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commentary The start of the year can be a little slow for noteworthy news, whether IT, general, or world news. But a few headlines stood out as being worth a second look.
Written by Oliver Descoeudres, Contributor on

commentary The start of the year can be a little slow for noteworthy news, whether IT, general, or world news. But a few headlines stood out as being worth a second look.

Spam at record levels
According to a recent United Nations report, spam could be costing as much as US$20.5 billion in "wasted technical resources" (I wasn't aware that the UN charter included analysing e-mail traffic.) Based on data from various private research firms, the United Nations Conference on Trade and Development predicted late last year that the proportion of junk e-mail would rise from 25 percent in January and 36 percent in March to 50 percent by December 2004. Digital attacks over the Net are also increasing significantly, a major shift from not too many years ago when threats originating from inside the company formed the majority of reported cases.

While governments are starting to implement various "anti-spam" legislative measures, the nature of e-mail and the Internet makes this virtually impossible to regulate. The US currently generates the highest percentage of spam (58.4 percent), followed by South Korea and China. Just wait until China reaches the same level of PC and Internet penetration as the US. By this time next year, we'll be back to sending each other paper memos, or worse yet, using the phone.

Outsourcing trend accelerates
In general, I think the concept of outsourcing is a good thing. (As our company provides managed network services, this is probably not surprising.) David Ricardo back in 1817 had a valid point when espousing his theory of comparative advantage, the principle being that a country (or company) will gain from specialising in producing those products or services that they are relatively better at, and investing resources in these areas. More recently, this view was expressed by Geoffrey Moore in his book Crossing the Chasm  on outsourcing to maximise shareholder value: "It turns out that whatever is context in one company can be core for someone else. This is the fundamental principle behind outsourcing."

However, I'm digressing. A large Australian telco recently announced plans to move application programming to India, as part of a plan to significantly reduce operating costs. This decision--reflecting a global trend in moving IT development to India and China--will save up to 25 percent compared to current costs. Gartner has predicted India will represent over 60 percent of the international "offshore market" within three to four years. India's Information Technology Minister Arun Shourie has urged action among Asian countries to unite against any Western countries planning laws to restrict outsourcing over political pressure from job losses. At the same time, US technology companies have announced major contracts to upgrade networks in China, and the US government has suggested an expansion of their guest services program. Would it be cynical of me to suggest that comparative advantage is alive and well in 2004, as long as it consists of Indian and Chinese workers performing low-paid jobs in Western countries that no one else wants to do?

Tech floats are back
I didn't think I'd see this headline for a while. I'm tempted to photocopy it along with another recent article suggesting that IT and marketing are both growth segments in 2004. The theory is that (a) venture capital funds are reducing focus on mature investments, (b) large technology corporations are open to acquisitions as their own share prices improve, and (c) superannuation funds are looking for new investments. There's also the fact that people have hopefully forgotten about what happened to their technology shares in 2001, which is more tactfully expressed as "increased confidence in public markets". So if you're looking at recovering your losses from the "tech wreck" over the next 20-30 years, now might be the time to start.

Oliver Descoeudres is marketing manager at network IP/Internet network infrastructure builder and solutions provider NetStar Australia.

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