February 06, 2006
Format Wars, Overseas Investment and Apple iPods
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The following formats are part of the specification:
Both Blu-ray and HD DVD systems use the blue-violet laser which has a shorter wavelength that a red laser. This makes it possible to fir more data than on a CD or DVD even though it has the same physical size.
A DVD has a capacity of 4.7GB and can hold about 2 hours of standard definition (SD) television images.
higher than the HD-DVD version.
On December 16th HP, who is a member of the Blu-ray group, announced it will also support the HD-DVD high-definition DVD format and join the HD-DVD Promotions Group. HP had requested that the Blu-ray Disc Association adopt two customer-friendly technologies, Mandatory Managed Copy and iHD, which are already included in the HD-DVD format. Only the former was adopted.
There is little likelihood that one side will unilaterally withdraw from the marketplace for the greater good. Too much has been invested and the revenue opportunity at stake is too great for such a grand gesture. Also there is no organization in place that can dictate a solution.
None of the firms mentioned above are EDA companies but they are among the largest end users of EDA tools. Moreover, there are lessons to be learned that can applied to the EDA arena. Being first and/or having superior technology, format or specification is not a guarantee of success. To ensure widespread adoption it is better to be open than to be proprietary. One needs to form alliances even with existing or potential competitors to promote adoption of what you have to offer even if you have to donate it to the alliance. If you developed it, you will have an advantage through that experience that others will not. There are a number of alliances and consortiums in the EDA arena.
In earlier columns I have covered Software as a Service (SaaS) as an alternative to traditional sale and delivery model of software wherein a vendor hosts their software modules and client access them through an Internet or Intranet. Salesforce.com is best the best known SaaS provider. The firm offers Customer Relationship Management (CRM). According to their latest report they have 18,700 clients. Unfortunately, Salesforce.com had a 5 hour disruption of service on December 20th and several slowdowns near the peak demand at the end of the month. What is an acceptable level of accessibility? Stated another way, what is an acceptable level of downtime?
According to Murphy's Law any disruption will come as the worst possible time. Add to this the fact that it seems to be human nature to wait to the last possible minute to do something. This means that user demand will not be evenly spread over a given time period but will have significant peaks such as month end, quarter end and year end.
The cost for the vendor to provide greater accessibility, approaching 100%, is considerable. Think of redundant systems. What is the benefit to the clients and how much extra would they be willing to pay to add another decimal place? Of course, if one relies totally on internal IT resources, there is no guarantee that the accessibility will be any higher or even as high.
How much will concern over potential outages impact the growth of SaaS and Salesforce.com in particular? Many customer and prospects particular small firms may not have a reasonable alternative if they wish to use CRM capabilities.
In a recent editorial I commented about customer electronics becoming a primary driver in the semiconductor industry and about the convergence of many devices into multifunctional platforms. As evidence of this trend consider Apple. On January 18th Apple announced financial results for its fiscal 2006 first quarter ended December 31, 2005, reporting the highest revenue and earnings in the Company's history. Apple posted revenue of $5.75 billion and a net quarterly profit of $565 million.
Table Apple's Financial Results for 1QF2006
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-- Jack Horgan, EDACafe.com Contributing Editor.