China: Notes from the Asia giant

To gaze upon an ancient temple etched against the skyline and then to look over at the smiling, Asianized face of Colonel Sanders on one of the many KFC signs is to be struck by a world in the midst of a fundamental transformation. It’s clear that technology is playing a powerful, positive role in that transformation. Its end result will be fascinating and the transformation process itself will change our own world in fundamental ways.

To learn without thinking is fruitless. To think without learning is dangerous.Confucius Dear Vorticians, 

Greetings from Beijing, where I’m spending the week with my publishing colleagues from around the world. Wrapped around the sight seeing – Temple of Heaven, Forbidden City, Summer Palace, the Great Wall and other wonders – our discussions center on the vast market opportunity here for technology companies and the seemingly insatiable hunger for information about technology.

Our Chinese colleagues within International Data Group (parent company of Vortex and Network World) are emerging superstars and we watch with envy as the circulations of their publications skyrocket, their Web sites blossom and tens of thousands of new or future technology consumers throng to their conferences. A strategically timed joint venture signed by IDG founder Patrick McGovern in 1980, just months after China adopted an “open door” policy to outside investors, has put the company at the forefront of China’s information and publishing revolution and given us Westerners something very nice to fall back on in our golden years.jgallant@vortex.net.www.vortex.net and sign up. Hope to see you there. 

The atmosphere here reminds me of the 1980s, when the combination of the PC and networking revolutions unshackled the U.S. technology market and imbued everyone with a feeling that we really could change the world. The opportunity horizon was limitless. That same sense of explosive potential permeates China.

There are differences, to be sure. China is a developing country and the contrasts between the new and the old, the affluent and the lowest tier, are dramatic. The occasional reference to the ‘one-child’ policy or the reluctance of a speaker to openly criticize policies reminds you that you ain’t in Kansas anymore. As one speaker instructed us, 1.3 billion people don’t equal 1.3 billion new technology buyers, given the low wages here.

But to gaze upon an ancient temple etched against the skyline and then to look over at the smiling, Asianized face of Colonel Sanders on one of the many KFC signs is to be struck by a world in the midst of a fundamental transformation. It’s clear that technology is playing a powerful, positive role in that transformation. Its end result will be fascinating and the transformation process itself will change our own world in fundamental ways.

Thanks for entertaining that aside.

I mentioned a couple weeks back that, in advance of Vortex 2004, I’ll be running some commentary from key speakers appearing at the conference. This week, some thoughts from Shai Agassi who, as a member of SAP’s executive board, is one of the most influential executives at the software giant. Vortex co-executive producer Geoff Moore asked Shai about the implications of SAP customers migrating to the company’s NetWeaver applications services platform.

Here’s what Shai had to say.

“From a business perspective, organizations fundamentally engage in two types of activities. First, there are those activities that are seen by their customers as providing a significant competitive advantage. Second, there are all the other things that need to be done to run the business. For a very long time, IT has been recognized as mainly supporting the latter, but more and more organizations today understand that IT in itself can be tremendous asset in providing more value to customers than the competition.

“There are significant implications to IT that result from this insight: Activities that are providing a competitive advantage today might turn into a must have with much less competitive advantage over time – like the airlines’ frequent flyer programs. This results in the need for much more flexibility in how these activities are handled from an IT perspective. For example, those activities that provide significant competitive advantage you will not outsource, but things that do not might be handed over to other companies.

“No matter if a company chooses to in-source or out-source the systems required, the overall business process (flight booking, to stay with the airline example) must stay under the overall control of one organization. Only then an organization can drive process innovation and business growth as the overall business process is changed at the required pace. Sometimes the process change happens as a result of an innovative idea (no assigned seats – driving 25 minute turnaround time), most other times it is a response to other innovators, Companies that achieve that can consistently perform such process change become ‘In-Time Enterprises’.”

“As SAP customers adopt SAP NetWeaver, they make a big step towards becoming an In-Time Enterprise. SAP NetWeaver helps reduce the total cost of ownership and allows companies to reinvest the savings to drive innovation and growth. SAP NetWeaver enables a services-oriented architecture and thus enables business solutions that have the flexibility and control required to drive business processes across SAP and non-SAP systems, no matter where they run or who operates them.

“As the foundation for every SAP solution delivered and with strong integration capabilities, system integrators enjoy a tremendous opportunity. And for the quickly increasing number of ISVs who build software on top of SAP NetWeaver and SAP’s processes represented through the growing collection of enterprise services, they can provide more value to customers while reducing their overall TCO through technology consolidation, better integration, and better utilization of skills they already have.”

Thanks Shai.

That’s it for now. Any thoughts on China, SAP or anything else that crosses your mind can reach me at

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Bye.