Wednesday Oct 07, 2009

Technology spending? Economic growth? Have you heard of UAE?

Recent news of increased economic stability in the world is comforting.  However how much of it is based on sound fundamentals?  If you are an investor or run a business where in the world do you want to invest for growth and equityUnited Arab Emerates may be a place of interest.  The UAE growth rate in GDP is astounding.  While not all economic indicators are objectively sound, you have to speculate where can you find a better risk/reward ratio. 

Western based banks have recovered their share price as well as balance sheets, but new credit lending is still tight.  Loan losses are still surging in the West.  In my opinion there remains too many toxic, complex, leveraged, convoluted, imaginary assets out there that have not been exposed to date.  In order for the world economy to move forward the majority of bad credit instruments need to be exposed and liquidated.  Otherwise we will continue to regain the false sense of consumer comfort that eventually got us into trouble. 

Most world economies are driven by consumer spending, but consumer savings is the buffer from repeating what we are seeing today.  One issue is where (globally) to place your assets into safe saving instruments with a secure and viable return. 

I'm not sure anyone out there has all the answers...

Blog is available also at: http://bobporras.wordpress.com/

Tuesday Jul 21, 2009

Do you remember your 1st job after graduating university?

Do you remember your first job out of college?  More importantly do you remember your first manager?  Yes that  person who decided to give you a chance.  I was on vacation during the July 4th holiday weekend in Maine and had a chance encounter.  This young person named Pat R., who was working the concierge service, was off in the corner being quiet on a slow night.  My wife Ellen and I along with our gang of three Michael, Michelle and Mikayla (are all versions of the name Michael) were the only guests having an early evening snack.  So I struck up a conversation with Pat.  I asked him if he was from Maine and was this his summer job, to which he said yes to both questions.  I also found out that he was entering his senior year at Colorado College.  I asked Pat what was his major and he replied Computer Science.  Bingo... my wife and kids were probably thinking: "we are going to be here for a while..."  I told Pat I worked at Sun Microsystems and then he started talking about Java, Java and more Java.  Pat admitted to being a Xbox 360 heavy user, especially at college.  My son really liked this part as I pester him for his diligent practice of his  Xbox dexterous skill.  My son enjoyed that Pat was a Halo 3 and Call of Duty player as well.  As we left to go back to our room I wished Pat good luck and we agreed to keep in touch via Facebook or Linkedin since he is a member of both networks.  Even though I only interacted with Pat for a short period of time I sensed he was well rounded and envision him doing well in his future.

There are many stories throughout the world from people who speak of remembering that first chance that “someone” gave them.  Through all walks of life from business, entertainment, sports, cuisine, medicine, etc. there are instances of people not forgetting that initial opportunity that started their climb in life.  I was in New Zealand recently and was told a story by my driver of his friend. His friend is the sole provider of beef in New Zealand for a large U.S. based fast food franchise.  Many years ago this gentleman responded to a small local newspaper advertisement.  He eventually won the contract over much larger companies in New Zealand because the decision maker had a good instinctive feeling about him and was willing to give him a chance.

I've been fortunate to have given several college graduates their first chance in their career and it is one of the most satisfying parts of the job.  To be able to watch young college graduates transform into seasoned industry veterans is similar to watching your own children grow into adults.  Listening to graduates from all over the world tell their story of what education has enabled for their lives is humbling.  It reminds me of the stories of my grandparents when they immigrated to the U.S. They too got that first chance which eventually led to my own first chance in the working world here in the U.S.

As an engineering undergraduate I had to complete 2 years of full time work experience in order to graduate from Northeastern University.  In 1979 Tom Seiker gave me my first cooperative education job at AVCO Research Laboratory in Everett, MA.  I also completed cooperative education at the Mitre Corporation in Bedford, MA.  Bob Preuss, Dr. Greg Robertshaw, John Roberts and Dr. B.N. Suresh Babu all gave me a chance at Mitre.  In fact, Bob Preuss made me do an official daily written status report that was logged and filed as part of the company record.  As you can imagine few engineers enjoy writing words, myself included, but because of his insistence writing became much easier for me.

My cooperative education was  mostly working on classified projects that required a secret clearance, so I naturally interviewed with the National Security Agency (NSA) and the Central Intelligence Agency (CIA).  I decided that the commercial industry was right for me.   Ten companies wanted to give me a chance and I picked Digital Equipment Corporation (DEC).  Bob Raspallo, Jim Scott and Mike Pennington gave me my first chance at DEC.  Thank you, I have not forgotten and continue with what you started with me.

Blog is available also at: http://bobporras.wordpress.com/

Monday Jul 14, 2008

The simplified Coca Cola business model

I like Coke as my favorite soft drink. If you see me drinking a soft drink it's usually that red can... (not the diet stuff).  Let's take a hugely successful business that serves both tasteful and tasteless liquid for human consumption.  The Coca Cola Company.  Established in 1886, it provides 1.5 billion servings of its products per day with over 2800 different products.  In a very competitive landscape it has managed to maintain demand of its most mature product "Coke" while constantly bringing newer beverages to market such as "Full Throttle."  It is remarkable the beverage industry has convinced consumers to spend money buying bottled water which has become a huge industry. 

The beverage "Coke" has been around for a long time yet consumers have not grown tired with its taste.  In fact The Coca Cola Company in 1985 tried to change the taste and got a negative reaction from consumers.  All companies want to retain their customers as well as acquire new customers.  In other words grow.  While "Coke" is a cash cow throughout the world (it does taste different in China), the Coca Cola Company has done a remarkable job of introducing newer products for growth.  Just about every company with any longevity operates to sustain their core products while introducing new products to maintain and grow their revenue. 

Just as investment banks make varying bets on different types of businesses.   A venture capital investment carries a much higher risk and return than an investment bank who's advisory services guide an established business to divest, acquire, merge, etc..  A key part of strategy for any company is to be able to adapt the mix of established products with new products.  You cannot starve off one for the other or your competition will take advantage.  A plan that can absorb unanticipated changes, conditions and is willing to stay the course only draws investors appeal. 


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The blog of Bob Porras - Vice President, Data, Availability, Scalability & HPC for Sun Microsystems, Inc.

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