Multicore NZ

January 14, 2009

The Global Crisis and Multicore NZ

Filed under: Models, Multicore — multicoreblog @ 6:57 am

The report Multicore NZ formally started in May 2008 and was delivered in October with the final version being ready in November 2008.

It included an avalanche of information and data that was retrieved at the time of writing…

It is interesting how now -just a few months later- some of them are radically different.

Let’s see examples:

  • Sun Microsystems shares are today -14 January 2009- worth USD $4.50.

But back in 14 April 2008 were…USD $15.17

It will be interesting to see how these rankings change during 2009.

Ranking 2008: #184 on the Fortune 500

Fiscal Year 2008 Revenues: $13.880 billion.

  • Fonterra, the biggest company in NZ, used as an example at some parts of the report, saw how  “dairy commodity prices tumbled by about half from a peak in November 2007, and the forecast payout to farmers this season is $6 a kg of milk solids, compared with a record available $7.90 last season, with Fonterra warning it is likely to drop further“.
  • The NZ Fast Forward initiative for funding of scientific research for primary industries was announced oficially in March 2008 by the Government of NZ. However, after the elections of November 2008, it seems to have been discarded, even if less than a month ago, it was still discussed in the Parliament. Today, the links to the respective website of the ministry are not working: the pages were removed
  • As part of the research for the report, I did a trip to Japan, to visit several companies, including Sun Microsystems Japan, Mitsubishi Electric and NEC. I also met a company called 3Di which was already doing business with a Dunedin based company. 3Di is backed by NTT and NGI, a Japanese venture capital firm that was interviewed for the report in August 2008. In October, 3Di established a partnership with another Japanese company. A month later, the CEO and three directors were arrested, so NGI did a very fast public declaration saying that they weren’t involved.

But what finally motivated me about writing this post, were the news originated from India, just a week ago, related to Satyam, the fourth biggest Indian IT company, after TATA, Infosys and WIPRO. Satyam has been selected to provide IT services for the FIFA World Championship of 2010, so it was growing, with 53,000 employees/associates.

Satyam was analysed for the report, and I even had a meeting with the representative for NZ, given the links that the company was trying to establish with Otago University.

India itself was presented in the report as an interesting example on a different market for Multicore NZ.

NZ is considering to establish a Free Trade Agreement with India, so it would be strategic to include IT research as part of the negotiations from the very beginning.

After this headline that perception probably would be revisited:


“The head of Indian outsourcing company Satyam Computer Services has resigned, disclosing that profits had been falsely inflated for years and sending its shares plunging nearly 80 percent”.

“India’s biggest corporate scandal in memory threatens future foreign investment flows into Asia’s third-largest economy and casts a cloud over growth in its once-booming outsourcing sector”.

“The news sent Indian equity markets into a tailspin, with Bombay’s main benchmark index tumbling 7.3 percent and the Indian rupee fell”.

“The New York Stock Exchange halted trading in Satyam’s shares indefinitely, saying it wanted to review the news”.

“Ramalinga Raju, founder and chairman of India’s fourth-largest software services exporter, said in a statement that Satyam’s profits had been massively inflated over recent years. He added that no other board member was aware of the financial irregularities at the Satyam, which in Sanskrit means “truth.”

This situation is a real challenge for India, because the outsourcing services industry is based in trust, so when one scandal arises, it immediately starts to have consequences

“Mumbai : Investment banker DSP Merrill Lynch on Wednesday said it has terminated its services with software services firm Satyam, after coming to know about the ‘material accounting irregularities’ in the IT firm”.

You can’t judge a country by the actions of some of their businesspeople.

However, this sequence of events, from the US (Sun) to NZ (Fast Forward, Fonterra); from Japan (NGI) to India (Satyam) shows that:

1- A forecast of potential circumstances is just that: a forecast.

2- Reports are full of data, but the user must check them at the time of reading and before making any decision based on them

3- Entrepreneurship in Science and Technology is more tied than ever to a global series of events, that could be related very fast (I am not assuming that the events quoted above have any direct connection).

It will be interesting to see how long it will take until I will be able to write a post about “good news” from other recommendations made in the report.

Nicolas Erdody

Wellington, New Zealand

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