steffen Endler, Siemens on their view and research projects. They have developed an interesting model to rate and compare the current city health which gives good indicator on where a city should target and invest to improve the quality of life of its people.

Mr. Gordon from Cisco has worked on a live project on Masdar, a new smart city being developed in Abu Dhabi. He discussed his experiences, views and lessons learnt. Some of the questions raised were around the return on investment, green energy and funding for smart cities. Similarly we had a session by Dr. Chen-Ritzo Ching-hua where she explained the research being done by IBM on these projects. How IBM is making inroads on such projects and why it makes sense for them to explore this area.  We also had some insight into the way Sodexho is doing business. They have discovered a unique opportunity in providing quality of life services at remote sites for industrial projects. Later in the day, we had a panel discussion with these speakers where people clarified their queries. I was wondering that this concept actually presents new wave of business opportunity as it is an elite market and cities and countries are making huge investments in such projects.

Discussion with our mentor

In evening we had a meeting with our project mentor, Prof Sekhar to discuss on the progress of the project and how we should take it forward. We discussed on the content of report and what areas to be targeted in report.

Day 10
The day started with session by Jayson Goh on Media companies and what lies in future. There will not be any need for typing in future and the machines will understand what you speak. This can open up whole sea of opportunities ad one critical barrier in using technology will be made redundant. Afterwards, the sessions revolved around the waste and water management in Singapore. Environment business is one of the biggest industries (to the tune of $300 billion) in the world today as all the nations are fighting to manage it. Singapore has very limited source of natural water and is dependent on water pact they had signed with Malaysia years ago which is due to expire. Besides this source, it is very costly to process sea water. Within these constraints, they invested in technology to recycle water. The water recycling technology is so advanced that one can drink water from any tap in Singapore as it meets WHO standards.

We also had a visit planned in the evening to water processing unit and waste management plant. Almost all the waste in Singapore is incinerated and is used to produce energy. This helps in dealing with the waste produced. The ash from the plant is dumped at a remote site in ocean and there is a plan to use that site once it is completely filled.

Friday, August 30, 2013

Singapore Diary - Part III

Preparing for the Friday event
Since the time I have landed here, there has not been a single day when this small country has failed to amaze me. I mean even Delhi is more than twice the area of the size of this country. Here people pay almost ten times more than what I pay in India for owning a car. Imagine paying 50 lakhs for a Swift or 90 lakhs for Toyota Corolla!!! The weather is not at all pleasant, cost of living is high, single party system, caning is still prevalent as mode of punishment and what not, but still it is a favorite destination amongst businesses as well as tourists. Unfortunately, even though Indians contribute a lot to the Singaporean economy, corporates or policy makers are hardly betting on India which can be interpreted from the discussions we had or presentations that were shown.

Trying Chinese Lunch
 Just the other day, there was a discussion on Chinese culture and surprised to hear that it is not difficult to distinguish a Singaporean Chinese from China Chinese. It was an eye-opener to know that Indian and Chinese culture have similar elements. We had tryst with Chinese food and our effort to use chopsticks were marked with irony. I am not joking, and it is quite an effort to eat with chopsticks and it in a way proves that these folks are really hard working. It is another story that most of us went to food court to satiate their tummies. In the afternoon, we had quite a productive discussion at Research Management Institute at NUS where we got to learn about the mechanism being followed by different rating agencies around the world. The common aspect between rating agencies is that everyone uses around the same data source but come up with different rankings based on their evaluation mechanism.

Understanding Art and Culture
The sessions at NUS are slowly getting serious with talks by Industry experts, business houses and government agencies in Singapore. We got deep understanding on how Singapore is controlling its exchange rate against basket of currencies despite being a surplus economy. An industry talk session by CEO of CWT Limited was quite fruitful. We always thought that China is the place for cheap labor, but was quite interesting to note that Indonesia, Vietnam, Cambodia are much cheaper. Despite pay higher rise expected in these, they would still be cheaper than China. Also learnt about the efficient cargo clearing capability of Singapore where 80% of cargo is cleared in 8 minutes while 100% is done in 15 minutes!!!
Jurong port
The talk by Zafar Momin who is on board of MapleTree Trust was quite interactive with many counterviews with regard to strategy and implementation coming up. The discussion was mostly centered on real-life and he stressed on understanding rather than memorizing. He mentioned lot of interesting quotes one of which is, "If the going is too easy, may be you are scratching the surface". Explained in simple words that life is challenging and nothing comes easy. We also visited Jurong Port which is a privately managed port in Singapore primarily handling cement cargos. I was pretty excited for this as I have never been to any shipping facility before. We also had a visit to Ikea Factory and got insights into its marketing and sales strategy. The layout is designed in a very convenient way so as to make it easy for any customer and at the same time optimizes its operations cost. No wonder they sell the stuff cheap and most of us contributed to Ikea cash flow that day :).

Tuesday, August 27, 2013

Singapore Diary - Part II

Our discussions next day were focused on the Singapore, how it progressed despite having minimal resources and its development as a major hub for transport. We were surprised with the story of turning itself into a major financial center since its Independence. Probably the single party system played a big role in this. There was a fascinating comparison between roving vs. stationary bandit wherein even if there is a bandit who does not change places, it will be to his benefit that locality grows as he will have more at his disposal for his adventures. Another interesting fact was that there is no multiplier effect in Singapore economy because if leakages in system - hard to believe this for this fast paced economy. One has to appreciate the development advancement and infrastructure in this small city of 710 sq. km where more than 20% land is reclaimed from sea. Not sure how much ecological impact will have on the environment and marine life. 
We had a small talk on the movement of global economy around China and it has taken a shift from the time when it was centered on Japan and US. One astonishing observation was the role China is playing in the development of East Asian countries and how it is benefitting from it. India it seems is being left out because of its foreign policy which is not focused on East Asia. For example, we are not utilizing our historical ties with Myanmar for increasing trade with mineral rich Myanmar while China is making significant inroads because of our lax policy.

Should we invest here?
Post lunch, we had a lecture on the Aviation industry by Prof Anthony Chin, Academic Director for EPGP immersion. He described how aviation industry is fueling economic growth and what are the new models developing. Like what has been implemented in Tiger Airlines where there are charges for every single feature which were earlier considered basics in airline industry. There was an interesting talk on the port development and it’s financing.
I think Singapore has done a commendable job in coming this far. In the words of first PM of Singapore, Lee Kuan Yew, "there was no secret; we had no choice but to take a chance and sail into rough waters.” There are many lessons to be learnt from Singapore development by other countries like political stability, quality of governance, high salaries to ministers, openness, high cost of rebellion, single party system. We might not agree with all, but this model is effectively working for them.

Lets find some rodents
To surrender or not?
Of course we had our fun moments during the day. Some of us roamed around appreciating the beauty of campus while some were busy shooting rodents. So far, every day is bringing something new about this small country along with interesting cuisine. One thing I got to know is that this country is all about food and people love eating all the time. I have not find so many food joints and restaurants in every nook and corner even in India.

Monday, August 26, 2013

Singapore Diary - Part 1

Start of Journey
Waiting for boarding pass
As soon as we got breather from Term II exams on 16th August, the focus shifted to the 2 weeks international immersion program in Singapore, one of the top ten financial centers of the world. The enthusiasm of the batch was there to see and it reminded me of my school/college trips. Even though I have had numerous trips to Americas and Europe, a trip to East Asian was a first to me like to many of us and probably first trip outside the country for few of us. We boarded the 12:45 AM flight to Singapore to begin our 2 weeks journey at NUS. Once at the Singapore airport, most of us bought some stuff at duty free shops to take care of essentials for next 2 weeks.
Singapore, we are here
As we stepped out of airport, I was reminded of the sticky weather of Chennai or the hot summers of Delhi. It was totally different from the pleasant weather of Bangalore I have been enjoying for last 5 months. Once we were at our hotel, most of us dozed off to catch the lost sleep of previous night, while the higher mortals went to take a dip at the swimming pool. In the evening, it was time to browse the happenings all around. We went to Bugis mall which was quite close to our hotel. The first day itself, I realized that it is going to be challenging here to satisfy my vegetarian appetite, though my friends with taste of meat loved the variety of delicacies on offer.
First Day at NUS
Next morning, we started our first day at sprawling green and splendid NUS campus. It is lush beautiful and very well maintained. At the university, we were welcomed by Professor Tilak from Department of Economics, NUS. With that we kick started our journey to understand ASEAN economies. The first lecture by Professor Shandre provided invaluable insights to the ASEAN countries, their distribution and economic progress. We also learnt about how ASEAN countries have progressed from 2000 to 2011 after the Asian financial crisis of 1998 and also the impact of recent financial crisis of 2008 on the progress in these countries.
While in India, we keep on hearing about China and its fast paced growth, and it was no exception here. We also learnt that though China can play strong role in US, European economies etc. but they do have big challenge of managing social unrest. This blip aside, China is in fact a major player in ASEAN economy and the impact of growth in China is clearly visible here. An interesting aspect to know was that growth in Australia is directly influenced by growth in China as it exports most of the minerals to China. After that we had discussion on how India fits into the scheme of things at ASEAN and the trade pact, AIFTA, which India has with ASEAN. The drivers for growth in both regions were elaborated as India is a supply driven economy while ASEAN is demand driven economy. As mentioned by Prof Shandre, India has to improve on its policy making, Infrastructure and Innovation in its vision for 2020 and to have big impact on this region.
Later we had superb business insights by Mr. Sameer Arora, founder and Fund Manager, Helios Capital Fund. The discussion was very candid and he had a story for every situation. One interesting question was on the depreciation of rupee if exchange rate changes from 50 to 60 for a dollar. Most of us were caught at wrong foot as all along we have been calculating dollar appreciation and not rupee depreciation. Another takeaway was that there are cyclical changes in the equity markets and we should not be afraid of it. The best time to invest is when the market is slow as then you can get larger returns in long run.
Post Lunch we had meeting with Prof Sekhar for the project on Smart Cities. This is part of our international group project being driven by ITU for United Nations. We discussed the plan and deliverables for the project. With that we ended our first day at NUS.

Thursday, July 18, 2013

Is Congress playing into the hands of NaMo?

While we all are busy washing dirty linen for last 2 days, my thoughts wandered towards the fancied ways NaMo is adopting to arrive at the big political scene and the flutter being generated by his 'puppy' comments. It was only few months back that BJP was struggling to find a leader who can spearhead their campaign for next General elections and bring them back to power. And then they have been taken over by this NaMo effect.

It is known to everyone including the Congress party that they have very difficult chance of coming back to power and BJP thought they had great chance to grab top post. But what they were missing was a charismatic leader - one who can keep the flock together and who can decrease the dissidence prevalent in the party. It is surprising to note that after initial cribbing, most of the voices within BJP against the elevation of NaMo has gone silent. The elevation has had an exponential effect on the morale of RSS cadres who does all the ground work. It seems that someone has infused fresh leash of life into them.

The point to ponder is whether Congress has enough ammunition to ward off this threat and gift 'yuvraj' coveted post in the country. Is it only a veil on secularism which will be sufficient and even if it makes a difference, is Congress overdoing it? The way comments are coming in from senior Congress leaders indicates that everyone who is a Hindu is communal and everyone else is secular. Within no time, BJP has been branded a communal party and a threat to country's secularism culture. In my opinion, the elevation of NaMo has come at an opportune time as this mud-slinging campaign against communism would live its life much before the elections.

I must appreciate the meticulous and articulate work his team is putting in to make this person larger than life and ensuring that NaMo has very high visibility in all sections of society. The recent 'puppy' remark has generated a lot of controversy. Was it a slip of tongue or deliberate act on his part? To brand himself as a 'Hindu' nationalist has been condemned by various other parties. Only a fool would believe that NaMo had accidentally generated such controversies. He plans his acts very carefully and never have seen him making any controversial statements. One thing is for sure that this guy is garnering huge chunk of publicity at Congress' expense and expanding his reach.

Many will agree that NaMo likes to focus his campaign on development agenda and probably he is just ensuring that Congress and all the 'secular' parties run out of any ammunition they have and then he can start propagating his agenda. Since he would have reach to larger parts of society thanks to Congress, people would actually like to evaluate him and I doubt he will then create any furore with any such controversial comments.

It looks quite obvious to me that controversies are being created with larger cause in mind. Instead of focusing on the remark, it will do political parties more good to look behind the scenes and probably unearth a bigger picture. The comments are not directed to any section of society but they are being made to appear like that.