Background

The case studies discussed in this book thus far have concerned the work relationships of North American or European firms and Indian software companies. This chapter is different from the other case studies as it concerns relationships between firms from two Asian countries, Japan and India. The focus is also not on one particular relationship analysed over time. Instead a ‘snap-shot view’ is provided of a number of firms, in Japan and in India, that are engaged in or attempting to start GSAs. Since many of the relationships are not yet developed but in a stage of planning and projection, a large part of the analysis is based more on the managers' expectations of what issues will develop in the GSA rather than on actual experience. However, understanding these expectations is crucial because they shape the attitudes and actions of the people involved in the GSA. Although the cross-sectional research design is guided by pragmatic considerations of access and the intention of identifying and exploring interesting relationships and issues, it also reflects the current state of the business environment where GSAs between Japanese and Indian firms for software development are still in their infancy. While the success of East Asian firms in a variety of domains, including consumer electronics and automobiles, is well known, they are feeling the pressure to become globally competitive by strengthening the software component of their products.

Over the past few years, the wireless phone has become an invaluable extension of daily human life. With the cost of voice services and phones being commoditized so rapidly, more and more people across the world are embracing wireless, even in regions where the technology has only recently been introduced. One of the key elements of this phenomenon is the value of the wireless device. It helps you stay connected (especially in case of emergencies) with people and information, and enhances personal and professional productivity (it can help you get things done in less time).

Personal subscribers

Consumer applications are designed for a different reason than enterprise applications. It is primarily to extend the brand (hence loyalty), extend the reach (especially in countries in Europe and South America, where wireless phones are the primary way for users to connect to the Internet), and generate revenue (transactions). Wireless Internet is all about “instant gratification” and “impulse transactions”. Consumer companies can largely benefit from this new wave of application services. Wireless Internet is a prime candidate for promoting “social communities” – instant messaging, chat, auctions, etc. It is also great for providing information to the user on the move. Some of the key factors in keeping consumers satisfied are to focus on the applications and services from a consumer point of view, understand the customer and deliver the service based on their expectations and needs. The following criteria are very important for the consumer.

As wireless technology and services became more pervasive around the world over the course of the 1990s, one thing immediately became clear: the uniqueness of the major markets around the world. SMS in Europe, i-mode in Japan and Blackberry in North America all point to the diversity of consumer acceptance. Likewise the problems facing these markets are unique as well. While Scandinavian and Japanese carriers worry about market saturation, the USA wrestles with its spectrum allocation confusion and intense competition. While European carriers worry about getting out of their enormous debts due to auctions, carriers in South America worry about the technology evolution of their TDMA networks. In this chapter we will cover the salient features of the major global wireless markets – the USA, China, Japan, South Korea, South America and Europe.

Figure 3.1 and Table 3.1 show the penetration of wireless telephones and wireless data, respectively, across different regions of the world.

USA

During the past few years, the US wireless market has continued its substantial growth: from about 86 million subscribers at the end of 1999, the total number of subscribers had increased to 137 million by February 2003. Carriers are all upgrading their networks to gain more capacity and efficiency for their voice networks as well as to introduce high-bandwidth data capabilities. The year 2001 saw experimentation with wireless applications and the development of various relationships amongst the players in the wireless value chain.

Introduction

We have already reviewed the various segments that make up the wireless value chain, looked at various players in those segments, and discussed why it is so important to have a healthy ecosystem of players and service providers. In this chapter we will review another key element of wireless business – the business models and strategies. With the advent of wireless data applications and services, the old value chain has been disturbed with the emergence of a new breed of players providing valuable services to the industry; for example, content providers and game developers who did not have a place in the chain before constitute an important component of the ecosystem today.

In this chapter, we will also look at the success factors behind i-mode, the service that changed the landscape of wireless Internet applications and services forever. We will also clear up some misconceptions regarding the success factors of i-mode that are common amongst analysts and the press. We will look at various business models, their advantages and disadvantages and how various players open the revenue stream for themselves.

Wireless applications and services are being used extensively in situations that require personalized and/or time-critical information. Location-specific transactions are also becoming possible now, opening up a new range of commercial opportunities. Broadly speaking, wireless data services will embrace infotainment services, lifestyle facilitators and transaction-based services, with financial services and travel and transportation being the most obvious industry segments to go on the wireless data world.

Introduction

This brief story is an insight into the day-to-day life of Global Software Work (GSW), which is the topic of this book.

Introduction

This chapter is concerned with developing implications to aid managers currently engaged in establishing, managing and strengthening GSA relationships. Our aim is to develop implications that are grounded in rich empirical data that has been subjected to rigorous theoretically informed analysis of ‘how the GSA process evolves over time’. This analysis develops relevant management implications around the six analytical themes discussed so far: standardization, identity, space and place, knowledge transfer, power and control and communication. The theoretical and empirical basis of the analysis helps us to transcend providing mere prescriptions and ‘how-to-do-it’ guides for GSA management and instead, develop a set of questions around key tensions that managers can analyse in the process of managing GSAs.

The GSA literature has a number of examples of prescriptions for management (see for instance Apte 1990; Apte and Mason 1995; Rajkumar and Mani 2001; Karolak 1998; Carmel 1999). For example, the rule to ‘outsource only structured tasks’ may work in certain situations but this is not always the case. Such rules, while useful in sensitizing managers to issues of importance for managing GSAs, are limited in the face of the complexity of the unfolding process over time, which makes it difficult to apply ‘best practices’ or ‘universal methodologies’. Prescriptive rule-based approaches tend to downplay the local and contingent situation in favour of broad generalizations and ignore the possibility that what worked well in one relationship may cause problems in another.

In Chapter 13 we discussed the future of wireless data technologies, applications, and services. We began our journey with the discussion of the impact of globalization on wireless industry and businesses and ended the conversation by taking a look at the promise of technologies that will enable future wireless data applications and services that will capture our imagination and make our lives simpler. Along the way, we discussed a wide variety of topics to cover different aspects of the wireless data industry. We hope we were able to provide you with discussion on a spectrum of topics and issues that will help you appreciate both the complexity and the promise of wireless data. As was the purpose of the book, we discussed the trends, technologies, business models from a global angle as we have discovered – geography matters, it matters a great deal. The wireless data offerings from the carriers and the developers need to be customized and tailored to individuals. There must be continuous focus on this mantra to be successful. Over the past few chapters, we have talked quite a bit about the future of the industry. Let us continue that discussion in this chapter by analyzing various possible scenarios for wireless data for rest of the decade (2003–2010).

As described in previous chapters, the size of the wireless market for voice services has been approaching saturation levels in several developed countries, so the carriers need to create new revenue streams in addition to existing voice services.

Introduction

This chapter aims to focus on the discussion of future of wireless technologies, applications, and services in the twentyfirst century. In Chapter 10, we discussed some of the technology issues and challenges for the industry. In this chapter, we will continue the discussion on the evolution and challenges of wireless technology in the context of the next 5–10 years. Several industry standards groups made up of manufacturers, carriers and academic institutions – including the IPv6 Forum, SDR Forum, 3GPP, Internet Engineering Task Force (IETF), and the Wireless World Research Forum – are helping to formulate a vision of a next-generation wireless world. Manufacturers and carriers are already looking to build on existing 3G specifications. AT&T has been developing a network prototype called 4G Access that combines Enhanced Data Rates for GSM Evolution (EDGE) with wideband orthogonal frequency division multiplexing (OFDM). Nortel has been working on software radio power amplifier technology needed to make higher wireless speeds a reality, and the streaming media research group of HP Labs has been working on systems for delivering multimedia content over next-generation networks.

Several companies are funding wireless research activities at the University of California. NTT DoCoMo research labs are constructing a trial 4G network based on the ITU's proposals. The system combines variable spreading factor (VSF) and OFDM technologies.

With each passing year, geographical borders between nations appear to be shrinking. The masses might be separated by culture heritage, religious beliefs, or ethnicity, but almost all of the human race has been transformed and touched by the global phenomenon called globalization. In general, globalization refers to the adaptation of business practices and processes to take a business, product, application or service to global markets. It refers to the internationalization and localization of these products and applications, so that they are ready for the global market. As economies continue to become interconnected and interdependent, an event in one corner of the globe can have an effect of much larger magnitude than ever before. One does not have to look far to fathom the ripple effect of world events. The collapse of the Asian financial markets in the mid-1990s or the horrible events of 9/11 in the USA touched the lives of people living far beyond. With trade barriers lifted (most recently in China), products from around the world compete on quality and price in any local market. With the advent of the first wireless technology and then the Internet, physical boundaries have become almost meaningless as far as trade and business are concerned. The European adoption of a common GSM standard for wireless communication fostered the growth in the industry that is unparalleled in recent times.

GSW: a power and control perspective

In this chapter, we examine the role of power and control in shaping the process of a GSA relationship over time. In society and also in an organization, issues of power and control are intrinsically inter-connected with culture. Power has an influence on how cultural norms are collectively defined. The exercise of this power must be based on existing cultural values and assumptions. The exercise of power also enables the production and reproduction of cultural values. The process of globalization that defines the working of a GSA introduces new dimensions of power. Power structures that have been historically shaped – for example, through relationships between developed and developing countries – come into play in different ways and levels when firms from these countries are drawn together in a GSA. MNCs typically situated in the developed world have the economic and political power to make investments in infrastructure required for running GSAs. This economic power is also translated into cultural values, such as the norms of communication and conventions of meetings, etc. However, the introduction and stabilization of power- and culture-related values are always contested, especially in GSAs where the linkage between the firms is through the aspect of ‘knowledge’.

Power and knowledge are also deeply inter-connected, a point made emphatically by Foucault (1991). Three key strands in Foucault's analysis relate to power, knowledge and discourse.

Rapid and widespread growth of wireless technology in the 1990s shaped one of the largest technology markets after the PC revolution in the 1980s. Untethered connectivity, any time anywhere, fueled a major market and technology disruption, which permeated almost every consumer market worldwide. The domino effect of the success of wireless technology resulted in a unique opportunity for innovation and creativity in technology, marketing, and business strategy.

Unceasing innovation in technologies ranging from the semiconductor industry to network design set the stage for the immense success of wireless technology such that, within a few years of its inception, the wireless phone transcended from a luxury gadget or business item to a necessary tool in everyday life. The personalized aspects of mobile phones, along with ease of use in voice-centric applications, helped to make the mobile phone an indispensable part of our life beyond age, gender, or even social class.

The next commonsense step was perceived to be further wireless services in addition to voice. Yet wireless, like any other major technology and market breakthrough, is no exception to the cyclic nature of the high tech economy. Rapid market growth driven by innovation and competition diminished the profit margins of the terminal market and network access rate to a level that compelled the technologists and marketers to search for new applications and markets.

If we look at the progress made by Homo sapiens over the past 1000 years, the past 100 years have had more impact on us than the rest of the centuries combined. The breathtaking pace of advances in various fields of technology has transformed the human landscape. As we move into the twentyfirst century, the impact of wireless technologies and globalization will have a profound effect on the way we interact culturally, socially and intellectually across geopolitical boundaries.

The new millennium will continue the feverish pace of globalization, and bring its denizens closer to each other than ever before. One of the critical factors at the heart of this revolution is mobility; both wireless voice and data technologies will continue to enhance our daily lives and help transform the business and consumer market place over the course of next several decades. The global community continues to embrace wireless applications and services and globalization, irrespective of region, gender, culture, or age. This trend is not limited to human beings; even machines are exchanging information wirelessly.

The recent explosive development of wireless technology has contributed not only to the acceleration of globalization of the world economy, but has also changed our lifestyles. Conversely, the rapid globalization of the world has also made a great impact on the wireless industry. For wireless engineers like Chetan Sharma and Yasuhisa Nakamura, the present authors, physical borders mean nothing. Everyday, a new wireless device is being introduced and a new service starts somewhere in the world.

Software is a key element in the increasing use of information and communication technologies in contemporary society, and thus its production and use are of major importance. Outsourcing of software production has been common for many years, but since the late 1980s this has increasingly occurred across national and cultural borders, a phenomenon which is known as ‘global software outsourcing’. Cost is a major driver of this, with production normally located in countries with relatively low wage levels, but outsourcing organizations recognize that effective relationships with their software suppliers must be developed and maintained if full benefits are to be realized. This has resulted in various forms of collaborative arrangements, which can be labelled as ‘Global Software Alliances’ (GSAs).

This book provides rich empirical data on Global Software Work (GSW) and associated organizational alliances. The material is derived from the extensive fieldwork carried out by the authors over a number of years, with special emphasis on outsourcers in Canada, the UK and Japan, and companies in India as the software producers. India is a major success story in this area, with quite exceptional growth rates of its software export sector since the 1990s. However, as the book so vividly illustrates, this has not been achieved without lengthy and sometimes painful learning processes on the part of those involved on both sides of the outsourcing alliances. The longitudinal nature of the fieldwork carried out by the authors enabled them to trace and analyse such processes over several years.