The Economist writes:

What India needs now is a raft of supply-side reforms that will, in the short term at least, hurt powerful interests. These are principally the trade unions which, through their control of the Communist parties that in turn prop up Mr Singh's minority government, are able to hold him to ransom. As we report (see article), the Communists have more or less brought Mr Singh's reforms to a halt. He has been unable to continue the task of privatising the plethora of inefficient state-owned businesses. He has found it almost impossible to ease the system of caps that limit foreign direct investment in many big sectors, notably retailing. And labour market reform is not even being discussed.
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The gloom should not be overstated: India today has a dynamism that has never been there before: witness the incredible growth of outsourcing companies, now doing legal and medical work for clients around the world, not just running their call-centres. The momentum from the earlier reforms continues, and despite his difficulties Mr Singh has been able to introduce a national rate of value-added tax, and pioneering public-private partnerships for road building. It probably is the case that the earlier reforms focused too much on the affluent city-dwellers at the expense of the rural poor—who voted the BJP out of office last year—so a period of consolidation may be no bad thing. Sooner or later, though, India will have to tackle its remaining rigidities.

Richard MacManus writes about the speculation:

Although the hosted services move will put Microsoft into more immediate competition with the likes of Salesforce.com and NetSuite, I see this as a natural segue for Microsoft into the Web 2.0 world. Plus it ups the ante significantly in their much-publicized competition with Google.

Microsoft has come to realise that most of the value in an always-on broadband world derives from 'the cloud' - aka the Web. So if Microsoft is going to stay competitive with the likes of Salesforce.com - and keep Google and their web-based Office at bay - then they need to start the transition to the Web platform NOW.

CNN Money has an article by Michael Copeland and Om Malik:

A new technology boom of potentially unprecedented power and durability is spawning in all of the nation's tech centers from Palo Alto to Seattle to Austin to New York.
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The tech industry in many ways is following the classic arc of boom-and-bust cycles produced by transformative technologies of the past, from the steam engine to electricity to the automobile. Each time, the revolutionary technology—the Internet, in today's case—brought a burst of new enterprises that were just too early and got wiped out by brutal consolidation.
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For now, most Web ad spending is going to the big players, steadily adding to their accumulation of scads of cash. Google is sitting on more than $7 billion; Yahoo has about $3.5 billion. Microsoft remains the cash king with almost $40 billion on hand. A lot of that money will be earmarked for strategic objectives—acquisitions, say. But a good chunk of it will be spent in other ways, creating a slipstream that will pull many other companies along and provide strong impetus to the boom.

The New York Times writes:

Those little ads - 12 word snippets of text, linked to topics that users are actually interested in - have turned Google into one of the biggest advertising vehicles the world has ever seen. This year, Google will sell $6.1 billion in ads, nearly double what it sold last year, according to Anthony Noto, an analyst at Goldman Sachs. That is more advertising than is sold by any newspaper chain, magazine publisher or television network. By next year, Mr. Noto said, he expects Google to have advertising revenue of $9.5 billion. That would place it fourth among American media companies in total ad sales after Viacom, the News Corporation and the Walt Disney Company, but ahead of giants including NBC Universal and Time Warner.

Not content to just suck advertising dollars from Web search, Google is using its windfall to pay for an eclectic range of ambitious projects that have the potential to radically disrupt other industries. Among other things, it is offering to build a free wireless Internet network in San Francisco, plans to scan nearly every book published and is testing a free classified advertising system it calls Google Base.

More quietly, Google is also preparing to disrupt the advertising business itself, by replacing creative salesmanship with cold number-crunching. Its premise so far is that advertising is most effective when seen only by people who are interested in what's for sale, based on what they are searching for or reading about on the Web. Because Google's ad-buying clients pay for ads only when users click on them, they can precisely measure their effectiveness - and are willing to pay more for ads that really sell their products.

The Milestone Group has an interview with Brad Feld, Managing Partner, Mobius Venture Capital. Excerpts:

Milestone: So how can a startup find space large enough to attract venture capital but not too large to attract strong competition early from the big players in any given space?

Feld: I don't think the best entrepreneurs worry about the big players. The big players are inevitably going to be attracted to opportunities that are meaningful and significant. The resulting challenge for the entrepreneur is to out-innovate and be more agile, effectively, in what they are creating in a larger player. When I started doing this 10 years ago, the question everybody asked is “Why can’t Microsoft do that?” The question now of course is “Why can’t Google or Yahoo do that?” It’s just an irrelevant question; of course they can do that. In software, specifically, the barrier to innovation is human creativity and software engineering skill. The ability to synthesize things and modify them and react to customer needs, service the customer better and build something that is compelling. Doing it faster is the competitive advantage for a start up, not identifying something that is just the right size to be big enough but not too big.

I have been managing companies since I embarked on the path of entrepreneurship 13 years ago in 1992 after I returned from the US. For the most part, these have been small companies. IndiaWorld was all of 20 people. Netcore has only now grown to about 60+. These are still small numbers. Even though I have to manage these companies, I have known for some time that my strength does not lie in day-to-day operations. I like the thinking part, putting a coherent strategy together from the various jigsaw pieces that one can see (or imagine), and then being the evangelist of tomorrow’s world that we’d like to go out and create. [In May this year, Girish joined as COO of Netcore so that has been a big help for me.]

I tend to live in the future. I read an incredible amount of stuff – mostly around technology. In fact, the world of new and emerging technologies fascinates me. The challenge lies in taking all of these new technologies and putting them together to build compelling services that make a 10x difference to the way of life. I like to focus on the emerging markets because I live in one (India) and therefore I understand it better than other markets. In addition, I believe that the emerging technologies can have the greatest difference on life in our kind of markets because we have missed so many of the previous revolutions and our limited legacy which can potentially make adoption of appropriate new solutions easier.

My dream is to use the ideas to build an ecosystem of large, successful companies (I think of these as Googles for Emerging Markets), generate significant wealth, and then use some of that capital go about building the New India. Bringing about change in India across various sectors (education, healthcare, energy, rural) requires money. While the government has the money, they cannot get themselves to spend it right – relying on handouts rather than building scalable institutions and organisations which can bring about exponential change which amplifies itself over time. I believe that the entities that we build have to be based not on philanthropy but profit. Change has to happen in India in years, not generations. We are amongst the lucky ones, having been blessed with opportunities aplenty. We owe it to others to provide them similar opportunities in their lifetime – by leveraging our ideas, experience, and capital.

These were some of my big picture thoughts as I found myself at a gathering of CEOs of IIT-Madras’ Tenet group companies. The topic for discussion was on what are the worries that each one had as CEO of their company or on a personal level. The job of a CEO can be a lonely one; so the idea was to share insights and learnings in a group with others who perhaps may have faced similar situations.

It was an interesting evening – in the sense that the discussion did not focus only on the business issues that every CEO faced. People delved into personal challenges also. I did the same. In this week’s Tech Talk, I will write about what I spoke that evening – and add to it some more thinking from after the event.

Tomorrow: Work-Life Balance