THE GILDER FRIDAY LETTER of 10-27-06
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gilder.com | Issue 269.0/October 27, 2006
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HEADLINES:
- The Week / Can Technology Defeat Terrorism?
- Friday Feature / EZchip: Getting the Giant Fabs’ Attention
- Friday Blogger Bonus / Maintaining Momentum
- Readings /
The Week / Can Technology Defeat Terrorism?
Peter Huber, Senior Fellow, Manhattan Institute for Policy Reasearch, speaking at the Gilder/Forbes Telecosm 2006 Conference earlier this month in Lake Tahoe (excerpt):
When a deliberate nuclear release occurs in the United States, as I think it inevitably will, we will almost certainly find that the material originated somewhere mundane—a hospital, a factory, an industrial setting. There is a whole lot of nuclear material out there all over the place. It has many useful applications. People who want it will find it.
The London subway bombers used Triaceatone Triperoxide (TATP). They brewed it in the bathtub using acetone, drain cleaner, and bleach. The Japanese subway attackers home-brewed their Sarin gas. The Oklahoma City bombers mixed liquid fertilizer and diesel fuel.
It is easy to forget about things like this if they haven’t happened in very recent memory. One would prefer to think that they’re not possible. But, the simple fact is—and people in the know really do know this—we still face today an absolutely horrifying disconnect between u-weapons (these very toxic materials) and our own ability to see them before they are released or detonated in a subway or a stadium.
Scientists can of course see anything in a lab. They can see a single atom of Cobalt-60 or a molecule of TATP or a strand of anthrax DNA. Just bring your sample to the right building and a well-trained technician will fire-up a room-sized or larger mainframe unit and in due course the instrument will tell you exactly what it is you brought in. It happens after every attack. They can always tell you what hit you, after you’ve been hit.
The challenge is to see these things before they detonate, before they’re dispersed, before they get into the air ducts, and to see them not roughly or approximately, but so precisely that you can see exactly what they are and react to them appropriately, in real time, in all of the places where they could inflict damage.
How do you even begin to do that?
Just across Manhattan on any given day are some 4 million letters, 3 million people, at least half a million motor vehicles, half a million parcels, any of which could be carrying a tiny amount of something that could cause enormous harm.
Some time ago, the officers who patrol the mall in Washington D.C. were given portable radiation detectors. They soon removed the batteries. The units registered so many false alarms, they were worse than useless.
Radiation is easy to detect. It’s easy to detect badly. You can’t evacuate Yankee Stadium twice during every game to respond to false alarms.
Again, inferior technologies are worse than useless. A significant fraction of money spent in the immediate aftermath of 9-11 on technology was wasted. Yet, with that said, there is absolutely no other alternative. You cannot fight unstable atomic nuclei or nerve agents or DNA with guns and guards and gates. Guns and guards and gates are too expensive and completely ineffectual. They can’t see the stuff and, if they can see it, they can’t intercept it. You need the accuracy of a lab in something the size of a pager. You need to push out the boundaries, so you can screen huge numbers of packages and containers and so on at points of origin overseas and screen again at ports of entry and at key switching points like mail centers and transportation transits points and buildings and hospitals, where the first responders are treated, and on and on and on.
What are the essential technologies that will make this possible? What are the core enablers?
I will not suggest that there is a short list, but one can begin to zero in on a few of them. That is certainly what I and some fellow investors started doing before 9-11 and have continued doing since…
Download the audio of Peter Huber’s complete Telecosm 2006 keynote address:
gildertech.com
(NOTE: This is a large 69MB MP3 file, which includes George Gilder’s opening Telecosm 2006 remarks. It may take a few minutes to download.)
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Friday Feature / EZchip: Getting the Giant Fabs’ Attention
Charlie Burger, October 18 (excerpted from the October issue of the Gilder Technology Report): Following last September’s surprise sales slide to $687 thousand from $2 million the previous quarter, EZchip (LNOP) has been building momentum, and the window of opportunity to buy at startup prices may be drawing to a close. EZ’s network processors or NPUs—programmable chips that process data, voice, and video packets at high speed—should gradually find their way into Ethernet switches and routers across the network, especially in the metro regions, as triple-play (data, voice, video) applications become ubiquitous.
The last of the score or more NPU startups are now falling before EZ’s highly integrated NP-2 chip, which is available is three interchangeable models and includes all the major line-card functions such as wirespeed 10 Gigabit per second (or 5 Gbps) processing, classification search engines, traffic managers, and Ethernet ports. Traffic managers shape and schedule packets, and integrated NPU/TM chips are becoming ubiquitous.
The networking industry is now as innovative as the PC industry was, constantly changing and creating new products. EZchip has survived because it boasts the most flexible and most highly integrated chips, becoming a general-purpose solution to the network market much as the MPU (microprocessors) was to the PC. Full programmability enables systems houses such as Juniper (JNPR) to differentiate their products from competing vendors, to adapt quickly and economically to evolving standards, and the fuel the proprietary network flavors being deployed by service providers.
The final and most serious opposition to EZchip by far comes from homegrown NPUs, such as Alcatel’s (ALA), Redback’s (RBAK) internal solution developed through its Siara acquisition of several years ago, and Cisco’s (CSCO) Toaster. But internal solutions are costly and require expertise many systems houses don’t have. Nonetheless, EZ’s ascendance over in-house solutions will be hard won. It’s tough to get a big company to bet a billion-dollar product on a small startup. EZ has to assure prospective customers that it’s not going to succumb to growing pains and that its supply of NPUs will not get swallowed up by a Cisco.
That could be difficult to do without a strategic partner. Now that Broadcom (BRCM) has absorbed Sandburst, Marvell (MRVL) becomes the leading candidate to fill that role. Based on EZ’s recent progress inside Cisco and considering that Marvell has a design center down the street from EZchip in Israel, we suspect that such a partnership may be in the works. Because Marvell is one of Taiwan Semiconductor’s (TSM) largest customers, such an alliance would also help tiny EZ to get the giant fab’s attention as sales surge.
But an alliance with Marvell or anyone else would come with strings attached, which we would examine closely…
Read Charlie’s complete EZchip analysis by logging in with your subscriber ID at gildertech.com.
RELATED READING
EZchip Partners with Marvell on Next Generation
Network Processor-based Line Card Architectures
news.moneycentral.msn.com
DID YOU MISS TELECOSM '06? Or did you attend, and find yourself wishing you could experience once again the musical thrill of a lifetime? Pay a visit to Jeff Stambovsky's Telecosm Songbook!! You'll hear musical tributes to George Gilder and other Telecosm luminaries of the past ten years, the people who made the future come true. Listen now at www.telecosmsongs.blogspot.com.
Friday Blogger Bonus / Maintaining Momentum
Shlomi Cohen (10/25/06): LanOptics (Nasdag: LNOP) has maintained its momentum of recent weeks, after it climbed 7% in Friday’s session on Wall Street on large volume to reach an annual high. As always, the man who came up trumps for LanOptics was George Gilder, who on this occasion, was replaced by his deputy, Charlie Burger, himself an expert on tech stocks in the telecommunications sector.
In his review in the “Gilder Report,” Burger analyzes in depth the potential of LanOptics’ subsidiary, EZchip Technologies over the next two years, and comes up with figures that look fantastic. He believes that the developments in the field of video, specifically home-wireless video, will propel forward the network processors made by both EZchip and its competitors, not just into telecommunications infrastructure (through the use of routers) but also home digital converters, which will have to handle phenomenal volumes of wireless video communications…
LanOptics; most recent offering, which raised $6 million will be peanuts compared with the major needs that EZchip will have on its way to becoming the large company that Charlie Burger predicts it will be.
Read Cohen’s complete blog:
networking.seekingalpha.com
The Gildertech Blog, blog.gildertech.com | Logon now to see what’s new.
Readings /
Lessig Is More
handsoff.org
The Age of Infinity and the Scarcity Matrix
opednews.com
Seybold: WiMax: A Worldwide Winner?
outlook4mobility.com
Steve Forbes: Slick Solution
forbes.com
Qualcomm To Use Common Platform Technology
edn.com
Not Bad Is No Longer Good For AMD
forbes.com
Can Apple Still Think Different?
siliconvalley.com
Better Way To Handle Asian Currencies
cato.org
Wesbury: SEP New Home Sales
ftportfolios.com
The Beginning Of The Technology Boom
forbes.com
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