Sovereign Wealth Funds

Interested in the details about these much talked about and little understood funds? Here’s an outstanding piece in Middle East Quarterly about the investment funds you are hearing more about in the news.

Countries have used sovereign wealth funds (SWFs) as instruments through which to buy assets with their surplus foreign exchange since the 1950s when Norway and Singapore, and soon after Kuwait, sought new strategies to insulate themselves from exchange rate fluctuation. Central banks employed SWFs only as buffers for currency stabilization when countries had little or no international debt and large current account surpluses. Today, SWFs have become quite common. As of March 2007, the United Arab Emirates (UAE) and Saudi Arabia had, respectively, the first and third largest SWFs internationally, and Kuwait ranked sixth.[1] Because of burgeoning oil prices, Persian Gulf sovereign wealth funds have become the preferred investment vehicles of Kuwait, Qatar, and the United Arab Emirates. As SWFs blur the line between public and private investment, however, Western nations worry about the security implications of foreign countries, including Persian Gulf states, acquiring important positions in key industries and companies.

[From Sovereign Wealth Funds: Investment Vehicles for the Persian Gulf Countries - Middle East Quarterly]

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Lessons in Bad UI Design

I went over to PG&E, my local utility company, to setup automatic payment of my bill. I hate bill paying so having stuff get automatically paid is great for me, and better yet is the points I accumulate that turn into Apple iTunes gift cards on a regular basis from using my Apple Visa card.

On a side note, this is the only credit card I have ever had where the company executes really well on their customer service and the points convert into something that is a regular “small luxury”. I haven’t paid for an iTunes purchase in over a year, I keep using the $25 gift cards that the credit card company sends me.

What a frustrating experience the PG&E web site is. On the sidebar under “billing” is an item for setting up an automatic payment, which you use to setup the thresholds like what is the max payment and when to send it. But when you click on “continue” you get an error message indicating you can’t continue until you setup the actual payment details, represented by the “add payment account” link in the top bar. Web users have pretty much been conditioned that “continue” means move on to the next step up until the point at which you want to actually commit a multi-page form, which is then done through something more explicit like “add automatic payment.”

When you click on add payment account you go to a page that has details for adding a check payment from your bank account, no credit cards. In order to setup an automatic payment with your credit card you have to click on the separate sidebar link labeled “pay bill with Visa card” and then “setup automatic payment”. So not only do they have two entirely separate pages for automatic payments, one of them is hidden in a page that suggests “pay your bill NOW with your Visa card.”

Also, you can’t use anything other than Visa for some reason, no Mastercard or Amex.

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Act 2: Buyer’s Remorse

Yesterday I wrote about the Techmeme blogger reaction to Google Sites, basically critical of it because it’s a pattern that is all too familiar: Google comes out with something new or updated and says it’s x or y and A-list blogger first reaction is to throw the company up on their shoulders and take a victory lap. There is little critical analysis.

I have been spending a lot of time in Sharepoint and when I read the various blog posts calling Sites a Sharepoint killer, it was evident to me that most of these commenters had never even seen Sharepoint, much less actually have used it. Sharepoint isn’t a wiki (which is basically what Sites is), so to compare Sites to Sharepoint on the basis of Sites superior wiki-ness begins with a false premise.

Even if Sites were competitively superior to Sharepoint on the basis of product features, that alone would not be enough.

Google’s competitive weakness with regard to Microsoft in SMB and enterprise accounts is partly due to the fact that their apps are lightweight when compared, but is more due to the account control that Microsoft holds as a key asset. Sharepoint is sold into SMB and enterprise accounts as a bundle, an up-sell to existing account, or offered as an incentive to get something else. Google simply doesn’t have the ground operation that Microsoft has, nor quite frankly the resources to build it.

What I mean by this last statement is that Google is starting to come under increased scrutiny with regard to expansion plans. As their search advertising business levels off the level of scrutiny they face will only grow, which means that spending a few billion dollars to build out a true enterprise sales and channel organization, or acquire one, which is likely to take years before returns are seen, is something they are not well positioned to do right now.

In my opinion, their original assumption was that they could flank Microsoft with the Google search appliance straight into IT and end users adopting applications as a guerilla insurgency within the enterprise. That simply hasn’t happened and probably won’t. Search appliance is doing well but those IT groups have little say in what business applications are adopted, and users as well as business decision makers have little incentive to risk going with Google when Microsoft is proven and already there.

Furthermore, the total cost of an application represents a package of associated items, the least of which is the license, so going with Google apps still means you incur support, training, and administration costs. If Google wants to really beat Microsoft in the enterprise then they are going to have to execute a full frontal assault, something they are ill-prepared to do.

I started out this post writing about the lack of critical analysis in the blogosphere, but an interesting thing tends to happen as the day goes on with announcements like this. Below is a snapshot of Techmeme later in the day when a number of bloggers started showing up with a “hold on cowboy” message that does reflect a more sober look at what Google is doing.

Maybe instead of criticizing the lack of critical analysis, I should modify that to suggest it’s a lack of immediate critical analysis that I find troubling. The problem with the blogosphere, like media, is that there is a race to be first rather than to be the most complete. TechCrunch has built a nice franchise on scoops and breaking news, and as a consequence everyone rushes to be a part of that early group.

What does all this mean? Probably not much on balance as my observation isn’t unique or earth shaking, it’s more a reflection on the traditional dynamics of media and PR, as well as human desire for recognition which is played out in the blogosphere with trackbacks and links. One thing that would be pretty cool to see is a trendline that tracks sentiment on particular issue or product launch over time to see if there is any repeating pattern.

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