To: Thomas Mercer-Hursh who wrote (16773 ) 1/30/2000 2:41:00 AM From: Seeker of Truth Respond to of 54805
The manual is quite clear on this. Service providers can't become gorillas. BUT --. Let's look at some details. As you know, being in the business, every programmer has more or less knowledge about what time saving tools are useful. Most programmers also have their own collection of tools that they have built(programmed) themselves. In a well knit and cooperative group the knowhow about such tools is well shared. After a project in industry X, some codifiable knowledge about industry X is obtained; this too can be shared. The program design level thus also becomes permanently strengthened. If management knows how to retain people, the resulting organization can be awesome in its power, quite hard to compete with. Now this is precisely what you are talking about, the inherited know how "substantially alters the cost of delivering" the service. CMG looks like this. In 2000 internet business will finally become important for it. Perhaps the same for CTSH. CSC is also in the service business and has a good record. None of these companies have ever or will ever double their profits in a year, a la gorillas or internet incubators. But on the other hand, with continuous reeducation of the personnel, they might easily in a 20 year period, outpace a gorilla whose CAP ends during the period. I find the determination of the impending end of the comparative advantage extremely difficult. For example there are clouds over MSFT. Are they important? But the market is certainly saying "forget about the Justice Department". Who knows? In this world injustice often wins(eg. the U.S. Supreme Court Dred Scott decision of 1853).