TheGarage Tech Blog

A little over a month ago I said:

You never know, oil could fall a dollar a day for the next three weeks. Funny thing is that BP will still have to fix their damn rotten pipeline without the big price spike.

So it’s only been fifty cents a day.

I guess Yahoo was slightly over-valued.

Yahoo is probably a pretty good buy right now.

CHECK THIS OUT. I don’t know who thinks this crap up, but it’s freakin’ genious!

Upon re-reading the post on Money’s top jobs, I noticed that the list did not include any of the people managing those jobs. The moral: Beware! Corporate advancement is not always what it’s cracked up to be.

Not only that, but on retrospection the list seems somewhat Bourgeoisie, no?

DEPENDING ON HOW YOU CLASSIFY IT, I have either the best job in America or the seventh best job in America.

If you are a technology professional, especially a programmer/analyst, this study result comes as no spurprise to you:

Consulting company Sand Hill Group last year surveyed executives from about 50 software companies and found that offshore software development has become standard practice. Eighty-four percent of companies said they use offshore developers, an increase from about 63 percent two years earlier.
“Core software development is done offshore, not just maintenance and testing,” said M.R. Rangaswami, co-founder of Sand Hill Group. “These executives said they are more reliant on offshore development than ever before.”

The study also showed that many of the overseas IT sweatshops are passing along higher prices and are experiencing a shortages in skills.

A couple of years ago I predicted that the huge costs savings of off-shoring would soon begin to fade. India has 1 billion people with about half living in squalid conditions. As more and more Indians climb the socio-economic ladder, there will be more of a demand for technical services internally. Not to even mention the greater demand for more social services. Also, other emerging economies as well as developed economies all compete for the same IT resources in the major offshore labor markets.

As competition increases and thus costs rise for the offshore resources, the better domestic IT providers look from a competitive standpoint. For the deal to work the decreased labor costs overseas have to offfset the higher cost of managing a distributed workforce. One solution of course is to move the management overseas too. Which I have also predicted.

As a free market conservative, I believe that the laws of supply and demand will bring balance to the technology services market, even on a global scale. I don’t change my viewpoint because I am one of the ones sitting on my ass while programmers on the other side of the world do the same work for about 20% or less of what I used to earn.

One other item of note in the study:

[Rangaswami] said many software companies expected massively lower costs by hiring offshore developers. However, those companies found that prices were about 40 percent lower when all factors were included.

I wonder if all factors are indeed included in the price. For example, is there a value placed on the stability of using a predominantly domestic workforce? Or a cost placed on the risk of using a predominantly foreign workforce? How much does a one month work stoppage of three dozen programmers cost a small software company who uses offshore IT for 80% of its labor? A hit like that could be a deal killer.

I only bring this up because they are burning Valentines cards in India today and they always seem to be on the brink of nuclear war with Pakistan. Other than that, there are probably no concerns regarding India’s security.

Rather than making good movies, movies that people might actually want to watch, Hollywood chooses to make fewer movies in an effort to stop the bleeding that has resulted from the crap they’ve been shoveling for quite some time.

The Dow is down about 150 today and the NASDAQ 45. I wonder if any American executives will commit Hari Kari like the LiveDoor guy?

I used to own and operate a small business that depended heavily on continuously running heavy duty trucks around the greater Houston area. During the year 2001, after the Y2K threat was a bust along with the entire tech market, fuel prices had been high for some time and the Dow had been fluctuating around 10,500. I said then and have been saying since then that the Dow would never budge from the 10,500 median until the price of gasoline comes back down to an affordable price. Little did I know how right I was. Five years and counting and I am still right.

9/11 knocked the Dow in the dirt but it recovered. That the stock market recovered from 9/11 but not from the high fuel prices should put in to perspective how important inexpensive fuel is to the economy.

A buck twenty–buck fifty max–is the price point under which the stock market will resume its inexorable growth to 100,000. The reason the market wont grow otherwise is that our economy, like no other in the world, is dependant on gasoline. This is especially true for the small business economy, which everyone knows makes up the bulk of the economic activity in America.

When the Dow recently went over 11,000 for the first time since June 2001, I was worried that my corollary was about to be shattered. Today, I stand on my prediction. As long as fuel is above a buck fifty–and certainly while it is above two bucks–the Dow will remain around 10,500, give or take five hundred.

In lieu of fuel prices receding, the only thing that can kick off a significant surge in the stock market is another technology bubble that everyone will scramble to get in on. Irrational exuberance I think it is called.

UPDATE: Dow down 174, NASDAQ down 50, due to spike in oil. Google down 8%

FINAL: Dow down 210, NASDAQ down 54, oil settles over $68, Google down 10%

Dayum!

The market always sorts out supply and demand issues.

WASHINGTON (AFP) – More bicycles than cars have been sold in the United States over the past 12 months, with rising gas prices prompting commuters to opt for two wheels instead of four.

Not since the oil crisis of 1973 have bicycles sold in such big numbers, according to Tim Blumenthal, executive director of Bikes Belong, an industry association.

When everyone from the corner gas station to the storage tanks at the wellhead in Saudi Arabia have excess inventory on hand the price will plumment. Always does.

The Rita evacualtion cost me approximately 56 hours of downtime. No big deal, right? I don’t even advertise. The only costs to me are intangible. Or are they? How much is ten percent of Google PageRank worth?

I bet there are a lot of organizations who have a pretty close approximation of what PageRank is worth to the their revenue model. Marketing folk can probably cite the figure off the cuff for many different industries and sectors.

How much is a point of PageRank worth to an average blogger’s advertising revenue model? Anyone know? Guesses?