Daily Archives: September 4, 2009

More IBM Jobs Cuts this Month?

Late last month, Alliance@IBM reported that IBM had pared more than 10,000 jobs in 2009 — and the year is far from over.

Now I’m hearing unconfirmed reports about further IBM job cuts being announced or executed this month. Those with knowledge of the alleged force reductions are invited to submit comments, anonymous or otherwise, below.

Sir Terry’s SBC Company Meets Its Demise

Do you remember the heady days when session-border controllers were all the rage, the market for them taking off like a rocket?

No? Neither do I.

That’s because the market for session-border controllers (SBCs) never did take off — not like a rocket, nor like anything else upwardly mobile. Instead, the SBC market stagnated, like a fetid pond. A market developed, yes, but it wasn’t huge, it spread slowly, and it’s most prominent independent players never became industry giants.

Acme Packet is the only SBC startup to grow into something remotely resembling an industry notable.

Now, though, Zeus Kerravala of the Yankee Group and his counterparts at Infonetics Research think there’s reason to be optimistic about the SBC market.

That newfound prosperity, if it arrives, will be too little, far too late for Newport Systems, an early SBC entrant that never made the big time, though it was publicly listed. Unlike Acme Packets, Newport focused on carriers rather than enterprises. That might have been part of the problem. Many carriers have resisted SIP trunking because, as Kerravala explains, it cuts into revenue derived from traditional trunking services.

Regardless of whether carriers or enterprises buy SBCs now, Newport will not benefit from the expenditures. That’s because Newport Systems is no more.

The death notice has just been filed and published, but Newport had been moribund for a long time. Bankrolled by Sir Terry Matthews — co-founder of Mitel and founder of Newbridge Networks — Newport came out of the gate with promise, then fell behind and stayed there.

Newport had cash-flow problems in 2006, slashed payroll in July of 2008, needed to be bailed out by Matthews that same summer, failed to find a buyer, and was delisted from London’s Alternative Investment Market (AIM) early this year. Newport suffered a lingering death.

Sir Terry will be disappointed and saddened, of course — he named the company after the town in Wales where he was born — but he’s not the type to wallow in misfortune.

Among the aphorisms attributed to Sir Terry are the following:

“I take a spoonful of concrete with my cereal … You will hate me if you take me on, because I will be there long, long after you have gone.”

. . . .

“The secret of building a successful firm is to hire good people and put them under pressure – and I’m very good at that.”

Newport is gone, but Sir Terry isn’t dead yet.

Kai-Fu Lee Leaving Google to Start Chinese Venture Fund

The Wall Street Journal, with others following in quick succession, reported earlier today that Kai-Fu Lee, president of Google Inc.’s China operations, is resigning from the company after struggling unsuccessfully to get Google to the top of the search mountain in China.

Although Google is the web-search leader in most geographic markets, it ranks a distant second to Baidu in China. In 2005, Google plucked Kai-Fu Lee from Microsoft to head its Chinese operations. His mandate was to take Google to the top of the Chinese search charts. Although he had some success in helping Google close ground and establish improved relations with the Chinese authorities, he probably didn’t achieve as much as he or Google anticipated.

When Google extracted Kai-Fu Lee from Microsoft, litigious animosity ensued, with Microsoft filing suit, Google parrying the thrust, and the two companies eventually coming to a settlement, terms of which were not disclosed.

Many believe that Kai-Fu Lee’s defection from Microsoft was the trigger for Microsoft CEO Steve Ballmer’s chair-throwing meltdown. That’s not true, though the tantrum came to light as a result of the legal fracas between Google and Microsoft. In actuality, Ballmer went into his splenetic, furniture-vandalizing frenzy when Mark Lucovsky, then a distinguished engineer at Microsoft, informed Ballmer that he was leaving Microsoft for Google.

In addition to throwing a chair, Ballmer vented his anger at Google in a potty-mouthed, gangster-movie rant worthy of Martin Scorsese treatment:

“Fucking Eric Schmidt is a fucking pussy. I’m going to fucking bury that guy, I have done it before, and I will do it again. I’m going to fucking kill Google.” ….

How does one kill a company, exactly? Ballmer might want to ask the Nortel board of directors for advice on that one, but I digress and need desperately to get back on track.

So, now that Kai-Fu Lee is leaving Google, it’s logical and reasonable to wonder why he’s leaving and where he’s going.

Lee answered the first question, regarding why he’s leaving Google, as follows:

“With a very strong leadership team in place, it seemed a very good moment for me to move to the next chapter in my career.”

Okay, taken at face value, that indicates his motivation had more to do with the appeal of his next venture than with any problems Google might be experiencing. So, what’s that next venture?

Those who had been briefed on Lee’s next move disclosed that he would be running a venture capital firm that would invest in startup companies launched by Chinese entrepreneurs. That seems to have been confirmed in subsequent reports.

I can understand the move. It’s probably an aspiration that Lee has nurtured for some time, waiting for the right opportunity to pursue it. The timing is right, especially now that the Chinese government is fully committed to growing a consumer economy that will lessen its dependence on tapped-out American consumers.

There’s no doubt the Chinese authorities will be more supportive of Lee’s new venture than of his role leading Google’s China operation.