Today Apple’s shares are up around $450, making its market capitalization surpass Exxon Mobile. So Apple is the most valued corporation in the US and the world. This is significant as the founder and visionary leader of Apple Steve Jobs died last October. The momentum of sales continued even stronger than before. The new iPhone 4S sold briskly contributing to the total sales of 37M iPhones. Even the iPad sold 15.4 Million units. The Amazon Kindle Fire made no dent to iPad as many pundits had speculated. Now the onus is on Apple to continue keeping up with sky-high expectations.

But what a remarkable journey! Tim Cook said yesterday that they could have sold even more if they had enough supplies. He also said new products are in the pipeline later this year including new releases of iPhone and iPad. The Apple TV box for wifi link to the TV has also sold better than expected.

Just see what is happening to RIM, makers of Blackberry with their rapid market erosion forcing the  change of CEO. Also Yahoo reported decline in sales and profit as the new CEO Scott Thompson takes over and Jerry Yang finally steps down. These former market leaders can look with envy at Apple’s tremendous success – a testament to excellent product design and world-class execution by its leadership team.

Apple seems safe for a while executing its product roadmap and plans. One never knows what will happen five years from now. But they have reasons to celebrate now.

Palmisano went into the second phase of “value creation” and changing IBM’s course in several ways. He said that the world is instrumented, interconnected, and intelligent and hence IBM’s new solutions have to address that. Here are some of the key decisions during his tenure:

• Acquisition of Price Waterhouse Coopers in 2002 for $3.5B, injecting business solutions services for large clients
• Selling of the PC business to Lenovo for $1.75B back in 2004-2005 to get out of the consumer hardware commodity business. Again to refocus on large enterprises.
• Selling of the storage business to Hitachi, which was not yielding great profits
• Increasing the R&D budget by 20% to a whopping $6B per year, to refocus on innovation. A new research lab came up in Brazil, the ninth such lab across the globe.
• Introduction of several initiatives like Smarter Planet in 2008, Watson supercomputer last year (answering questions posed in natural language for speed, accuracy, and confidence. It trumped in the Jeopardy game against two smart humans), Corporate Services Corps to address hard issues with clients across the globe, etc.
• Cutting $8B cost to make IBM operationally trim

What were the results of such moves? Well, during his tenure, IBM’s earnings quadrupled and the  market cap went up above Microsoft last September(first time since 1996) to $214B, just behind Apple’s. So shareholders are happy and even Warren Buffet (who never buys technology stocks) bought significant chunk of IBM stock late last year.

Like a true leader in IBM’s tradition, Palmisano celebrated the 100th. birthday of a great company and reminded everyone of the basic principles of its founder Thomas Watson Senior. In October, 2011, he named Virginia Rometty as his successor as the new CEO starting this month and him serving as chairman of the board.

IBM’s sustainability as a great company is exemplary in the world.  Many of today’s high-flying valley technology companies can learn from IBM’s leadership and value system.

The average American spends at least eight and a half hours a day in front of a screen, Nicholas Carr notes in his eye-opening book “The Shallows,” in part because the number of hours American adults spent online doubled between 2005 and 2009 (and the number of hours spent in front of a TV screen, often simultaneously, is also steadily increasing). Even more scary - The average American teenager sends or receives 75 text messages a day, though one girl in Sacramento managed to handle an average of 10,000 every 24 hours for a month.

Few years back, at a conference, the interviewer asked Eric Schmidt, then CEO of Google, “what is the first thing you do when you get up in the morning”? Pat came the reply – “check email”. What was considered cool few years back – “Always On”, seems like a real burden now. The constant barrage of emails, Tweets, Facebook, SMS, does not leave us any time to be quiet with ourselves.

I have been saying for years, “we are drowning in information, but starving for knowledge”. Above that is Wisdom and you might as well forget that one. So it is like a pyramid and at the bottom is the flood of information we are bombarded with. Filtering essential nuggets of knowledge is a monumental task. No wonder the emphasis is on business intelligence and meaningful analytics to make the information useful. Wisdom is above that which becomes our guiding light in life.

In a recent thought-provoking article in New York Times, the well known author Pico Iyer said, “In barely one generation we’ve moved from exulting in the time-saving devices that have so expanded our lives to trying to get away from them — often in order to make more time. The more ways we have to connect, the more many of us seem desperate to unplug. Like teenagers, we appear to have gone from knowing nothing about the world to knowing too much all but overnight.”

I have always used the adage – “ease of use equals ease of abuse“. The perfect example currently is the overuse or abuse of Facebook. Over-communication of trivia is happening in the name of social networking. Even in offices, productivity is affected negatively by such distractions of constant email, tweets, etc.

As Pico Iyer says, we need to get back to allocating quiet time to ourselves – set aside a chunk of hours every week with no interruptions. He comically mentions resort hotels charging a premium for rooms with no TV, no Internet, and no phones. People are willing to pay for being away from all these distractions.

I recommend highly to do meditation every day for 30 minutes, preferably in the early morning.  Yoga is another option also.

The new B2B is Back to Basics.

Recently SAP bought Success Factors at a very high valuation and many saw that as a desperate move to get into the Cloud. Oracle also bought RightNow in the same vain and there is a strong possibility that Oracle will acquire NetSuite in the next twelve months (NetSuite addresses mostly the SMB market). SalesForce.com (SFDC) has been growing and its valuation has gone quite high. The new entrant Workday (founded by the founders of Peoplesoft) has been doing very well. Someone said it is valued at almost $2B with yearly booking rate of $300M. Not bad for a five year old company. Workday addresses the HR space, but is moving to financial applications as well. It wants to be known as an “ERP Replacement” company, not just an “HR Company”.

Most of Workday customers are the large enterprises such as Tyco, AIG, Flextronics, etc. These customers are replacing legacy applications from SAP and Oracle with Workday’s SaaS suite offered through the Cloud. The advantages are obvious for the customers – same version always, new functions added more frequently, vendor takes care of upgrades, less cost paid to SI’s. The traditional applications typically require a 5 to 6 times expense (over product license cost) on consultants (SI’s) who keep customizing the apps. Workday claims their customers have a 90% reduction on SI cost, which is a big deal.

The challenge for the enterprise Cloud vendors is the revenue model, where they do not get the hefty license dollars up front. Hence their investment (both capex and opex) is quite high. For example, Workday has taken investment of $250M to date, counting the last round. But if they can sustain like SFDC, then there is a thriving growth business. By the way, Google has a growing enterprise business and currently brings $1B revenue which is not bad at all. They clearly are focused to make this part grow faster in future.

This is not good news for legacy enterprise application companies like SAP and Oracle. They have to re-invent (or acquisitions like Success Factors and RightNow) quickly to catch up with this shift to the Cloud by large enterprises. Oracle is more likely to ride this bandwagon sooner than SAP. As per the SI’s, they need to re-invent also to at least keep their current clients happy. That means they have to shift from “customization” of code to more reconfiguration of business processes.

1. Next Web Architecture = Hypernet + Hyperweb

2. The decline and fall of Windows unlocks revenue. Software development on Windows is declining. The new focus is the Web, Apple OS, and open source. In 2011, Windows devices will be less that 50% of the Internet, down from 95% four years ago.

3. Index search is peaking. Google search on mobile and tablets is much lower than on PC and Android does not fix that. New search is content-focused, such as Twitter (real time search), Wikipedia (facts), Linked-In (business people), or Facebook (social, taste,..).

4.  Apple’s model threatens the Web. Web is more flexible, but Roger calls it Digital Detroit and one gets mugged easily. Apple’s iOS App model simplifies access to information on the Internet. HTML5 can be a threat to Apple when every content-provider starts using it.

5. HTML5 is game changer for publishers. Developers can embed audio and video easily replacing Adobe’s Flash. It will be disruptive. Content producers will redesign their sites to reduce power of Google and ad networks.

6. Tablets are hugely disruptive. iPad has replaced DVD as the most actively adapted tech product ever. So far, Apple dominates this market. The number 2 (Kindle Fire?) is yet to emerge.

7. First wave of “Social Web” is over. Facebook has won the platform war as the new Windows. But going forward, social will be a feature of every product.

8. Smartphones in the US = Apple + 7 Dwarfs. Android has more units but Apple gets almost all profits. Also Android has some serious security issues.

9. Wireless Infrastructure is competitive threat to the US. US has the least capable wireless infrastructure in the developed world. This will impact productivity and competitiveness  in a big way.

10. Integration of TV and Internet could be disruptive. The convergence of Web and Television has the potential to disrupt cable and satellite, but it may not happen.

These are interesting and thoughtful hypotheses and like any predictions they are unknown in terms of velocity (when would it all happen), but certainly we see several of these at play even now.

Steve brought an unique combination of technology and liberal arts. His products were not just boring boxes in gray with alarmingly complex usability challenges for the user. They were delightful in design, looks, and user experience. When I joined Oracle in 1992, after spending 16 years at IBM, I had no experience of using an Apple McIntosh computer. On my second day at work, my new computer arrived in a box with the Apple logo. As usual, I waited for someone to come and install it when Larry Ellison commented to me, “why don’t you just plug it in, and see? It might work”. He had that teasing smile. I actually did and to my surprise everything was so simple and easy to use. I never had to look at a manual or get into any training. I felt embarrassed that I had never used such a product before.

During the second coming  of Steve Jobs to Apple from 1998 on, we saw one amazing product after another – iMac, iPod, iTunes, iPhone, iPad, iCloud, not to speak of his other grand success at Pixar. He always followed his conviction that vertical integration of hardware, software and service is the only way to bring out the best user experience. This was contrary to the horizontal structure that emerged during the PC era (each layer had many suppliers). Microsoft achieved bigger success by licensing its operating system to any hardware manufacturers, but the PC and Windows remain quite complex for the user to this day.

Steve’s original idea was vindicated when it came to consumer products like the iPhone or the iPad. Of course, Apple opened up the access to large number of application builders on those devices. But they never licensed the operating system to other device manufacturers, something Google’s Android is doing. Steve also did not allow buggy and bloated piece of software like Adobe Flash into those devices as they would have compromised his “insanely great” product. Initially he was criticized for such a move, but he was all along right as Adobe recently stopped supporting Flash on mobile devices.

I just finished reading his biography by Walter Isaacson, a 945 page book. It is worth reading as it brings out the unique personality of Steve Jobs. Former vice president and Apple board member Al Gore said the other day that someone like Steve Jobs comes to this planet once every 250 years. A genius in innovation, design, technology, and aesthetics Steve brought products that touched all of our lives in some way or the other. By the time he died in October Apple’s market valuation was almost at the top. He left behind a great legacy.

Steve will remain a tremendous inspiration to technology folks for years to come.

During my stay, like every time, I saw India as a land of contradictions. There is abject poverty next to an iPhone user. More expensive cars abound, but roads are clogged like never before, with chaotic traffic all around. Modernity coupled with a lot of superstitions.

I observe two Indias – one that belongs to the youth who are well educated, of the Facebook and Twitter culture, and the other that refuses to grow up, the corrupt politicians, bureaucrats, and con-men. While the second kind uses modern gadgetry, they continue to take bribes, tell lies, and are extremely selfish without any care for the country and its people. Many of these are the rulers of modern India. In recent months, there have been huge scams involving many politicians and bureaucrats (some of them are in jail). But the average Indian shakes his head with a denial that anything will ever change and such corruptions are here to stay.

Upon visiting a place near Delhi called Gurgaon, I am reminded of Sao Paolo in Brazil, a concrete jungle with never-ending construction all around. My friends tell me how their real estate investment has been appreciating over 30% every year over last 7-8 years. It’s more expensive than any place in the USA. Then when I spoke with someone in charge of urban planning for the Government of India, I am told that there is no sewerage or proper power infrastructure planned for this entire area. The building permits were given illegally (thanks to bribes) without consideration for the necessary infrastructure needs.

The industrial scene is still dominated by family-owned businesses with the only exception of Infosys. Young people willing to start a  company are sneered at. So they all prefer to take a job. Costs have gone up and food inflation is very high. Many items seemed much more expensive than here in the US. Labor costs have been going up, making India a less attractive place for outsourcing (skills become the attraction not cost savings).

Like Gandhi said, “India lives in its villages”. I visited several rural areas and nothing much has changed. The technology stuff is yet to reach the interior. The poor is becoming poorer with high inflation. Visiting big cities does not give one a real perspective of the real India. The GDP growth is also slowing down from its heady days of 9% and up.

But it is one of the biggest consumers of cell phones, televisions, and other electronic gadgets. There is an Amazon-like company called Flipkart that ships books to your door step. You can pay by cash on delivery also if you don’t have a credit card for web purchase. The middle class with spendable income is larger than the population of the USA.

One hopes the first India wins eventually, with better efficiency and transparency. That will elevate the poor masses also.

Steve had a spiritual side that is less known to the public. During the early 1970s he made a trip to India looking for the inner meaning of life and visited places like Varanasi and an ashram in the Himalayas. He was a converted Buddhist and even his marriage was conducted by a Buddhist monk from Stanford University. The Beatles, Bob Dylan, and the hippie culture of the early 1970s had an impact on his way of looking at the world. He always went with his own convictions and was quite non-linear in his approach. He followed his own intuition and beliefs. Hence we see such brilliant Apple products plus  the incredible animation products from Pixar.

In his famous Stanford speech to the graduating class of 2005, he spoke eloquently about death and his direct experience of coming face to face with it when the first diagnosis of pancreatic cancer happened.  In spite of a liver transplant and subsequent best possible medical care, death happened. This humbles all of us on how fleeting this life is.  In a famous dialog from the Indian mythology, a question was asked as to what is the most surprising thing in this world. The answer was quite profound and goes like this – everyday so many people die. But the remaining ones think they are immortal. That is the most surprising thing.

Steve, we pray for your soul to rest in peace. You will be missed.

So what’s exciting about Kindle Fire? First and foremost is its price of $199. With a dual core chip and fine display, it is probably losing money or has a razor-thin margin. But here are some of its salient features:

• It is called a media tablet that pulls together all of Amazon’s media services – Amazon Web Services, Instant Video, Kindle books, Amazon MP3 music store, cloud storage and Android App store.
• Yes, it is the best Android device so far
• It introduces a new mobile browser called Silk which uses Amazon EC2 to load pages faster
• It is WiFi only, no 3G announced yet
• All media is backed up and synced wirelessly in the cloud

The essence of iPad’s success is its design and usability combined with the myriad applications available. Someone said it will be a war between Amazon’s cloud and Apple’s cloud. Amazon has pioneered cloud services better than anyone in the industry, so their credibility to deliver cloud services is very high.

Kindle Fire can have books, but if that is all you need, then go for the $99 Kindle Touch. However, for an extra $100, see all the media stuff you can get. Bezos repeated this morning – a premium product at non-premium price. The Android developer community can add lots of applications over time.

Amazon’s media services include 18 million digital books, movies, songs, apps and games. All these are accessible via the new media tablet Kindle Fire.

Mark Hurd rescued HP after Carly Fiorina was kicked out by the board. Under her watch, HP made the biggest acquisition (Compaq). Mark cut costs and tightened operations to show better profitability. But innovation for which HP is known from the start, took a back seat. Last year Mark Hurd had to leave for inappropriate conduct. The board quickly appointed Leo Apotheker, a software executive from SAP to lead the company. During last eleven months, much confusion was created. First HP said it will promote the tablet based on Palm’s operating system WebOS. Then 3 months later, the tablet was abandoned. HP also said it will spin-off the PC unit, which caused much confusion to competitor’s delight. Lastly an acquisition of a British software company called Autonomy at highly inflated price of $10B (revenue less than $1B) was heavily criticized by experts. These mis-steps have caused steady decline in revenue and share value. The board was forced to fire Leo Apotheker.

But why Meg Whitman? She joined the HP board after losing to California’s governorship to Jerry Brown. Previously she served as the CEO of eBay, a consumer good exchange company. What makes Meg the right leader for HP at this juncture? She has no enterprise-hardware-software experience. Under Leo, and with the board’s approval, HP has been shifting more towards a software and services company much like IBM and Oracle. It is unclear if Meg Whitman can steer HP towards that goal. Why not Ann Livermore, who served at HP as a senior executive for decades? She definitely understands HP’s core competency and DNA better than any outsider.

Let us watch over next six months if Meg Whitman will be that turn-around leader at HP.