New Global Alliances on Tap?

 
 
By Eric Lundquist  |  Posted 2006-03-20
 
 
 

Is the next technology powerhouse India or China or a combination of the two? During an interview at the annual CeBIT trade show in Hannover, Germany, this year, Jörg Schomburg, the CeBIT division director, raised the likelihood of competition from combined operations from India and China.

"We all must be on alert," Schomburg told a group of U.S. journalists regarding the continued growth of both Indias software prowess and Chinas product manufacturing skills.

While, to date, those alliances have not yet materialized, the possibility of new combinations of companies from once-competing regions of the world was one of the underlying themes at this years trade show. For the IT customer, those alliances could mean new vendors and suppliers. For the technology vendors, those alliances could present new competitive threats.

Click here to read about how India could be home to the worlds dominant IT firms in 20 years.

Just as in the consumer digital world, where there is now much talk about mashups of applications from distinct companies being combined into new unique business applications, maybe international company mashups will be the next thing in the business world.

Not that those agreements are not often fraught with problems, as witnessed by the debacle surrounding the thwarted transfer of control of some U.S. port facilities.

In either case, in CeBIT presentations by two top-level CIOs, the idea of operating your IT organizations on a truly international scale is only increasing in intensity.

Both Thomas Enders, CIO of Deutsche Lufthansa, and Colin MacLean Boyd, CIO of Sony Ericsson, talked about the opportunities and difficulties of those international outlooks at an executive forum held in Germany the day before CeBIT opened.

"It is a struggle to get people to look beyond their national silos, but you have to convert your national staff into a global staff," said Boyd.

A week later, I had the chance to ask Yang Yuanqing, chairman of the Lenovo Group, about the possibility of Chinese and Indian companies operating jointly to offer new international competition. Not at this time, Yuanqing said. Yuanqing was in Las Vegas at IBMs PartnerWorld conference to discuss the companys strategy following the acquisition of IBMs PC operations.

While he wasnt talking too much about India, what was on Yuanqings agenda was explaining the distinction between customers built around a relationship and those built around a transaction.

The relationship customer is more conservative, while the transaction customer is more demanding of the latest technologies. Yuanqing believes there are efficiencies that the company can bring to both of those segments in the United States.

"We are very confident we can improve the efficiencies," said Yuanqing. He said those models have worked very well in the Chinese market, and he expects they can be brought to the U.S. market without creating undue channel conflict.

Those two ideas—combined India and China operations and bringing the Chinese marketing model to the United States—represent, I believe, an inflection point in the technology industry.

While the idea of mashed-up Indian software expertise and Chinese manufacturing operations sounds pretty far out there, so did the idea that blogs could change the publishing model or podcasts could challenge traditional broadcasts.

This is an idea worth watching to see if it grows. The idea that not only Chinese manufacturing expertise could have an impact in the United States but that Chinese marketing models can also be exported should be part of any marketers radar.

The U.S. technology market has always been besieged by channel conflict problems, and finding a way to both satisfy the customer and remove the conflict would be a remarkable show of marketing progress.

The wisest statements may be from those two international CIOs, Boyd and Endres, who were smart in noting that the only way to compete in an international marketplace is to make sure your staff has an international footing and is able to look beyond the silos of nationalism.

Editorial Director Eric Lundquist can be reached at eric_lundquist@ziffdavis.com.

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