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The WAVE Report on Digital Media 3D --- Media Creation --- Shared Space ---Published by 4th Wave, Inc.--- Issue #0542------------------10/21/05 |
The WAVE Report is Searchable on
http://www.3dlinks.com
http://www.wave-report.com
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0542.2 Home Appliances
0542.3 Online Resources
ebrary Adds Thousands of Online Books to Its Growing Collections
0542.4 Micro-Manufacturing
IC Interconnect Announces New Wire-Bonding Process for High-Temperature Applications
0542.5 IT Futures
0542.6 Calling All Macs
Macintosh Users Get a Show to Call Their Own; MacLive Conference Coming to New York City
0542.7 Web Programming Assets
Macromedia Launches Macromedia Labs to Provide Early Access to Emerging Technologies
0542.8 Outsourcing Trends
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0542.1 Story of the Issue
***Emerging Technologies Conference 2005
By John Latta
Boston, MA
9/28 – 29/05
The event is done in conjunction with the Technology Review magazine on the MIT campus. It is focused on major issues in technology with particular emphasis on innovators, young and old. Topics are broad and include social computing, bio-nano frontiers, and nuclear power. Our attention will be on those that relate to computing. The badge scan indicated individuals from around the world. This is neither an academic conference nor a traditional trade show. It is one of the few we have attended which examines technology “from every angle” as the tag line indicates.
Is the Low Cost Notebook Real?
Nicholas Negroponte, Chairman, MIT Media Lab, presented details on the $100 lap top. The implications are deeper than just the price.
Mr. Negroponte is passionate about the education laptop. Here is a summary of what he said during his keynote.
This is the most important thing I have worked on in my life.
It is about education not a laptop.
In emerging nations, the issue is not about connectivity. There are many ways to solve this problem. Many people are working on this. It is happening.
For education it is the laptop itself that will change education and I have learned this in the projects we have done at the MIT Media Lab.
We have seen the power of bringing technology to education. The first was Costa Rica where now 50% of the exports are IC related and I believe this is related to our efforts to improve education. But this did not scale to adjacent countries. Another country we worked with on using computers in education was Senegal.
The idea for this project began in 1999, when my wife and I set up schools in two Cambodian villages – one so remote there are no roads to the village. The children were given laptops. When they first took the laptops home, the parents would not let them use them being afraid they would break. This was changed and we found that the parents loved it because the laptop screen was the brightest light in the house. In these villages they have only one room homes. Of the 50 laptops only one failed. All 50 of the AC adapters failed. There was great pride in the laptops and the children were very careful with them.
Maine has passed legislation which mandates OLPC (one laptop per child).
Last week, as part of an education reform plan, Massachusetts governor Romney proposed to spend $54 million to buy these laptops for every student. The first three grades would get computers during fiscal year 2007, while students in the other three grades would get them the following year. The computers would be gifts, so that students could keep them after graduating. I was with the Governor when this announcement was made.
The non-profit project is called One Laptop Per Child (OLPC). It has significant implications on the ability to accomplish our ends. For example, 50% of the cost of a laptop has embedded in it the costs of sales and marketing – we have none. We can work with governments in emerging countries in ways that for-profit companies cannot.
Initial countries participating in the program are:
Brazil
China
Egypt
Thailand and
South AfricaWe expect to ship 5 – 15m units to these countries.
To participate in this program, a county must purchase a minimum number of 1m units up front.
We are working with all the agencies of the UN which would have an interest in such a laptop but nothing is ready to be announced now.
These machines have the following characteristics:
Dual mode 7.5” display which is projected to cost $35. One is a transflective color display and the other is a Bi-stable e-ink display so that it operates as a very low power e-book.
Our efforts on a 2nd Generation display based on e-ink technology which I have been showing to countries would cost 10¢ per sq. in. The target is $12 for a 12” color display with near Zero power consumption.
There are 4 USB ports which support transfer to and from the unit.
The CPU is 500MHz and runs from FLASH (1GB) and DRAM. There is no hard drive.
The power source can be any one of a battery power module, hand crank or AC. The carrying strap is also the AC power cord. When the transflective display is operating there is a 10:1 crank ratio – the use is 10X the crank time. When in e-book mode it is 100:1.
There are many modes which the notebook can be used:
Laptop
Theater – to watch like a television
Writing tablet
Table Notebook
EbookThe design is very rugged. For example, the carrying handle is the power source.
Each laptop is a node on a mesh network which allows networking to be implemented in a village. All children are connected. We have found at 2MB will 1000 students very well.
The operating system is a light weight version of Linux. We feel that 75% of the of the overhead of a notebook is consumed by the “weight” of the OS.
I believe that the power of Wikipedia can help support the educational material needed for this effort. This another example of how open source will help this effort.
The corporate sponsors are:
AMD
Brightstar
News Corp
Red HatA prototype will be shown at the World Summit on the Information Society (WSIS) on Nov. 17. The WSIS is due to be held in Tunis, Tunisia, from Nov. 16 to Nov. 18.
There was considerable discussion on the grey market for these machines. That is, will they be stolen or become a part of the corruption in many countries. It is hoped that the distinctive design and use will frustrate this but the issue will it only be determined in each country.
We expect to have:
2 Prototypes – Q1 2006
5 – 15 m units – Q4 2006
Year 2 – 100 – 150mGiven that there are 50m laptops sold today our volume will be 2X to 3X what is currently being sold
There may be a commercial unit sold in a parallel channel but it would likely cost $200.
Individuals involved in this project include:
Joe Jacobson (co-founder and director of E Ink)
Seymour Papert (one of the world's leading theorists on child learning),
Mike Bove,
Mary Lou Jepsen,
Alan Kay,
Tod Machover,
Mitchel Resnick, and
Ted Selker.Although the price is targeted at $100, it is expected that the price will float with time because of the non-profit structure. It is hoped, with the low cost 2nd generation display, for example, that the price will continue to decline. Even at $100, the price is too high.
WAVE Comment
Much has been made of the $100 price point, and that misses the point. It really important is what this laptop will be able to do. In order to be successful, assuming that the price point is met and high volume manufacturing is accomplished, these factors need to fall in place:
The countries buying these laptops support them in the schools;
There will actually be a connectivity infrastructure;
There is content to support the educational objectives; and
Bureaucracies and corruption does not disable the program.
This is a tall order and has little to do with the actual machines.
Accomplishing production of >100m units in 24 months is a large expectation. In spite of being a non-profit, a commercial entity or many of them, must take on the responsibility for production and distribution. The team that Negroponte has described does not have this experience. That is, there might be an ecosystem around laptops but no ecosystem around low cost laptops for these struggling markets. In spite of the fact that the project is non-profit, someone, and likely many, will have to make profits in the ecosystem to accomplish the scale.
All of this aside, the gains from the end result can be huge. It will take passion to carry this project. Few can match Negroponte in passion. Certainly the team he has assembled has their hearts in making technology further education.
Cisco Plans Massive Improvements for Teleconferencing
Charles Giancarlo, Senior Vice-President and Chief Development Officer, Cisco, stated he shows up 20 minutes late for any meeting with video conferencing. He figures by that time it is either working or turned off. One of the problems is that the quality is so low and there is no visual connection between the individuals. Cisco is planning on a conferencing product which raises this bar significantly. Using HD and large screen displays, they want the meeting to be like being there. Rather than call it video conferencing, it will likely be called Telepresence. The product is expected in 2006.
Charles Giancarlo is also President of Linksys/Cisco. He expects that the video technology will also transition to the home. One of the major activities will also be the extension of VoIP technology into the home.
Due to the high performance of networks, we are at the threshold of virtualization of the computer. This includes not only the disintermediation of the memory and disk drives but even to the OS. That is, the operating system will be made up of open independent parts in much the same way that the computer components are.
One of the most important developments of the evolution of computing is the move of computers that are horizontal to vertical – from computer rooms with computers in big boxes to blades. This process will continue.
The New Intel – a Solutions Company
Justin Rattner, Intel Senior Fellow, and Director of Intel’s Corporate Technology Group described the emergence of Intel 3.0. The first was a DRAM company, the second was microprocessors and the third a solution company. The turning point was Centrino technology. Justin’s comments:
The market value of going beyond just one component, the microprocessor, was a call to action in the company. This has given rise to many efforts including Intel’s ethnography and people and places activities. There is a huge worldwide opportunity for computing technology. When one considers that PC penetration in the US is approaching 78.5% and the rest of the world is only 4.4%, there is much to do to open new markets.
Our work in China has shown that there are specific needs unique to Chinese market and the role that parents play in a child’s education. As a result of our research, including observing in homes, we have released the China Learning PC called SuitMe.
The situation in India is quite different. There are 700m individuals in 600,000 villages. Here the kiosk model is prevalent. A PC is made available to a whole village by a operator who runs a kiosk. This individual is literate and can operate the computer for others. As a result Intel has created the Rurally-Hardened Platform – Community PC.
Motorola Concept: Seamless Mobility
Edward J. Zander, Chairman and CEO, Motorola showed a collection of new phones. At the same time he promoted the concept of Seamless Mobility. In his mind this is as significant at the minicomputers and Internet in their own times. This concept is founded on:
Movement to digital
Broadband wireless
Intelligence everywhere
The result of this is:
Anyone
Any Device
Any Time
Any Where
Always on and
Network Agnostic
He was particularly strong on the Network Agnostic requirement. For example, there are many who feel 3G is better than WiMAX or 802.20 but this misses the point. Seamless Mobility should operate independent of the network:
Motorola has made a major commitment to WiMAX. We now have 400 engineers working on this technology.
The rate that the cell phone industry is expanding is amazing. Some statistics cited were:
There will be 800m cell phones sold in 2005, this is 6 to 7X the number of notebooks;
There are 320m wireless users in China alone.
Ring Tones represent 10% of all the music industry revenue.
It is estimated that by 2012 there will be 17b network to network devices connected.
A number of innovative phones were shown. But with the usual, sad commentary, that phone network innovation is not in the US but Europe and Asia.
Kurzweil’s World is Becoming Flat
Ray Kurzweil, Chairman and CEO, Kurzweil Technologies, Inc. gave a shotgun 30 minute presentation on Innovation Everywhere—How the Acceleration of “GNR” (genetics, nanotechnology, robotics) Will Create a Flat and Equitable World. If this can be captured in one sound bite it is that all technology is plotted on a log log graph.
It is Ray’s view that it is impossible to accurately gauge technology as it happens but only over time. His analysis led to some striking predictions as humans on biologic scale integrate with technology.
By 2010 Computers will Disappear
Images will be written directly on our retinas
Ubiquitous high bandwidth connection to the internet at all times
Electronics so tiny it’s embedded in our environment, our clothing and our eyeglasses
By 2029 there will be an intimate merger
$1,000 of computation – 1,000X the human brain
Reverse engineering of the human brain is completed
Computers pass the Turing test
Nonbiological intelligence will continue to grow exponentially whereas biological intelligence is fixed.
Constant Theme – Decline of the US in Engineering and Sciences
If there was one message which was pandemic in virtually all the sessions is the decline in US engineering and science education. With only 60,000 graduates in the US a year and 260,000+ in China alone, the situation was seen as declining. Funding for engineering has remained flat for more than 20 years.
One of the concerns is that engineering is no longer exciting. There is noting like Sputnik to fuel the competitive spirit.
When asked why are other countries ahead of the US most felt this issue was not innovation in process. In the 80’s and 90’s individuals from China and other countries toured many companies here in Silicon Valley and Boston, for example. They took notes and now the results of their carefully study are bearing fruit. It was cited that many countries have cabinet level posts in technology and the US does not. There are national goals in technology and there are none in the US.
One of the reasons for concern is that there is a close tie between GDP growth and technology innovation which is related to an educated workforce.
The alarm bells have been rung but it is unclear if the US has the leadership and will to regain its leadership position.
WAVE Comments
In looking at the big picture, Ray Kurzweil constructed a compelling picture of the evolution of technology and how progress is unrelenting. But, there is an even more important observation to draw – relentless change makes technologies and organizations which are dependent on them obsolete at the same pace. The Internet bubble of 2000 – 2002 is the digital Mesozoic Era which killed the dinosaurs of a pre-historic digital time. History has shown that evolution periodically cleanses the environment of species and obsolete life forms (e.g. technologies and companies).
If there was a constant over the two days of the Emerging Technologies Conference it was instability. The water of innovation sought its own level in disruption. Ultimately disruption impacts companies. Edward J. Zander, Chairman and CEO, Motorola stated: The time to make radical business changes is when the business is at its peak not when it is under assault.
One of the saddest parts directly relates to the US. Our leadership in technology is being disrupted. The WAVE sees this on a continuous basis in wireless. The Klaxons went off at the Emerging Technologies Conference in education – the life blood of sustaining innovation. Overcoming these issues takes leadership and there no signs of this emerging anytime soon.
Technology progress, in isolation, was less important than creating paradigm shifts. It was interesting that Intel and Nicholas Negroponte agreed on the importance of bringing computing to emerging countries but the solution was radically different. Intel was about fine tuning its normal ways of doing business. The MIT Media Lab was about going into the business of making laptops at very low prices. Another very different example was that Motorola was not concerned about which 3G technology wins but how it can be network agnostic to implement seamless mobility.
One tidbit, which could ultimately be the largest force for effectiveness in emerging countries, was the presence of Google on the MIT team. It may ultimately be that the use of open source on the OLPC (one laptop per child) is much less important than the rethinking of how educational material can be delivered – this is what Google can bring.
***DDD Launches 3D TV Set Top Conversion Box
SANTA MONICA, Calif.
Oct. 18, 2005
DDD Group plc, a 3D software and content company, announces the introduction of the TriDef(R) Vision+ 3D set top box ('Vision+'). Vision+ automatically converts most popular consumer video formats to 3D as they are watched, allowing any broadcast, DVD and videocassette content to be presented in 3D on the latest 3D displays and projection systems.
The delivery of the Vision+ set top box represents the final milestone in a GBP 140,000 development agreement with Arisawa Manufacturing Co., Ltd., announced in late 2004. By combining the real time 3D conversion capabilities of the Vision+ with the large 30" 3D LCD displays developed by Arisawa's optoelectronics division, Arisawa and DDD have delivered an efficient and effective solution for mass-market 3D television.
Using Arisawa's innovative 3D optics, the flat screen 3D televisions are capable of displaying conventional 2D pictures as well as 3D. When the viewer decides to watch in 3D, they simply activate the Vision+ set top box using their remote control and put on a pair of 3D glasses. The system then delivers 3D images from any viewing position in the living room with the same clarity and quality as the latest 3D digital cinemas.
In addition to the real time conversion feature, the Vision+ also supports the playback of specially made 3D movies. This yields an important in-home distribution channel for the latest generation of Hollywood 3D movies that are in production for the new 3D digital cinemas that are presently being opened around the United States.
The Vision+ is compatible with DVD, video and broadcast standards used in the United States, Japan and Europe. Vision+ also supports twin projectors allowing it to be used in trade show and professional/educational venues where big screen 3D is required for large audiences.
Both Arisawa and DDD are now actively engaged in presentations and discussions with leading flat screen display manufacturers with the goal of licensing the combined solution for mass-market 3D television.
***ebrary Adds Thousands of Online Books to Its Growing Collections; The Company Expects to Exceed Its 2004 Content Growth of More than 60% in 2005
PALO ALTO, Calif.
Oct. 17, 2005
ebrary has announced that it has significantly enhanced its Growing Collections of online books during the third quarter of this year. Academic Complete, a robust collection that spans multiple subject areas, has increased by more than 2,000 titles for a total of more than 25,000 full-text books and other authoritative content from over 200 leading academic, trade, and professional publishers. Public Library Complete has grown by more than 600 titles for a total of more than 8,500 documents. Government Complete has expanded by more than 1,000 titles and now includes more than 16,600 online books and other valuable content.
Among the additions, Academic Complete now includes a selection of books from Oxford University Press (US), Lawrence Erlbaum Publishing, Artech House, and Sage Publications. New titles added during the third quarter span a variety of academic disciplines and include work from Pulitzer prize-winning authors such as James M. McPherson (Crossroads of Freedom: Antietam, Oxford University Press) and Mark Stevens and Annalyn Swan (de Kooning: An American Master, Alfred A. Knopf). Public Library Complete now offers additional titles in self-help law, introductory computer guides, and education. Government Complete customers now have access to a greater selection of titles in international relations, science, and public policy.
Like all of ebrary's book database products, the company's Growing Collections are delivered via the ebrary Dynamic Content Platform (DCP) featuring the ebrary Reader and InfoTools software. The ebrary Reader optimizes online viewing by delivering documents page-by-page to the end user's desktop, eliminating cumbersome document downloads. InfoTools enables end users to select any word, in any ebrary document, then instantly link to additional information in the library, in ebrary's DCP, and on the web without losing their place of reference.
All ebrary subscription databases are delivered under a simultaneous, multi-user access model. Any number of patrons or students can access the same book, at the same time, from any computer with Internet access.
Additional key features include the following:
-- Personal Bookshelves that automatically archive highlights, notes, and bookmarks.
-- Copying and Printing text with customizable, automatic citations.
-- Automatic, Customizable Citations that include a URL hyperlink to the exact page from which the information was gathered.
-- Multiple Search Options including simple, advanced, full-text, key word, Boolean, and proximity search.
-- Integration with ILS system and other subscription databases.
-- Free MARC Records provided.
-- Reporting Tools show how content is being used while protecting end-user privacy.
-- Hosted Service eliminates overhead costs.
Pricing and Availability
ebrary's Growing Collections are available from subscription databases as well as its perpetual access online book products and OnDemand content delivery platform.
***IC Interconnect Announces New Wire-Bonding Process for High-Temperature Applications; Electroless Ni/Immersion Au Process Receives Positive Customer Reviews as a Wire Bond Surface after Rigorous Testing
COLORADO SPRINGS, Colo.
Oct. 17, 2005
IC Interconnect, a wafer bumping service company, has announced qualification of its Ni/Au pad resurfacing process for high-temperature wire bond applications, producing bonds that are stable at high temperatures with a thinner gold layer. These special high-temperature wire bonds are especially useful in avionics and automotive applications, and require no additional lead time for production. IC Interconnect's process eliminates the Kirkendall voiding that takes place in an Al/Au interface at 200(degrees)C thermal exposures.
IC Interconnect successfully uses a 0.1 um thick gold layer where other companies require at least 1 um of gold or thicker.
Nickel/gold pad resurfacing also benefits copper-based ICs. To avoid Cu corrosion in plastic packaging, there are two solution paths -- aluminum plating on copper pads, which is expensive, or nickel/gold plating on copper pads. The second option is maskless, eliminating costs associated with thin film sputter, photo lithography and metal etch.
According to IC Interconnect, electroless Ni/Immersion Au is an inexpensive method to enable standard gold wire bonding to be extended to the thermal demands (200(degrees)C) required of today's state-of-the-art electronics.
This application contributes to IC Interconnect's extensive list of manufacturing qualifications for automotive, aerospace and other high-reliability applications. The company is currently ISO/TS 16949.
http://www.icinterconnect.com/wirebond.htm
***Gartner Says At Least 75 Percent of IT Organizations Will Change Their Role and 10 Percent of IT Organizations Will Be Disbanded by 2011
LAKE BUENA VISTA, Fla.
Oct. 17, 2005
IT organizations are in a period of radical change. By 2011 at least 75 percent of IT organizations will change their role, at least 10 percent will be disbanded and 10 percent more will be relegated to commodity status, according to Gartner Inc.
The maturation of traditional applications of technology, the growing role of outsourcing and the greater penetration of technology into all aspects of business are driving this change. Gartner analysts discussed the future for IT organizations and IT management at Gartner Symposium/ITxpo.
Gartner believes that a new organization type is emerging - one that will take the lead on information and process. While it will grow from an IT base, the primary focus of the new organization will be business transformation and strategic assets of information and process. When mature, it may no longer be identified as an IT organization.
As technology becomes more pervasive and more critical to the routine operations and strategic goals of most business, its contribution will come under greater scrutiny, whether it produces good results or bad. Businesses that master technology exploitation will recognize that success, but those that fail will blame technology accordingly. Gartner analysts said that by 2011, IT contribution will be cited in the top three success factors by at least half of the top performing businesses, while IT barriers will be cited in the top three failure factors by at least half of the lowest performers. This trend will have a major influence on the role and organization of IT and on IT leaders.
Gartner analysts predict that IT organizations in 2011 will have 20 percent less people, 40 percent less in-house technology roles and double the number of information, process and business roles compared to 2005. This parallels the evolving role of IT leadership that Gartner has identified, in which the strategic IT leadership role will split into business technology and business network leaders. IT could also be embedded in business as a pervasive commodity that is managed by business executives as part of their regular roles. In this case, IT would typically be sourced as part of a broader business process.
However, the evolution is not all in one direction. Some businesses are even starting to disband their IT organizations and to embed IT throughout the business. This approach could cause a disruptive backlash among some business leaders who may resist the rise of process and information architectures.
***Macintosh Users Get a Show to Call Their Own; MacLive Conference Coming to New York City
TAMPA, Fla.
Oct. 17, 2005
Mac users will have plenty of reason to celebrate when the first annual MacLive Conference kicks off May 11-13, 2006 at the Jacob K. Javits Convention Center in New York City.
Billed as the "Learning Conference for Creative Professionals," the MacLive keynote address will feature a rare appearance by the original Mac evangelist -- Guy Kawasaki, who commented, "Macintosh creative professionals deserve a show where they can inspire each other, share new ideas, and 'raise the roof.' MacLive is the perfect event for this, and New York is the perfect town."
The organizers assert that this conference is going to break new ground in the Macintosh creative market because the whole focus of the show is on live training. MacLive is about building a richer, more interactive learning experience for Macintosh digital photographers, graphic designers, motion graphics editors, and Macintosh professionals of every kind.
MacLive brings together an all-star team of the industry's most passionate, most talented and most respected instructors. In addition to Scott Kelby, icons like David Pogue, Bob LeVitus, Chris Breen, Deke McClelland, Dave Cross, Lesa Snider, Bert Monroy and many more will teach over 50 educational sessions with entire training tracks on Mac OS X Tiger, Photoshop, Final Cut Pro, Motion, Illustrator, InDesign, Dreamweaver, Flash, Digital Photography, the iLife programs, and the iPod and Podcasting, among others.
***Macromedia Launches Macromedia Labs to Provide Early Access to Emerging Technologies; Alpha Versions of Flex 2 Product Line and Flash Player 8.5 Now Available for Download
ANAHEIM, Calif.
Oct. 17, 2005
Macromedia announced Macromedia Labs, a new site on macromedia.com for developers to download early versions of Macromedia technologies, share feedback and insight, and help shape the direction of new products and technologies. Beginning immediately on Macromedia Labs, developers can download the public alphas of Macromedia Flash Player 8.5 and Macromedia Flex Builder 2, part of the Macromedia Flex 2 product line announced earlier this month. The Flex 2 product line and Flash Player 8.5 are the foundation for building effective rich Internet applications that blend the responsiveness of desktop software, the cross-platform reach of the web, and the breathtaking expressiveness of the Flash Platform.
By sharing early releases of emerging technologies and products, Macromedia Labs enables developers to help shape development, provide feedback sooner, and begin to build expertise and reputation within the broader community. Documentation, samples, and technical articles make it easy to get up to speed quickly. Forums and wikis encourage discussion and collaboration, while podcasts and chats give everyone insight and updates in a casual developer-to-developer format. RSS notifications enable developers to stay current with Macromedia Labs activities. Developers can inspire their peers by sharing their work based on these early releases in the Showcase Gallery.
As part of the Macromedia Labs debut, developers can download an alpha release of Flex Builder 2 and Flash Player 8.5. Flex Builder 2 is a new Eclipse-based environment for developing rich Internet applications and includes the Flex Framework. Previously code-named Zorn, Flex Builder 2 can incorporate rich media content from the recently released Macromedia Flash Professional 8, the leading authoring tool for creating rich interactive content.
Flash Player 8.5 adds industrial-strength programming power on top of the expressiveness introduced in Flash Player 8, creating a state-of-the-art, cross-platform runtime. It includes a new virtual machine that offers faster runtime performance, full runtime error reporting, improved debugging, and ActionScript 3. Flash Player is currently installed on over 600 million desktops and mobile devices globally.
http://www.macromedia.com/go/mmlabs
***TPI Index Forecasts 10 to 15 Percent Decline in Global Outsourcing Total Dollar Value Awarded this Year
HOUSTON
Oct. 17, 2005
TPI, Inc., has published its latest market observations in the TPI Index, a quarterly report on the state of the global outsourcing industry for financial analysts, media and sourcing industry participants. Third-quarter results indicate an expected decrease of 10 to 15 percent in total dollar value for outsourcing contracts awarded in 2005, to US$60 to $65 billion from an average of US$72 billion awarded in recent years. To date, the year's total contract value (TCV) is US$43.8 billion for transactions signed in the Americas (US$21.3B), Europe (US$20.3B) and Asia (US$2.2B), compared to a global total of US$52 billion this time a year ago.
According to TPI, With the exception of HRO, BPO has not grown as quickly as some had expected. Firms are increasingly taking advantage of offshore service delivery, reducing the TCV of contracts. TCV is also sluggish because of reduced capital intensity and shorter terms in ITO contracts.
The decline in TCV notwithstanding, Q3 2005 marked a record gain of 11 percent in the total number of outsourcing contracts signed year-to-date, to 191 from 172 this time a year ago. This quarter's contracts numbered 57 valued at US$13.5 billion, compared to last quarter's 54 worth US$15 billion. A year ago, the third quarter saw 49 contracts worth nearly US$19 billion. While the number of contracts has increased, average TCV has declined considerably.
Also affecting overall TCV is the marked increase in contract restructurings this year. Nearly 28 percent of the restructurings in the TPI pipeline are competitive, more than ever before, indicative of overall industry competitiveness.
TPI also commented that offshore buy-side strategies have strengthened during 2005, and global service delivery (GSD), aka offshore outsourcing, will experience accelerated growth in the coming 18 months, particularly among client companies with three or more years of experience under their belts. GSD is spurring intense competition among established, multinational service provider firms and fast-growing offshore 'pure play' companies in countries such as India.
It is TPS's belief that outsourcing is not falling out of favor. In fact, this year it is more prevalent than ever. But the value of the outsourcing pie has shrunk in size compared to 2004 as the value of individual transactions is generally getting smaller. With the number of transactions growing and overall values declining, the effect of global service delivery alternatives for outsourcing is ever more apparent but certainly not a new phenomenon.
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