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Monday, October 31, 2011

A million-dollar dream?

What would you do if you have a million bucks?

Monday Starters - By Soo Ewe Jin

WHAT would you do if you have a million bucks? A poor government clerk from Bihar, a remote and poverty-stricken region of northern India, has become the first person to win 50 million rupees (RM3mil) on the popular Indian version of the gameshow Who Wants to be a Millionaire?

Sushil Kumar's win is a classic case of life imitating art as the script is similar to that of the 2008 Oscar-winning film Slumdog Millionaire.

According to the Associated Press, Sushil said he would spend some of his prize money to prepare for India's tough civil service examination, which could lead to a secure and prestigious lifetime job.

He would also buy a new home for his wife, pay off his parents' debts, give his brothers cash to set up small businesses and build a library in Motihari so the children of his village would have access to books and knowledge.

Real life slumdog millionaire: Sushil (left) says thank you with clasped hands as he receives his US$1mil prize from Bollywood actor Amitabh Bachchan during the fifth season of the Indian version of the Who Wants to be a Millionaire? television quiz in Mumbai on Oct 25. Kumar, a computer operator who earns just US$130 a month, has become the first person to win the top prize. — AFP

Everyone loves a story like this. Although people can become instant millionaires by striking the lottery or pulling the lever on a one-armed bandit at a casino, using one's talent at a tension-filled gameshow is more admirable.

And I applaud Sushil for his noble attitude in thinking of others to share in his newfound fortune. Bihar is one of the poorest states of India and its remoter areas, such as Motihari, have been largely untouched by India's phenomenal recent economic growth.

Do you know that there are now at least 39,000 millionaires in Malaysia? According to a recent report by the Credit Suisse Group, 19,000 new millionaires were created over the past 18 months alone.

Meanwhile, the Asia-Pacific Wealth Report 2011 by Merrill Lynch Global Wealth Management and Capgemini, also released recently, revealed that Malaysia's rich prefer splurging on a fancy new set of wheels, luxurious yachts or private jets.

Up to 46% invested their ringgit in luxury collectibles like cars, boats and jets, the highest percentage of any country within the Asia-Pacific region.

Their counterparts down south seem less interesting and still prefer jewellery and luxury watches.

I know that the CEOs who read the business section of this newspaper may consider a million ringgit small change but to most of us, it is a very faraway goal, not something one can possibly achieve as a regular salaried worker.

But we can all dream and I was wondering to myself, what would I do if I suddenly had a million ringgit in hand? I suppose our wishes would coincide very much with our age, status, and ultimately our character.

To those who believe material pursuits equate to real happiness, a shopping spree would be fantastic.

Those who do not focus too much on material things may want to travel around the world and complete their Bucket List, which may also include going on a religious pilgrimage.

I believe that God never gives us more than we can handle, just as He never lets us go through trials and tribulations beyond our capacity to endure.

And that was when I stopped dreaming. Because I know, seriously, I will never be able to handle so much money at any one time. So I shall be content and count my blessings. I hope you will too.

Deputy executive editor Soo Ewe Jin notes that the world's population officially hits seven billion today. No one really knows who is Citizen Seven Billion, of course, but by the time he grows up, millionaires and billionaires will probably be a dime a dozen.

Sunday, October 30, 2011

Made in China: Country's new supercomputer uses homegrown chips

China is stepping up its semiconductor manufacturing efforts and using domestic chips for its latest supercomputer. It's going to be interesting to see how fast China can close in on U.S. supercomputer processor makers Intel, AMD, and Nvidia.

The New York Times reported that a supercomputer called Sunway BlueLight MPP, was installed in September at the National Supercomputer Center in Jinan, China. The details emerged at a technical meeting. The real catch is that China used 8,700 ShenWei SW1600 chips.

Those semiconductors are homegrown and indicate that China is aiming to be a major chip player. The New York Times story was mostly sourced to Jack Dongarra, a computer scientist at the University of Tennessee, but Chinese sites reported on the technical meeting. Dongarra helps manage the list of Top 500 supercomputers. China's previous supercomputers used Intel and Nvidia chips.

Meanwhile, ZDNet UK highlighted the blog of Hung-Sheng Tsao, founder of HopBit GridComputing, who posted the slides detailing the Sunway BlueLight MPP, which come from covered China's supercomputing powwow extensively this week.

ZDNet UK's Jack Clark noted:
According to (Tsao's) slides, which appear to be from a presentation describing the computer's capabilities, the ShenWei Sunway BlueLight MPP has 150TB of main storage and 2PB of external storage. Each ShenWei SW1600 processor is 64-bit, has 16-cores and is RISC-based.
Here's a Google Translate link offering more details via IT168.

The Wall Street Journal noted that the China domestic supercomputing effort is very credible and signals an effort to cut the country's reliance on western companies. It's unclear whether China's chips are completely original blueprints or based on a previous design. One issue for the Sunway chips is power consumption. The Sunway supercomputer apparently doesn't need that much power relative to rivals.

The New York Times added that that ShenWei chip appears to be based "on some of the same design principles that are favored by Intel's most advanced microprocessors."

China's efforts appear to be a few generations behind, but rest assured the country will try to close any gaps quickly.

This story was originally posted at ZDNet's Between the Lines under the headline "China steps up its semiconductor game with homegrown supercomputer effort." 

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Don’t let the sun go down on our rights; those mess up politics, religion & race!

Elton John


Don’t let the sun go down on our rights

Any secular party would be a better pick than one whose politicians masquerade as religious leaders.

IT’S becoming boringly predictable with PAS as it again plays its self-appointed role of custodian of morality by telling Malaysians what they can watch – mostly cannot watch, unfortunately.

Just a few months ago, the Islamist party had attempted to project a somewhat liberal image, possibly believing that Putrajaya was within its grasp.

That short flirtation has ended and it has now decided to return to its conservative image, rudely awakened by the reality that it was more important to try to hold on to its jewels – Kelantan and Kedah – and that hardcore supporters were loudly voicing their dissatisfaction.

It now wants to be recognised for its main objectives – setting up an Islamic state and implementing hudud laws – and will surely have no tolerance for rock concerts, which it has dismissed as hedonistic.

PAS surely does not want to see its Malay votes, the deciding factor, slipping away for non-Muslim votes.

So it is now back to making the wearing of headscarves compulsory for women and punishing those who disobey the rule in Kelantan, and banning the setting up of cinemas in Bangi, Selangor, simply because a PAS state assemblyman objected.

And the party is not even the dominant player in the Selangor government.

No one can deny that, except for that brief experiment, PAS has always been consistent with its Islamist objectives and has never strayed from its purpose of wanting to set up a religious and puritanical society.

For many, due to their anger with the Barisan Nasional as well as for political expediency, they are prepared to pretend decisions made by PAS will not affect them, brushing them off as minor matters or merely distractions for a larger interest.

That was what the Iranians thought when they dumped their Western-backed but corrupt monarch for the ayatollahs. Thirty-two years later, however, many are wondering whether they gave up their human rights and secular lifestyles too.

There is an elected government in Iran but it is the theologians who call the shots, invoking laws in the name of religion and according to their interpretations, which not many of the faithful are prepared to challenge.

In the case of the minorities, their voices are easily suppressed and they are dismissed curtly for their religious ignorance.

Even in Tunisia, after the euphoria of its recent first elections, secular Tunisians are wary about the Islamist-dominated assembly and fear that their civil rights legislation will be reversed.

In Malaysia, we could head down that dangerous road if we are not careful because some of us are being convinced that PAS alone cannot redraw our legal systems.

PAS has decided to go ahead with the implementation of hudud laws in Kelantan, claiming that non-Muslims would not be affected.

One does not need a doctorate in law to know that there can never be two kinds of laws, particularly in civil and criminal matters. So there is no such thing as hudud laws would not affect non-Muslims.

The PAS Supporters Club has been jolted and it is finally realising that this was not part of the bargain.

Better late than never, it can be said, but then the PAS Supporters Club had organised tours to Kelantan and persuaded voters to elect more PAS candidates by claiming non-Muslims would not be affected, thank you very much.

Any objection to PAS’ agenda these days risk being rubbished as propaganda, abused, rebutted or named-called as abuses involving the Barisan. Objecting is surely not for those wanting to seek popularity.

The point is any secular party, whether Umno, the MCA, the DAP, PKR or PPP, would be a better pick than one whose politicians masquerade as religious leaders, insinuating that their words cannot be questioned because they are “men of God”.

Malaysia may not have the best system but we have one that works and functions. There are politicians who claim we are already an Islamic country but the Federal Constitution is pretty clear about the fact that we are still secular. Our legal system is also pretty clear and intact.

For sure, I cannot take seriously those who think Elton John’s song Can You Feel The Love Tonight, soundtrack for the film The Lion King, could be a gay anthem. By the way, one of his hit songs is Don’t Let The Sun Go Down On Me – it’s sun, not son.

The accidental entrepreneur

LOOKING back at the last nine years, here are the hard facts I have had to face:

1. Before SPM, I was too lazy to study hard as I knew I had the financial backing of my parents. I never thought about how lucky I was, or how much they sacrificed to put me through college;


All great journeys start with small steps, and I hope anew everyday to have the courage to take themANAND PILLAI

2. I finished SPM with dreams of being a hotshot engineer in Silicon Valley riding the dot-com bubble. Of course, I knew shockingly little about what any of those things really entailed; and

3. Up till recently, my knowledge of the world – its problems, its people, and its culture – was severely lacking as it was shaped by commercialised Western television and the Internet. Although I grew up in Malaysia, I had little exposure to folk from other social classes.

My journey began at the dawn of the millennium when I completed my A-Levels and went on to pursue an engineering degree at Northwestern University in Chicago, the United States (US). It was very, very cold there – minus 20 degrees Celsius at times.

Three years after starting college, I was a radically changed person. I realised that my true calling was to devote my life to work that was meaningful to me, and that I did not enjoy engineering in its traditional sense, although I graduated with a Bachelor in Industrial Engineering and Management Sciences.

Upon graduation, I was determined to find employment in the non-profit sector and secured an internship at an organisation that provided food to the homeless in Chicago.

Although I enjoyed my work immensely, I was not able to remain employed there due to my US work visa situation. I had to decide if I was to return to Asia to work in the development/non-profit field, or pursue a corporate career in the US, which was the only way to secure a work visa at the time.

The allure of a large pay cheque, sharp grey suits and expense accounts eventually won me over and I accepted a management consulting position in Philadelphia. I worked there for two years and went on to become a manager at a global pharmaceutical company in Princeton, New Jersey, making more money than I ever thought possible.

Fortunately, throughout my corporate career, I focused on learning from my work environment and saving as much money as I could while pursuing other interests after work hours.

After three years in my cubicle, I left the corporate world and began to work on my own entrepreneurial ventures in Philadelphia and other cities. I wanted to be a small business entrepreneur because it would allow me to live a lifestyle that I cherished. More importantly, I would be able to pursue work that would be meaningful to me – personally and professionally – without being held accountable to someone else’s whims or the profit motives of owners or investors.

Over the years I discovered (due to a combination of part-time work and meeting new people) that my passion lay in “social business”.

This is the model of running profitable, successful companies which at its core takes into account the 3 P’s – people, planet, and profits.

This effectively combined my interests in the traditional business world with providing a social benefit to the communities I worked in.

My entrepreneurial ventures include partnering with an experienced real estate investor on low-income housing in Philadelphia. I also developed an education consulting business where I worked as a career counselor for 20-somethings who were trying to find their place in the world. Most importantly, both endeavours were entrepreneurial in nature and very meaningful to me as they met the objectives I wanted to achieve in my professional career.

After spending close to 10 years in the US pursuing further education and work opportunities, I recently decided to move back to Asia.

Spending time with my family, pursuing meaningful business ventures in Malaysia, and exploring and enjoying my native land was a calling too strong to ignore.

I intend to continue my work in real estate and career guidance here, but also focus my energies on other business ventures including sustainable tourism, fitness, and nutrition – all passions of mine.

As I pause midway through my life and look back at life after SPM, I realise that the road I took was one that I never expected to be on, but I am eternally grateful and humbled by the opportunities I have had. I intend to live the rest of my life building upon that foundation.

I constantly remind myself of my primary goal – creating positive change in the world. All great journeys start with small steps, and I hope anew everyday to have the courage to take them.

Finishing school is a fun time but for most of us, it is a time for some serious thinking about your future. The Star Education Fair’s Options After SPM talk is a good place to help you make your choices easier.

This story is published in What’s After SPM? available at MPH Bookstores.

Some advice on how to be a successful entrepreneur

An illustration of a company's supply chainImage via Wikipedia


Tan Thiam Hock gives some free but useful tips on how to be a successful entrepreneur.

 Know your weaknesses and strengths

JAGDEV from StarBiz sent me a cheerful email this morning reminding me of my weekly responsibilities. I am desperately searching for inspiration as I look around the dreary faces of fellow passengers on a train ride from Cambridge to London. Looking out the window, the sunny autumn day looks promising as we pass through the pretty countryside but somehow I had this feeling that it was going to rain in London. It was a hardly an inspiring thought but I do have to persevere and continue, inspired or not.

Since I started this column five weeks ago, I have had quite a number of entrepreneurs writing in, describing their frustrations at their slow progress in achieving success and was searching for nuggets of inspiration from me. Some relate their current business predicaments and asked for advice, others seek direction and even mentorship.

As for me, I was seeking refuge from a deluge of questions tinged with high expectations. I was in trouble, deep trouble. All I wanted to do was share some experiences, make a few jokes about celeb entrepreneurs and show the Star CEO a thing or two about mass marketing. Suddenly, I am expected to give advice and solutions to a vast variety of business scenarios and problems.

Qualified and knowledgeable consultants charge you for advice as much as your wallet can afford. Advice with solutions will cost you twice as much. Solutions with more questions which begets more solutions will result in permanent charges. I believe they call this personal coaching.

Sharing of opinion is free. You do not have to agree with an opinion. But you normally take an advice seriously because you paid for it. For once, I will give you free advice which should save you tonnes of ringgit in consultant fees. Just a few simple opinions for that man in the mirror.

Know your own limitations. Strengths. Weaknesses. Tolerance tests for suffering, humiliation, stress and financial deficits. Only your mum knows more about you than you. Once you have a favourable opinion about yourself, set realistic and achievable targets. Just be yourself. Play to your strengths and be the biggest fish in a small pond.

Be happy with little successes. Each brick of success will inspire you to the next level. Do not always dream of the big day, the one deal that will help you rule the world. It might never come. Besides higher financial rewards, have you built a better reputation with your bankers, suppliers and customers?. Are you happy with what you have achieved or do you still feel that the world owes you a living?

Wealth is relative so do not compare. There is always someone richer than you, bigger than you and smarter than you. Unless you are Bill Gates. Of which you are not. So stay humble. You will have more friends. And you will be a richer person for that.

Do not profit from other people's misery. Share your profits with your suppliers and your staff. A continuous profitable supply chain ensures long-term business survival. Suppliers and staff stay with you if they trust and respect you. And the only way you earn their trust is through honest engagements and mutual respect.

Behind all successful entrepreneurs, you will find a loyal core team of very capable managers. Ralph Marshall of Astro and Maxis, Kathryn Tan of AirAsia, Tan Sri Tay Ah Lek of Public Bank and countless other professional managers in all the successful corporations. Entrepreneurs hog the limelight with their vision and persona but they need to be complemented by trusted executioners to crystallise their vision. They are the unsung heroes and deserved to be treated with tender loving care by entrepreneurs.

Whether your business is small or big, when you are faced with what seems like insurmountable problems, you will feel really lonely sitting alone on your own little hill. Learn to embrace the solitude. Take this opportunity to reflect on where you have gone wrong. Take responsibility and not blame others. Eat humble pie if you have to. Take a step backward so that you can move two steps forward.

All entrepreneurs make mistakes. A successful entrepreneur does not make fatal mistakes. They just make more right moves than wrong ones. Just make sure the sum of positives exceed the sum of all negatives and you are on the way to a healthy balance sheet.

The Achilles Heel of high flying entrepreneurs has got to be over-confidence. Used to continuous rapid success, they start to believe in their own invincibility and perceived ability to be successful in every new business they wish to undertake.

Over-leveraging to fuel expansion can be fatal if the bleeding from new projects does not stop. So unless you have a bottomless pit of reserves like Genting or Hong Leong, be cautious in your ambitions. Expand, consolidate, strengthen your cash-flow, then expand. You will never be poor again.

I must admit that these opinions or free advice are hardly inspiring to entrepreneur wannabes. If you are seriously looking for guidance, there are many books on entrepreneurship. You could attend many seminars and join the numerous clubs for entrepreneurs. Just Google and you will find enlightenment.

Last piece of free advice.

No free lunches in business. Chew on that.

The writer is an entrepreneur who hopes to shares his experience and insights with readers who want to take that giant leap into business but are not sure if they should. Email him at

Saturday, October 29, 2011

Towards a multi-polar international monetary system

IMF nations


IMF cannot create sufficient credit to help resolve growing financial crises 

MOST people think of the international monetary system as an architecturally designed system made in Bretton Woods at the end of the Second World War. This may be true for the international financial institutions like the International Monetary Fund or the World Bank, but the existing system is a messy legacy of rules, regulations and foreign exchange systems and institutions that facilitate trade and payments between countries.

Unlike a national monetary system, where there is one currency issued by the national central bank and national agencies responsible for financial stability, there is currently no global central bank, no global financial regulator and no global finance ministry. In short, we have global financial markets, but no global mechanism to deal with periodic crises, except through the (sporadic) consensus views of national policy-makers.

This was not a problem when the United States was the dominant power in the 1950s and 1960s. But this changed when the United States dropped the link to gold in 1971. From then on, the international monetary system was largely driven by decisions between the United States and Europe, which collectively owned the majority of the voting power in the IMF. Needless to say, the emerging markets had little say, since they were the major beneficiaries of aid and funding from the IMF and the World Bank.

In 1975, the Group of Six (G6) formally came into being, comprising the United States, UK, France, Germany, Japan, Italy, with Canada being added to form G7 the next year. Basically G7 leaders met regularly and decided most of the decisions for the international monetary system. The G7 accounted for roughly half of world GDP, but essentially ran the global financial system.

The grouping was only widened in 1997 when the heads of the United Nations, World Bank, IMF and WTO were invited to join the regular G7 meetings. In 1998, Russia was added to form G8, but with the outbreak of the Asian crisis, the need for more global representation let to the formation of G20 in 1999. The G20 collectively account for 80% of world GDP and two-thirds of the world population.

The reason why the international monetary system is not functioning smoothly is that decision-making lies in the hands of sovereign nations, not the global institutions. A unipolar system is alright as long as the dominant power is stable. This is not necessarily true in a multipolar system, because even obvious decisions cannot have consensus, because of different national interests.

If we keep on thinking about reforming the international monetary system in national terms, can we arrive at a more effective system in promoting global trade and payments and maintaining global financial stability?
For example, the debate over the role of the US dollar and the emergence of the renminbi is seen as threats to the status quo. This is understandable, but money and finance are not ends in themselves, but means to an end of global prosperity and stability.

The real question is what is the global financial system supposed to do, and what is the best way to achieve it?

In the immediate post-war period, there was a shortage of US dollars. Hence, the IMF was created to provide liquidity and foreign exchange reserves for the post-war reconstruction. The United States ran current account surpluses, held most of the world's gold reserves and everyone wanted dollars. Today, because of the Triffin Dilemma, the continuous US current account deficits gave rise to the Global Imbalance, thought to be the cause of the current crisis.

One theory goes something like this. East Asia went into crisis in the 1990s, built up large foreign exchange reserves and current account surpluses and these surplus savings reduced global interest rates and caused the advanced markets to lose monetary control. However, that is not the complete story. There is increasing awareness that the global shadow banking credit was pumping out leveraged liquidity that may have caused national monetary policies to lose effectiveness.

In other words, instead of shortage of global liquidity, we have too much liquidity sloshing around global financial markets, so much so that most central banks are debating how to prevent such liquidity creating asset bubbles, banking crises or over-appreciation of the exchange rate that haunted Japan and East Asia. You either deal with this through self-insurance, building up large exchange reserves, or you allow the IMF to become the provider of liquidity when you need it.

Most countries do not like IMF imposing stiff conditions and they discovered quickly that the IMF has no teeth when you are not a borrower.

This is the real dilemma of the current international monetary system. Do we seriously want a global institution to re-balance the global economy through carrots and sticks? If so, each nation would have to give up sovereign power to the IMF.

Currently, the IMF cannot fulfill the disciplinary role against the large shareholders nor can it create credit sufficiently to help resolve the growing financial crises. IMF resources are roughly US$400bil and it would have to be increased by a factor of five, before you have enough resources to deal with the European debt crisis. No single country nor group of countries can deal with such exponential growth of the global financial system, last measured as US$250 trillion in conventional financial assets and US$600 trillion in nominal value of derivatives.

In sum, there are structural issues on the global system to be thought through, before you consider the technical question whether surplus country currencies like the renminbi should be included into the SDR basket of currencies as the global reserve currency.

The reality is that no country will forever be in surplus, and sooner or later, deficit countries will have to borrow from the international pool of savings.

In the absence of a coherent global consensus on what to do, muddling through from crisis to crisis seems to be the likely way forward.

In short, don't expect the dollar dominated system to change a lot unless there is another systems crash.
Andrew Sheng is president of the Fung Global Institute.

Eurozone seeks bailout funds from China

Klaus Regling: ''These are regular consultations at an early stage and there will be no conclusions''

The head of the eurozone's bailout fund is beginning attempts to persuade China to invest in a scheme to help rescue member countries facing debt crises.

After meeting Chinese leaders, Klaus Regling said there were no formal negotiations and would be no deal now.

It is thought China may pay about 70bn euros ($100bn) into the fund, which is expected to be boosted to 1tn euros.

Meanwhile French President Nicolas Sarkozy said debt-ridden Greece's entry to the eurozone was a mistake.

Greece was "not ready" when it joined in 2001, he said, adding that it could be rescued thanks to a new deal on the debt crisis.

European leaders worked into the early hours of Thursday in Brussels to secure an agreement aimed at preventing the crisis from spreading to larger eurozone economies.

The deal triggered a worldwide shares rally.

'Regular buyer' Beijing has made it clear that it will demand strong guarantees on the safety of any contribution it might make.

With more than $3tn in foreign reserves there are European hopes that China could ride to the rescue.

As the EU's biggest trade partner Beijing would also be hard hit by any downturn in Europe.

But like other investors, China will want guarantees.

And Beijing may push for other concessions, such as market economy status - a move that would make it harder for European companies to press trade complaints against Chinese rivals.

Any investment will also be fraught with political risk.

China's fund managers have faced criticism after earlier overseas investments soured.

Despite being the world's second economy, more than 200m Chinese live in poverty.

China's leaders won't want to be seen giving "charity" to countries richer than their own.

Mr Regling, who is chief executive of the European Financial Stability Facility (EFSF), said he was not negotiating with China as a potential investor but holding consultations to decide the terms for raising the money.

"Don't expect any precise outcome of our talks," he said, quoted by AFP news agency.

"I cannot say today, and it's certainly far too early to say what kind of amounts might be envisaged."
He said China had been a regular buyer of EFSF bonds in the past.

He would present the fund's bonds as a potential commercial investment to China, he said, adding that Beijing regularly needed to find safe investments for its trade surpluses.

"I am optimistic that we will have a longer term relationship," he said.

Chinese Vice Finance Minister Zhu Guangyao said there was work still to be done.

"We need to wait for the technicalities to be clear and also to carry out serious studies before we can decide on investment," he said, quoted by AFP.
Xu Juan

“Start Quote

If we have the ability to help them then we should, but there is no feeling of pride in that”
Xu Juan International trade firm employee in Beijing
  • Why would China want to help Europe?
"We hope that all these technical and specialised arrangements can be thrashed out at an early date and can be implemented and feasible. That will be very important for the effectiveness" of the fund.

The President of the World Bank, Robert Zoellick, has said he believes China will invest in Europe only if there are incentives for it to do so.

"I don't think that China will just come in as a white knight to try to provide money just to bail out Europeans," he told the BBC.

But investor Jim Rogers said China was prepared to help.

"From China's point of view, it's cheap foreign aid. They'll buy goodwill. I guess they'll put up some money," he said on BBC Radio 4's Today programme.

The suggestion that China should use its financial clout to assist the eurozone met with mixed reactions on the streets of Beijing.

"If we have the ability to help them then we should, but there is no feeling of pride in that," said Xu Juan - a 27-year-old employee of an international trade firm.

We need to focus on doing a good job on developing our own country."

Wang Xiaodong, a 23-year-old univeristy student, said "With the global economy everybody prospers together or becomes weaker together, so we just have to endure this tough time together."

The framework for the new EFSF bailout fund is to be put in place in November.

Germany, as the largest economy in eurozone, is expected to be the largest contributor.

Asian markets rose for a second day on Friday and bank stocks in Europe continued to rally, a day after the deal was reached.

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Friday, October 28, 2011

Which player can steal more eyeballs in pay-TV market?

Friday Reflections - By B.K. Sidhu

PAY TV there has been some failures in the past.

Mega TV, FineTV and MiTV never made it big. In fact, some just closed shop after a few months of ambitious screening.

Running a pay-TV business requires deep pockets, content that appeals, low pricing and wide reach. However, repetitive programming irks and the station must be very mindful that consumer behaviour is constantly changing, so they need to adapt to change.

The Internet has finally cracked the door to our living rooms and that by itself has brought a change in consumer behaviour.

That has posed a new challenge for traditional broadcasters, pay-TV operators and the likes.

But by the second quarter of 2012, digital cable TV will come knocking on our living room doors with entertainment and education programming. Internet and interactive functions will be a feature and the promoters are looking at “reasonable pricing'' and “wide reach'' as their strategy.

Nilamas Corp Bhd, a company owned by some high ranking ex-army personnel, has the licence to bring digital cable TV here.

I have no clue what the “reasonable pricing” would be, but it should be a lot less than the current offerings and it should come with a lot more varied content, or else it cannot be termed “reasonable''.

Going by Wikipedia, digital cable is a generic term for any type of cable TV using digital video compression or distribution. Nilamas wants to use fibre optic to link the last mile to homes for picture perfect.

Currently, we have satellite pay-TV operated by Astro, IPTV (Internet protocol TV) offered by Telekom Malaysia Bhd (TM) and RedTone International Bhd's DeTV. There are several free-to-air channels now and these analogue networks will migrate to digital terrestrial television broadcasting (DTTB) by 2015.

Astro has also entered the IPTV space to protect its turf. It has over three million subscribers and offers 150 channels.

TM rides on its high-speed broadband to offer Hypp TV. It has 184,000 UniFi users of which 80% are viewers of the IPTV.

Maxis Bhd is also in the entertainment game and had some months ago launched its Maxis Home services. Though a disappointing launch then, its recent teaser ads are generating interest as it seems to have something for everyone in the family. It intends to launch IPTV pretty soon.

Celcom Axiata is silently working on a strategy to be part of the big-screen offering while DiGi.Com Bhd is still focused on small-screen entertainment.

YTL Communications Sdn Bhd is the other player hoping to ride it big in the entertainment scene. It will offer hybrid TV services over a wireless platform by the end of this year with partner, US-based Sezmi Corp.

Incidentally, YTL Communications is also one of the two potential contenders for the DTTB contract. The other is Puncak Semangat Sdn Bhd which teamed up with New Zealand's Kordia for expertise as well as to train people on the digital migration.

In a nutshell, the entertainment scene via our idiot box should get competitive by mid next year, provided, of course, if Nilamas keeps to its launch date.

At the moment, the players decide on the rates and content and there is virtually no competition. Some consumers are constantly looking for cheaper options, flexible packages and attractive programming and those that can offer them what they want will get their eyeballs.

But let's not forget that the Net is a huge source of content and a lot of people prefer free downloads. The likes of Google TV is also a potential threat that can steal the eyeballs away.

So while the fight for eyeballs should get intense and the incumbents will not give up without a fight, the threats are aplenty out there.

The biggest threat would be the inability to reach out to the next generation of consumers who want everything in their living rooms as well as while they are on the go, and a lot of them are using personal computers as their home entertainment hub.

Deputy news editor B.K. Sidhu believes switching between web and TV should be seamless.

The Malaysia's court and the PM’s Department

The court and the PM’s Department


The separation of powers is a central principle woven into the fabric of our Constitution. And it is essential that the judiciary is not only independent, but also seen to be independent of the other branches of Government.

“MAHKAMAH Jabatan Perdana Menteri”. I have to admit to have been slightly taken aback, to say the least, when I saw these words the other day, embroidered in gold on the black cotton jacket of a member of the court staff at the High Court in Penang. I blinked.

Was I at the wrong court? Had the High Court suddenly been subsumed into the Prime Minister’s Depart­ment? Or was it that the Prime Minister’s Department was now a department of the High Court?

Perhaps I should have understood that cashiers, clerks and other administrative staff at the High Court were civil servants appointed by the executive and assigned to the courts to support the administration of justice.

Perhaps I should have appreciated that in the absence of a dedicated Justice Ministry (which was abolished in 1970), it was only natural that such staff members would come under the Prime Minister’s Depart­ment.

And yet, in spite of every rationalisation that I could think of, I knew, deep down, that the words in gold thread looked wrong, and were plainly inappropriate.

They could not possibly be read by a litigant appearing before the courts without giving him the wrong impression about the relationship between the courts and the head of the executive. And yet some staff manager had ordered those jackets.

Some court staff members were plainly wearing them. And there must have been some judges and registrars who saw them being worn on a day-to-day basis without raising any objection.

The separation of powers is a central principle that was woven into the fabric of our Constitution.

The Alliance submission to the Reid Commission, reflecting the unanimous view of all parties in Malaya, stated that “The Judiciary should be completely independent both of the Executive and the Legislature”.

And for the public to have confidence in the judiciary, it is essential that the judiciary is not only independent, but also seen to be independent of the other branches of government.

Our Merdeka Constitution originally contained admirable safeguards of judicial independence.

Until 1960, Supreme Court judges were appointed by the King upon the recommendation of the Judicial and Legal Services Commission, after consulting the Conference of Rulers, with no input from the executive. Only in the appointment of the Chief Justice was the Prime Minister consulted.

The Merdeka Constitution likewise gave the executive no power to suspend or to constitute tribunals for the removal of judges, such powers being vested in the Judicial and Legal Services Commission, which was chaired by the Chief Justice and consisted mainly of judges or retired judges.

History sadly shows that the amendments of 1960, which vested in the executive the right to select, suspend and to commence removal proceedings against judges, ultimately paved the way for the 1988 constitutional crisis, the darkest days of the Malaysian judiciary, during which Lord President Salleh Abas and two other Supreme Court judges were dismissed by the executive.

Yet, even the Merdeka Constitution did not provide for a perfect separation between the executive and the judiciary.

This shortcoming can best be seen in the Judicial and Legal Service (JLS), which supplies magistrates and subordinate court judges as well as government legal officers.

Unlike in India, where the leaders of independence comprised many people imprisoned by the colonial justice system, and where the independence movement therefore campaigned for a strict separation of the judiciary and the prosecution services, in Malaya there has never been any pressure for such a separation.

To this day, it is normal for a JLS officer to alternate between the subordinate judiciary and the government legal services, and for magistrates and Sessions court judges to be junior in the JLS to Senior Federal Counsel who appear before them.

Lawyers will even tell tales of Sessions court judges standing up and addressing senior government lawyers as “Tuan” when the latter enters the judge’s chambers! This state of affairs is plainly unsatisfactory.

Once a judge is appointed to the High Court, he enjoys security of tenure and cannot be removed except for misbehaviour or disability. Nor can the terms of his employment be altered to his disadvantage.

However, that does not prevent him from being given additional benefits by the executive. The most obvious discretionary benefit today is in the conferment of titles.

In England, every High Court judge is knighted, every Court of Appeal judge is made “The Right Honourable” and every Supreme Court judge without exception gets the title of “Lord” or “Lady”.

But in Malaysia, there is no standard system of titles for judges. A judge who is showered with federal titles will naturally be regarded as being a favourite of the executive, whereas if a senior judge retires without any federal title, it will generally be assumed that he has displeased the executive.

The inconsistent awarding of titles within the gift of the executive is detrimental to public confidence in the independence of the judiciary, and has even led to public scandal.

It is high time that the judiciary, the executive and the legislature take concrete action to improve public confidence in the independence of the judiciary.

The setting up of the Judicial Appointments Commission has been one positive step in recent years. It should be followed by further confidence-building reforms.

> The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit

David Graeber, the Anti-Leader of Occupy Wall Street

Meet the anthropologist, activist, and anarchist who helped transform a hapless rally into a global protest movement

The Guy Fawkes mask—worn by a ­protester in New York on Oct. 5—has become ­symbolic of the Occupy Wall Street movement 
The Guy Fawkes mask—worn by a ­protester in New York on Oct. 5—has become ­symbolic of the Occupy Wall Street movement Scout Tufankjian/Polaris 
By Drake Bennett

David Graeber likes to say that he had three goals for the year: promote his book, learn to drive, and launch a worldwide revolution. The first is going well, the second has proven challenging, and the third is looking up.

Graeber is a 50-year-old anthropologist—among the brightest, some argue, of his generation—who made his name with innovative theories on exchange and value, exploring phenomena such as Iroquois wampum and the Kwakiutl potlatch. An American, he teaches at Goldsmiths, University of London. He’s also an anarchist and radical organizer, a veteran of many of the major left-wing demonstrations of the past decade: Quebec City and Genoa, the Republican National Convention protests in Philadelphia and New York, the World Economic Forum in New York in 2002, the London tuition protests earlier this year. This summer, Graeber was a key member of a small band of activists who quietly planned, then noisily carried out, the occupation of Lower Manhattan’s Zuccotti Park, providing the focal point for what has grown into an amorphous global movement known as Occupy Wall Street.

It would be wrong to call Graeber a leader of the protesters, since their insistently nonhierarchical philosophy makes such a concept heretical. Nor is he a spokesman, since they have refused thus far to outline specific demands. Even in Zuccotti Park, his name isn’t widely known. But he has been one of the group’s most articulate voices, able to frame the movement’s welter of hopes and grievances within a deeper critique of the historical moment. “We are watching the beginnings of the defiant self-assertion of a new generation of Americans, a generation who are looking forward to finishing their education with no jobs, no future, but still saddled with enormous and unforgivable debt,” Graeber wrote in a Sept. 25 editorial published online by the Guardian. “Is it really surprising they would like to have a word with the financial magnates who stole their future?”

Graeber’s politics have been shaped by his experience in global justice protests over the years, but they are also fed by the other half of his life: his work as an anthropologist. Graeber’s latest book, published two months before the start of Occupy Wall Street, is entitled Debt: The First 5,000 Years. It is an alternate history of the rise of money and markets, a sprawling, erudite, provocative work. Looking at societies ranging from the West African Tiv people and ancient Sumer to Medieval Ireland and modern-day America, he explores the ambivalent attitudes people have always had about debt: as obligation and sin, engine of economic growth and tool of oppression. Along the way, he tries to answer questions such as why so many people over the course of history have simultaneously believed that it is a matter of morality to repay debts and that those who lend money for a living are evil.

Graeber’s arguments place him squarely at odds with mainstream economic thought, and the discipline has, for the most part, ignored him. But his timing couldn’t be better to reach a popular audience. His writing provides an intellectual frame and a sort of genealogy for the movement he helped start. The inchoate anger of the Occupy Wall Street protesters tends to cluster around two things. One is the influence of money in politics. The other is debt: mortgages, credit-card debt, student loans, and the difference in how the debts of large financial companies and those of individual borrowers have been treated in the wake of the 2008 financial crisis.

“He is a deep thinker. He’s been a student of movements and revolutions,” says Kalle Lasn, the founder of Adbusters, the Vancouver-based anticorporate magazine. “He’s the sort of guy who can say, ‘Is this thing we’re going through like 1968 or is it like the French Revolution?’ ”

As Graeber explains it, it’s all part of a larger story: Throughout history, debt has served as a way for states to control their subjects and extract resources from them (usually to finance wars). And when enough people got in enough debt, there was usually some kind of revolt.

Graeber is small-framed and fidgety, with a pale boyish face and blue eyes. He dresses like a graduate student and speaks fast, in bursts punctuated by long ums, a ragged laugh, or pauses to catch his breath. He doesn’t make much eye contact. When finishing a thought, he has a habit of ducking his head and arching his eyebrows, as if he has just heard a faint but alarming sound.

For several weeks—since the fourth day of Occupy Wall Street—Graeber has been in Austin, Tex., reuniting with his girlfriend, a fellow anthropologist just back from fieldwork in Mexico. While there he has been peripherally involved with Occupy Austin, a small, fractious offshoot of the original Zuccotti Park occupation, one of many around the world.

Graeber began the summer on sabbatical, moving back to New York from London and frequenting an artists’ space called 16Beaver. It was an intellectual activist salon, located near Wall Street, the sort of place where people would discuss topics like semiotics and hacking and the struggles of indigenous peoples. Like many other American activists, Graeber had been deeply moved by the occupation of Cairo’s Tahrir Square and by the “Indignados” who had taken over central Madrid; in mid-July, he published a short piece in Adbusters asking what it would take to trigger a similar uprising in the West. For much of the summer, the discussions at 16Beaver revolved around exactly that question. When a local group called Operation Empire State Rebellion called for a June 14 occupation of Zuccotti Park, four people showed up.

On July 13, Adbusters put out its own call for a Wall Street occupation, to take place two months later, on Sept. 17. Setting the date and publicizing it was the extent of the magazine’s involvement. A group called New Yorkers Against Budget Cuts—student activists and community leaders from some of the city’s poorer neighborhoods—stepped in to execute the rest. For three weeks in June and July, to protest city budget cuts and layoffs, the group had camped out across the street from City Hall in a tent city they called Bloombergville. They liked the idea of trying a similar approach on Wall Street. After talking to Adbusters, the group began advertising a “People’s General Assembly” to “Oppose Cutbacks And Austerity Of Any Kind” and plan the Sept. 17 occupation.

The assembly was to be held in Bowling Green, the downtown Manhattan park with its famous statue of a charging bull pawing the cobblestones. Graeber had heard about the meeting at 16Beaver, and the afternoon of Aug. 2 he went to Bowling Green with two friends, a Greek artist and anarchist named Georgia Sagri and a Japanese activist named Sabu Kohso (who is also the Japanese translator of Graeber’s books).

A “general assembly” means something specific and special to an anarchist. In a way, it’s the central concept of contemporary anarchist activism, which is premised on the idea that revolutionary movements relying on coercion of any kind only result in repressive societies. A “GA” is a carefully facilitated group discussion through which decisions are made—not by a few leaders, or even by majority rule, but by consensus. Unresolved questions are referred to working groups within the assembly, but eventually everyone has to agree, even in assemblies that swell into the thousands. It can be an arduous process. One of the things Occupy Wall Street has done is introduce the GA to a wider audience, along with the distinctive sign language participants use to raise questions or express support, disapproval, or outright opposition.

When Graeber and his friends showed up on Aug. 2, however, they found out that the event wasn’t, in fact, a general assembly, but a traditional rally, to be followed by a short meeting and a march to Wall Street to deliver a set of predetermined demands (“A massive public-private jobs program” was one, “An end to oppression and war!” was another). In anarchist argot, the event was being run by “verticals”—top-down organizations—rather than “horizontals” such as Graeber and his friends. Sagri and Graeber felt they’d been had, and they were angry.

What happened next sounds like an anarchist parable. Along with Kohso, the two recruited several other people disgruntled with the proceedings, then walked to the south end of the park and began to hold their own GA, getting down to the business of planning the Sept. 17 occupation. The original dozen or so people gradually swelled, despite the efforts of the event’s planners to bring them back to the rally. The tug of war lasted until late in the evening, but eventually all of the 50 or so people remaining at Bowling Green had joined the insurgent general assembly.

“The groups that were organizing the rally, they also came along,” recalls Kohso. “Then everyone stayed very, very late to organize what committees we needed.”

While there were weeks of planning yet to go, the important battle had been won. The show would be run by horizontals, and the choices that would follow—the decision not to have leaders or even designated police liaisons, the daily GAs and myriad working-group meetings that still form the heart of the protests in Zuccotti Park—all flowed from that.

For Graeber the next month and a half was a carousel of meetings. There were the weekly GAs, the first held near the Irish Hunger Memorial in Battery Park City, the rest in Tompkins Square Park in the East Village. He facilitated some of them and spent much of the rest of his time in working group meetings in people’s apartments. (On Aug. 14 he tweeted, “I am so exhausted. My first driving lesson … then had to facilitate an assembly in Tompkins Square Park for like three hours.”) He organized legal and medical training and classes on nonviolent resistance. The group endlessly discussed what demands to make, or whether to have demands at all—a question that months later remains unresolved.

In the Sept. 10 general assembly the group picked the target for their occupation: One Chase Manhattan Plaza. They also picked several backups. So when the police fenced off Chase Plaza the night before the occupation was scheduled to start, the occupiers were prepared. On Sept. 17, barely an hour before the scheduled 3 p.m. start time, the word went out to go to Zuccotti Park instead, and 2,000 people converged on the now famous patch of stone flooring, low benches, and trees. It was a fortunate choice: Zuccotti is a privately owned park, so the city doesn’t have the right to remove the protesters. Graeber helped facilitate the GA that night in which they decided to camp out in the park rather than immediately march on Wall Street. Three days later, when he flew to Austin, the protests were still little more than a local New York story.

Graeber has been an anarchist since the age of 16. He grew up in New York, in a trade-union-sponsored cooperative apartment building in Chelsea suffused with radical politics. A precocious child, he became obsessed at 11 with Mayan hieroglyphics. (The writing had then been only partially deciphered.) He sent some of his original translations to a leading scholar in the field, who was so impressed that he arranged for Graeber to get a scholarship to Phillips Academy in Andover, Mass.

Graeber’s parents were in their 40s when they had him and had come of age in the political left of the 1930s, self-taught working-class intellectuals. Graeber’s mother had been a garment worker and, briefly, a celebrity—the female lead in a musical comedy revue put on by the International Ladies’ Garment Workers’ Union that managed to become a Broadway hit. His father worked as a plate stripper on offset printers. Originally from Kansas, he had fought for the Republicans in the Spanish Civil War. Anarchists made up one part of the fragile Republican coalition, and for a brief period they controlled Barcelona.

“Most people don’t think anarchism is a bad idea. They think it’s insane,” says Graeber. “Yeah, sure it would be great not to have prisons and police and hierarchical structures of authority, but everybody would just start killing each other. That wouldn’t work, right?” Graeber’s father, however, had seen it work. “So it wasn’t insane. I was never brought up to think it was insane.”

Years later, Graeber was a graduate student at the University of Chicago, and his field research brought him into contact with another, albeit very different, anarchic community. His dissertation was on Betafo, a rural community in Madagascar made up of the descendants of nobles and their slaves. Because of spending cuts mandated by the International Monetary Fund—the sort of structural-adjustment policies Graeber would later protest—the central government had abandoned the area, leaving the inhabitants to fend for themselves. They did, creating an egalitarian society where 10,000 people made decisions more or less by consensus. When necessary, criminal justice was carried out by a mob, but even there a particular sort of consensus pertained: a lynching required permission from the accused’s parents.

Graeber didn’t become an activist until after the massive 1999 World Trade Organization protests in Seattle. At the time an associate professor at Yale, he realized that the sort of movement he had always wanted to join had come into being while he was concentrating on his academic career. “If you’re really dedicated to this stuff, things can happen very quickly,” he says. “The first action you go to, you’re just a total outsider. You don’t know what’s going on. The second one, you know everything. By the third, you’re effectively part of the leadership if you want to be. Anybody can be if you’re willing to put in the time and energy.”

It was a particularly happy period for Graeber. In New Haven he was a scholar, and in New York, where he spent much of his time, he was an anarchist—he had found a new community among the loose coalition of activists, artists, and pranksters who called themselves the Direct Action Network. There were protests but also elaborately choreographed festivities—“reclaim the streets” parties, or nights when everyone converged on a particular subway train and rode it through the city carousing.

It came to an end in 2005, when Yale terminated his contract before he had a chance to come up for tenure. Graeber appealed, and his case became a cause at Yale and in the broader community of academic anthropology. He maintains he was targeted at least in part because of his political activism. Others saw evidence that the modern university was exactly the sort of hierarchical organization that Graeber was philosophically opposed to and temperamentally unsuited for.

“There was an issue about his personal style, whether he was respectful enough to various senior people both in the department and at the university. He’s not someone who is known to be very pliable,” recalls Thomas Blom Hansen, an anthropology professor at Stanford who was a friend and Yale colleague of Graeber’s at the time. “I don’t think anyone doubts that he’s a major figure in his field,” he adds. “But he’s not really interested in the humdrum daily life of administration that constitutes an increasing part of our life in the academic world.”

Everyone involved in the creation of Occupy Wall Street, from Graeber to the editors of Adbusters to New Yorkers Against Budget Cuts, has been astonished by its success. The world of American left-wing activism, populated as it is by an unwieldy mix of progressives and pacifists, civil libertarians and Marxists, idealists and pragmatists, is often riven by disputes and mutual misunderstanding. What’s notable about Occupy Wall Street is that it was born not in spite of that tendency but because of it. For his part, Graeber doesn’t attribute the success of the occupation to its planners but to luck, timing, and the pervasive mood of anger and disillusionment in the country: There are few jobs, the political process has ground to a halt, and as individuals and as a nation, we’re drowning in debt.

Graeber’s problem with debt is not just that having too much of it is bad. More fundamental, he writes in his book, is debt’s perversion of the natural instinct for humans to help each other. Economics textbooks tell a story in which money and markets arise out of the human tendency to “truck and barter,” as Adam Smith put it. Before there was money, Smith argued, people would trade seven chickens for a goat, or a bag of grain for a pair of sandals. Then some enterprising merchant realized it would be easier to just price all of them in a common medium of exchange, like silver or wampum. The problem with this story, anthropologists have been arguing for decades, is that it doesn’t seem ever to have happened. “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money,” writes anthropologist Caroline Humphrey, in a passage Graeber quotes.

People in societies without money don’t barter, not unless they’re dealing with a total stranger or an enemy. Instead they give things to each other, sometimes as a form of tribute, sometimes to get something later in return, and sometimes as an outright gift. Money, therefore, wasn’t created by traders trying to make it easier to barter, it was created by states like ancient Egypt or massive temple bureaucracies in Sumer so that people had a more efficient way of paying taxes, or simply to measure property holdings. In the process, they introduced the concept of price and of an impersonal market, and that ate away at all those organic webs of mutual support that had existed before.

That’s ancient history, literally. So why does it matter? Because money, Graeber argues, turns obligations and responsibilities, which are social things, into debt, which is purely financial. The sense we have that it’s important to repay debts corrupts the impulse to take care of each other: Debts are not sacred, human relationships are.

If we understand the social origins of debt, Graeber says, we become much more willing to renegotiate debts when conditions change, whether those are mortgages, credit-card debts, student loans, or the debts of entire nations. And if the desperate response to the ongoing financial crisis has shown anything, he argues, it’s that we’re willing to forgive debts if the institution that has them is important.

“Sovereignty does ultimately belong to the people, at least in theory. You gave the bank the right to make up money that is then lent to you,” he argues. “We collectively create this stuff, and so we could do it differently.”

Graeber’s book is getting glowing praise from his fellow anthropologists, and it has gotten attention beyond that world as well. (Though according to Mandy Henk, a librarian from Indiana minding the library that has sprung up in Zuccotti Park, copies of his work there aren’t seeing a lot of use.) Few mainstream economists are familiar with his ideas. Professor Tyler Cowen of George Mason University, who happens to be a widely read blogger, is one of them. “He whacks a bit of sense into people, and I think he’s right and Adam Smith was wrong,” he says. Yet Cowen, himself a libertarian, isn’t won over to Graeber’s politics. He sees little alternative to the modern state. “Look at Somalia. If there’s a vacuum, something has to fill it.”

He might also point to the drummers of Zuccotti Park. The constant beat from drum circles there has provided the occupation’s soundtrack, but it has also elicited a steady flow of noise complaints, trying the patience of an otherwise supportive community board and elected officials. Through weeks of mediation and discussion in the general assembly, a few drummers have steadfastly defied any limits on when they can play, though organizers are hopeful an agreement hashed out on Oct. 25 will finally solve the problem.

At the end of his book, Graeber does make one policy recommendation: a Biblical-style “jubilee,” a forgiveness of all international and consumer debt. Jubilees are rare in the modern world, but in ancient Babylon, Assyria, and Egypt under the Ptolemies they were a regular occurrence. The alternative, rulers learned, was rioting and chaos in years when poor crop yields left lots of peasants in debt. The very first use in a political document of the word freedom was in a Sumerian king’s debt-cancellation edict. “It would be salutary,” Graeber writes, “not just because it would relieve so much genuine human suffering, but also because it would be our way of reminding ourselves that money is not ineffable, that paying one’s debts is not the essence of morality, that all these things are human arrangements and that if democracy is to mean anything it is the ability to all agree to arrange things in a different way.” —With reporting by Karen Weise

Bennett is a staff writer for Bloomberg Businessweek

Thursday, October 27, 2011

Google's Business Experiment: Nothing but Web

In the cloud: A model uses a Chromebook on an airplane.Google

Google's Business Experiment: Nothing but Web

Computers that do everything in a Web browser are touted as an inexpensive alternative for companies.
  • Thursday, October 27, 2011 By Tom Simonite

Decades of Moore's Law have trained us to expect every new computer to do more than the one before. Google's most ambitious foray into cloud computing, however, has it wooing businesses with computers that do much less.

Those computers are known as Chromebooks. The laptops, officially launched in June, use an operating system called ChromeOS that is little more than a souped-up version of Google's Chrome Web browser. "Chromebooks came from this realization that cloud computing gives an opportunity to rethink what the desktop is," says Rajen Sheth, Google's program manager for Chromebooks. The pitch to businesses is slightly more prosaic: outfitting and supporting workers with Google's Chromebooks costs a lot less than giving them conventional PCs.

Google offers Chromebooks under a subscription model, where each machine costs between $20 and $33 per month. That price includes support and a promise that a replacement will be priority-shipped for any computer that breaks. Gartner research estimates that the total cost of ownership to a business is between $3,300 and $5,800 annually for a regular desktop computer, and more for laptops. The cost of owning a Chromebook, according to Google, is simply 12 times its monthly subscription cost—at most, $396 per year.

In typical Google fashion, Chromebooks were not released as a fully polished product. They first appeared in December 2010, when Google sent a prototype, the Cr-48, to thousands of volunteer testers and journalists (read Technology Review's review of the Cr-48). Feedback from that experiment was used in creating the first Chromebooks available for sale, which appeared this summer and are made by Samsung and Acer.

Despite the low cost, Chromebooks outperform conventional PCs in some respects. They take only eight seconds to boot up and can manage even a long workday on a single battery charge. Yet logging in to find nothing but a browser—no desktop with shortcuts, no conventional applications such as Microsoft Office—is unnerving. Whether you're composing e-mail, creating a presentation, or editing an image, you have to do it using the Web. Without an Internet connection, very few Chromebook apps will work at all.

Sheth says that poses no problem for many workers. "A significant proportion of people in business today just use a browser for everything they do," he says. Many call center workers and traveling sales reps already rely on software accessed through a browser. In fact, before leading Chromebook, Sheth was responsible for much of Google's success in convincing companies to adopt business versions of Web-based apps such as Gmail.

Sheth's most clearly detailed business case for Chromebooks revolves around what the laptops offer to IT staff. There's no need to install and configure security software, because the only software on the computer—the ChromeOS operating system—is updated automatically by Google and encrypts all saved data. What customization tasks remain can be handled using a slick Web-accessible dashboard.

"There's a huge pain point for IT managers around manageability, upgrades, and security," says Frank Gillett, who covers emerging technologies in IT for Forrester Research. "Google has built a back-end service for Chromebooks that takes care of all that very well."

Sheth declined to say how many Chromebooks have shipped, but there are some signs the market for Web-only computers may prove larger than many anticipated. Gillett recently surveyed IT buyers and found that around 16 percent of them said their users could survive with just a Web browser. "I expected to prove they're really skeptical, but they weren't," he says. Even so, Gillett still considers Chromebooks an "experiment" rather than a polished product line.

As Google upgrades the ChromeOS operating system, its stripped-down computers are likely to become more capable. Full support was recently added for the business package Citrix, which allows a Chromebook user to log in to a remote desktop and use Windows. Sheth says the important thing for Google is that the Chromebook gain a toehold in the market. "We're really aiming for the future vision of the enterprise. Today is the market entry strategy, not the end point," he says. He predicts that it will be another three to five years before most business tasks are done through a Web browser.

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