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Blog speed, visibility, deception, and counterdeception

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Blog speed

The National Security Archive produces excellent Electronic Briefing Books, "online access to critical declassified records on issues including U.S. national security, foreign policy, diplomatic and military history, intelligence policy." On 10 February, 2005, the Archive released Bush Administration's First Memo on al-Qaeda Declassified. A citation was on Australian news the same day, factoring time zones, possibly from AFP sources in DC. dKOS picked it up and had it out on a blog entry at 10 Feb, 2005 at 18:40:42 PST. The full memo PDF is here. Distribution would have occurred without dKOS, but slower.

Traditional journalists have rightly commented that some bloggers rush materials on-line without sufficient fact checking and that due process should reign, which means the journalists' due process speed and not the medium's speed. Rubbish says I, these people might as well be Xerxes flogging the sea. Highstreet press has acknowledged the trend by permitting/nudging their serving journalists to put their own blogs.

The key for an open source analyst as myself is identifying an accurate datum regardless of provenance:

Figures vary on the percentage of open versus covert sources, but 90+% figures consistently cling to the open source category. Yes, one must apply the same critical analysis as one would do with classified data, starting with validity of source and validity of datum from source, but the data is there and it is often free of a central overriding institutional filter.

The scouring, refining, and gathering of competent blogs is time-consuming, but it has become an essential component of our I&W (Indicators & Warning) process. Blogs are often mixes of personal and 'core subject' material that it is maddening at times, but in terms of Asia, Africa, and the Persian littoral, they yield a form of battlefield surveillance outside the control of governments that constrict the mainstream press - and offer an early warning ability that we used on occasion.

Blogs have become the tripwire equivalent to ProMED in medical circles. We say ProMED first, CDC, second, and WHO in the back of the bus. (This ranking is on an organizational response level as some CDC and WHO staffers are on ProMED.)

Blog visibility

Too many bloggers, both amateur and skilled, are unaware of, or forget, the archiving and caching capacity of the web that leaves their posts in perpetuity even when the author 'deletes' the original. Amazingly, those who exercise good data control - emcon, or emission control, in broadcast transmission terms - can park their minds when they move to pursue their personal passions, or are unaware that a third party has logged their actions, comments, or presence in a completely unrelated venue.

Personal blogs may identify the author so that one half of a communication is known. Context, especially context over a stream of posts, will often identify their surroundings, their firm, and those with whom they describe.  Even blogs that do not reveal the author's identity can be identified by the context in their posts. That contextual relevance can extend back years, so the more you say, the more places in which you say it, and the more specific the content of your posts, the greater the likelihood of identification.

Add to that the inexorable shift of data to the web and the increasingly automated search ability of both personal and institutional sources which should give one pause before they post, but often does not. Transparency can be close at hand when assaulted by aggressive open source analysis.

Blog spoofing

The common occurrence of usernames - avatars - on blogs that allow participants to mask their identity and, from that, all manner of mischief can arise. Short of evidence of criminal intent, materials, true or false, can be inserted without disclosure of their identities. users may use their anonymity to seduce, draw out, or expose the gullible.

A rumor smear effort on Baltimore's mayor by a longtime aide to Maryland's governor was exposed by what appears to a superb counterdeception effort, the transcripts of which were turned over to the Washington Post.

Uproar Brings Focus on Role Of Bloggers
By David Snyder and Matthew Mosk
Washington Post
February 11, 2005

Free Expression Can Be Costly When Bloggers Bad-Mouth Jobs
By Amy Joyce
Washington Post
February 11, 2005

Your Blog or Mine?
By JEFFREY ROSEN
New York Times
December 19, 2004
Has
scrolled to archive but can found here and as PDF here

Blog Interrupted
By April Witt
Washington Post
August 15, 2004

Gordon Housworth



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Open letter to KOS and Kossacks

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It is regrettable to see that dKOS has pulled down the counterattack thread which I recently cited in what I would respectfully submit to be a thoughtful and complementary review of dKOS' open source activity in F is for fake; P is for Propagannon.

"Sorry. I can't seem to find that story," is not a sufficient replacement for a valid discussion thread of a legitimate issue.

It would appear that dKOS is guilty of the same actions that I have laid to your political opponents:

Their political opponents were tracking the research as revealed by the removal of embarrassing pages or sites soon after Kossacks reported them.  These passive countermeasures were fruitless as documented images were captured before reporting. To my mind, these after-the-fact removals were evidence of culpability and an acknowledgement of the merit of the discoveries.

I have an excerpt of that thread and post it here in the hopes that the original dKOS thread will reappear:

Excerpt:
 
* [new] Researchers (4.00 / 3)

check your spam blockers, firewalls, your cookies, your computer security systems. Protect yourself against tracking and invasion. Enjoy any hate mail.

Rolfyboy6
by Rolfyboy6 on Thu Feb 10th, 2005 at 01:17:52 PST
[ Reply to This | ]

* [new] IP address (4.00 / 2)

Also, a reminder to everyone that these mean, venomous, crazy, freeper people have access to logs.  So while you are researching, they can find out a lot about you (your IP & referrer & exit URL)

  • Use google cache & Internet Archive
  • Use a free proxy (JAP, proxify, the-cloak, anonymouse.ws, unlimited PHProxy)
  • Use your neighbor's 802.11 WLAN
  • Use coral cache (.nyud.net:8090) for downloads
  • Use mailinator.com for forum signup & validation

I've been considering setting up a progressive friendly web service (proxy, incoming email, webmail to POP, RSS aggregator)

by electiledisfunction on Thu Feb 10th, 2005 at 01:36:58 PST

Other than that, keep up the rigorous analytic process as evidenced in Plame & Propagannon: We've Only Just Begun.

To dKOS' political opponents: You may not like the message, but you would do well to adopt the medium and professional rigor.

The nation can only benefit from such a debate.

Gordon Housworth



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F is for fake; P is for Propagannon

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Agitprop has taken a leap with the addition of Propagannon, the "general tactic of a government or political party using a fake reporter to pollute the press pool."

Those expecting a polemic of any kind should move on. This note deals with the intersection of deception, national security breach, open source analysis, shadowing and passive countermeasures, power of weblogs, national security (again), political judgment, lapse of mission, and counterattacks. The locus of many of these threads pass through a single weblog.

When I spoke of the committed collector in Value from the fringe, I had not envisioned one as large, distributed, and committed as Daily KOS whose dKosopedia describes itself as a "collaborative project of the DailyKos community to build a political encyclopedia. The dKosopedia is written from a left/progressive/liberal/Democratic point of view while also attempting to fairly acknowledge the other side's take."

For an open source analyst, dKOS is remarkable rich resource by virtue of its management, rigor, enforcement control on contributors, frequent timelines, and features such as a political glossary Kossary. It's political adversaries appear to recognize the reach and diligence of dKOS by the attention that its opponents pay to the threads under development. Its threads are so enormous, so extensively researched, that I will merely cite some exemplars in the themes that I see interacting:

  1. Deception in the creation of a sham journalist of extraordinarily dubious professional and personal credentials.
  2. National security breach, laced with possible further deception in which said sham journalist may have been given the original Plame "leak" and that all subsequent investigative efforts were unfortunate red herrings.
  3. Extraordinary open source analysis by the Kossacks, a modern day Baker Street Irregulars, Sherlock Holmes' street urchins who aided Holmes and were paid a shilling a day (plus expenses), with a guinea prize (or one pound, one shilling) for a vital clue (Kossacks work for zeal, not money).
  4. Shadowing of Kossack research by political opponents employing near real-time, passive countermeasures.
  5. Power of weblogs and dedicated contributors that form a distributed, human parallel processor array -- call it the Sixth Estate.
  6. National security (again), this time for said dubious journalist, employing an alias, obtaining White House access, passing FBI background checks and repeatedly receiving press day passes from the White House press secretary.
  7. Political judgment of those who would initiate such shallow deceptions.
  8. Lapse of mission of both Fourth and Fifth Estates who appear omissive in the fulfillment of their charter.
  9. Counterattacks, a not unreasonable concern.

Kossacks were able to marshal assets as diverse as facial recognition analysis, website and network analysts, gophers (to verify addresses, most of which were bogus), specialist researchers, subscribers to paid research, etc. It was a massive human parallel array that often returned answers to questions posed within minutes.

Their political opponents were tracking the research as revealed by the removal of embarrassing pages or sites soon after Kossacks reported them.  These passive countermeasures were fruitless as documented images were captured before reporting. To my mind, these after-the-fact removals were evidence of culpability and an acknowledgement of the merit of the discoveries.

I find it appalling that these exposes were unimpeachably done by a blog while the highstreet press was shamefully missing in action. It fell to specialist journals such as Editor & Publisher to expose their miserable failures -- such as quashing well-researched analyses of the 'bulge.' Built largely on the back of work by Kossacks, Rep. Louise Slaughter was able to field an open letter "regarding James "JD" Guckert (AKA Jeff Gannon) of Talon News" that caused Guckert/Gannon to immediately close his website and leave the White House press corps.

What judgment would field such a shallow deception failing all four of deception's classic components: security, plausibility, adaptability, and integration?

Gordon Housworth



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  • In response to the pulling down of the counterattack thread in this note, I have...more
    - [Gordon]

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6:2:1:0, but the 0 says it can deliver the insurgency

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Wags would say that exit polls and early precinct reports appear to be no more reliable in Iraq than they were in the US. The current tally of 4.6 million voters has reduced the Iraqi United Alliance from 67% (which would have theoretically given it a commanding mandate) to 51%. Kurds have moved into second with 25%. The Allawi alliance is reduced to 13%. Sunni voting is so effectively near 0 that the Shiite Iraqi United Alliance and Kurdistan Democratic Party (KDP) 'won' the vote in Salah al-Din Province, the Sunni-dominated region that is home to Saddam Hussein.

As US highstreet news is not delivering the requisite base knowledge underlying Iraqi voting (al Jazeera does better), I will offer some underpinnings here:

Iraq is divided into 18 provinces (Arabic: muhafazat, singular - muhafazah, Kurdish: پاریزگه Pârizgah), referred to in Iraqi government documents as Governorates, which are further divided into Districts. I still doubt that many readers have a grasp of Iraq geography, administrative regions, and demographics. Humanitarian Coordinator for Iraq (HIC) has a superb collection of geographic and thematic maps, and satellite imagery, of which here are but a few: Iraq (large), Governorates (provinces), Districts, Tribes in Iraq, and Population by Governorate.

The "Sunni Triangle" is too often painted as a convenient handkerchief of a triangle when fully more than a third of Iraq, the Sunni Anbar, Ninewa, and Salah al-Din Governorates are declared 'hostile provinces' and they collectively abut Najaf, Karbala, Badhdad, Taamin, and the three Kurdish provinces of Dahuk, Erbil, and Sulaymaniyah. Kurds would claim Taamin as theirs but for the forced resettlement of Sunni arabs to displace Kurds under Hussein). While on the subject of Kurds, the constitutionally-recognized Kurdistan Autonomous Region includes parts of a number of northern provinces, and is largely self-governing in internal affairs. (However if you ask the Kurdish National Congress, you will get a somewhat more extensive map of what they call Kurdistan.)

Let's go back to that 0 again. We see that it is non-zero and more a variable x whose value has yet to be determined. Add in some 100 parties that registered for the election (out of some 200 political groups active in Iraq today), fielding lists of about 7000 registered candidates, and the knowledge that Iraqis voted not for individual politicians but for candidates representing a party or coalition such that those that place at the top of the lists are those deemed to have the strongest chance of being elected, and we have a more complex equation.

The value of the Sunni x rose substantially when Association of Muslim Scholars (AMS) hinted that it could call off the insurgency. When AMS was asked if it would "take part in drafting the constitution," Omar Ragheb said, "We told [UN special envoy in Iraq Ashraf Qazi] that we had conditions and that we would discuss them with the parties that boycotted the polls and would put forward a common stance. These demands focus on reaching a consensus with all political parties on a withdrawal of foreign forces":

The association, which opposed last Sunday's general elections along with other Shiite and communist powers, hinted that it could then weigh on fighters to end resistance. "Then, the country's elders will tell the resistance: 'No need to spill more blood'," Ragheb said.

A bluff perhaps but I think it has a basis in fact. I also think that the Shiites are flexible enough -- and not nearly as doctrinaire as many US nationals might think -- that they can reduce their '6' in order to increase the x to a politically acceptable number.

The Shiite factor
By Jay Tolson
US News & World Report
Issue 31 January, 2005

Iraqi Sunnis Link Constitution Drafting Role to Pullout
Islam Online
5 Feb 2005

Iraqi Ayatollah To Leave Constitution To Politicians
RFE/RL
8 Feb, 2005

Gordon Housworth



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Pan-industry “beggar/maker-prince/maker” initiatives in supply chains

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Part 1

Enter Intel, a chipset manufacturer that is promoting "white box" (generic PC) and "white book" (generic notebook) devices using generic designs, cases and hardware modules. Intel's intent is said to be the creation of a family of more compliant suppliers and so escape their current vulnerability to the two US giants - Dell and HP. 

Intel seems to be pursuing an approach that mimics the "beggar/maker-prince/maker" process that we see emerging among US automotive OEMs.  (As Intel provides roughly a fifth of the world's server products (at higher margins than PCs) and so competes with their server customers, it may be to Intel's advantage to suppress their current troublesome generic PC vendors while created a wider market for their chip sets.)

For those readers unfamiliar with beggar/maker-prince/maker, we see OEMs in a number of sectors, automotive included, that perceive themselves increasingly captive to powerful Tier One suppliers. To escape that burden, we believe that the OEMs are in the process of elevating smaller suppliers (making princes out of serfs) while taking business away from the leading suppliers for future models (making beggars out of kings).  The result in both automotive and electronic market sectors is to leave the top of the manufacturing tier in stronger control of its supply chains. 

Lenovo, then called Legend, abandoned their PC designs and subbed back to Taiwan (though manufacturing still occurred in China) in order to achieve greater price volume advantages.  While not an expert on the tax matters of foreign subsidiaries I am told that the formation of a new foreign subsidiary in China allows the foreign company to restart the clock on tax relief and other advantages offered to the foreign firm.  This may account for the growing number of subsidiaries formed in China by Taiwanese firms. This is likely one contribution to the significant overcapacity on the manufacturing side that has led to depressed margins for many of the Taiwanese OEMs and ODMs. I should think that Taiwanese manufacturers would look favorably on supporting Lenovo branded line of computers.

Lenovo may actually perceive themselves as a branded marketing channel akin to Dell and HP, taking advantage of excess "Taiwanese" manufacturing capacity and the white box and white book push by Intel.  An unintended consequence of Intel's action could be that Lenovo instantly harvests a world-class PC and laptop design and manufacturing capability that rivals Dell and HP.  The lengthy transition that the market had factored into Lenovo's acquisition of IBM's PC unit could thereby be collapsed into a process of well-under a year.

Extension to other segments: There is an interesting connection between laptop and supercomputer design.  It would appear that the technology in high-end density servers mimics that of laptops in that they all require means to deal with power efficiency, heat management and switching/docking mechanics.  This recognition of thermal efficiency indicates that the push for absolute power has shifted to efficient use of power.  This same skill in thermal efficiency may impact future supercomputer design.  If so, acquiring these skills in laptop design could allow Lenovo a leap into more efficient and smaller supercomputer designs.

Secondary implications: Taiwanese manufacturers have been aware of the coming shift to China as the principal manufacturing center and have been searching for ways to increase their price-volume curves as well as defining replacement industries to enter.  For a number of the major firms, that decision appears to have been made but that is the subject of a future note.

Globalization of knowledge work: Notebook PC design & development
Kenneth L. Kraemer, Jason Dedrick
Personal Computing Industry Center

Sloan Industry Studies Annual Meeting Sloan Industry Studies Annual Meeting

April 19, 2004

Taiwan's ODM/OEM Industry: A few snapshots
Jerome Fourel
22 Mar. 2004

IBM-Lenovo deal said to get national security review
By John G. Spooner
CNET News
January 24, 2005

Lenovo: The making of a legend?
Mary Hennock
BBC News
8 December, 2004

Gordon Housworth



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Lenovo's transition to Dell and HP peer competitor should be measured in months rather than years

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UPDATE: While this note was in development, the Committee on Foreign Investments in the United States (CFIUS) gave notice of review of Lenovo's purchase of IBM's PC unit on national security grounds over the "concern that Chinese operatives might use an IBM facility for industrial espionage." While that review may alter the timeline of Lenovo's international brand expansion, I do not think that it fundamentally alters the ability of Lenovo to quickly become a peer competitor to Dell and HP while it strengthens its market share in the Chinese and Asian market.

Market Assumption: The transition period between (1) Lenovo's purchase of IBM's PC group and (2) the appearance of robust Lenovo desktop and laptop products (products that challenge the likes of Dell and HP) is to be measured in terms of years.

Our Forecast: The transition period between Lenovo's purchase of IBM's PC group and the appearance of robust Lenovo products is far shorter than what the perceived wisdom (years) would indicate. The transition could easily be accomplished within twelve months, less with a more concerted effort, requiring little or no additional dependence on intellectual property (IP) diversion.

Rationale: Lenovo has already positioned itself to climb out at the top of the electronics supply chain. It lacks only in brand and distribution (both of which it believes it has purchased). Pricing pressures in the electronics industry are no less fierce than those between automotive manufacturers (OEMs) and their Tier One suppliers.  Dell, HP, and IBM, among others, have placed unrelenting pressure on their Taiwanese suppliers for price reductions.  It is understood in the sector, but seems not to have reached the level of actionable risk analysis, that this pricing pressure has driven much "Taiwanese" electronics to China with supplier badging remaining in Taiwan. (See activity location 2003 versus 2006.) 

Those same pricing pressures have forced Taiwanese producers to make the calculation as to when they will drop, or "go direct" in competition with, their US customers who are, in effect, increasingly reduced to marketing organizations.  Unlike the automotive industry, where Tier One suppliers do not have a ready substitute for the current OEM customers, the Taiwanese firms (with much of their manufacturing already located in China) will now have Lenovo as an option, a fact not lost on Lenovo in its acquisition of IBM's PC marketing arm.  This "onshore" Taiwanese production in concert with other industry trends allows Lenovo to emerge as a competitor to Dell or HP without a lengthy transition time.

History: Some terms are in order when examining the Taiwanese electronics manufacturing hierarchy, especially as the term "OEM" means something very different there. Their manufacturing sweep is broad: servers, PCs, laptops (notebooks), phones, MP3 devices (iPod included), calculators, spelling devices, language translators, calculators.

In increasing level of integration:

  • "Manufacturing engineering" of simplistic components or subassemblies.
  • "OEM," or Original Equipment Manufacturer, indicating that the vendor has design capacity but provides sub-system design for a client who owns the design and its intellectual property.
  • "ODM," or Original Design Manufacturer, who own their own intellectual property and designs and can resell them at will.
  • "IDM," or Integrated Design Manufacturer, an emerging term for a manufacturer producing turnkey product ready for market in their customer's trade dress.

Firms like Cisco, however, perceive the first three tiers are contract manufacturers who give away engineering design in order to get the manufacturing follow-on.  The two largest Taiwanese manufacturers are ODM Quanta and Inventec that sell their designs and equipment on to the likes of Dell and Gateway.  (There was an interesting case in which an almost identical PC occurred under both the Dell and Gateway badge, both provided by Quanta.) Quanta and Compal are the largest laptop producers, with Inventec third, while Inventec leads in servers. Certain Inventec suppliers market direct to end-users. Colleagues in the segment describe a marketing spin back in the US is which Dell and HP represent these designs as their own. While that occurs with some products in the higher ranges, much of Dell and a significant amount of HP product are actually Taiwanese designs.

Part 2

Globalization of knowledge work: Notebook PC design & development
Kenneth L. Kraemer, Jason Dedrick
Personal Computing Industry Center

Sloan Industry Studies Annual Meeting Sloan Industry Studies Annual Meeting

April 19, 2004

Taiwan's ODM/OEM Industry: A few snapshots
Jerome Fourel
22 Mar. 2004

IBM-Lenovo deal said to get national security review
By John G. Spooner
CNET News
January 24, 2005

Lenovo: The making of a legend?
Mary Hennock
BBC News
8 December, 2004

Gordon Housworth



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Cost pressures on supply tiers prompt loss of supplier intellectual property

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Suppliers worry that design reviews by an OEM prior to contract award are efforts to extract price concessions, extracting information to compare (1) proprietary cost buildups and (2) ideas among competing suppliers. OEMs, for their part, may be mistaken in asking the supplier for full disclosure of the supply chain during this period of minimum trust and maximum fear, a more common occurrence among the three "US" OEMs than Toyota or Honda.

In reality, the supplier has often not gone to the cost and effort to fully detail the part. OEM staff profess outrage when they 'find out' this is the case. We ask them what they expected. Would they not do the same were circumstances reversed?

The following [sanitized] exchange involves AutoCo and CarCo, two automotive OEMs, MetalCo, a Tier One supplier, and MasterCo, a related subsidiary. AutoCo is under financial pressure to produce improved results. Such pressure always creates hot spots under excruciating demand, to the point of program cancellation and (participant) job loss.

This redacted segment illustrates how financial pressures on AutoCo were converted into a loss of intellectual property by the supplier (MetalCo). Once compromised, the intellectual property was transferred without controls, more easily coming to the attention of both competitors and collectors.

This example includes impacts from as yet unabsorbed mergers, resulting from suppliers' efforts to build capacity in the face of OEM requirements. Problems often extend beyond regularizing amortization when some suppliers fail to understand that the OEM had asked for increased capacity or capability, not increased cost, and thus have failed to restructure the acquisition. The supplier may be too distracted, may not know how to do the analysis, or did not want to interrupt its current relations with its subsuppliers to perform the streamlining. When we see a supplier that has not restructured its acquisition costs, we know that they have not restructured their supply chain's IP protection.

In this case, pressure was transmitted from the OEM (AutoCo) to a specific program that was under threat of cancellation. As we so often see in such cases, loose corporate guidance and personal fear combine to put the supplier at maximum risk:

AutoCo Finance: I have checked your SEC 10K filing and it states that MetalCo uses a straight line, 10-yr. amortization of capital investment. Why are you using a 7-year amortization of capital investment with us in this quote?

MetalCo Controller: Were you looking at the 10K for MetalCo or for MasterCo?

AutoCo Finance: MetalCo.

MetalCo Controller: We are trying to commonize our accounting practices after the mergers and have yet to accomplish this.

AutoCo Finance: Can we assume then for this [part for model year 20XX] that you will have this straightened out and adjust the piece price down to reflect a 10-year amortization?

MetalCo Sales: We must weigh the risks we take on and make certain that we are acting responsibly for our health, for our shareholders. We have weighed our risk and feel that we must use this 7-year amortization. Can we be sure that AutoCo won't take the business elsewhere before ten years of production? Should we risk being stuck with this capitalization and no business to pay for it?

AutoCo Finance: I think that we are showing commitment to do business with you by continuing our discussion and calling for this session to spend two days trying to understand the best way to invest in this machine line and brainstorm ideas for leaning that process.

MetalCo Sales: I don't think we want to talk about this in this forum. Well, okay! Let's get it out on the table. We are all thinking about it. We are sharing information and cooperating despite the fact that you continue to market test and will probably source lowest price quote, no matter how cooperative we have been, how good our product is, how flexible our proposed process is to deal with your changing volumes. We are competitive.

AutoCo Buyer: I think you are talking about the past. It has been month's since we were market testing. Your quote has improved (reduced) since then. We are here to find the best way to design this line and help reduce capital, labor and tooling costs.

AutoCo Finance: I think the fact that we keep meeting with you and are hosting this session evidences that we are serious in pursuing you as the supplier.

MetalCo Sales: You are market testing right now and we know it. Where is your intent letter? We haven't received it!

AutoCo Buyer: There is no market testing currently.

MetalCo Sales: Unfortunately, our tool suppliers talk and we are aware that one of them is participating in a quote for a competitive supplier for this business. Of course, every idea that we have had for this part is explained to the machine supplier so that they can quote machinery for our line. Then, they incorporate that idea when they quote to our competitors in your market test.

AutoCo Finance: The only reason that we would seek other costs would be to try to understand if your costing is competitive. We feel that we are demonstrating our interest and probable commitment to you.

The AutoCo staff have now indirectly admitted that they bootlegged one supplier's data to a competitor(s) in order to secure a part at lower cost - either as price leverage upon MetalCo or by contracting to another supplier using MetalCo's IP.

Additionally, in a subsequent part of this meeting, the process of another OEM, CarCo, was mentioned as a possible solution. It would take little effort to identify the CarCo supplier whose IP was compromised.

It is an understatement to say that this is a typical instance in US automotive OEM-Supplier relationships, that these relationships are porous and that as a result their IP protection is poor.

The unintended consequence is that, unknown to AutoCo leadership, AutoCo staffers had broadcast MetalCo's information through a diffuse and uncontrolled network of suppliers and subsuppliers, a process that we see as more the norm than the exception. Unless the supplier puts in place workable security controls at the business level to deal with IP protection (such as probes from an alerted collector seeking further data on proprietary processes), MetalCo can only expect further losses through these 'normal' supply chain negotiations.

Postscript: The pressure on AutoCo continues to the point that, during piece part negotiations, suppliers are told when they cannot meet AutoCo's target price: "Meet this price or we take your [insert part name here] to China."

Gordon Housworth



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Emerging Information Technology (IT) themes in India and China

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Stepping out into prediction space on the Indo-Chinese IT sector:

  1. India will, for the foreseeable future, become the low-cost IT counterpart to China low-cost manufacturer
  2. India and China will complete a shift to Linux, of increasingly indigenous versions, that, given the region's user volume and technical expertise, could see the center of Linux development shift to Asia
  3. India will use its IT expertise to develop "asymmetrical" low-cost efficient computing devices driven by its 'disadvantaged' position on the Digital Divide. Much like Japanese vehicles in the 1960s, those devices will mature and expand out of Asia
  4. India's IT-based products will take advantage of both rising local manufacturing efficiency and Chinese low-cost manufacturing (rising price-volume efficiencies in both nations) along with their rising broad based consumerism
  5. India will increasingly outsource to, and acquire, IT/tech resources in China such that supply chain risks will reach similar proportions in both countries
  6. India will become the recipient of Chinese attentions in IT intellectual property (IP) much as have US and European firms in the heavy manufacturing segment

Acting as drivers, India and China, along with smaller Asian nations, acting as consumers, will invent new paradigms and take leaps unencumbered by legacy infrastructure. In 2002 for example, the third world explosion in wireless networks over traditional landlines was typified by this unacceptable cost fault line in both long line and last-mile connection:

"Unfortunately telecom networks are designed for people who can afford to pay around US$35 in monthly bills, and very few people in the rural areas can afford that," said Ashok Jhunjhunwalla, a professor at the prestigious Indian Institute of Technology (IIT).

The upshot was Wireless in Local Loop (WiLL) technology, rugged electronic switches that need no air conditioning, and solar-powered relay stations providing both voice and data. The Simputer (from "simple computer") followed at $250 on the back of Linux SW and a simplified design using low cost components. A "WiLL kiosk with a personal computer, printer, telephone, and power source" fetched about $900, which compared quite favorably with the Indian government's $800 cost of a telephone line.

Fast forward to 2005 and the Linux-powered, hand-held tactical battlefield C2 SATHI (Situational Awareness and Tactical Hand-held Information), or 'buddy' in Hindi, whose commercial versions sell for some $200. (One would expect such devices to enter terrorist inventories for similar purposes.) Indians value Linux's cost, ease of installation, and security (open source over proprietary code with possible trap doors) for both military and commercial apps:

Officially, India's strategy is to make Linux the standard for students in all academic institutions while the government trains employees to help them work in a Linux environment with support from IBM. In Bangalore, a global information-technology hub, Linux now runs a Center of Competency (CoC), equipped with IBM hardware, that offers consulting, education and certification and allows users to test and gain insights into how Linux can help them. Jyoti Satyanathan, general manager for Linux-IBM in South and Southeast Asia, believes that the CoC is set to play a "significant role in the worldwide Linux community". Red Hat, a leading purveyor of Linux, now has offices in several Indian cities.

We can expect to see IBM repatriate code and devices here. On the high end, that can be a C-DAC (Center for Development of Advanced Computing) supercomputer built after the US halted supercomputer shipments to India due to diversion to weapons and nuclear programs. Now making teraflop machines, C-DAC differentiates themselves from English or Romance language-centric devices in that they design to enable nationals of many countries to "use computers while working in their own languages." That is a powerful advantage among the largely double-byte character languages of Asia. Another interesting item, equally at home in rich areas or poor, is the Amida, a Simputer variant that is a hybrid PDA, hand-held, and phone that includes a smart card reader so that rural poor can buy a card and rent an Amida for a short period. Indians are designing for a broad use spectrum of developed world to third world.

Such advances will draw the attention of those interested in the code and architecture embedded in Indian devices, especially as Indian firms move through increasingly more complex devices while they expand their outsourcing to China and other low cost countries, retaining BPO (business and process outsourcing) from the US while outsourcing the IT/technical services that do not require English proficiency to China. As Indian firms expand both outsourcing to, and acquisition within, China, it will be increasingly impossible from the client's viewpoint to distinguish supply chain risk between India and China. One wonders how clients and end-users will evaluate the critical path of risk.

Bridging India's digital divide with Linux
By Ranjit Devraj
Asia Times
Jan 28, 2005

China no threat to India's IT industry - just yet
By Priyanka Bhardwaj
Asia Times
Feb 2, 2005

Gordon Housworth



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Iraq's 72-hour lockdown ends tomorrow

  #

Permit me to puncture the unremitting boosterism and cheerleading by US news sources with regards to the 30 January Iraqi vote. Yes there is sense of spirit, of nationhood (but whose 'nation' remains to be seen), or the mere ability to independently vote, period, but the 30 January event was not an uniformly nationwide election on its face, but more a referendum along parochial interests. (Kurds not only voted for the Iraqi Transnational assembly and a Voter's Provincial, but an Autonomous Kurdish Parliament and a federalism referendum that voted overwhelmingly for independence - something that will trouble the Shias.)

All the boosterism has a kernel of truth to it, of course. Iraqis hadn't been able to choose their leaders at all in recent decades, even by some strange process where they chose unknown leaders. But this process is not a model for anything, and would not willingly be imitated by anyone else in the region.

What is also not properly covered is the slow windup of the voting and the near-hit that insurgents almost landed against it. I know as, at 8-hours offset, I was up at night to watch (but then I stayed up for the 1993 Russian coup attempt, the shelling of the "White House" (parliament building) in Moscow, and Yeltsin's ultimate appearance atop the tank). Only a few sources note that the insurgents launched the highest one-day volume of attacks in the war (US officials recorded more than 175 attacks), but they appear to have surged early in the morning, and with their bolt shot, allowed a relative calm to appear. Noting the growing silence, Iraqis began to explore, often sending out a male family elder with a cellphone to make a reconnaissance (and the US after having debating shutting down the cellphone network did not and so allowed an impromptu comm network to spread the news) in combination with reinforcing video reports. Had the insurgents focused their attacks, say on pivotal Baghdad, and staggered them though the day, things might have turned out differently.

Iraqis know deeply what seems to have slipped off the radar of most US polity, that the US had intended either a "soft dictatorship under Chalabi, or would have had stage-managed elections with an electorate consisting of a handful of pro-American notables":

[the US] opposed one-person, one-vote elections of this sort. First they were going to turn Iraq over to Chalabi within six months. Then Bremer was going to be MacArthur in Baghdad for years. Then on November 15, 2003, Bremer announced a plan to have council-based elections in May of 2004. The US and the UK had somehow massaged into being provincial and municipal governing councils, the members of which were pro-American. Bremer was going to restrict the electorate to this small, elite group. Grand Ayatollah Ali Sistani immediately gave a fatwa denouncing this plan and demanding free elections mandated by a UN Security Council resolution.

I believe that Baghdad was the most courageous spot as it has so much at risk in comparison to the Sunnis who boycotted, the Kurds who were committed and armed, and the Shias who were more distant.

The voting has had no impact on the Baathists and insurgents, save that they might reasonably be alarmed at the outcome and so double their efforts to destabilize the country and kill a nascent political class. The insurgency remains widely popular in the Sunni community and while the politically astute Shias will attempt an outreach, I do not see it as being successful for a civil war in Iraq is already in progress and still hold to the October forecast:

Barring an intervention that I cannot yet see, I expect jihadists and fundamentalists to continue to gain sway through their marriage of convenience with the Baathists and mercenaries running around the Sunni heartland. The "King of the Green Zone," Allawi, will either be killed or join the Sunnis in the death struggle of a unified secular Iraq against the Shias. (Those with good memories know that Allawi was a Baathist before he fell from favor and went into exile.) Neither Turkey nor Iran will sit idly by watching the further isolation of US forces -- dispense with any fiction of a meaningful coalition -- diplomatically and on the ground. Ever the survivors, the Kurds may cut a deal with the Turks before they move on Kirkuk.

In meantime, Sunni insurgents will hammer away at the thin supporting infrastructure of cooks, drivers, barbers, and translators, not to mention the security forces -- who, by the way, primarily take up this line of work because the economy has collapsed and there are no jobs to speak of. We may not wait 12 to 18 months to depart, but what we leave behind will make Taliban Afghanistan look like children's day care.

The 72-hour lockdown ends tomorrow and it is hard to believe that the insurgents will not reaffirm their presence, degrading a making sense of the vote, attempting to blunt the rise of Shia power thereby allaying the fear of a US-Shia alliance (an opinion held in other frontline Sunni states), and derailing, or tilting in their favor, the writing of a Constitution and its subsequent referendum.

It is hard to imagine a spirit of negotiation when the Muqawama al-Iraqi al-Islamiya (Iraqi Islamic Resistance) general command issues a communiqué by broadcast and leaflet calling for a new offensive, the "Operations of the Children of Mohammed the Messenger of God to Break the Back of God's Enemies." Still, patronage is a powerful lure and refusing to join, or later withdrawing from, a ruling coalition would deny that faction billions, unless, of course, they thought that you could get it all.

Gordon Housworth



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Why do you think insurgent political killings will stop with the election?

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Consider the situation in Iraq on the eve of the election: Relatively massive and mobilized US military support at highest alert, Iraqi police and national guard on high alert - and likely receiving the greatest support to date from US forces, national and provincial borders sealed, unauthorized vehicles on a "no-roll" lockdown, poling places guarded and relatively armored - with many concealed as to their location, and individual candidates' identities withheld.

Half a dozen candidates have been assassinated. As a result, candidates' names were not released; they were available in the last days of the campaign on Web sites inaccessible to most Iraqis, few of whom own computers. Until less than 24 hours before the vote, the location of most of the 5,300 polling stations across the country were kept secret. Even to get to the polls on Sunday, the 14-million eligible voters will have to walk; all but officially approved vehicle traffic has been banned to deter insurgent attacks, especially car bombings. Insurgents have warned that they will kill anybody approaching within 500 yards of a polling station.

In the northern city of Mosul, insurgents spread graffiti -- some of it on walls at polling sites -- threatening to behead voters, and they sprayed gunfire at Iraqi security forces protecting polling stations. At one site, Arab and Kurdish security forces who were supposed to be working together were not talking.

The insurgents are preparing to emulate friendlies in their attacks:

The police in Baghdad reported that 11 police cars had been stolen in the past 10 days, raising the possibility that insurgents could stage attacks on polling places as they have promised using one of the few types of cars that will be permitted to move freely on the streets. Masked men have been spotted carrying away police flak jackets from the scenes of car bombings recently, and security agencies were warning journalists and others to be on the lookout for fake checkpoints that are manned by insurgents in disguise.

It would appear that opportunities will be many:

For all the thousands of soldiers and police officers on the streets, the security around many of the polling places appeared inadequate and improvised. Many of the barricades consisted of little more than a string of bricks, tin cans and cardboard boxes.

Even if the insurgents make election day look like Fort McHenry in the War of 1812 (when the British bombarded it for 25 hours) and succeed in disrupting it to a greater or lesser degree, the election defense posture and commercial hiatus cannot be sustained.

After the election, the winners, if that term can be used, will presumably be announced. Once that is done, their homes and likely transit paths to and from work should become obvious, the locations of their children's schools known, their extended family identified.

I find it odd that there is no post-election consideration, at least in public, that the insurgents will then continue their depredations in a highly targeted manner, merely rolling up the elected members, their children, and their extended families in a version of the Columbian "leave no seed" killings.

I very much lament the decision to hold a single-day 30 January election instead of a:

staggered, region-by-region voting stretching over two or three weeks that might have allowed United States and Iraqi forces to concentrate troops more effectively in each voting district, [and allow] Dr. Allawi and other mainstream political leaders to reach out for an accommodation with ex-Baathists and Sunni tribal leaders who back the insurgency.

Accountability for the date is clear:

That proposition was put directly to Mr. Bush in a telephone call by Dr. Allawi in mid-January, according to Dr. Allawi's aides, but Mr. Bush was adamant. To Mr. Atiyyah, who spent his years of exile in London writing a newsletter cataloguing Mr. Hussein's human rights abuses, the decision showed a familiar pattern: the White House standing tough on issues that the Iraqis felt could be better managed by arbitration among themselves.

With the die cast, the 30 January election defense is unsustainable. I also wonder how voters will be marked to insure that they do not vote twice. Iraqi exile voters have had a finger marked with dark blue of purple ink, but that would be a deathmark inside Iraq.

Those who vote tomorrow and those who serve afterwards are some of the bravest souls about. US forces engaged in Operation Founding Fathers have a devilish task before them. I wish them all well.

One Vote, but Many Reactions: Resolve, Discouragement, Joy
By JOHN F. BURNS
New York Times
January 30, 2005

Insurgents Vow to Sabotage Balloting
By DEXTER FILKINS
New York Times
January 30, 2005

U.S. Forces Intensify Preparations For Iraq Vote
By Steve Fainaru
Washington Post
January 29, 2005

Gordon Housworth



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