Tuesday, 3 December 2002 8:30 am
The thing to be most thankful for is that the investors have not given up on high tech.  The 33% rise of the NASDAQ composite since October 9 shows that the investors still believe tech is the growth market, despite almost three years of evidence to the contrary.  That’s very good news.  The only question is how not to disappoint them.

When Lee Iacocca took on the job of saving Chrysler in the early 1980’s, I recall a press interview where he was asked what types of cost savings programs he would introduce to keep Chrysler out of bankruptcy.  He responded by mentioning a few cost reduction programs, but then said (my paraphrasing from memory): “This is a product business, and we need new product to survive.” So in the midst of his huge restructuring program, he allocated one billion dollars in 1983 to the building of a new Chrysler technology center, and funded the development of the first minivan. 

Back to IT.  This is [also] a product business, and we need new product to survive. We need new products that create new markets.  New products that solve unsolved business problems.  New products that drive new consumer demand. Not warmed-over versions of ten year old "office suite" software and operating systems.  Not the newest x gigahertz processor stuffed in a box.   Not more efficient switching and transmission equipment.  Those are all nice, but not sufficient.

Nationwide, unlimited usage, wireless, always-on data service, such as Sprint had the guts to introduce this year, is an example of a whole new market created by technology and yet to be exploited.  Bravo Sprint!  IBM’s vision of an “on-demand economy” is another example of a whole new market created by technology that is yet to be exploited.  Bravo IBM! 

But I cannot think of any other bold moves by IT companies in 2002 that will drive significant new growth and not leave the investors disappointed. 

In the telecommunications industry, voice traffic and voice lines are now in decline.  I have to strain my memory to think of the last significant new voice service to be introduced.  Was it cellular service, or call-waiting, or voice-mail? Those were all introduced a while ago - more than 20 years!   It’s no wonder the voice communications business is in decline.

What new types of products/services would drive more voice traffic?  How about a speech-driven system that would go over your calendar with you, hands-free,  while your drive to work?  Or a similar system that would read your email to you and allow you to respond via dictation while driving?  Why are we unable to make thirty years of research in speech-to-text, text-to-speech, and speech understanding pay off?  This is a product business, and we [badly!] need new product to survive.

We also need the entrepreneurs, the venture capital, the research labs, and the visionary corporate leadership to make it happen.