For someone that makes a living producing and selling technology, I should probably not be writing this but ever since I took up my first job, I have been fascinated by the amount of money the financial world spends on software. What is even more fascinating is that all this money goes into building arcane software that the financial institutions love and the rest of the software world loves to hate. Billions of dollars are spent every year by wall street firms on their information technology needs, when millions would probably suffice. All because the smart sales guys over at some International BeheMoth consulting corporation convinced the financial institutions that security of their clients’ data can only be achieved through either software so badly written that a hacker won’t be able to follow it, or software so unnecessarily bulky that a hacker would never be able to get through it in order to make any sense of it. Jokes aside, let’s just say that the financial services software is hardly cutting edge.

Lehman Brothers announced bankruptcy over the weekend, laid off employees (some of my friends included), and triggered a selloff on the stock markets around the world. So I am shocked to learn that they upped their spend on IT, right through the credit crunch and into the bankruptcy! The subprime mortgage mess and the associated credit crunch first became news in mid-2007. According to Computer World, Lehman’s IT spend for the whole of 2007 was $1.145 billion, an 18% increase over 2006! Since then, there have been bad news after bad news for wall street, and especially Lehman Brothers. In March 08, Bear Stearns, a firm that is similar to Lehman in many ways, had to be rescued by the Fed. Many were quick to point out that Lehman might be next. What does Lehman Brothers management do? They go spend another $309 million on IT in Q2 08, up from $282 million in Q2 07!

Certainly, the Lehman Brothers executive team is responsible for this, but I’m sure they were worried about finding billions of dollars to cover their losses and decided that a few hundred million dollars would be immaterial. Either that, or the left hand at Lehman didn’t know what the right hand was doing The result is that a billion dollars of revenue is at risk for the software industry. Assuming that wall street will tighten its belt now by stopping large investments in newer arcane technology and, hopefully, start shifting to cheaper software services, there will be ripple effects across the financial services industry. We should expect most financial software companies to issue downward guidance in their next investor call, even if they don’t miss their targets this quarter, thanks to the generosity of firms such as Lehman.

I hope, for my savings and investments and not so much for my friends in the financial services sector, that the days of outrageous IT spending by financial firms are behind us.

I was browsing Slashdot this morning when a post headlined Superconducting Power Grid Launches in New York caught my eye. Growing up a nerd, I was fascinated by superconductors. They were the coolest thing, literally, since you could only achieve superconductivity (conducting electricity without any resistance) at very low temperatures - typically 250 degrees below zero. In the late 80’s, the field of superconductivity was abuzz with the discovery of high temperature superconductors. An American research team had concocted a new ceramic material that could achieve superconductivity at 92K (-181C), a temperature higher than liquid nitrogen, a commonly used coolant that is reasonably economical. That discovery spurred hopes of manufacturing commercial superconductors one day that could transmit electricity with very little loss (~ 7% of the power is lost during transmission in conventional power grids).

After that major discovery, for the last 20 years or so, superconductors pretty much disappeared from mainstream attention. But with this announcement by American Superconductor and Long Island Power Authority, commercial superconductor power grids are finally here! And we will be hearing a lot about them in the coming months.

My flight from New York to Raleigh got diverted to Greensboro, NC thanks to a few thunderstorms that are hovering over the RDU airport. We’ve been told it could be another hour before the storms clear and we are allowed to take off for our intended destination. It’s already been two hours since we landed. While I am clearly frustrated at the delay, I figured I’ll make the most of it by blogging about my first impressions of North Carolina and contrasting them with those of Seattle.

About ten days back, I had to take a connecting flight out of Charlotte, NC. We were all boarded up, our flight taxied to the front of the line and was literally seconds away from racing to take off, when I saw an alarming formation of swirling dust and clouds from my window seat. The formation was probably a mile away from where we were parked. I asked the person sitting next to me, who had mentioned a few minutes ago that she lives in Charlotte, whether tornadoes ever touch down there. Her response was “rarely”, which gave me no comfort at all. I started wondering if an amateur storm-chaser is going to soon boast of rare footage of a plane caught in a tornado. Within seconds, there was hail, followed by pouring rain. I had a perverse anticipation brewing in me. Luckily, the swirling winds died down quickly even though the storm stayed on for another 45 minutes grounding the plane for that duration.

While my first impressions of North Carolina are thunderstorms and pouring rain, my first impression of Seattle, my home for five years, is a beautiful, sunny city surrounded by snow-covered mountains and water! It wasn’t even summer when I first visited Seattle to interview with Amazon. It was one of those very rare spring days when the rain gods of the pacific northwest take a break. Of course, by the time I finally packed my bags and moved to Seattle, it was almost fall. Within a month, the sun hid behind the clouds and my first impressions gave way to the more familiar images of gray skies.

Once again, reality may be very different from first impressions. This time, that would be a good thing

It’s that time of the year again when the book industry gathers to get a read on itself. Book Expo America is the book industry’s premier trade show with attendees including publishers, retailers, authors, librarians, agents and consultants. This year, BEA, i.e Book Expo America, not to be confused with the software company, is being held in Los Angeles. Harish and I will be there all four days. If you plan to go, send us an email and we can meet at the expo.

I will be speaking on the panel titled Social Networking for Authors and Publishers. It is scheduled for 2:30 - 3:30 on Friday (May 30th) and is being moderated by Jerome Kramer of Rosetta Solutions. I plan to talk about iRead as an efficient and highly-effective marketing platform for authors and publishers. If there are any specific points you’d like me to touch upon, please leave those in comments. I’ll try my best to include them.

Samsung is coming out with a 256GB solid-state drive that is billed as the world’s fastest and largest SSD. How soon? Gizmodo says mass production will begin by the end of this year! This is great news.

For the uninitiated, this ZDNet article explains why SSD is something we should all be excited about. SSDs do not have moving parts, like the conventional hard disks. This translates to faster reads, lower power consumption, thinner profile, and most noticeably, no sound.

So why is it that I still don’t own one? Because of the cost. A 64GB SSD upgrade (on the Apple Macbook Air) costs upwards of $1000! While I am selectively cheap, I have happily paid early-adopter prices for many gadgets in the past - bought the first generation iPod, one of the first hand-held GPS devices, an eBook reader. The SSD is just too expensive. And turns out it doesn’t quite live up to the hype. This Computerworld matchup shows that SSD drives are only marginally better than HDD ones, and only for certain types of use cases.

This much-awaited announcement from Samsung changes the equation. The prices of SSD drives will fall significantly and reads will be twice as fast making them more compelling. Really exciting. What will be even more exciting is to see how the world of desktop software takes advantage of this technology and what types of new, innovative apps it produces.

One of the biggest benefits, often taken for granted, of delivering books in an electronic form is that you can potentially save lots of trees. I don’t sound confident on that claim because I’m not sure how many trees go into manufacturing an electronic reader and the power it consumes over its lifetime. In fact, I’m not even sure how one would estimate the quantity of natural resources indirectly consumed by a manufacturing process. Not too long ago, I learned that 140 liters of water goes into your cup of coffee! According to ScientificBlogging.com, Professor John Anthony Allan from King’s College London and the School of Oriental and African Studies has been named the 2008 Stockholm Water Prize Laureate for showing a way to measure how much water is embedded in the production and trade of food and consumer products. For our discussion, I’ll just say I have a hunch that digital delivery will save trees.

Coming back to the main story, I read in Publishers Weekly that Random House has decided to give Sony Readers to all its field sales reps.

At its national sales meeting in Bermuda this past weekend, Random House told its field sales reps that they’ll soon be receiving a fancy gift: a Sony Reader. According to RH spokesman Stuart Applebaum, “We have bought several hundred of the devices.”

It seems Random House isn’t the only publisher doing it. Simon & Schuster, Hachette, and St Martin’s Press had already announced similar plans. All of them seem to be as motivated by reducing paper wastage (and associated expense) as they are by improved process efficiency from digitization.

The use case that created an incentive for the publishing houses to invest in eReaders is not too different from the one, millions of school students face every day. I was in Hyderabad, India earlier this month, for my sister’s wedding, when I saw little kids lugging their body weights in their backpacks. It reminded me of my own childhood - we lived in Hyderabad till my 5th grade. I couldn’t help but notice, though, that the packs have gotten a lot heavier over the years.

I was sitting with my uncle, who came from a village in South India for the wedding, watching the kids make their way through the school gates. I remarked that in the future, the kids will just need to carry their notepads and an eReader to school. He was intrigued. I showed him my Sony Reader and told him it can hold 160 books. And that a future version might hold thousands. He was truly blown away. For someone who hasn’t yet seen the ipods and the digital camcorders, this was fast-forward 10 years. Even he could visualize kids in his village reading all their textbooks and comic books on their reader. But then he found out how much the Reader costs and the enthusiasm quickly faded away.

I got to thinking. If a $100 laptop can be possible, a sub-$50 eReader should certainly be possible. An affordable reading device could mean lots of trees still standing.

Sony Reader

It was a chilly November morning. I picked up the Wall Street Journal from my driveway. I opened it while sipping my morning coffee to find an article on Kindle, Amazon’s wireless ebook reader. Amazon, my former employer of 7 years, had recently launched the much touted Kindle in a widely publicized event on Nov 19^th. Since then Kindle generated an enormous amount of buzz, the kind that the ebook world never saw before, the kind it badly needed.

I put the newspaper aside, fired up Firefox on my always-on laptop, and started reading reviews for Kindle. I read this bland, but comprehensive, review on CNet and this really great, mostly negative, video review from Robert Scoble, and this one from Joe Wikert, who launched Kindleville, an entire blog dedicated to Kindle, a couple of weeks later.

Most of the reviews praised Kindle for its wireless freedom, but blasted it for poor design, restrictive DRM, and an outrageous price tag. All those negative reviews did little to suppress my old loyalties to Amazon. I decided to pay up $399 + tax and get myself a Kindle, even though many of the articles I read suggested alternatives. I hop over to Amazon.com and find that they are temporarily out of stock. Bummer! I was all ready to get one and now I have to wait. Amazon doesn’t even say how long I’d have to wait.

I wasn’t going to wait. I drove down to the nearest Borders store and bought a Sony Reader for $299 + tax. The shopping experience itself was quite funny and merits a mention. None of the store reps at Borders seemed to know they stocked Sony Readers. They had to ask around and finally some store manager type knew where they were on “display”. Unfortunately, the only reader they had in stock was locked inside that display case and they couldn’t find the key. They clearly hadn’t opened it in weeks, may be even months. Anyway, they finally found the key and I got my hands on the Sony Reader. Let me point out that I was not one bit annoyed by all this. The staff was very friendly and I thought the whole thing was pretty hilarious. It just gave me a perspective on where we currently are in the evolution of ebooks into mainstream media.

As I was leaving the store, I was worried that I might have jumped the gun. I tried reading books electronically before (on my laptop and my mobile phone) and that wasn’t great. The Reader might end up in the long list of gizmos that I bought but rarely used – digital voice recorder, GPS (handheld, not the car one), digital photo frame, cordless electronic can opener, etc etc.

Getting the ebook reader turned out to be the best purchase decision I made in a long time. Ever since I bought it, my Sony Reader and I have been inseparable. It goes wherever I go - trains, planes, the DMV. I have to say it’s quite a head-turner. Of course, I have been reading a lot of books since November – the free classics promotion from Sony certainly helped. And I’m loving it. If I have to put my finger on one thing that explains why I’m loving it so much, it would be the e-Ink display. What they say is true - it really is like reading on paper. I can read for hours without any eye strain. I can definitely see myself reading news papers, blogs, just about anything I spend hours reading on my laptop today, reading on an eInk device in the future.

With the new display technologies and the enthusiasm around Kindle (will Sony be far behind on its own wireless ebook reader?), we can finally say that the eBook has arrived. It’s still very early but we are past the point where the average joe walking down the street will agree that most books in the future will be read this way.