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Dell Buys Perot Systems

September 21st 2009 19:53
Earlier today Dell Computer announced the purchase of Perot Systems for $3.9 Billion in cash. The move is seen an indicator that Dell will be moving into more lucrative business consulting services as PCs become an increasingly commodity-priced low-margin product.

Perot Systems was started by H. Ross Perot after he sold EDS to General Motors. Perot Systems specializes in the health care industry (48 percent of revenue) and government (25 percent of revenue). While both companies are based in Texas, about one-third of Perot Systems' employees are based in India.

Additional analysis and links to announcements available at CNET News.



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Labor Unions and Environmentalists

June 30th 2009 19:06
Who would have expected labor unions to hold up development of environmentally positive projects? Well, as IBD Editorials report, that's exactly what's happening in California.
The New York Times [no link], for all its problems, can still do good reporting, one example being its coverage of unions using environmental regulations in California to try to pressure developers into signing "agreements pledging to use union labor."


"If they refuse," reports Todd Woody, "they say they can count on union groups to demand costly environmental
In other words, damn the environment - we want union labor only on these projects.

Since the economic viability of 'green tech' projects is already questionable in most cases, the difference between union labor rates and free market rates may be the deciding factor between projects being profitable (or even being built!) or not.
The difference in unions using greenmail and blackmail, says Sherk, is that in greenmail "unions use government bureaucrats instead of armed thugs to intimidate businesses." And "it happens repeatedly."

Companies that are victims of greenmail should stand up to union shakedowns. While refusing to unionize won't allow companies to avoid the snarl of environmental rules, it will improve their chances to operate their businesses at lower costs and provide investors with better returns.
Oh, glad you 'splained it to us.
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Outsourcing Into Iowa

January 20th 2009 18:23
There has not been much good news about jobs in the Plains states in recent years, but that might change soon. IBM has leased a building in downtown Dubuque, Iowa, to use as a service delivery center, essentially a call center for support personnel. As many as 1,300 people could be employed there by the end of 2010.

But that's not all...

In addition, IBM says it will work with institutions of higher learning in the tri-state area of Iowa, Illinois, and Wisconsin for recruitment and training of potential employees. IBM also will look for opportunities to partner with these schools to enhance their curricula to better prepare students for opportunities in the IT industry, including the types of roles found at IBM. (Dr. Dobb's Update)


These kinds of education and recruitment programs often cause cascading effects in the surrounding job markets. For example, if other companies need to hire technical resources, they may begin opening similar facilities in the area. Michael Dell, are you listening?

The partnership with the schools could also have some far-reaching results, such as expanded enrollment in the schools of students looking for high-tech education, new areas of research and study at the schools, and expanded recruitment to other companies.

Also, new jobs in Dubuque means demand for services and support facilities in the immediate area. Businesses such as restaurants, shops, car dealerships, housing, etc. will all see an increase as these jobs are staffed and the payroll flows through from IBM to employees to local merchants. Economists refer to this as the "multiplier effect", where a dollar of payroll may generate ten dollars of economic activity, or more, in the local community.
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Circuit City To Close All Stores

January 16th 2009 18:40
Back in November Circuit City entered bankruptcy court and announced it would close a few stores in an re-organization attempt. Today, however, the company announced that a re-organization has not been possible and they are closing the remaining 567 stores.

This could represent another 30,000 unemployed Americans, and the removal of another in a long list of technology retailers. Anyone remember Sharper Image, Good Guys, Egghead Software, ComputerLand, BusinessLand, etc.?

[Alan L.] Wurtzel [son of the founder of Circuit City] has previously said Circuit City didn't take the threat of rival Best Buy Co. seriously enough and, at some points, were too focused on making a profit in the short term instead of building long-term value.

With billions of bailout dollars going to banks, auto companies, insurance companies and the like, what happens to the retailer who lands on hard times? What kind of capitalism do we have if there is only one technology retailer? Will Best Buy compete with Wal-Mart for television sales, or will they carve up the market with Wal-Mart taking the low-service price shopper and Best Buy taking everyone else?

The AP article mentions the possible impact on malls and shopping centers, where already vacancy rates are high in parts of the country. If the anchor stores these malls rely on for volume business close, what happens to the rest of the businesses and the mall itself? Will we have cascading closures, the way the mortgage melt-down cascaded through the various participants?
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Comcast In The News Again!

September 3rd 2008 22:02
Since my previous post, Comcast has again landed in the news. Now they announce that, starting in October, subscribers will be limited to 250GB of bandwidth per month. Go over that limit, you get a warning. Exceed the limit again and you get cut off the Internet for a year.

Ah, isn't that a little harsh? Especially considering that Comcast gives (a) no information about your usage trend, (b) provides no way to monitor your ussage, (c) makes no adjustment for subscribers with multiple users (such as roommates or families with active kids) and (d) provides no option to buy more bandwidth to avoid the cut off.

And since most cable providers are monopolies in the markets they serve, a subscriber who gets cut off may have no option to re-gain Internet access.

Does this work for you? What about the fact that every page full of ads and video that someone else placed there will count against YOUR usage cap...is that fair?

Seems to me this will be a class-action lawsuit as soon as the first person is cut off. Yes, the limit is high, but Comcast cannot make the penalty so harsh. What if the local water utility said you had used too much water and "you don't get any more for a year"? Bad analogy? Maybe, but what if you were a video developer working in your home office and suddenly you were unable to do your work?
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Fiber Optic Cables

August 19th 2008 21:13
The New York Times reports that Verizon Communications is spending billions of dollars installing fiber optic cables to the homes of customers in their service area.

The investment will allow Verizon to provide bundled services such as cable TV, high definition video, voice communications and Internet broadband services faster and cheaper than competitors. The estimated cost is $4,000 per customer and Verizon is marketing the service as FiOS


[ Click here to read more ]
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