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MARCH 2000 |
IN THIS ISSUE
MAIN FEATURE Helping Hand? The State and India’s Software Industry By Romi Mahajan eBUSINESS Managing IT Resources: The World at Your Web By Amber Cargile IT COMMUNICATIONS DSL: Newer Faster Internet By Murali Bhat About Us • Java World: Beginning Class Law: Immigrants’ Spouses • Finance: Retirement Accounts Health: Dealing with Heartburn • Culture: Raga Marwa • Yoga: Eye Exercises Bollywood • Telugu Cinema • Recipe: Kashmiri Dum Aloo • Horoscope |
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About Us:
We are a magazine for Silicon Valley South Asians with special focus on the Infotech industry in particular and science in general. In addition, it will also look at the broader aspects of South Asian hi-tech life covering an all encompassing gamut that can include issues as diverse as law, philanthropy, health care and relationships. We are not above throwing in a mouth-watering recipe to add zest to your dinner table. |TOP|
Main Feature I nodded appreciatively and smiled. But what she didn’t know is that I was thinking about the Indian market when she made the comment, not the U.S. market. Anybody who has been watching the Indian stock markets knows that the indices have soared to dizzying heights and that the bull market has been propelled largely by Information Technology stocks, of which software stocks are the leading lights. In addition, a few Indian companies have listed their shares on the NASDAQ and anybody who got in to those shares (INFY and SIFY) early is sitting pretty. The New York Stock Exchange estimates that as many as 10 Indian IT companies will list on U.S. exchanges this year and many people I know are making cash available to invest in these upcoming issues. But hold your applause. This go-go market has unleashed free-market orthodoxy of the most extreme kind, with a convenient intellectual sleight of hand that ignores the pivotal role the Indian state played in nurturing India’s software potential. Silicon Valley tycoon Kanwal S. Rekhi, a 54-year-old IT entrepreneur who made $300 million before he retired, told the New York Times in a Feb. 29 article that “he went to America so his brain wouldn’t go down the drain in socialist India,” and added condescendingly that his business trips to India are “missionary work.” And recently at an address at Stanford University by India’s deputy planning chief B.C. Pant, Rekhi harangued Pant with the caustic remark that the government should get out of planning anything, period. Luckily for Rekhi, the advice could not be applied retroactively. For if it were indeed applied retroactively, then the much derided Nehruvian planning would have been jettisoned in the 1950s, and there would be no IITs. No IITs means no coveted degree for Rekhi and hence no $300 million. This sort of remark is typical of the ostrich-in-the-sand myopic fulminations that are clouding common sense. The reality, whether in India or in the U.S., is that the state role has been crucial in the development of IT industry don’t forget that in the West, two of the key elements of IT both came from the public domain the internet from the U.S. Defense Department, and the world wide web from the Geneva-based European physics research organization CERN. And lest history vanish into thin air, destroyed by PR and rhetoric, it is important to remember that the great ascendancy of the U.S. in high-technology is largely due to the government’s role in nurturing the incipient technology companies of Silicon Valley and Route 128. In India , the intellectual knowhow to tap the vast potential of IT has sprouted in the plethora of state-funded engineering training institutes of which the IITs are just the acme. It is important, though, to remember a few things here as well:
It is through a complex and fruitful interaction of the state and the market that the long-term health of India’s software industry can be guaranteed. Yet the market frenzy has drowned all sense of perspective. In India, trading volumes are at all-time highs and companies that were quoting below Rs. 100 a share a mere two years ago are now quoting in the thousands. As Rajneesh Mahajan, director of Composite Securities, a Delhi-based brokerage house, told me, “With IT scrips in this incredible bull run, we are finding that investors feel that they can’t afford NOT to be in the market. These are heady times volumes are stratospheric and despite commissions being razor thin, profitability is high as well.” Judging by the markets, one would think that Indian software companies are the best, most innovative companies in the world. But just like the stockbrokers and investors who have never seen bad times, investors in Indian IT stocks who have entered the market in the past two years may get a rude awakening if Indian companies can’t justify their lofty valuations. Now let me be clear. I am not predicting a stock market downturn and am not trying to begrudge Indian software companies their enormous success over the past decade. In fact, I am optimistic about these companies because I know from direct experience that many of them (certainly not all) are managed professionally and employ technical talent that of extremely high caliber. I also know that there are increasing forays into international markets (especially the U.S.) that are allowing Indian companies to grab market share in the biggest software markets of the world (the U.S. market is itself responsible for between 40 percent and 50 percent of world demand). But what gives me pause is the fact that Indian software companies are still at the low end of the value chain and are not innovative; furthermore, there is little sign that they are moving up the value chain because they compete on one factor alone -- comparative cost advantage. In the fast-moving world of technology which itself is embedded in an increasingly competitive global economy, competing on cost advantage and not on the ability to innovate is not sustainable. Without innovation and constant striving to move up the value chain, India’s competitive advantage that may for a while be derived from cost advantage will erode as technologies evolve, terms of trade and patterns of investment change, and as new locations spring up that can undercut India on price. While the stock market bulls may call me a naysayer it is useful to consider the following:
“We are trying a new model at iDLX we are not an offshore company. We compete for the high end of the U.S. value chain.” To understand what is at issue, it is useful to look into some of the more theoretical aspects of technology and economic growth. Scholars generally agree that technology is a driving force for economic growth and international competitiveness. In fact it has become a truism that countries that can create and deftly adapt technology into usable processes and products have an advantage over countries that cannot sustain innovation. The Nobel laureate Abdus Salam in fact averred that what distinguishes the developed world from the developing is “the ambition, the power, the élan which…. stems from their differing mastery and utilization of present-day science and technology.” Using the Indian software industry as a platform for analysis, it is useful to understand that the science and technology gap or innovation gap results not just from constraints to innovation in developing countries imposed by a world system of unequal exchange, but also as a result of institutional incapacity in countries like India to manage innovation. Simply put, India does not have the institutional capacity to create a milieu of innovation on the model of a Silicon Valley. The reasons for this are manifold and complex, but it is important to understand them at a qualitative level. There are three issues that are of particular salience here: Product Cycle Theory, international subcontracting/offshoring, and lack of domestic demand. Product Cycle Theory states simply that products pass through phases during their life cycles in which the necessary inputs for production change in their relative importance. Witness the now ubiquitous Walkman. First developed by Sony in Japan, it was truly an innovation in consumer electronics; most readers will recall that when it first appeared on the market, it cost over $50 and wasn’t as functional and sleek as the Walkman is today. But as the market grew and the production process became increasingly rationalized, production of this product was offshored to low-cost South East Asian countries. Now, one can get a Walkman for $10 that has more functionality than the original. In other words, as different factors of production are emphasized, the geographical location of production migrates from advanced to developing countries. In the early or innovative phase of a product’s life cycle, high skill-intensity personnel are important, sophisticated R&D systems are necessary, and proximity to the main market is crucial. Quite clearly, this implies that the innovative stage will occur in advanced countries, with large markets and an abundance of highly trained humanware. This theory suggests that high-end steps in the creation of software are done in advanced countries and the low-end, portable steps are offshored to countries like India, where medium and low-level task can be performed at a fraction of the costs reigning in the advanced countries. The issue of offshoring is important in any analysis of the Indian software industry. Trans-national companies are happy to outsource low-end work to Indian companies since software programmers in India earn about 10 percent of what they earn in the U.S. These companies subcontract “job-work” to Indian companies that compete only on the basis of cost. While subcontracting certainly brings great promise in the short-term, dependence on subcontracting for revenue also brings great peril. First, well-defined, project-oriented job-work may pay handsomely, but it does not create a recurring stream of revenue. Second, it creates a sense of technological stasis in the subcontracted firm since it is generally low-level, labor-intensive work that is subcontracted. Third, it creates technological dependence on the multi-nationals that actually design, produce, and market high-end products and systems that subcontractees have to buy. Thus, a constant diet of low-end, subcontracted work militates against the need for and creation of an innovative base within India itself. Still, if they want business, Indian firms must scramble for subcontracted work since the domestic market in India has not shown the buoyancy that pundits have been predicting since 1991: During the last fiscal year, the total internal demand was a paltry $1.25 billion. The lack of domestic demand is perhaps the single largest constraint on innovation in the Indian software industry. Close proximity to a large source of demand is critical in order to encourage and sustain the types of feedback loops that are necessary for innovation. Clearly, there are enormous odds against the creation of innovative milieus in India, but there is no reason to believe that these are permanent features of the Indian economic landscape. I started this article with talk about markets; I will conclude it with a warning about markets. There are two worrisome trends in Indian economic discourse that compound the already existing problems of India’s low place on the value chain. Both of them have to do with markets. First is the constant invocation of comparative advantage principles from which it is argued that since India’s advantage is cheap labor, India should do its best to grab low-end, outsourced work and not worry about high-end, innovative areas since cheap labor hardly helps in these areas. This market-dictated, static view of comparative advantage has never stood any country in good stead. Second is the mantra of the “market,” adopted with the vast reforms in the Indian economy staring in 1991. Implicit (often stated) in the rhetoric about the market’s ability to push India out of the economic doldrums is that the state must recede from the productive milieu. My research indicates that such thinking is wrong-headed, even disingenuous. Even a casual stroll through the history of technological innovation over the last century and a half leads to the conclusion that the role of the state in promoting innovative enterprises is of singular importance whether you look at Silicon Valley and Route 128, the M3 Corridor, or Tokyo. Second, only the state, an actor that still strides like a Colossus on the economic scene, can preside over (in concert with other actors) the types of institutional reconfigurations needed if India is ever to create an innovative base and truly compete on equal terms with other countries. What other entity could manage what planners refer to as “social re-engineering?” What other entity could make proper investments in education, health care, the legal system and a host of other institutions that are necessary for the creation of a skilled populace not completely burdened by the existential issues that necessarily arise in an environment vitiated by scarcity? Markets are important to the upward pushes of any economy, but market fundamentalism will lead India down the wrong path. What we really need in India is an honest assessment of our social, economic, and political institutions. Only after such an assessment is made can we hope to set processes in motion that will allow the economy to prosper. While the Indian software industry has had considerable success over the past decade, there is a large task ahead. Only if we heed the lessons of other countries and create a framework in which the state, a reconfigured and recast state certainly, can work synergistically with educators, politicians, entrepreneurs, and other actors will we be able to move up the value chain. I do not wish here to make specific recommendations (though I do that in my consulting work). The aim in this piece is to make a broad point: I want to reintroduce in the state to the agenda in policy discussions. The question, “Can Indian software be innovative?” can only be answered truthfully once India creates the basic preconditions for innovation. Though riding high now (and rightfully so), the Indian software industry must take the long view and expend energy and resources into creating structures and institutions that make moving up the value chain possible. Romi Mahajan is an associate of the |TOP| Learning Java This introductory article assumes no knowledge of object-oriented programming and is designed to get you thinking in terms of how to create classes. I won’t use the exact syntax of Java yet. It is most important to get the idea of thinking in classes first. Classes The most important construct in the language is the class. It is used as a way to structure and organize your program. Think of how you would separate things in the world. Think of one thing, a person perhaps. What attributes might a person have? Name, age, height, etc. You would combine these things into a class doing something like: class Person name age height name : Sriram age : 28 years height : 5’9” name : Mary age : 37 years height : 5’8” class Employee name : SocSecNum: name : Sing Lei SocSecNum:0983451234 The concept of classes allows them to be put together as building blocks to model the real world. In Java and other object-oriented languages, the construct to model the real world is inheritance. Inheritance allows you to extend the functionality of the class. For example, there are specific kinds of employees: managers, software engineers, human resources. The class for the manager might include the department he or she manages. The class would be: extends Employee department: name : Sitaram SocSecNum:1234567890 department: research and development You could also create a class SoftwareEngineer to extend the Employee class: class SoftwareEngineer extends Employee languages: SocSecNum:0987654321 languages: Java, C++, Fortran Next month, you will learn about getting started using a Java compiler and some basic language constructs of the Java syntax. Marian Corcoran can be reached at marian@centeradv.com - Marian Corcoran is president of Technical University |TOP| eBUSINESS: Ask Ron Faulkner, vice president for customer service technology solutions at Cotelligent, about the impact a good Management Service Provider can have on a company and he’ll sing its praises. Cotelligent was one of the beta customers for @Manager, a service recently introduced by a rising-star MSP called @Manage, based in Sunnyvale, Calif. A software professional services firm that provides information technology consulting and outsourcing services, Cotelligent conducts operations from offices in 27 metropolitan areas across the United States. “Cotelligent was having problems with its network, “ said Faulkner. “We were troubleshooting problems and trying to patch it up, but couldn’t figure out why the network wasn’t working properly. With the help of @Manage, we got a handle on the problem. They monitored our system and documented how many times our server was down and impeding our flow of business. With this hard data, we were able to justify additional hardware to top management which eliminated all down time on our system.” Cotelligent appears to be on the right track. According to Gartner Group analyst Stephen Elliot, using such services is a good strategy for companies that want to gain control of their internal information technology infrastructures. Elliot, who coined the term Management Service Provider, said MSPs eliminate the need for companies to buy, maintain or upgrade management systems. In a recent article in Networld Fusion, Elliott said that by allowing the MSP to take over responsibility for monitoring, measuring and reporting on its servers, networks and applications, a company is able to fully focus on its core competencies, while still maintaining control of its network resources. @Manage, which recently received $1.2 million in first-round funding from NetAngels and other strategic investors, is the only Web-based MSP that remotely monitors and manages IT infrastructures for small to mid-market companies. In addition to Cotelligent, @Manage clients include Oracle Business Online, Fannie Mae, Washington Post.com, HotBiz, and Chipshot.com.@Manage delivers its management services to clients through its suite of tools, which includes @Manager and @Monitor, services that are currently powered by Sun Microsystems and hosted on servers co-located at Exodus Communications. The company was founded in 1998 by CEO Paras Gupta,along with VP for business development Christine M. Flores, CIO Xun Fang, and CFO Derrick L. Arias, all former Exodus employees. Under their leadership, the company is realizing its vision to provide a cost-effective enterprise management solution for e-businesses that monitors and manages anything, from anywhere, anytime, over the Internet. Using Web technology, @Manage customers can get a desktop, consolidated view of their IT resources, right on their Web browser. “One of the great aspects of our services is that management can access the information anywhere, anytime,” said Gupta. “An administrator can be laying on a remote Polynesian beach, sunscreen in one hand, wondering how his system is running, dreading the sound of his beeper. All he or she has to do is go back to his hotel room, fire up the laptop, connect to the Internet, and voila!, the administrator can get a consolidated picture of the status of his or her IT resources, in real time,” he said. For many clients the biggest appeal of using an MSP is the bottom line, which can translate into big dollar savings. “@Manage believes information technology should support the growth plans of businesses, not hinder them,” said Gupta “However, many top-tier enterprise management solutions require considerable investment of resources that most growing companies cannot afford. This puts this kind of capability fiscally out of reach for many small to mid-size companies. And of course finding qualified IT professionals is a major challenge as well. But our services make that kind of critical protection an affordable reality for our customers,” he added. “Our services help management on many levels, from ensuring they know about their IT problems before their customers do, to ensuring the company’s vendors are performing up to their service level agreements. This is essential in a business environment where a company must literally operate and respond to problems on Internet time in order to survive, ” said Christine Flores, co-founder and vice president of sales & marketing. @Manager monitors and manages networks that contain equipment from a variety of vendors and over different operating systems. It provides real-time monitoring, reporting, and alerting for Internet, Extranet, and Intranet IT resources. It offers advanced functionality that ensures ongoing availability and performance of servers, networks, applications, and services. By continually monitoring IT resources, @Manager identifies potential problems before they impact operations, thus ensuring that IT resources continually deliver responsive service to the end users. Businesses using @Manager can view a graphical representation of comprehensive metrics for key IT resources and also have direct access to raw data that can be exported to third party analytical tools for further analysis. IT resources are color-coded and handicap-enabled to designate the overall status of each resource. These graphs empower system and network administrators to control and respond to IT problems before their end-users experience any disruption in services. Automatic alarms can be set based on user-defined thresholds and @Manager immediately reports conditions that require corrective action and can send alerts to appropriate personnel via either an “event console”, a pager, or e-mail. For a limited time, @Manager is offered at $199 per IT device per month for a one-year commitment. The company’s @Monitor service, offered for free, was introduced last year and provides hourly, daily, weekly, and/or monthly graphs to measure performance and utilization and allows for trend analysis and capacity planning of IT resources. This helps to ensure high availability and performance 24 hours a day, 7 days a week for e-Commerce, email, file servers, database servers, and ftp servers. @Monitor also performs diagnoses on key system components such as CPU, Memory, and File System for UNIX, LINUX, and NT Servers. Secured browser access to all performance and historic data allows for trend analysis. The key benefit to using @Monitor is the ability to run leaner systems with predictable costs and scalability. The system provides immediate implementation and return-on-investment, solutions that reduce the costs of technology ownership, and additional valuable time that can be spent on other aspects of managing and operating a business. It also helps avoid the risk of errors in costly technology planning and implementation. “We recognize that effective monitoring and management of networks, systems, applications, and services is critical for businessesby using an MSP, companies are buying a technological insurance policy against the uncertainties of the future,” Gupta said. MSP ADVANTAGES
@Manage: The Players Paras Gupta, CEO Born in New Delhi to a family of entrepreneurs, Gupta attended a private, English-language school in India before heading to college near Des Moines, Iowa, where he majored in computer science and computer engineering at Graceland College. Gupta worked in both Kansas City and Minneapolis before settling in Silicon Valley and pursuing his own business and entrepreneurial dreams. Inspired by the success he witnessed first-hand at Exodus Communications, Gupta first set out on his own with the successful Unify Consulting Group, which he formed with his fellow Exodus comrades Christine Flores, Xun Fang and Derrick Arias. The four segued their experience and successes at Exodus and Unify Consulting into founding @Manage and recently securing $1.2 million in first-round funding. Flores, as chair of the board for the Center to Develop Entrepreneurs, oversaw the successful launch of over 60 new businesses in high tech, biotech and consumer retail industries as president for the Center to Develop Women Entrepreneurs from 1996 to 1998. Fang has extensive experience in software design & development. His expertise includes programming in JAVA, C++, TCP/IP, object-oriented methodology and database application development. - Amber Cargile works for a |TOP| LAW: Once when your priority date becomes current, you will be interviewed at the US Embassy and if your petition is approved (if the marriage is genuine), you will be given a “Green card”. Generally it is a number , starting with “A” stamped on your passport at the Consulate. You will also be given a package to be given to the INS officer at the airport at which you land into the US. Based on this, your “Green card” will be mailed to you at your local US address within 6-8 weeks after you land in the US. The green card that you are given is temporary, valid for 2 years. Within 3 months of your approaching this 2 year date, you need to re-file for a permanent green card. You basically must prove that you and your sponsoring spouse are still married and living together. You and your spouse will be interviewed by INS and you will be approved for a permanent green card unless INS suspects fraud. TimeLine: After filing with INS/US Embassy or Consulate abroad, it takes approximately 6 months for your petition to be processed. After this period, you are in a que. Currently the que for India exceeds 4 years. This means you will be outside the US for approximately 4 years before you can join your spouse in the US. In the meantime, you will be denied an non-immigrant visa because, by filing for an immigrant visa, you have proved your intention to immigrate permanently and have lost the non-immigration intent. Non-immigrant visa basically includes tourist, student and business visas. There may be other options that you may have available to you:
Options if you do not get married.
- Anu Gupta is an immigration attorney |TOP| IT COMMUNICATIONS: DSL’s use of the existing twisted pair infrastructure makes it cheaper to install than other services which require additional cable to be laid. And unlike cable modems, DSL is not a bus technology, so the bandwidth available to the end user is more consistent. However, despite all of its positive attributes, DSL is not without flaw. For instance, in order to be eligible for DSL, the end user must be geographically within a certain distance from the central telephone office, otherwise the signal degradation is too great and DSL is unfeasible (for ADSL that distance is two miles.) In addition, numerous standards still exist for DSL, hardware is still comparatively pricey, and service is available only in limited areas. Despite these drawbacks, DSL is still a faster alternative to analog modems and ISDN, and should rival cable modems as far as actual bandwidth offerings. DSL is the acronym for Digital Subscriber Line technology. DSL is a relatively new technology that makes use of the old copper phone lines to significantly increase bandwidth between the phone companies and their customers. DSL is a service that everyone should have if they are using a standard dial-up connection and want faster internet. Remember DSL uses your existing phone line and does not require an additional phone line. The DSL service uses your existing phone line. This gives you 24 hour access and does not tie up your line and cause it to have a busy signal if you’re on the web. In its various forms DSL offers users a choice of speeds ranging from 32 Kbps to more than 50 Mbps. These digital services can and will be used to deliver bandwidth-intensive applications like video on demand and distance learning. Today DSL is putting high-speed Internet access within the reach of homes, small and medium-size businesses. DSL takes existing voice cables and turns them into a high-speed digital link. Over any given link, the maximum DSL speed is determined by the distance between the customer site and the Central Office. Most ISPs offer a range of speeds so customers can choose the rate that meets their specific business needs. At the customer premises, a DSL modem connects the DSL line to a local-area network (LAN) or an individual computer. Once installed, the DSL modem provides the customer site with continuous connection to the Internet. Analog Modems use a telephone network as is. That is, there are no special provisions that are required to use analog modems in today’s telephone networks. Analog modems simply allow digital data to flow over the telephone company’s already analog network by performing a digital to analog conversion for transmission onto the network and vice versa on the receiving end. The only necessity for analog modems is that each end of the call must have a compatible modem. In essence, this makes analog modem connections the most ubiquitous form of data communications available today. However, analog modems are thus limited by the telephone company’s voice bandwidth service. Current analog modems are struggling to achieve rates of only 56Kbps. With only a bandwidth of about 3,000 Hz, there is a extremely small finite limit on the amount of data that may be encoded and sent reliably through this network. User requirements far outstrip what analog modems can obtain today. Wireless There are a number of different wireless schemes proposed, planned and implemented throughout the world. Wireless access technology takes shape in a number of different forms such as via a satellite TV service provider or a cellular phone network. Wireless systems can provide ubiquitous access to a large number of subscribers in a relatively large area. Bandwidth can range from a few kilobits a second to many megabits and be either symmetrical or asymmetrical. Like all other technologies, there can be deployment issues which may include spectrum licensing, interference and noise problems, or bandwidth limitations. DSL speeds have a wide range. Typically ADSL users can expect maximum downstream rates of 1.5Mbps. Other DSL standards have their own specific speeds. Murali Bhat is a software professional |TOP| FINANCE: Income tax deferred savings with long-term compounding make IRAs an effective way to accumulate assets for retirement. Because individuals control how they invest their money, they can manage the risk and reward just as they would the rest of their financial portfolio. A variety of vehicles that might include mutual funds, CDs, stocks, and bonds can be balanced in conservative to aggressive investments providing the diversity and growth that will help build savings toward a comfortable future. Since the enactment of the Taxpayer Relief Act of 1997, there have been more IRA choices and flexibility. All IRAs grow income tax-deferred until withdrawn, at which point the earnings in traditional IRAs are taxed as ordinary income. In addition to the tax, a 10 percent federal income tax penalty may apply to contract owners under the age of 59. In some cases, contributions may be deductible from taxable income. But limitations exist. In a traditional IRA, anyone with earned income can contribute up to $2,000 per year, until age 70. For a married couple filing jointly you could say it is up to $4,000 ($2,000 each) until age 70. If neither spouse is covered by a company retirement plan, the maximum joint IRA contribution of $4,000 a year is fully deductible, provided they meet the earned income requirement. Depending on their amount of adjusted gross income on a joint tax return, a participant in an employer’s retirement plan and his or her spouse may also be able to make deductible IRA contributions. To reinforce the focus on retirement savings, any withdrawal taken prior to age 59 may be subject to a 10 percent federal income tax penalty on earnings withdrawn, as well as ordinary income taxes. As the government continues to push people toward managing their own financial retirement potential, there are two other kinds of IRAs that give people more savings choices. Most significantly, the Taxpayer Relief Act of 1997 included an alternative to traditional Individual Retirement Accounts, the Roth IRA.
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