Posts Tagged ‘Microsoft’

Bill Gates, Sr.: The Rich Must Pay More Taxes

Monday, December 19th, 2011

Bill Gates, Sr., a retired attorney in Washington state, supports a ballot initiative that would require the state’s highest earners — including himself and his son — to pay an income tax.  Currently, the state does not collect personal income taxes.

The father of billionaire Microsoft founder Bill Gates, Jr., believes that the poor pay too much tax, and that the rich don’t pay enough.  Washington’s school system, which is a catalyst for future economic growth in the high-tech state, suffers from too little funding because the wealthy aren’t paying their fair share, according to Gates.  His 1098 initiative — an income tax on adjusted earnings that exceed $400,000 a year per couple or $200,000 for an individual — is drawing protest from Washington business leaders, as well as anti-tax groups.

Initiative 1098 would give tax credits to approximately 80 percent of Washington-based businesses and slash the state share of property taxes by 20 percent for businesses and homeowners.  According to critics, the legislation would harm the economy by taxing the earnings of people who own the businesses — money that would be used to put people back to work.  The opposition’s Defeat 1098 campaign believes that an income tax on 38,400 of the state’s highest earners would take away vital competitive advantages and drive away entrepreneurs.  Even Governor Chris Gregoire’s Commerce Department has publicized Washington’s lack of an income tax in statements about the state’s business climate.

Gates considers Washington state’s tax system to be “dramatically regressive”, something that was proved in 2002 when he led a commission created by the Legislature to study the state tax system.  The commission recommended replacing the sales tax or property tax with an income tax that would rebalance the load.  Gates cited data gathered by the national Institute on Taxation and Economic Policy that show Washington’s poorest 20 percent pay 17 percent of their income in sales, property and other taxes.  By contrast, the wealthiest one percent pays less than four percent.

The initiative would impose a state income tax on individuals earning more than $200,000 and couples earning upwards of $400,000.  In other words, single people would pay a five percent tax on income over $200,000 and nine percent tax if they earn more than $500,000.  Couples would pay five percent over $400,000 and nine percent if they earn a combined income that exceeds $1 million.

“It’s not a matter of picking on someone,” Gates said.  “It’s a matter of correcting to some extent a bad historic situation and arguing — I think absolutely persuasively — that this is a proper source for a serious financial shortfall in our operations, namely the public education system.”

Gates’ proposal also has met opposition from Steve Ballmer, Microsoft CEO, and Jeff Bezos, President of Amazon.com, both of whom donated $100,000 to anti-tax groups.

Another voice of opposition is Stephen Moore, who wrote in the Wall Street Journal, “I wish I had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes. That list includes Warren Buffett, George Soros, Bill Gates Sr., Mark Zuckerberg and even Barack Obama, who now says that not only should rich people like him pay more taxes, they want to pay more.”

Gates is joined by Berkshire-Hathaway CEO Warren Buffett in calling for higher taxes on the wealthy.  President Obama supports “the Buffett Rule”, a guiding principle to ensure that the rich pay as large a percentage of their income as the middle class.  Some millionaires insist that Buffett doesn’t speak for them.  “There is more of a difference between my financial position as a multi-millionaire and Buffett’s than there is between mine and a guy that makes minimum wage,” one CNN Money reader said.  “Why am I grouped with him and why does he feel he can speak for me?”

Just 24 percent of millionaires said higher taxes on large incomes is the optimal solution, according to a survey from Spectrem Group, a research firm specializing in the finances of affluent Americans.  The largest group of millionaires, 44 percent, believe that a flat-rate tax across all income brackets is the fairest system.

Visionary Apple CEO Steve Jobs Dies at Age 56

Monday, October 10th, 2011

Apple’s  iconic co-founder and CEO Steve Jobs, who altered the habits of millions by reinventing computing, music and mobile phones, has died at the age of 56.  With Jobs’ passing, Apple has lost a visionary leader who inspired personal computing and products such as the iPod, iPhone and iPad.  These innovations made Jobs one of his generation’s most significant industry leaders.  His death, following a long fight with a rare form of pancreatic cancer and a liver transplant, set off an outpouring of tributes as world leaders, business rivals and customers mourned his early death and celebrated his historic achievements.

“The world has lost a visionary.  And there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented,” said President Barack Obama.  Even Bill Gates, his rival at Microsoft, joined in the laments.  “For those of us lucky enough to get to work with him, it’s been an insanely great honor,” Gates said.

With a passion for minimalist design and a genius for marketing, Jobs laid the groundwork for Apple to flourish after his death, according to analysts and investors.  A college drop-out, Jobs altered technology in the late 1970s, when the Apple II became the first personal computer to gain a wide following.  He repeated his early success in 1984 with the Macintosh, which built on the breakthrough technologies developed partially at Xerox Parc to create the personal computing experience. 

“Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve,” Apple said.  “His greatest love was for his wife, Laurene, and his family.  Our hearts go out to them and to all who were touched by his extraordinary gifts.” 

According to Apple co-founder Steve Wozniak, “We’ve lost something we won’t get back,” he said.  “The way I see it, though, the way people love products he put so much into creating means he brought a lot of life to the world.”  Wozniak said that Jobs told him around the time he left Apple in 1985 that he had a feeling he would not live beyond the age of 40.  Because of that, “a lot of his life was focused on trying to get things done quickly,” Wozniak said.  “I think what made Apple products special was very much one person, but he left a legacy,” he said.  Wozniak hopes the company can continue to succeed despite Jobs’ death.

Computerworld raises the question “Where will that excitement come from now?”  When Jobs stepped down as CEO in August, industry analysts said that Apple, with a team of talented, creative employees, will be able to continue his tradition for ingenuity, if not all of his passion, perfectionism and energy.  “Steve’s excitement for technology will still come from Apple and from the team that Jobs carefully built that worked with him to give us the iPhone and iPad and many other successful products,” said Carolina Milanesi, a Gartner analyst.

“Jobs didn’t just change mobile phones — he reinvented them,” said Ken Dulaney, an analyst at Gartner.  “That was typical Steve.”  In another example, the iPad took user-centric values inherent in the touch-screen iPhone and larger-screen laptops, and found a useful compromise — a classic expression of Jobs’ ability to combine technological concepts, art and ideas and deliver a product that was termed “magical,” according to analysts.  “Apple, under Jobs’ leadership, focused on the user experience first and the technology second,” said Jack Gold, an analyst at J. Gold Associates.  “This focus was groundbreaking in that most tech companies were just the opposite.  Apple pioneered hiring many usability specialists, human factor engineers and designers before it was fashionable to do so.  Jobs’ vision of technology was to make a smooth intersection into our lives and our work, and that was what put Apple ahead of the pack.  He redirected engineering from technical engineering to engineering for usability.”

One question that has industry analysts abuzz is whether Apple will be able to maintain its dominant position now that Jobs is gone. Jobs’ passing and the industry’s mixed response to the recent iPhone 4S model create challenges for Apple in coming quarters,” said Neil Mawston, an analyst with Strategy Analytics.  “Industry eyes will inevitably turn to the iPad 3 launch next year to see whether Apple can continue the company’s impressive legacy of innovation created by Steve Jobs,” he said.  In a sign of deepening competition, Amazon.com recently unveiled its Kindle Fire tablet at an affordable $199 that could pose a serious threat to the iPad.  “Apple is facing a competitive firestorm from not just one company but a coalition of rivals that are trying to beat it, including some of the largest consumer electronics companies on the planet,” said Ben Wood, head of research at British mobile consultancy CCS Insight.

Writing in the Washington Post,  Melissa Bell believes that one of Jobs’ longest-standing legacy will be the recognition that his illness and death are bringing to pancreatic cancer.  According to Bell, “Steve Jobs knew the art of keeping your cards close to your chest.  Though  leaks did spring from the closely guarded Apple world, Jobs was a master at unveiling his secrets only when the time was right for him.  As with his business ventures, so it was with his cancer.  Jobs ‘kept his illness behind a firewall,’ the Associated Press reported.  Apple released no more of a statement than that they lost a ‘visionary and creative genius, and the world … lost an amazing human being.’  It was not known whether Jobs died from the rare form of pancreatic cancer that plagued him for seven years, or from complications from a liver transplant two years ago.  Despite the lack of details, Jobs’ role as the very public face of Apple put his illness on display along with his products.”

Is the Motorola Mobility-Google Marriage Made in Heaven?

Tuesday, October 4th, 2011

Google’s recently announced $12.5 billion acquisition of Chicago-based mobile phone maker Motorola Mobility could be different if Google CEO Larry Page keeps his promise to run the acquisition as “an independent business.”  “If you believe what they say, they’re going to leave the company alone and let it do what it has been doing,” said Steven Kaplan, a professor at the University of Chicago’s Booth School of Business.  “If anything, maybe they would move resources here because the tech talent is less expensive and our taxes are lower (than California’s).”

There remains the question of the economic impact of the sale on Chicago’s economy, especially in northwest suburban Libertyville, IL, where Motorola Mobility has its sprawling campus.  If Google retains Motorola Mobility’s Illinois workforce, the move will represent a win for the state, giving it the bragging rights that come with being part of one of the world’s wealthiest and most entrepreneurial companies.  If Google moves Motorola Mobility to California, it will be a blow to Chicago’s northwest suburbs, where many of Mobility’s employees live.

Motorola Mobility has deep roots in the Chicago area, which go back to the 1928 founding of Galvin Manufacturing Corp. in Chicago.  The company, which was rechristened Motorola, pioneered early televisions and two-way radios during the World War II years.  Motorola helped lay the foundation for the mobile-phone industry, and demonstrated its original handset in 1973.  “Motorola was a pioneer in this business,” said Will Strauss, an analyst at Tempe, AZ-based Forward Concepts Co.  “They certainly have a lot of intellectual property.  It will certainly level the playing ground quite a bit. It’s going to give them an awful lot to defend Android with.” 

One reason for the purchase is the patents that Google will acquire as part of the acquisition.  Google pointed to patent disputes as important in its agreement to buy Motorola Mobility.  Apple, the iPhone’s manufacturer, and Microsoft, which created Windows Phone software, have targeted phones that run on Google’s Android system.  Lacking its own trove of patents to vie with Apple, Microsoft and other companies, Google and its hardware partners were targeted by suits aimed at slowing the adoption of Android smart phones.  Adding Motorola Mobility, with 17,000 patents, which has been inventing mobile-phone technology since the industry began, may help Google stanch the onslaught.

“The analogy to a nuclear arms race and mutually assured destruction is compelling,” said Ron Laurie, managing director of Inflexion Point Strategy LLC, which counsels companies on purchasing intellectual property.  Google and its rivals “look pretty evenly matched at the moment.  Google may have become a patent superpower.”

Google plans to continue to license its Android system to other smart phone makers, such as HTC, Samsung and LG. ”Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them,” according to Page.  According to analysts, the Motorola deal is likely to help Google expedite its innovation in smart phones and tablets.

Bernstein Research analyst Pierre Ferragu believes the acquisition was “solely driven by the ongoing patent war and is an unambiguous positive for the Android ecosystem.  It is in the interest of Google to continue to offer a fully open Android platform with equal access to all manufacturers.  For Google, there is much more value in securing a major market share for Android than favoring Motorola against HTC and Samsung,” Ferragu wrote.

 Writing in The Business Insider, Henry Blodget predicts that the deal will be a “colossal disaster.”  According to Blodget, there are multiple reasons why this venture will fail.  “Google is a massive global software company with huge profit margins, genius engineers, extraordinarily high pay scales, and a near-monopoly on the most amazing advertising business the world has ever seen.  Motorola is a has-been, low-margin, global hardware-manufacturing business that operates at break-even, has 19,000 employees — 19,000!  Motorola, in other words, is a VAST company, one that will increase the size of Google by a staggering 60+ percent.  Mergers of this size rarely work well (or smoothly), even when managed by companies that are very experienced at making huge acquisitions (which Google isn’t).  Motorola does not have dominant share of the key businesses Google is buying: smart phones, tablets, and TV gadgets.  This means it does not have the weight necessary to push anyone around.  For example, Motorola only has a small slice of market share (10 percent) in its key business (smart-phones).   It’s nowhere in tablets.  The only way to make decent money in the hardware business is to have real leverage, and Motorola doesn’t have it.  The only thing that Google and Motorola have in common is that they are loosely considered ‘technology’ businesses.  This is not enough commonality for a massive merger like this to be a success without heroic integration efforts.  (Think AOL-Time Warner).”

Facebook Is Worth $50 Billion? Anyone Remember the Dotcom Bubble?

Tuesday, July 12th, 2011

Could social media be the victim of the next dot.com bubble? Although Facebook has been valued at $50 billion – more than Yahoo!, eBay, and Time Warner and butting heads with such giants as Amazon and Google, there is some question about what the valuation is based on.  According to Newsweek, “Some media experts have compared Facebook with Disney, valued at about $70 billion.  But Disney has real, tangible assets – parks, hotels, cruise ships, iconic images to market on everything from T-shirts to tableware, and a massive library of classic animated films – to back its assessed value.  Facebook has a virtual network that, according to Time, links one-twelfth of the world’s population.  However, according to The Wall Street Journal, Facebook still has enormous infrastructure costs that include as much as $700 million for two data centers, and its profits have yet to be publicly disclosed.  When an investor buys a piece of Facebook, what exactly does that investor get?  The sudden, meteoric explosion in value of online social media sites like Facebook and Twitter is eerily reminiscent of the rise about 15 years ago of the online businesses that created the ‘dotcom bubble.’”

On the PBS Newshour,  Ray Suarez interviewed Josh Bernoff, a senior vice president of Forrester Research, who has written two books on social media.  According to Bernoff, “I certainly think that there’s no rational way to understand these valuations.  I want to be clear here.  Social is very exciting.  There’s a lot of business perspective, a lot of optimism that goes along with it.  But I think these valuations are based on where people think the next buyer will come from and not on where the actual revenues of these companies are going.”  Earlier this year, Microsoft bought Skype for $6.5 billion, although its revenues are less than $1 billion a year.  When LinkedIn went public, it was valued at $9 billion.  Its profits are just $12 million annually.

According to Experience:  The Blog “The dot-com crash of 2000 was devastating.  Even now, 11 years later, the NASDAQ Composite is just a hair over half of where it stood in March 2000.  The crash caused the loss of $5 trillion in market value, huge numbers of people lost their jobs, and the facade of most of those dot-com millionaires crumbled as their paper wealth evaporated.  (To me, the insanity of the dot-com craze is demonstrated by a single story told to me by a now-successful exec in a social enterprise company.  Back in 2000, he ran a tiny startup that got caught up in the dot-com hysteria; at one point it hit a market cap of $1 billion but was generating just $60,000 of revenue.)  I am taking you on this trip down Memory Lane for a reason:  It’s happening again.  Investors in social media startups are looking to cash in, and valuations are soaring despite modest to no profits.  Recently, Airbnb, a site that allows people to arrange short-term vacation rentals of rooms, homes and apartments, received a round of funding based on a $1 billion valuation.  While the company has not released financials, best guess estimates are that Airbnb only generates around $10 million of revenue.  To put this into perspective, Marriott has $12 billion in revenue and a market cap of $14 billion.”

The Next Web disagrees with predictions of a second dotcom bubble.  “Dotcom 2.0 is much stronger than its predecessor.  People are more technologically savvy and, crucially, broadband and smart phones are approaching ubiquity.  The world is switched-on, tuned-in and can’t get enough Internet.  Technological advances aside, the one thing that will ensure we don’t see another dotcom disaster is social media marketing.  The key to success this time lies in finding ways to monetize the many ventures – it’s understood that driving traffic isn’t enough, which is why Twitter is actively seeking ways to drive its revenue.  In fact, Twitter may make as much as $150 million this year, according to some reports.  There’s no question there are a lot of over-valued companies out there at the moment; some will undoubtedly crumble and some will flourish. But Dotcom 2.0 isn’t a bubble, and it won’t burst.”

The Giving Pledge Encourages Billionaires to Share Their Wealth

Thursday, July 1st, 2010

The Giving Pledge asks billionaires to donate 50 percent of their wealth to charity.  Two of the nation’s leading billionaire philanthropists are joining forces to encourage others to donate as much as half of their wealth to charities.  Microsoft founder Bill Gates and Berkshire Hathaway Chairman Warren Buffett are teaming to create the Giving Pledge, “an effort to invite the wealthiest individuals and families in America to commit to giving the majority of their wealth to the philanthropic causes and charitable organizations of their choice either during their lifetime or after their death.”

According to Patty Stonesifer, who is advising Gates and Buffett on the Giving Pledge, four additional families – real estate and construction’s Eli Broad, venture capitalist John Doerr, media entrepreneur Gerry Lenfest and former Cisco Systems chairman John Morgridge – are already on board.  Buffett, who has already pledged to donate 99 percent of his wealth to the Bill and Melinda Gates Foundation, said “At the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled.  Nothing will go to endowments.  I want the money spent on current needs,” according to Buffett.  Forbes magazine ranks Gates as the world’s second richest man with $53 billion and Buffett as third with $47 billion.  The United States is home to 403 billionaires.

The Giving Pledge is not accepting money itself.  Rather, it is asking billionaires to commit to giving their money to charity.  Although the campaign specifically targets billionaires, the Giving Pledge is “inspired by the example set by millions of Americans who give generously (and often at great personal sacrifice) to make the world a better place.”

Your Choice of Font Can Make You Greener

Monday, April 19th, 2010

Century Gothic font is eco friendly.  Changing your font can save significant money by requiring less ink to print documents.  Because various fonts require different amounts of ink to print, changing to a simpler font can make printer cartridges last longer.

Printer.com, a Dutch company that evaluates printers, worked with the University of Wisconsin – Green Bay in its changeover from using the Arial to the Century Gothic font.  According to Diane Biohowiak, the university’s coordinator of information-technology user support, she has asked faculty and staff to use Century Gothic for all printed documents.  The University also plans to implement Century Gothic as its default email font.  “The feedback we’ve gotten so far has been positive,” Biohowiak said.  “Century Gothic is very readable.”  The campus, which spends approximately $100,000 every year on ink and toner cartridges, expects to save $5,000 to $10,000 because of the font change.

Printer.com tested several fonts to determine their ink friendliness, with Century Gothic and Times New Roman emerging as the clear winners.  Century Gothic uses approximately 30 percent less ink than Arial.  The amount of ink a font requires is a result of how thick the lines are.  A font with “narrow” or “light” in its name typically is better than one with “bold” or “black”, according to Thom Brown, an ink researcher with Hewlett-Packard Company.  Additionally, serif fonts – with short horizontal lines at the top and bottom of characters – tend to use thinner lines and less ink than sans serif fonts.

Microsoft executives point out that it’s even greener to just not print documents.  The firm changed its defaults in Office 2007 from Arial and Times New Roman to Calibri and Cambria, said Simon Daniels, a program manager for the firm’s typography group.  “We’re trying to move the threshold of when people hit the print button.”

Will the iPad Make Laptops Obsolete?

Monday, April 12th, 2010

Will iPad put the PC to pasture?  Does the introduction of Apple’s new iPad sound the death knell for laptop computers?  The Wall Street Journal’s Personal Technology columnist Walt Mossberg’s test drive of an iPad has him believing that the new product has “the potential to change portable computing as we know it.”  During the test drive, Mossberg used his laptops only 20 percent of the time, because he found the iPad to be extremely user friendly and significantly lighter in weight.

According to Mossberg, “If people see the iPad mainly as an extra device to carry around, it will likely have limited appeal.  If, however, they see it as a way to replace heavier, bulkier computers much of the time – for Web surfing, email, social-networking, video- and photo-viewing, gaming, music and even some light content creation – it could be a game changer the way Apple’s iPhone has been.”  Weaknesses include the inability to write and edit long documents or view Adobe Flash videos, which the iPad doesn’t support.

Based priced at $499 and topping out at $829, the iPad “is thinner and lighter than any netbook or laptop I’ve seen,” Mossberg says.  “It weighs just 1.5 pounds, and its aluminum and glass body mere a mere half-inch thick.  It boasts a big, bright color 9.7-inch screen that occupies most of the front.  As on all Apple portable devices, the battery is sealed in and non replaceable.  It has a decent speaker, and even a tiny microphone.”

Mossberg concludes:  “All in all, however, the iPad is an advance in making more sophisticated computing possible via a simple touch interface on a slender, light device.  Only time will tell if it’s a real challenger to the laptop and netbook.”

India Still Lags in Innovation

Tuesday, September 8th, 2009

Much has been made in the world’s press about India’s economy buoyed by its IT sector. And a lot of it is justified.  The nation’s IT sector managed to grow some 20 percent in 2008, according to India’s National Association of Software and Services Companies, and IT firms have already extended 100,000 job offers for 2009.

india-outsourceBut all is not rosy for India.  While the country has surged in the basic and mid-level areas of coding and development, it has struggled in the area of R&D and top-end innovation.  India produces about 300,000 computer science graduates a year.  Yet it produces only about 100 computer science PhDs, a small fraction of the 1,500 – 2,000 that get awarded in the United States or China every year according to a recent article from Reuters.

“Students here are not exposed to research from an early age, faculties are not exposed to research and there’s no career path for innovation because there’s a lot of pressure to get a ‘real’ job,” said Vidya Natampally, head of strategy at the Microsoft India Research Centre.  Rival China has already pulled ahead with more than 1,100 R&D centers compared to less than 800 in India, despite lingering concerns about rule of law and intellectual property rights (IPR).  India is also losing out in the patent stakes. In 2006 – 2007, just 7,000 patents were granted in this country of 1.1 billion people, compared to nearly 160,000 in the United States.

India is cheaper than China for R&D.  But salaries in India have been rising by about 15 percent every year and may soon reach parity with China. R&D centre costs in Shanghai are currently just 10-15 percent higher than in India.

But this could be changing:  Microsoft, for example, has just opened a new facility in Bangalore staffed with about 60 full-time researchers, many of them Indians with PhDs from top universities in the United States.  The center “is at the cutting edge of Microsoft’s R&D, covering seven areas of research including mobility and cryptography.  Cisco, IBM, Intel, Nokia are among the other companies going beyond low-end coding to bring R&D to India.

Jacob Cherian is AlterNow’s India Contributor. He is a freelance business writer based in Kerala, India.  He has written about business outsourcing for Offshore Advisor.