SNS: THE REAL WORLD

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STRATEGIC NEWS SERVICEä

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The most accurate predictive letter in computing and telecommunications

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This March 10th, 1998 Issue:

***SNS*** THE REAL WORLD

 

 

 

 

 

Provided by: Technology Alliance Partners

On the Web: https://www.stratnews.com

 

 

 

 

 

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This March10th, 1998 Issue:

***SNS*** The Real World

 

 

IN THIS ISSUE:
  • Three New Laws of Physics
  • Two More
  • General Relativity and Quantum Mechanics
  • Electric Charge and (A)Symmetry
  • Space Has Mass
  • Insites
  • Upgrades and Ethermail
  • Bride O' Week Gets Hitched Again; Jilted Honey Looks Funny
  • Compaq's Woes
  • IBM Gets Serious
  • Barry and Paul, Chapter Three
  • Intel's Woes
  • New Palm Pilot, But ---
  • Qwest Buys LCI: New Telco Gorilla
  • Client-Server vs. Browsers
  • SQL Server vs. Oracle
  • Siebel/Scopus vs. ERP Leaders
  • How to Subscribe, Including Corporate Volume Licenses

[A note to first-time readers: While SNS is almost always controversial, this issue is unique. I occasionally cover something which is off the beaten path, but which will affect the technology industry. One might argue that a revolution in physics will have such an effect. We'll come back to computing and telecommunications with a vengeance next week. Really. I promise -- mra]

 

 

The Real World

For SNS subscribers, the last couple of weeks have been kind of tough: very long, and quite analytical, pieces.

So this week, I thought I should offer something else, something light, like a fine sherbet taken after a heavy meal. And what could be more piquant and zesty than -- three basic (and undiscovered) laws of physics?

We are going to go exploring this week, and - with a bit of luck - come back with what makes the (physical) world work.

Why bother? First: All of us deal in the speed of light, and with light itself, as we try to coax electrons and photons down various wires and glassine tubules. And Second, it is probably good practice for a publisher to keep his readers in a state of constant excitement and apprehension by occasionally hurling the unexpected their way. Past examples include new (Patentable ?) router designs, a new field of science called Shape Theory, warnings on the health effects of electromagnetic radiation, and concepts like Earth II.

I should add one more, perhaps slightly reassuring, set of comments: First: These ideas are based on work I did, and actually attempted to publish, in 1979, under the title "Resonance Theory." In preparing this paper, I discussed various parts of it with several Nobel physicists, a well-known Einstein colleague, and the world's best mathematician (and no, he isn't Stephen Hawking). I also spent a quarter in private meetings with a professor emeritus in physics doing and proving derivations and applications to show its consistency with thirteen force laws. (I am not mentioning their names here in order to protect the innocent.)

And, last: when this work was first done, the physics world considered empty space to be (almost) empty; today, everyone knows this is false (they just don't quite know HOW false). And superstrings had yet to be invented; in fact, the paper was rejected by Physical Review because it used string mathematics, something the peer reviewer found inappropriate. Today, 19 years later, strings (and their sister membranes) are almost universally accepted as the most powerful mathematics in physics.

Here, then, is what you can bring to your next gym workout or cocktail party, without fear that your audience has heard it somewhere else. Heck, I'll even skip the math part.

The simplest way I have found to lay out Resonance Theory is to reduce it to three ideas:

1. Empty Space ("the vacuum") is not empty, but has an inherent geometry and physical properties.

2. The speed of light, "c," represents not so much a classical velocity, as a unique resonant geometry of interaction.

3. Electromagnetic radiation itself (including, of course, light) is the resonant activation of (otherwise-empty) space.

Pretty simple, eh? The basic idea here is to take the next step beyond General Relativity and Quantum Mechanics, where - despite protests to the contrary - we have been pretty much "hung up" for the last 50-100 years.

Of course, there are many more than the above three points to this thing, but since the human mind likes threes, I thought, what the hey --

OK, here is a fourth:

4. "Normal" matter (matter with rest mass) and antimatter are mirror geometries which, when brought together, create the geometry of activated space we call "light." (I'll use "light" instead of "electromagnetic radiation" in this issue for reasons of poetic license). In this view, the property of electric charge is simply one or the other of these mirror geometries.

By now, of course, everyone at the cocktail party has fallen silent in wonder, hanging on your every word ---

So we might as well give 'em something else to chat about on the ride home:

5. The Principle of Least Effective Action, originally derived by the French to calculate artillery shell trajectories, contains a much deeper physical (and mathematical) application. Although it is commonly known that Nobelist Richard Feynman used it as a centerpiece of his work in developing Quantum Electrodynamics (the most accurate physical theory yet devised), it has much wider application. This formula, and a derivative of it, produces all force laws. It also seems to be the basis for the Heisenberg Uncertainty Principle.

At this point, they'll probably just start laughing out loud at you, since everyone knows that the HUP has a completely different history and application than QED and the PLEA. Let 'em laugh, I say.

At this stage in our wee chat, you are probably starting to mentally picture a different universe than the one you thought you were living in at the top of the page. That world was made of solid points of matter inhabiting empty space, communicating with beams of light or (interchangeably) particles of light called photons. This world -- why, the whole thing is made of space, and space is not only not empty, but has measurable physical properties. Since mass is a curvature of empty space you might say it even has mass! What's worse, it has an innate geometry -- a preferred way of containing energy, you might say. And light is nothing more than space resonating!

In fact, the trend in theoretical physics toward accepting the power and beauty of symmetry as a tool, now is given a physical basis, and this elevation of symmetry and geometry represents not a toolset, but inherent qualities of the vacuum.

Of course, you knew from high school that even Maxwell recognized the speed of light not as so many meters per second, but -- strange coincidence of terms! -- the ratio of the square roots of the electrical and magnetic properties of -- empty space! How could meters per second be equal to this ratio of permittivity to permeability ?? Wild.

Guess I'll stop using the shift key now. By this time, either the party guests get it or they don't. Of course, there are always Doubting Thomases. That's why I've saved up a little something special for you, a throwaway line to use on your way out the front door.

"Of course, you news hounds will know that an amazing discovery was announced this week: measurements of the expansion of the universe seem to indicate a linear increase in expansion rate with distance. Interpreted by some as "anti-gravity" (which it is not), the simplest interpretation of this discovery, set to be published in Science this week, is that "space itself" has mass, and so contains energy."

If that doesn't win 'em over, forget it. They probably just came for the food.

 

Your comments are always welcome.

 

Sincerely,

Mark R. Anderson

President

Strategic News Service Tel. 360-378-3431

P.O. Box 1969 Fax. 360-378-7041

Friday Harbor, WA 98250 USA Email: sns@tapsns.com

 

-------------------------------------------

INSITES

SNS readers interested in additional predictions and information can turn their browsers to:

Our website, at https://www.stratnews.com.

The new Earth II site, for those interested in assisting in mapping our planet onto the Web, at https://www.earth.to.

At the Seybold Seminars website: https://www.seyboldseminars.com.

The Microsoft Internet Explorer Start Page at https://home.microsoft.com, during the first week of each month, for predictions by Mark Anderson, as part of the Vision series in Microsoft Internet Magazine; past columns can be found in the magazine's archive. This week's issue: "The Future of Online Advertising."

SNS at the Interop Resource Directory: https://www.interop.com/Interop_Online/htdocs/resources.html, and now at Club Interop as well.

 

 

New to the Family:

I would like to welcome, among others, these new members to the SNS Family: Carrie Casanas, Dir. of Finance, Gordon Kass, VP Eng., and David Chamberlain, VP Inf. Sys., who with their company Starwave have joined our Volume License Program; Hakan Thyr, Cambridge Information Systems (Boston); and Allan Marshall, MediaBase, UK.

 

Quotes of the Week:

"We had to do something radical. We weren't meeting our plan." - Compaq CFO Earl Mason, on how inventory backup led to price cuts.

"In some respects it's a little like watching your mother-in-law drive over a cliff in your new car. You're not sure what you're going to feel about it." - LCI CEO H. Brian Thompson, on the sale of his company to Qwest.

 

 

UPGRADES

 

Bride 'O Week Gets Hitched Again: Jilted Honey Looks Funny

That's right, folks, we're talking about Telefonica de Espana, who announced yesterday morning that they were partnering up with WorldCom/MCI; both TE and MCI were once dating British Telecom, but in recent interviews have indicated that it was "never really that serious." Asked if TE had had deeper feelings for AT&T, whom the hot-blooded telco had earlier jilted for BT, one source said, "We never knew what love was until we met WorldCom."

This gives WorldCom the greatest access of any third party to the South American/Latin telecom markets, and leaves BT looking even, well, dumber.

With aggressive stakes in Argentina, Chile, Peru, Venezuela and Puerto Rico -- guess what has to happen next here? Why, Brazil, of course. Time to brush up on that Portuguese --

 

Compaq's Woes

This is an inventory problem, apparently beginning with overaggressive internal forecasts as early as last summer. Remember when almost the entire senior management team took off? Now you (probably) know why. With CEO Pfeiffer pushing from the other side, and the company selling receivables (lame) in Q4 to keep the numbers up, the problem is not about current PC markets, but about using industry-leading aggressive pricecuts to blow out aging boxes. Eckhard saw this coming, and has had angry meetings with execs in the last few months; now he must be furious, even as Dell Computer gave out "no worries, mate" signals last week.

If you read the WSJ's inner headline last Monday: "Compaq Stumbles as PCs Weather New Blow," you can ignore it. This is not about PC demand; they're selling in increasing numbers of units. Expect more erroneous headlines as we move into the next phase of PCs and Handhelds.

IBM Gets Serious

The other non-CPC issue facing Compaq is a - dare we say it? - brutal counterattack by Big Blue on the high (server) end of the market, a place where Compaq has historically achieved margin balance across all lines by charging just a wee bit more. IBM cuts in Q4 looked to approach 30%, which is quite aggressive for the Bluester.

Even more shocking is this little quiz:

Q. Who was the fourth largest spender on TV advertising last week in the U.S. ? Ahead of, oh, AT&T, Nike and VISA?

A. Why, the IBM Internet folks, of course. Read "E-Commerce," as in full page WSJ ads. Now, read "Internet Servers," and, right after that, IBM's new message to Compaq/Digital: "Not In My House." As Shakespeare might have put it, the battle is joined.

This is going to be a Major Dustup. It turns out that IBM doesn't want Compaq to take its place. I'd say someone in Poughkeepsie decided that this is where they draw the line.

 

Barry and Paul, Chapter Three

Barry Diller's USA Network announced this morning that the company would take at least 50% of TicketMaster. SNSers know that I've thought Paul (a subscriber) has wanted to do some serious online selling with Barry since they first met. Should be interesting.

 

Intel's Woes

CEO Andy Grove has spent a decent amount of his time in print and media in the last five years back-patting his team and company for recognizing and responding to what he calls "strategic inflection points." Too bad they missed the CheapPC (yes, there were Intel VPs reading SNS then; and no, I won't tell you who), the most important event in PCs in a decade.

Intel says this new earnings warning is not about that, and adds that unit sales are fine. I believe that would be "Hooey," although we can assume Compaq's problems are having some Q1 overflow effect as well.

Q: What do you get when you put Celery into Celadon? Celeron, of course, the company's new CPC chip. Or maybe someone gave a prototype to VP Ron Whittier, and asked: "Can you sell'er, Ron?" Sorry about that.

 

 

New Palm Pilot, But --

3Com announced a new PalmPilot this week, hoping to maintain or grow its 66% share of the handheld organizer market, even as Microsoft and allies prepare new WindowsCE-based units. The PalmIII will be priced at $399, available in April, with a thinner form factor, 2MB RAM, an infra-red data channel, and new synchronization software.

While I have long been a booster of this product, and while I think this next iteration will probably succeed in the short term, I have some very serious reservations about the long-term future of this product family: 1) I am concerned about the stability and strategy of its parent; I particularly don't see how it will fend off Intel; 2) I suspect that the proprietary operating system will become a liability, as the market becomes flooded with me-too CE boxes this year; and 3) the advantages of OS extension will probably reach into this new category, as Moore's Law begins to allow handhelds all the power of yesterday's - and tomorrow's - PCs.

Qwest Buys LCI: New Telco Gorilla

My favorite aspect of this new merger -- other than creating a New Telco powerhouse -- came through the press releases yesterday. Release #1, March 9th 12:06 pm: "LCI International Agrees to Acquire Qwest Communications." Release #2, March 9th 12:09 pm: "Qwest Communications agrees to Acquire LCI International." Had to be an intense three minutes.

What Qwest gets for its $4.4B: a place as the fourth-largest U.S. long distance company, a successful multi-level marketing organization, a $480MM residential base, a sophisticated billing system -- and VP Anne Bingaman, past head of the Anti-Trust Div. at the DoJ.

It's funny: I saw Qwest CEO Joe Nacchio just a few weeks ago, during a talk I gave at a Merrill Lynch telecom retreat -- and he didn't mention a word about this. Must have been a secret. Nah, the deal only took two weeks.

There's a New Kid in town, guys; I expect Qwest to join WorldCom as the New Telco leaders. Joe's just that kind of guy.

 

 

ETHERMAIL

 

Re: SNS: Microsoft Unleashed: Products and Future Markets

Mark,

Your analysis of Microsoft is very helpful. As have been all of the writings I have read to date. It's the best use of $$ I have made in a while.

Your mention of SAP/BAAN and the like raises a couple of questions. In light of Intranet technology - its cost, ease of use, short learning curve, flexibility, etc. - are companies that are spending large sums on client server technology creating another round of expensive legacy technology? Or are SAP et al easily compatible with Internet technology? Or do companies care??

Thanks for your thoughtful writing. Keep it up.

Tom Johns

EnvisionIt

Tom,

I expect all of the major enterprise software firms to provide clients that will run compatibly within browsers. Certainly first-tier firms like SAP, Baan, Peoplesoft, etc., most of whom are already partnering with Microsoft and/or Netscape, will make sure they are running properly as the browser becomes integrated with the operating system.

And, since training costs are a critical aspect of the corporate cost of ownership, which increasingly drives purchasing, the answer is a definite Yes, They Care.

Mark Anderson

 

Mark,

Re: SQL Server vs. Oracle

You are absolutely correct that it is nearly impossible to dislodge existing installations of enterprise database engines. However, Microsoft does not have to dislodge any existing installations to win. All they have to do is start taking a significant percentage of the new installations. Oracle will keep its installed base for a long time, and will be able to continue to milk it with upgrades and consulting. Within 2-3 years SQL Server could end up with a larger market. This is by no means pre-ordained at this point, but if Oracle doesn't get really focused really quickly it could easily come to pass.

 

Steve Wood

President and CEO

Wireless Services Corporation

Steve,

My point exactly. The only issue here that I might pick apart has to do with numbers: while MS conceivably could use the explosion in enterprise software to boost SQL sales to new accounts and impressive numbers in new account penetration, it will be a very long time until they see the same success when measured in installed base.

Mark Anderson

 

Mark,

[You wrote:]

"Siebel Systems Buys Scopus

When Number One buys Number Two, Number Three better watch out. That would be Onyx -- great company, nice guys, but -- yow, now we are going from Competition to, ah, a larger challenge.

This area -- intense automated sales support, integrated with everything else -- is HOT."

You are absolutely correct that this market space is Hot. Adding more fuel to the fire is the entrance of all the major ERP vendors (SAP, Oracle, Peoplesoft and Baan.) With their broader enterprise view and account control, the ERP players are in postion to get the lion's share of the SFA/customer care market going forward. Merging -- and doing it when then did -- is the only hope the existing players in this space have of survival when the real action begins over the next couple of year. Here's a really safe prediction: Siebel/Scopus will soon be the number one in the current market space by default. But it will be number two or three to the ERP vendors.

Cheers

Brian Edwards

Waggener Edstrom

Portland/Seattle

Brian,

You have to wonder whether they won't just get picked off by one of the top three or four ERP players; that would certainly be along the current trend. Although they probably feel that they have created a new entity with enough critical mass to survive and prosper, it just makes them a more attractive target to the next tier of players.

An interesting aspect of the database applications world, however, is the difficulty of digesting new acquisitions -- not for business or personnel reasons, but because of the headaches of integrating variant core technologies. PowerSoft and Sybase kind of leap to mind --- all of which may buy a little extra time for the Siebel folks.

Mark Anderson

 

 

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About the Strategic News Service

SNS is the most accurate prediction letter covering the computer and telecom industries. It is personally read by the top managers at companies such as Intel, Microsoft, Sun, Netscape, and MCI, as well as by leading financial analysts at the world's top investment banks and venture capital funds, including Goldman Sachs, Merrill Lynch, Hummer Winblad, Venrock and Warburg Pincus. It is regularly quoted in top industry publications such as PCWeek, Infoworld, Institutional Investor, Upside, the Financial Times, the New York Times, and elsewhere.

 

About the Publisher

Mark Anderson is president of Technology Alliance Partners, publisher of the Strategic News Service(tm). TAP was founded in 1989, and provides trends and marketing alliance assistance to firms leading the convergence of telecom and computing. Mark is a director of Internet content provider PreText, Inc., and a Seybold Fellow. He is the founder of two software companies and of the Washington Software Alliance Investors' Forum, Washington's premier software investment conference; and has participated in the launch of many software startups. A past director of the WSA, Mark chairs the WSA Presidents' Group.

On March 19th he will host Teledesic President Russell Daggatt in Kirkland, WA, for the Washington Software Alliance Presidents' Group; Washington residents may reserve by calling the WSA at 425-889-8880. On April 9th he will serve on a panel in Seattle at the Bellevue Hyatt

reviewing the annual Price Waterhouse technology forecast.

In between times, he'll be filling potholes on a road that seems to get longer every Spring.

 

 

 

Copyright 1998, Strategic News Service

ISSN 1093-8494