Thursday, August 12, 2004

[urls] Build a Better Enterprise Application

Thursday, August 12, 2004
Dateline: China
 
The following is a sampling of my top ten "urls" for the past week or so.  By signing up with Furl (it's free), anyone can subscribe to an e-mail feed of ALL my urls (about 100-250 per week) -- AND limit by subject (e.g., ITO) and/or rating (e.g., articles rated "Very Good" or "Excellent").  It's also possible to receive new urls as an RSS feed.  However, if you'd like to receive a daily feed of my urls but do NOT want to sign up with Furl, I can manually add your name to my daily Furl distribution list.  (And if you want off, I'll promptly remove your e-mail address.)
 
Top Honors:
 
* Build a Better Enterprise Application (on Web services and SOA; great review of all the pertinent issues)
 
Other best new selections (in no particular order):
 
* Adaptive Document Layout via Manifold Content (PDF) (another hit for Microsoft, this article proposes a user interface for authoring and editing Web content for different form factors; think formatting for ubiquitous devices and pervasive computing)
A New View on Intelligence (on XML & EII, et al) (thoroughly enjoyable -- so good,  I almost blogged it; insightful perspective)
InfoWorld Special Report: Has desktop Linux come of age? (IMHO, a resounding "No!!"  But there are other perspectives worth considering.  I still think it's a lot of wishful thinking.)
* Negotiating in Service-Oriented Environments (PDF) (A slightly annotated excerpt: "The concept of delivering software as a service is relatively simply: 'do not buy software, simply use it as and when you need it'.  Putting such a concept into practice, however, is far more complex and involves many issues.  In this article, we address the question: What are the characteristics of a market for software services?"  Hot topic, good paper.)
* Real Time Means Real Change (so much talk about the so-called "Real Time Enterprise"; this article takes a look at the realities behind the hype of the "RTE")
Information Scent on the Web (PDF) (Courtesy of PARC, you need to read this for yourself; Google as The Matrix idea -- worse yet, The Time Machine Reloaded   In reality, useful perspectives for Web designers.)
Offshoring/Outsourcing: Fragile - Handle With Care (a brief but rather comprehensive overview; points to the various aspects of ITO and BPO along the IT value chain)
IT Spending For Comprehensive Compliance (original article linked; good review of the various opportunities "thanks" mostly to SOX)
* The Executive's Guide to Utility Computing - ROI of Utility Computing (a broad perspective on utility computing, different from what is usually published)
 
Examples of urls that didn't make my "Top Ten List":
 
> Benchmarking Study Shows 75 Percent of Enterprises Deploying Web Services (need I say more?; includes stats on ebXML and grid computing, too)
> Probabilistic Model for Contextual Retrieval (PDF) (a sneak peek at Microsoft's emerging search technology?)  See also Block-based Web Search, courtesy of Microsoft Research Asia (Beijing) and Tsinghua University, arguably China's best (the latter article is not urled; from the recent SIGIR conference).  If you think Google is the last word in search, think again.
> Where To Find New Growth Prospects And What Challenges Need To Be Overcome (necessary action items and preferred geographic regions; China <not Russia, Brazil or the Czech Republic> comes in the number two slot after North America)
> CIO Magazine: Are We Happy Yet? (on ITO and BPO) (dumb article title, but smart content; good metrics to consider, including a take on SLAs)
> Developing Killer Apps for Industrial Augmented Reality (restricted access) (this page provides some complimentary information to the restricted access selection, although it's not urled).  I just noticed something:  The apps section of IEEE CG&A is edited by two mil guys, one from the (U.S.) Office of Naval Research and the other from the U.S. Army simulation and training office.  Hey, who says all the good engineering jobs are outsourced!?    Frankly, I believe that the best American engineers can always find jobs within DoD or the intelligence community.  Besides, they do all the truly fun computing stuff!!  Trust me, there isn't so much fun stuff done at Oracle.
 
and many, many more ...
 
Cheers,
 
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China
 
http://www.itestrategies.com (current blog postings optimized for MSIE6.x)
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Monday, August 09, 2004

[news] Excerpt from a McKinsey Paper on IT Spending Trends

Monday, August 9, 2004
Dateline: China
 
I recently urled the abstract for this paper, but CNET and McKinsey were kind enough to post the full-text of the paper on the CNET news site (which downloads at glacial speed, at least from China).  Now that the article from the current issue of The McKinsey Quarterly is in the public domain, I'd like to include an excerpt in this posting.  (Bolded and colored notations are MY emphasis.)
 
"Although IT customers also want to improve their software, they are wary of big-bang packaged applications--purchases that are just now rolling off accrual budgets.  This time around, CIOs are shunning expensive panaceas, especially large-scale customer relationship management (CRM) systems.  Many tech executives lost face (or jobs) when the promised benefits didn't materialize, often because the technology demanded difficult-to-realize changes in processes and in employee behavior.  Even worse than buying packaged applications, CIOs told us, was buying applications and then customizing them, for this strategy made it necessary to reinvest in customization with each subsequent upgrade.  CIOs now favor narrower, more-targeted, less-ambitious improvements that mitigate the risk of organizational rejection.  Custom software that closely adheres to a company's existing processes (and therefore requires little or no process change) is popular, and so is software developed for a specific industry.  Meanwhile, integration--a higher priority now than it was during the boom--is generating demand for enterprise application integration (EAI) technologies.  Web services are gaining traction faster than anticipated, especially in small telecom and other companies at the forefront of IT innovation.  Of the CIOs we interviewed, 8 percent said that Web services were their primary integration strategy.  Despite these inroads, most companies are still at the experimental stage with this technology, which demands advanced skills and a high degree of commitment from the IT organization.  Others are choosing a different path:  Roughly half of the CIOs we spoke with have been (or are thinking about) investing in integration broker software, often combined with Web services.  Adoption is strongest among telecommunications and financial-services companies, whose technical complexity makes the software especially attractive.  The third-party services market could feel the pinch, however.  Many companies, spurred by lower IT salaries after the economic slowdown, hired talent and brought IT development in-house.  These new hires often support and develop the more-customized applications that today's IT budgets favor.  But this move could boomerang on companies in the future:  The absence of vendor support could reduce economies of scale and push up costs.  Offshoring in less-expensive labor markets could, of course, offset them."
 
ADDENDUM: Seeing Beyond "Traditional" Market Research ...
 
I've already received a few messages regarding my "Seeing Beyond" posting.
 
One of the questions was very simple to answer.  The question:  Can you name a few ISVs in China which could develop a hosted version of their packaged software?  Certainly.  Simple answer:  Bamboo, KingdeeUFSoft (all three are in the ERP space).
 
A reader also asked me about Fisher-Pry, having heard of this technique but not really familiar with it.  In simple terms, Fisher-Pry functions best as a substitution model.  I'm not thrilled about using it to predict end of life and market size issues per seWhere I find it useful -- EXTREMELY USEFUL -- is in determining when a NEW technology is likely to EMERGE.  I then put on my Geoffrey Moore glasses to look at the technology from a chasm crossing perspective.  And, if I'm really interested, I'll put on my Ed Roberts and Gordon Bell glasses -- and will evaluate the technology using other techniques as well.  But Fisher-Pry itself is extremely simple to use and a Geoffrey Moore analysis is also a no-brainer.  (Ed Roberts' -- and I'm the unofficial president of the Ed Roberts fan club -- various approaches to evaluating new markets and technologies requires me to fire a lot more neurons than Moore's approach.)  To me, Fisher-Pry is all about inflection points and EMERGING marketsTo see an application of Fisher-Pry, read an A.T. Kearney report on wireless futures at http://tinyurl.com/4zcas (and it's an excellent report, too).  See also a recent evaluation of the remote sensing market at http://tinyurl.com/6zxqm .  For a brief review of Fisher-Pry and a couple of related techniques for technology trend analysis, see http://tinyurl.com/4hf7t .
 
Finally, another reader questioned whether MIT's Innovation Futures market was doomed to focus on short(er)-term "bets."  My answer is that MIT may need to repackage Innovation Futures for addressing long(er)-term issues.  Many of us in America can remember playing the stock market in one of our classes.  For me, it was in my eighth grade government class.  We had to pick stocks and trade them through the course of the year.  Unfortunately, the very nature of this learning experience put a premium on trading versus investing.  In other words, picking stocks which might be solid over a three-plus year time horizon simply wouldn't work; it was much better to "gamble" on high Beta (i.e., higher volatility) issues.  Innovation Futures suffers from the same "need" to determine winners and losers on a relatively timely basis.  Probably time horizons of three or more years won't suffice, at least not from a "gamblers" perspective (sans venture capitalists).
 
I'd like to see their system changed to allow different types of "players" and "traders," namely the crop I had suggested in my last posting, but also another class of "all others."  Think of this as an experiment in social computing among technophiles, not online gambling.  In some ways, it could reveal the type of knowledge that is found in the blogosphere.
 
Cheers,
 
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China
 
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Sunday, August 08, 2004

[commentary] Seeing Beyond "Traditional" Market Research + A Golden Opportunity for China's ISVs

Sunday, August 8, 2004
Dateline: China
 
More general commentary than news commentary per se; let's dig in ...
 
Seeing Beyond "Traditional" Market Research
 
We're all familiar ad nauseum with market forecasts by firms such as Gartner, Forrester, IDC and even i-bankers (albeit i-bankers tend to have a shorter time horizon).  I've always been a bit suspect of IT market forecasts and was delighted that the META Group (where I was VP, Electronic Business Strategies) focused on qualitative and consultative approaches to serving our end-user and vendor clients.  We were more like a SWAT team version of McKinsey:  Get in, get it done, get out, move on.  The Kensington Group, an IT advisory services industry watchdog firm, has found that most forecasts are simply dead wrong.  Frankly, it's hard to blame the IT advisory services:  Forecasting is tough stuff!!  Some of the firms claim that they are not producing forecasts, but are producing projections.  Call it what you will:  It's a forecast -- and it's usually wrong.  (In defense of the IT advisory services, often the commentary which accompanies a forecast is quite useful.  The forecast may be wrong, but often other issues are adequately -- and usefully -- addressed.)
 
I've been a long-time proponent of more "advanced" forecasting techniques ranging from Delphi (pioneered by the RAND Corporation) to cellular automata to Lotka-Volterra (which in a plain vanilla and watered-down form was the basis of a lead article in an issue of Harvard Business Review) to the good 'ol Fisher-Pry technique -- and just about every flavor of forecasting in between.  Not only do I read Technological Forecasting & Social Change, but I annually read numerous papers published in a few hundred engineering journals and in all ACM, IEEE and SPIE conference proceedings which cite a paper published in TF&SC.  (Think CiteSeer.)  And something relatively new has captured my attention; I want to share this with the readers of this blog/e-newsletter.
 
MIT's Technology Review has embarked on a interesting project called "Innovation Futures".  (They may not view this as a "project," but it feels like a "project" to me.)  There is a fair amount of history behind the project -- and some may recall the related DARPA fiasco last year -- but I'd like to stick specifically to the MIT project.  To quote Technology Review, "Innovation Futures is a predictive market system that enables technologyreview.com users to predict the outcome of events related to emerging technologies."  Think of it as a futures and options market for emerging technologies -- NOT about companies, but about the underlying technologies.  For example, rather than betting for or against Nanosys as a pure-play nano firm, a "player" (think "trader") can bet for or against a definable nano event (e.g., commercial devices produced using molecular self-assembly techniques with combined annual sales of at least $100 million by 2006).  Something "easier" to phantom might be a bet that VoIP will be implemented in some form by at least 75% of G2000 companies by 2007.  Think about this:  Which would give a better indicator of buying intentions, the MIT predictive market system or an IT advisory service forecast?  I'll put my money on Innovation Futures or a clone.  (Frankly, I'd put my money on other technological forecasting techniques.  But if the choice is between the MIT system or Gartner, I'll go with MIT.  And the MIT market is a lot easier to follow than building a nonlinear model.  Leave the tough stuff to Pugh-Roberts; leave the everyday stuff to Innovation Futures.)
 
At this point, the MIT site doesn't have very much and most of what they have is focused on short(er)-term bets.  But this will be very interesting to watch, especially as broader -- and long(er)-term -- issues are market tested.  What happens when the marketing folks at IBM, Microsoft, Oracle, HP, Accenture, CSC, TCS, Infosys and SAP play?  And when the members of the Global Business Network and their brethren play?  And when IT advisory services analysts play?  And, perhaps most importantly, when CIOs representing companies of all different sizes and from all parts of globe start to play?  Food for thought.  I'll keep this readership posted:  I plan to have several long discussions with the folks running Innovation Futures.  I have many specific ideas to share with them.  For more information, see http://tinyurl.com/5bevb .
 
A Golden Opportunity for China's ISVs
 
In the past I've talked about the opportunities for SIs (systems integrators) in China to work with utility computing vendors in the States.  Well, I've given this a lot of thought and have another idea:  What about ISVs (independent software vendors) in China floating utility computing offerings in the States?  As one example, let's take Free CRM (see http://www.freecrm.com/ ).  The totally free version seems a bit worthless, but gives a smaller firm a chance to play with the idea with very little risk.  However, the "Professional" version is only $10 per month per user, far less than Salesforce.com's average of $70 per month per user.  Okay, the "Professional" version of Free CRM (maybe they should call it "Cheap CRM" -- or some B-school grad might name it "Value-Driven CRM) certainly doesn't have the industrial strength features of Salesforce.com.  However, think a modified Pareto strategy:  A good chuck of the functionality, but at a fraction of the cost.  Add a few zingers like syncing for a PDA/smartphone and/or pages automatically "modified" to fit any form factor (see the current issue of CACM for a great article on this; hot research area and tomorrow's urls listing will include a link to a downloadable paper on this subject) and the offering from the ISV in China becomes incredibly -- perhaps irresistibly -- enticing.  And guess what:  At least in theory the platform could be leveraged for both the market in the States and in China.  (I have some reservations about this, but it's theoretically doable.)  BTW, the Free CRM solutions are NOT hosted, but for in-house initiatives.  However, the same marketing principles apply in this analysis.
 
Bottom line:  This is truly a golden opportunity for ISVs in ChinaDon't target the F1000; go after SMEs, perhaps the same firms that are normally targeted by the largest ISVs using telemarketing.  (I'm not suggesting a telemarketing strategy; I'm simply segmenting the market in Oracle fashion.)  Think of a U.S. company with less than 500 employees.  The world (well, at least the U.S. part of it) will be your oyster ...
 
China: A Hotbed for Management Consulting?
 
An interesting article published on the China Economic Net site (in Chinglish, no less) kind of uses the phrase "management consulting" in a rather broad way.  But when it gets to specifics, it's illuminating.  First, there is the claim that "China has become the management consulting market with the most rapid growth rate."  Not sure if this is really true, but it's certainly one of the more interesting markets. 
 
For specifics, BearingPoint is cited.  Basically, they're bursting at the seams and projecting growth from about 1,000 today to 6,000 in 2008.  CapGemini went the acquisition route.  The average annual salary of a "good management consultant" is about US$40,000 -- a far cry from what a "good management consultant" makes in the States.  And what do the consultants bring to the table?  Well, this is where the article went from being written in English to Chinglish.  But if I can make out what they mean, it's the ability for management consultants to help with implementation and operational issues.  See http://tinyurl.com/43hlr .
 
Bottom line:  SIs in China should look to adding so-called "management consulting" services to their offerings.  I am NOT suggesting a massive move in this direction, but a selected approach.  Also, China's SIs should look to partner with Western management consulting firms already in or planning to enter China.  On the one hand, the BearingPoints of the world make good partners, especially for sub-contracting work.  On the other hand, the BCGs of the world are more complimentary and not directly competitive.  Have a strategy and plan for dealing with both types of management consulting firms, i.e., the strategy firms with a stake in IT (e.g., @McKinsey) and the IT consultancies/SIs with a strategy play (e.g., IGS, Accenture, ...).
 
What I'm Reading (and Why I Didn't Post as Often as Usual Last Week)
 
The new proceedings for SIGIR04 are out and I've been sifting through dozens of papers.  Google seems like child's play compared to what is brewing.  However, I have it on good authority that Google is brewing many of the same things.  But so is Microsoft.  In the future, we all benefit.
 
Cheers,
 
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China
 
http://www.itestrategies.com (current blog postings optimized for MSIE6.x)
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Monday, August 02, 2004

[urls] Top 10 Urls: 25 July-1 August 2004

Monday, August 2, 2004
Dateline: China
 
The following is a sampling of my "urls" for the past eight days.  By signing up with Furl (it's free), anyone can subscribe to an e-mail feed of ALL my urls (about 150-350 per week) -- AND limit by subject (e.g., ITO) and/or rating (e.g., articles rated "Very Good" or "Excellent").  It's also possible to receive new urls as an RSS feed.  However, if you'd like to receive a daily feed of my urls but do NOT want to sign up with Furl, I can manually add your name to my daily Furl distribution list.  (And if you want off, I'll promptly remove your e-mail address.)
 
Best new selections (in no particular order):
 
* A Web Services Choreography Scenario for Interoperating Bioinformatics Applications (SUPERB, covering all the bases; might serve as the foundation for a blog posting)
* ICC Report: Software Focus, June 2004 issue (if you're not familiar with this monthly newsletter from Red Herring, it's worth scanning; this particular issue is their "annual" on enterprise software)
* Northeast Asia: Cultural Influences on the U.S. National Security Strategy (this might serve as the basis for a blog posting; EXCELLENT, broad-based review of cultural issues)
* Economics of an Information Intermediary with Aggregation Benefits (think B2B and e-markets, although the implications are wide-ranging)
* How to Increase Your Return on Your Innovation Investment (provides a link to an article published in the current issue of Harvard Business Review; good food for thought)
* Why Mobile Services Fail (insights from Howard Rheingold)
* Anything That Promotes ebXML Is Good (lots of good links; I'm an ebXML advocate, so the tone of this article is one which I fully support)
 
Examples of urls that didn't make my "Top Ten List":
 
> RightNow, Sierra Atlantic Announce Partnership to Deliver Enterprise CRM Integration (a trend in the making; I've talked about this quite a bit, i.e., systems integrators working with utility computing vendors)
 
and many, many more ...
 
Cheers,
 
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China
e-mail: click on http://tinyurl.com/3mbzq (temporary, until Gmail resolves their problems; I haven't been able to access my Gmail messages for the past week)
 
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[news] Cognizant & the "Intelligent Internet" + a Peek at 2005 IT Budgets (Part 2 of 2)

Sunday, August 1, 2004
Dateline: China
 
Ah, the World Future Society.  Much to say about the WFS, but I'll save it for the end of this post.  An article which appears in the March-April 2004 issue of The Futurist was reprinted in a recent issue of Government Computer News (see http://tinyurl.com/yrp2w ); the original paper which was the basis for The Futurist article is also available (see http://tinyurl.com/5ymos ).  The article focuses heavily on findings from the TechCast Project at George Washington University (see http://www.techcast.org ; BTW, they're seeking beta testers).
 
The article acknowledges hype during the bubble, but goes on to indicate that 20 commercial aspects of Internet use should reach 30% "take-off" adoption levels over the next several years -- and will rejuvenate the (American) economy.  One area of particular interest is a "conversational" human-computer interface, called "TeleLiving," based on advances in speech recognition, AI, hardware/grid computing, virtual environments and flat wall monitors.  (Sounds like stuff out of PARC and Microsoft Research.)
 
Their Project results "portray a striking scenario in which the dominate forms of e-commerce - broadband, business-to-business (B2B), online finance, entertainment-on-demand, wireless, e-training, knowledge-on-demand, electronic public services, online publishing, e-tailing - grow from their present 5%-20% adoption levels to 30% between 2004 and 2010.  TechCast considers the 30% penetration level significant because this roughly marks the 'take-off point' when technologies move from their early-adopter phase into the mainstream, where they permeate economic and social life."  (Think of chasm crossing.  Also think of expeditionary marketing within the context of broadband.  BTW, bolded and colored items are MY emphasis.)
 
The authors discuss the notion that many think that the Internet is already mainstream, yet challenge that notion by stating that this is true only for nonpaying use, citing surfing for free information as one example.  "As of 2003, commercial operations involving monetary exchange were limited to about 23% for broadband, 10% for e-tailing, 12% for B2B, 10% for distance learning, and 5% for music.  And these are the most popular Internet applications.  Others hardly register in adoption levels at all."  Bottom line:  It's all about e-commerce, I guess.  Jerry Maguire said it best. 
 
A Look at 2005 IT Spending
 
Not as much as I had originally hoped for in the Forrester glimpse at 2005 IT budgets, but some things to note.  (See http://tinyurl.com/67pse .)  Example:  52% of finance and insurance firms -- led by insurers -- will spend more on IT in 2005.  Okay, sounds like an opportunity for SIs (systems integrators) building .NET solutions.  (For those who don't know, Microsoft has fairly strong solutions for the insurance vertical.)  At the subvertical level, media and nongovernment public sector plays look good, whereas the utilities and transportation sectors look weak.  Also, Siebel and PeopleSoft customers are planning to spend more on IT relative to customers of other key vendors, most notably SAP.  (I don't see this, but I don't dispute their data.  Frankly, I think we'll see a lot of activity for SAP SIs in 2005.  P'Soft is too hard to tell, especially with the confusion caused by Oracle.  Oracle benefits whether the acquisition goes through or not!!  It's the FUD factor.)
 
Not to be outdone, AMR came out with their peek at 2005 budgets for SMEs (small and medium enterprises).  (See http://tinyurl.com/5vlvo .  I got a lot more out of the AMR report.)  Something that is rather common knowledge among IT analysts, but may not be known by those not involved in the IT budgeting process, is that a typical large U.S. manufacturer spends 2% of its annual revs (i.e., revenues) on IT and a large service firm spends 5%.  However, the average for U.S. SMEs is 6.4% of revs, although a good chunk is for basic IT infrastructure.
 
CRM looks like a hot item for U.S. SMEs and the AMR report makes an interesting comment about the perceived need for other countries to implement a "keeping up with the Joneses" strategy.  This being said, then domestic firms in China may follow suit.  As far as operating systems are concerned, there is only one:  Windows.  And U.S. SMEs spend about 20% of their IT budget on software and software maintenance, with discrete manufacturers outspending process manufacturers or retailers.  Typical apps are for financial management and customer management, although expensive CRM suites (think Siebel or Oracle) are rare.  Sounds like an opportunity for utility computing vendorsBottom line:  If the SMEs market is your key market (by size), then go with Microsoft CRM solutions!
 
Fast Forward Over Three Decades
 
At this point, I'm going to get a bit personal.  If you're not interested, simply skip the remainder of this message:  It briefly covers three decades and my so-called "futurist" origins.
 
The first "adult" organization I ever joined was the World Future Society.  (Remember, the basis for the first section of this posting was an article published in their flagship publication, The Futurist.)  The year was 1971.  I had been an adolescent "futurist" since March 1968, the month that my father bought me a copy of Sky & Telescope magazine.  Although the Vietnam War was on the news each night, I was simply too young for it to really matter.  Both the war and protests against the war were merely uninspiring TV images.
 
But something caught my imagination and that "something" was the space program.  I can still recall the liftoff of Apollo 11 on July 16, 1969 at 6:32 am PDT.  Believe it or not, I can still recite the countdown.  I can also recite part of the landing sequence of the Eagle -- the Lunar Excursion Module housing Neil Armstrong and Edwin E. "Buzz" Aldrin.  And, of course, I can remember Neil Armstrong stepping off the foot of the LEM on July 20th, probably around 7 or 7:30 pm.  Two movies also inspired me toward a "tech" future:  The obvious, 2001: A Space Odyssey, and the not-so-obvious, The Andromeda Strain.  (My parents didn't let me stay up to watch Star Trek, so Star Trek didn't have any impact on my life during my early adolescence.)  Although I have been a member of the L-5 Society and the British Interplanetary Society (anyone remember Project Daedalus?), the World Future Society was the most influential organization in my life during my high school years.  Well, a wee bit of personal history.  Those were the good 'ol days ...
 
Cheers,
 
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China
 
http://www.itestrategies.com (current blog postings optimized for MSIE6.x)
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