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Dana Blankenhorn
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Dana Blankenhorn http://www.danablankenhorn.com has been a business journalist since 1978, and a futurist all his life.He warned about the coming Houston oil collapse in 1979. He began making a living on the Internet in 1985. He launched the first e-commerce daily for CMP in 1994, warned of the... More
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Dana Blankenhorn
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Dana Blankenhorn and the War Against Oil
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Moore's Lore: Better and Better, Faster and Faster
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  • The Problem With Remetty

    I applaud the fact that incoming IBM CEO Virginia Remetty is female.

    But I do have to question the fact she's being promoted from “senior vice president and group executive for sales, marketing and strategy.”

    The reason I worry about that is that she's the kind of get along, go along hire that has gotten IBM into trouble in the past. People like John Opel, Frank Cary and John Akers,  good people who made their careers at IBM, who understood its corporate culture and reveled in it.

    When your focus is on marketing, you can often lose strategic sense. When your focus is internal, you can easily miss opportunities, and the need to constantly reinvent a company if it's to thrive. The line of IBM chairs I just cited were all blind to the threat of the PC. They made the company vulnerable to the first kid with a clue who came along. They got suckered by Bill Gates, and it's taken decades to get the market cap lead back.

    The most notable decision Remetty is credited with, in IBM's own press release, is the integration of PriceWaterhouseCoopers into the organization. That's a purchase that was made almost a decade ago. No offense, but what have you done for me lately?

    We're told that Ms. Remetty cares about “the cloud.” Who doesn't? What about it? How are you to keep IBM growing in an era when more-and-more corporate data is moving to an architecture that saves them vast sums over buying, say, IBM mainframes?

    And that's the elephant in the room. IBM doesn't like to admit this, calling itself a “global services company,” but its profits still come from mainframes, from big iron, and while those profits are still rising the cloud has to ask, how long?

    The whole idea of the cloud is that you can, with a collection of ordinary PC-type parts, build capacity greater than any multi-million dollar mainframe. Sure, IBM retains its customer control in the mainframe space, but as the gap between mainframe and cloud costs continues to grow, how long can that continue?

    These are not marketing questions. These are strategic questions. These are questions that call for dramatic reinvention. You take a nice marketing person from inside and you're hiding from those questions.

    I'm hoping to be pleasantly surprised starting in January, but I'm keeping my powder dry and unless these questions are addressed I'm heading for the exits.



    Disclosure: I am long IBM.

    Additional disclosure: My IRA bought 100 shares back in 2005.
    Oct 27 1:00 PM | Link | Comment!
  • Next Stage in Solar Already Started

    China won the last round, but the great thing about fast-changing technologies like solar energy is that a new round is already just around the corner, fueled by growth

    The National Solar Jobs Census estimates there were over 100,000 people employed in solar energy this August, about half in blue-collar installation jobs, and predicts growth of 34% for the sector next year.

    While there are new U.S.-based producers coming on-stream in the next round, like Sunpreme and Stion , American emphasis this time will mostly be on getting costs down toward “grid parity” and financing new business models.

    Public markets will be looking to see which companies among a pack that includes Chinese silicon cell producers such as Hanwha Solar (HSOL), Canadian Solar (CSIQ) and SunPower (SPWRA), or Japanese companies like Sharp, make a breakthrough in the U.S. markets with new designs emphasizing “micro-inverters,” which turn DC power into AC power at the level of the solar panel

    The big name in this business is an American company, Enphase Energy, which has filed papers for a $100 million IPO to fuel expansion, mostly based on a standard called Zep Solar  from a company that closed its first round of funding last year. 

    It's true that 2011 has been very unkind to solar investors. The Guggenheim Solar (TAN) ETF has lost half of its value this year amid brutal price competition, as has the Market Vectors Solar Energy ETF (KWT).

    But that's a good thing. Technology follows a natural boom-bust-boom cycle. Lessons are learned, costs are cut, start-ups emerge, all aimed at turning today's fire sale prices into a cost ceiling for the next round of production. Without such a cycle progress stalls.

     

    Growth, meanwhile, continues.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Oct 19 9:02 AM | Link | Comment!
  • A Stimulus Program That Saves Money

    A French reporter called me yesterday afternoon, after I wrote about the failure of Solyndra here.

    She was asking about whether the President was in trouble, due to the failure of loan guarantees to jump-start the industry. I agreed those programs had not worked, adding government has two roles in renewable energy, expanding research and guaranteeing a market.

    The President has taken two important steps recently to assure a steady flow of research dollars. The first was the Defense Department's commitment of $7 billion to becoming more energy-independent. The second was the rise in CAFE standards. 

    Then I told her that the best possible short-term stimulus that might come from the President next week would focus on the cheapest form of renewable energy there is, something we have more of than any country in the world, something we can access cheaply and without new technology.

    Efficiency.

    Companies like Apogee Enterprises APOG, 3M MMM and Owens Corning OC, which are involved in insulation, could assure a return on loan guarantees, because insulation pays for itself in energy savings.

    All three should be selling for more than they are, because all three deliver value for money to people who buy what they make. Much more than a Solyndra or Evergreen Solar, which were trying to compete with Chinese labor costs head-to-head.

    Most homes poor people live in are poorly insulated. Most are rental units. What if you gave the owners of those units loan guarantees for improving insulation? The investment would pay for itself from the savings, we would lower energy demand, and working people would actually benefit.

    Unlike solar panels or wind farms, insulation is labor intensive. The insulation industry is local, it's mostly composed of small businesses. Give these people an incentive for hiring and most hires will be high school graduates who have the highest unemployment rate right now.

    Stimulating the purchase of energy-efficient appliances, of devices that turn-off electricity when appliances are not in use, and even LED lights for ball fields and businesses provides a quick bang for the buck, puts people to work, and lowers demand for all forms of energy.

    If America were as efficient in its use of energy as our economic rivals are, energy prices would be reduced and we would be more competitive in every area. The flip side of having 4% of the world's population using 25% of the world's energy means we have more of this cheap renewable energy around than any other country.

    Drill that, tap that, exploit that, and you'll put more people to work, and get a more sure return on any government spending, than through any other program. It's probably the least controversial program the President could propose.

    Industry has gotten the message, and energy use there has been going down for years.  Commercial landlords now use more electricity than our industry does, and could put incentives to use right away. Residences can use the help and many consumers would take advantage of it.

    It's easy money.

     

     



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Sep 02 10:53 AM | Link | Comment!
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