2844 posts • joined 1 Jun 2012
"All of it is entirely legal."
I'd dispute that it is legal - transfer pricing to move profits around is illegal in most jurisdictions. Just because the crooked megacorps like Starbucks often use "license agreements" in this way doesn't mean it's legal. The problem is that national authorities don't work hard enough to find the details, prove that this is what is going on, and prosecute. Partly this is lack of will because too many politicians are on the lobbying payroll, but in large part it is a resource, skills and talent problem in HMRC, who don't have the time, the experience, or the intellectual firepower to take on some of the world's best (paid) tax lawyers. In exactly the same way that a premiership footballer stands a much better chance than an ordinary Joe Soap of being acquitted for rape, driving offences or what have you, because his lawyer is an experienced, talented expert paid far more than the Clown Prosecution Service drones.
The best way to fix this would be to partly outsource complex tax investigations to legal experts on a contingent fee basis. The big law firms wouldn't touch this work because they are on the side of the bad guys, but there's plenty of small expert law firms who take up the cudgels and have more than enough expertise. In much the way that RBS got thoroughly nailed by "small" law firms over Highland Capital (wink, wink, nudge, nudge, to those in the know).
Re: Maybe...maybe not.
"I hope Google recognize how badly the 9 compares with the 7 and move entry level to 32Gb, adding a 64Gb option as should have been done in the first instance. And review pricing."
Just buy a Hudl 2 and stick in an SD card?
Re: Think of the spies
"You mean like the dossier provided to show a legitimate reason for the invasion of Iraq? pffft lol"
I did send an enquiry recently to Sir John Chilcot, c/o the Iraq War inquiry, asking if the dog had eaten his homework. I got a reply from a minion saying that my comments had been duly noted, which I'll take as a "yes".
I would encourage all interested parties to make similar representations:
"All they are supposed to claim is expenses necessary to perform their job as an MP so why do they need more than a one bedroom flat for their time in London?"
Why should the sponging fuckers get even a flat on expenses? When I took a job in London on an salary similar to an MP, with a long distance commute and long hours (but without ridiculously long holidays), nobody gave me free first class rail travel, nor offered me a big pit of cash to buy a place in London.
MPs: Lying, thieving, corrupt gits who think the rest of us are stupid
I think that's an accurate summary.
Re: Who cares?
"My 4G on a Galaxy S5 claims 111Mb/s on Ookla "Speed Test" that is faster than any WiFi hotspot, but it's NOT FREE! My contract limits me to 1 gigabyte per month."
At least you can boast to the rest of us that you can burn through your monthly data allowance in about nine seconds.
Re: Jupiter (and Mother)
" they (the Spanish) have always kept their family name, which is then passed on to their offspring along with the father's"
Your explanation solves some questions I couldn't be bothered to ask of Spanish colleagues, but raises the new question of how do they stop the cruft build up of names over the generations? Or is the female family name only passed onto the mother's offspring, and cast away when they have children (who presumably take the paternal family name and their own mothers family name)?
One thing you can say for paternal surnames, at least the rules are easy.
Re: Excellent if it happens...@Peter2
"So, having spent quite literally tens of billions for licenses "
The stupidity of the major networks in over-bidding for licences should be the problem of those companies' investors, not a justification for shoddy service to me many years later. Is that a challenging idea for you?
And it's not like the MNO's give a tinker's cuss about throwing money away. Vodafone for example have managed serial writedowns totalling something of the order fifty billion quid over the period since 2005, and on that basis I think they can more than afford a little extra competition, and investing a bit to make their customer's lives better, instead of their recalcitrant refusal to fix a fairly simple problem. I say good luck to Sajid Javid, because the MNO's have had the chance to forge their own solution, and they've decided not to bother. In all likelihood this won't get passed because civil servants take forever to draft or amend legislation, and our idle and underworked MPs won't get round to rubber stamping it before next May's musical chairs, but its still an excellent idea.
I suspect that won't buy very much. And it's a tad on the small side compared to the circa $30 billion spent annually on R&D by the top ten semiconductor makers.
Have the Singapore government been taking lessons from the British government on how to support R&D?
Re: Take a look at the annual reports
"The statements have been in the annual reports, you saying "it's not true" doesn't change that (and nor does me not having time right now to look up the references)."
Well, keep posting unresearched shite then. I work in the industry, I know what my competitors businesses do, and the points I've made are all correct and provable from public domain documentation.
Regarding First Utility, they own no generating assets, and buy in the wholesale markets. They believe that this harms their competitiveness because of their belief that companies with generation sell in a preferential manner to their own supply business. This is rubbish, of course, because if that were the case then the integrated players would be reducing generation profits by transfer pricing (mechanisms more complex than pure sale price, but not something I'll go into detail on), yet would have no advantage in the supply business because smaller non-integrated players already get (in effect) government subsidies of £60 a customer.
There's also the issue that most "integrated" businesses are anything but, and have completely ring fenced, arms length arrangements for generation and supply (and often for energy trading). With the problems of unprofitable margins in conventional generation (technically, "low spark spreads") caused by government energy policy, no business could afford to "subsidise" supply, because there aren't profits to transfer.
Oh, and nobody with any sense would build a base-load gas fired power station, since gas fired stations were never, ever, ever, designed for running base-load. However, the fact that we have gas plants like the one that had a fire in Didcot proves that the people making the decisions have no sense.
Where do you get daft ideas like this? All gas turbines have an optimal efficiency at a given speed, and that along with reliability suffers when you cycle power. They also have a relatively restricted speed range (compared to say a car engine that will work adequately well in a very wide range between say 1,200 rpm and 6,000 rpm). In combined cycle operation the plant doesn't start quickly, so isn't suitable for stop/start operations, and the cost of the combined cycle gear is difficult to recover in intermittent operation.
CCGT is perfect for baseload operation. It's compact, incredibly cheap and quick to construct compared to all other options. Compared to other fossil options is is very clean. It is highly efficient if you don't mess around cycling the plant. And it is very reliable.
The fire at Didcot is no big deal - there was a fire at the coal fired Ferrybridge plant this summer, a fire at biomass fuelled Ironbridge, last year there was a fire at the Hartlepool nuclear plant, and the year before a fire at biomass fired Tilbury.
So, your point was?
"Yes, absolutely. Take a look at the Annual Reports of the Big Six and you will see that they consider "vertical integration" (where they control the supply chain from ground to grid and beyond) an important part of their business model."
Not true. The gas and electricity national transmission systems are owned and operated by National Grid plc as a government regulated monopoly operating under price controls. Look at the accounts of RWE, nPower, EDF, and E.ON and you'll see they have no ownership of electricity distribution grids in the UK (for the hard of thinking, that's 4 of the former big 6 who have no stake in any grid or distribution activity). SSE and Scottish Power do own local distribution grids, but (like National Grid) these are separately accounted and separately licensed and regulated operations. The rationale for SSE and ScoPo owning distribution grids is because their board want to hold a related asset investment that has lower risk returns than generation and supply (because OFGEM regulate the economic returns of networks, and the profits are not dependent on wholesale energy markets or volumes of power delivered).
Most suppliers have some ownership of generating assets because that forms a partial hedge for reducing risk (and thus costs). Outside of the big seven (First Utility are no longer a "small supplier), smaller suppliers have to pay to buy hedging products in the financial market (or risk being bankrupted if the market moves against them), but they get a government subsidy in the form of exemption from Energy Company Obligation costs. That's worth about £60 per customer per year, and is greater than the costs of hedging cover.
The only way that vertical integration between generator and supplier can affect consumers is if the companies collude - if company A uses transfer pricing to make undue profits in its generating business, then its costs would be far higher than other companies, it would lose customers and volume, and ultimately it would have to change or go out of business (look at how Tesco have suffered after losing the plot and becoming uncompetitive in their core market). Given that UK gas plant has been paid £2 per MWh recently I think there's no evidence of the "excess profits" that the whiners keep going on about. Another indicator people might like to consider is why we have a problem with loss of capacity in the UK market. If it's such a money spinner why won't new companies apply for a generation and/or supply licence, build a new gas CCGT, and line their pockets? You can get into the supply business by spending as little as £300k on a new CRM, a leased office, and the necessary OFGEM licences.
All of this this should come out in the open as a result of the current Competition and Markets Authority investigation into the energy market, but you'll have to wait at least a year for that. Unfortunately the usual outcome of such investigations is incompetently planned market changes decided by civil servants, and last time they did something structural it resulted in British Energy (the UK nuclear power operator) going bust, and having to be bailed out by the government, who later sold it to EDF.
Re: Soon you will be able @James Micallef
"if UK residents are protesting that they will pick up the meter costs (or that the companies will pass it on to them by stealth anyway), surely ANY savings however small on reading the meters is a profit for them?"
In theory yes, in practice no. A very small reduction in operating costs will get swallowed up in the continual competition to win customers, in spiralling government interventions, and the like. Without droning too much, the two things that drive energy company profits are (like most businesses) volume and raw material costs. Across the full energy value chain the cost to serve is around 50% fixed, 50% variable (and that variable is related to input fuel costs that are set by world markets). So increasing volume (eg a cold winter) is very important for energy company profits, though note that the profits are recorded in accounts published long after the cold winter is forgotten. Equally a mild winter is an economic disaster for energy companies. And the reason rising input costs are a driver of profits is simply because (like all retail businesses) pricing is a margin on input costs. BMW dealers make better profits per car than Ford dealers, but not as much as Bentley dealers. The same applies in groceries, and most other forms of retailing.
In other markets (eg Spain or the southern US) peak demand can be summer, in which case volume and profits are driven by hot summers and greater air conditioning use, but the principle is the same.
Re: Soon you will be able @jonfr
"Annex 1 of EU Directives 2009/72/EC and 2009/73/EC3 on common rules for the internal market for electricity and gas require that Member States undertake a cost benefit assessment on the provision for domestic customers of intelligent meters that shall assist the active participation of consumers in the electricity and gas supply markets, and implement these meters where the assessment is positive."
That's from a House of Commons Library briefing note on smart meters. You can certainly argue that the EU didn't mandate them unless the cost benefit assessment is positive. But according to our government (with its evangelical belief in climate change) the cost benefit calculations are positive, and therefore the UK smart meter roll out is indeed mandated by EU directive.
You can argue that the calculations are wrong (and I suspect most people round here agree they are) but that's a separate matter. As long as DECC's numbers turn a positive NPV on the "benefits", smart meters are required by EU directive.
Re: Where's the free market when you need it?
"That means I can switch to the cheapest supplier for the next hour and then do the same thing an hour later"
Initially you won't be able to do that, but if we move to half hourly charging (as has now been mandated under code change P272 for all business customers) then you could well find that you get what you seem to want. On a half hourly basis you wouldn't be swapping to the "cheapest supplier", you'd be looking at the wholesale market prices that everybody pays. Everybody (on half hourly pricing) would pay the same rate for that half hour. Obviously there's a different rate the preceding and subsequent half hour. If a power station goes off line, or a big industrial customer goes off load, then prices vary unpredictably. Each day of the year the price varies for the same half hour.
You're welcome to that world if you want it!
Re: "allowing them to illegally slash their energy bills"
I've no idea how much a (oil/coal/nuke) power plant costs, but I would have thought £10.6BN wolud go a far old way towards it/them.
£10bn might buy you a single 1.6 GW reactor, based on the dismally high costs for Areva EPR plants (although in practice you'd build more like 2 x 1.6 MW reactors for around £15bn, like Hinkley Point C).
The same £10bn budget would buy around ten 2GW CCGT (ie more than enough to head off the capacity concerns in the UK power market).
And £10bn would buy you about 4 1.6 GW hard coal plants (when built to EU environmental standards).
However, government has mandated that suppliers must spend the money on smart meters, and they've also messed up the wholesale market so that gas plant is loss making. Even if smart meters weren't eating the money, nobody would invest in new gas capacity at the moment. The forthcoming "capacity mechanism" is intended to subsidise required non-renewable plant, and will make sure that the existing gas plant is retained (DECC hope), but unfortunately due to incompetent design it will act as a huge windfall for EDF's existing nuclear fleet in particular, at customers' expense.
"I don't think it's unreasonable to pay more for your usage at times of peak demand (and less off peak), others may disagree."
The real function of energy suppliers is little understood, and it's not reading the meter and sending you a bill. It is to insulate customers from the brutal world of the wholesale markets, where generators offer contracts using pricing that varies by half hour, and by day and season. Those contracts are settled on what amounts to a take or pay basis. If you buy more than your customers use, you have to sell back into the market (either bilaterally in advance, or through the market's balancing and settlement process on the day) - that's probably at a loss. The big losers, however, are those who buy less than their customers use, because they are hit with "out of balance" charges which can be very expensive, easily enough to wipe out a company that gets it wrong.
If you start down the route of "time of use" tariffs for residential customers, then you have real transparency problems for customers. Either the time bands are a crude approximation of the wholesale reality with unintended consequences, or you try and mirror the whole electricity charging structures, which include charges for distribution capacity, for maximum consumption rate, for total consumption, and has rates that can't be declared much in advance because the wholesale market doesn't work like that. And potentially you have to make customers sign up to similar "take or pay" tariffs (which mobile phone users are familiar with) accompanied by huge "out of bundle" charges if you exceed your contracted volumes.
If people really want to have 48 different billing periods per day, with rates that can vary for each half hour, and have different charges for each day, with the meter negotiating (along with the other 25m smart meters!) for the cheapest half hourly rates, it can technically be done. The bill will be good reading, particularly if you don't want your winter fuel payments to be five times the summer payments, and thus have a direct debit overlay. Note that DECC, OFGEM and Which are all agreed that even current bills of a standing charge and a fixed flat rate are challenging for customers to understand.
If you believe that you should fit your energy use to the convenience of the generators and distributors, then you're in company with DECC and OFGEM. Personally I think that things should work the other way round, and the systems should make my life easy, which (believe it or not) is the system we currently have.
Re: Oh, it is going to be fun
"The fundamental issue is that the power companies make billions. Literally millions per day. They are happy to take the subsidised government hand outs, & sod the rest of us."
Of course power companies make millions, we're huge companies undertaking complex and often high risk capital and manpower intensive operations to give miserable whiners like you power at an acceptable cost and reliability. I'd wager you don't do your locksmithing for free, why should the pension funds, insurance companies and private investors who own power companies provide the requisite capital for free? Take SSE, as they're a UK only company active in all parts of the energy market. Return on capital employed last year? 4.9%. That's about half the rate made by a supermarket, and a quarter of the figure for BT. If you've got a van and tools that are worth £15k, and your knowledge is intellectual property worth the same again, then 4.9% return would mean you earned £1.5k a year. So what you're saying is that you want power companies investors to provide the money required for a rate you wouldn't dream of getting out of bed for?
As for government handouts, what ****ing handouts? Energy companies are obligated by law to spend around £2bn a year on helping improve energy efficiency, and sorting out deficiencies in the welfare state. We have the government rubber stamping EU directives to shut down our generating assets without compensation. We have obligations to buy ever increasing percentages of power from the government's beloved wind turbines. We have to administer at our own cost bizarre middle class subsidies like the various "feed in tariff" payments. We have our arms twisted to invest in nonsense like "green deal".
But do continue to post your valuable thoughts - any comment thread on smart meters rarely centres on any facts.
The evidence does show that smart meters have a modest effect, of low single digit percentage savings on electricity, and circa 1% savings on gas.
Unfortunately that's about the same as the savings from a £30 energy monitor. But the cost benefit calculations for smart meters came from the same people that ordered aircraft carriers without aircraft, and who wrote the prize winning fiction that is the HS2 business case.
Re: Soon you will be able @James Micallef
"providers want smart meters because it saves them the cost of sending meter-readers round"
For crying out loud, James! Energy suppliers do not want to install smart meters at all. It is a legally mandated requirement, passed into law by your democratically elected "representatives" in the Energy Acts of 2008 and 2011. And they did that not because you asked them but because they were told to by the Uberfuhrers of Brussels, in directives 2009/72/EC and 2009/73/EC.
Manual meter reading costs are about five quid per meter per year, and I'm sorry to tell you that a £5 a year benefit won't even pay the interest on the costs of a £200 smart meter, never mind the capital or operating costs. There are some other modest savings over the £5 on manual meter reading, such as not having errors arising from estimated bills, and the ability to settle traded volumes far quicker and more accurately, but these are also modest.
Re: Stupid patching!
"Fortunately almost no-one who doesn't have a professional IT department needs Java anymore."
Whilst I share your opinions on the uselessness of Java, and the inadequacies of its update process, I have Markus Persson to thank for persistent demands to have Oracle's vile, antiquated bugware on some of the household machines. The man should be hunted down like a dog, and (at the very least) given a one way flight to the well known holiday destination Guantanamo Bay. And then do the same for everybody associated with Java.
Re: Negligence? Mal-or-nonfeasance in public office? Being a dick?
"Surely there is some stick to beat these officials with"
No, in a word. I work in a role that's very close to certain areas of government, and this is normal. It can be summed up as a process:
Problem is identified, government department forced to act
Long, slow "consultation"
Select really poor idea that has little stakeholder support
Design complex solution without any market testing to see if the idea works
Implement complex solution late
Ignore screams of protest and announce success.
Wait for pension and New Years Honours list.
There's nothing special about DCMS in this respect. Look at the mess of energy policy (including particularly madcap ideas like "Green Deal". Look at defence policy or defence procurement. Look at DfT's bungling in simply re-letting a couple of rail franchises. Look at DCLG's £1bn failure over fire control centres. Look at DFID funding education in India for years whilst India chose to spend its own money on nuclear weapons and a space programme. Look at the Home Office wasting a third of a billion on an immigration system that doesn't work. Look at the DoH wasting £10bn on the failed patient records system. Look at the MoJ wasting £50m on a failed shared services mess, and half a billion on the bungled Libra system. Look at DWP and the rolling disaster of universal credit. I could go on, but I think that's enough for now.
The "governance" in government is an unmitigated mess. The idiots of Westminster certainly don't help, but too many of the episodes mentioned above are wholly or largely under the control of the Civil Service, and this is the same Civil Service that advises ministers when they make decisions.
Once in a flood does a senior civil servant get held to account for this sort of disaster. More often they simply drift on to another well rewarded post in another government department about which they know nothing.
Sharing the winnings?
Your mention of Psy and footballers brings to the fore the issue of whether talent should get paid for its initial demonstration. For myself, football is a gentleman's game played by hooligans, and it's "stars" are weird names who do not represent the communities emblazoned on their shirts. But that's largely irrelevant, by the time they're drawing down enough to pay lawyers to get them off rape charges, they have demonstrated that their brain is in their toes, in a range of poorly remunerated leagues.
Now, consider Psy. A classic one hit wonder. A bit like Chesney Hawkes. They delivered the goods briefly, without really having showing any previous form. A plant that flowers without budding, if you like. Should they be remunerated according to (say) Youtube views? In my universe the answer is Yes. But that also means that "cat versus printer"
is worth millions. And the magic of this is worth so much more after a couple of drinks.
I'm happy with that, is everybody else cool with it?
"Although it may not go entirely peacefully - question of having the best beer and the best chocolate may well merit a vicious battle or two."
I raise a glass to you, sir!
" the MBTs these days only have room for about 20 shells"
Can you think of any scenario where a Western MBT would encounter enough targets to use 20 shells? The most pressing concern with MBTs is that we haven't found anybody to fight with them in the past fifty odd years. Entire generations of Western MBT's have come and gone without firing a single shell in anger, and even in the various Gulf Wars, by the time Western tanks arrived their opponents were pushing up the daisies from a smoking hole courtesy of the flyboys.
I say we should have a war, by prior agreement, with a friendly country to keep both sides hands in, show the youngsters of today what a proper war with tanks is, but keep the duration short to avoid any later accusations of senseless slaughter. Have the Swiss act as referees and score keepers, hold it somewhere that doesn't matter (Belgium has always been popular in this respect), maybe Britain versus Germany for a period of two months, and the loser has to pay for the beers afterwards. What's not to like?
"what humanity really needs, at this critical stage of our evolution, is a colossal hypersonic cannon"
I wouldn't worry, this continues the trend to fewer and fewer unfeasibly expensive weapons. The procurement cuts to (say) the F22 programme show what happens. Originally USAF had a "kiddy in the sweetshop" procurement plan, that called for 750 jets, which was progressively cut back as costs rose, until only 188 were built, with cost per aircraft climbing from under $150m to over $400m. This unsustainable cost escalation and reduction in hardware has been seen in all services, in all Western countries, and as a result fewer weapons get bought, but governments still incur vast increases in public debt, and their capacity to indulge themselves in hobby wars decreases.
Our colonial cousins still have enough poke to keep interfering in foreigners affairs, but the UK, with it's twenty ship navy, seven combat squadron air force, and increasingly part time army show how this pans out. Our armed services could probably defend us against a Danish attack, for example, but we'd struggle with anybody bigger.
From a logical perspective if the politicians don't have the resources to fight anybody, then they won't be able to, but as we've seen time and again our leaders are more than happy to start purposeless wars which our military are ill equipped for. Luckily we don't have a Nimrod fleet any more, so we won't be embarassed by Russian submarines in our territorial waters as we won't know they're there.
So, pacifists everywhere should be supporting rail gun development, exo-skeletons, laser cannons and all the other madcap ideas of military suppliers as the best hope for global peace.
Re: Wrong platform?
"and not have the associated risks of carrying explosives or explosive fuel"
You think that the risks of incoming fire to either a truck sized nuke or fusion reactor would be any more preferrable to chemical propellants?
Re: Wrong platform?
"So, what's this Bradley with the railgun supposed to use it for? Isn't this what main battle tanks are for, heavy hitting?"
I would guess that one of the primary advantages is that due to its short time in flight a rail gun projectile should be far less subject to atmospheric and gravity, and require less correction against fast moving targets. Which might translate to far greater accuracy, with out the risk of jamming or other interference that guided weapons may be increasingly subject to in future wars.
And with drones becoming off-the-shelf technology, you have the prospect of Western forces being ranged against small, nimble, disposable weapons even in "dirt wars", and against relatively small supersonic drones in combat against mid-tech countries. Missiles will struggle with smaller drones particularly at lower levels, and drawing a bead with a slow kinetic weapon will be difficult.
"Budget LEDs tend to either have light "hot spots", more pronounced flickering or more likely are just not bright enough to be usable replacements for the bulbs they replaced"
The old (cardboard cubed) Tesco own brand GU10 LEDs were excellent, particularly the dimmable 250 lm versions. Using 6W they aren't as efficient as newer models, but I'd happily trust Tesco as a supplier on my experience of 20 odd LED bulbs with accumulated run time approaching 2,000 hours per light.
The issue about hot spotting (or too narrow beam focus) can be somewhat improved by using a fine grained emery cloth on the plastic lens - frost it up a bit and the focus is diffused, the beam angle widened. If you're not really using GU10s as "spot" lights (as most I've seen are not) then this is worth doing by default.
Re: Lightbulbs are perceived to have a short life
"Look for Europe, with their incredibly pricey "green" power, to lead the growth of LEDs."
The main rationale for LEDs is replacement of halogen reflectors. In that case the cost of reputable GU10 is around £5-7, for a bulb that will last 20-30 times the lifetime of a halogen. At 25 * £2 (for branded GU10 halogen bulbs), it is a no brainer to replace the halogen with LED even if electricity were free, and even if the LED only lasted for a third of its rated lifetime.
Factor in that heat can be a real problem in a lot of halogen installations (eg ten fifty watt GU10 in a kitchen is quite normal, but has an effect like a 500W heater on continuously), allow only modestly for the circa seven fold reduction in electricity use, and Europe's energy prices are only a small bit player in the argument for LEDs.
"I think, as a whole, the entire LED segment of electronics is on a spiral to the cheapest possible way to do things, and that doesn't generate a lot of profit for anybody."
Maybe, but I think a bigger problem is that good quality LEDs last so long that there's no replacement market. Not quite the everlasting lightbulb, but near enough in commercial terms as to make no difference.
Re: Useless, expensive AND inconvenient, a genius idea
"Other more expensive Swiss ones were better of course"
And the cost of a genuine Swiss watch is now approaching what I'd consider car money. However for any sadsters currently dependent upon their smartphone to tell them the time, they might consider upgrading to a Seiko 5. That's a lovely piece of self winding mechanical precision (from Singapore last time I looked) offered in a range of cases and dial designs for around the fifty quid mark.
Useless, expensive AND inconvenient, a genius idea
I'd have thought that kinetic charging as the user moved wouldn't be beyond the technology of today,. Obviously such advanced ideas are alien to Apple.
Good luck with that, Tim.
Re: Adam Smith
"Well i guess its a morale thing. "
It's more than that. There's a fairly clear correlation between worker productivity and wage rates (often observable today in BPO productivity, where you'd need more offshore workers to replace a given number of higher cost per head onshore people). Logically, at an particular price point you could forcibly keep people's noses to the grindstone, and make the productivity equal higher paid workers, but that's rarely sustainable unless the workforce have no other options.
In developed markets like the UK or Germany, if you're paying low rates, then you get the least skilled, least motivated people who want to work, but can't find anything better. The implicit lack of respect that often goes hand in hand with low pay jobs leads to higher absence rates and shorter stays with the employer. And all it needs is somebody offering minimum wage plus 20p an hour, and these people will be off. Unlike higher skilled and higher paid jobs, the transactional "costs" of changing job are far lower. There's no crummy recruitment consultant to have to pander to, no need to polish up a glossy CV full of buzzwords, no two or three round employer interviews, no psychological or skills tests.
Also interesting to note that Tesco (who don't appear to give a stuff about productivity) pay poorly, Aldi (who have total cost in mind, and want high productivity) pay much better for comparable jobs.
Are the strikes the reason...
...for Amazon's rubbish delivery performance in the UK of late? Or is that down to the fact that they're already paying peanuts and getting monkeys in these parts?
Re: I can second the fuel prices.
"We all came to the same conlusion, their "gas" price was about half our petrol. And they still had the gall to complain about their "gas prices"."
Americans pay similar overall levels of tax as we do, just that their government squeeze it out in different ways, and waste it in different ways. Since the US taxes on road fuels are lower, they Merkins feel the pain of any global petroleum prices increases far more than we do.
In rough terms the impact of a 10% increase in global crude prices would only increase pump prices by 5% in the UK because fuel duty is a flat rate of around half the full retail price (whereas VAT/sales tax is an ad valorum tax, so varies depending on the sale price).
Re: I don't like Google buying Nest
The Nest acquisition was part of what is now emerging as a clear strategy of "owning" energy customers in their own homes. You may (or not) recall that Google have had a Federal licence to trade energy wholesale, and to supply it to residential customers in the US for several years now.
The purchase and immediate killing of the Revolv product shows that Google didn't want the brand, nor the current product, they wanted the team that developed it. And they'd only do that to develop their own home automation, control and monitoring hub. So we might expect a new version of Nest that integrates a Revolv-style home hub. All that lovely, lovely data on everything you do will be streamed back to the Googleplex to be used for their benefit (and I'd guess they'd really want to know more about media consumption, so what TV and radio is consumed if they can get that data).
And ideally for Google, you'll sign up for them to supply you energy, which gets Google a $1-2,000 revenue stream per home. Combine (potentially) real time data on energy use, by device, throw in a some load control to give Google the ability to remotely control some element of demand (demand response services are very profitable), add in some Google trading algorithms in the wholesale power market, and suddenly Google controls your home, knows where you are, what you do, what you watch and listen to. And you pay them thousands of dollars a year, whilst they subtly manage your heating, aircon and devices to make Google even more money. Throw in electric vehicle charging and there's even higher power demand and even more opportunity to manage demand.
"OK, so you three don't like the new Doctor Who"
No sane person does. HoFuCTAS.
Re: It is a pity that there's no "watchdog" for web services.
" At the least, the 3rd party service should have been fined. "
No. The duty of care was on the companies collecting the data. The 3rd party provider should face redress for (at most) breach of contract. And that assumes that the telcos wrote the security requirements into the contract. If they didn't bother to check the contracted security arrangements, it may be rather bold to assume that they did indeed write them into the contract.
Re: Economics 101
"But the companies have to make money somehow if they are to stay in business - so now they sell access to your phone number to anyone who will pay."
If you think that selling spam-call lists to dodgy companies is a big earner, then you know nothing about the economics of cold calling (even though any intelligent person can estimate these for themselves), and I'd presume nothing about either the technology or economics of a telco.
A very poor legacy
"His legacy? BAe Systems, the successor to those early firms: an £18bn global colossus employing 88,000 people....."
Not much of a legacy for a commercial and technical pioneer. BAe hasn't designed any aircraft in their entirety since the Hawker Siddeley initiated the 146 and the Hawk in the 1960s using slide rules and paper. And BAe has never even got involved with any aircraft development at commercial risk, choosing to run away from civil air transport, and wait for the clowns of the MoD to pass them vast sums of money for follies like Nimrod AEW3, MRA4, or to continue to make Cold War relics like the Typhoon, and then do daft things like strap bombs to jet fighters, because neither the useless, useless MoD, not BAe's management had bothered to think that we might need strike aircraft as the antiquated Tornadoes came to the end of their useful lives.
If anybody wants to get a real feeling for Britain's aviation heritage, then instead of looking to BAe, they should take a trip to the Shuttleworth Collection (which I assure you is a fantastic day out, far more engaging than the impressive but sterile RAF museums).
"By collaborating they are effectively giving the go ahead to create the largest governement(s) botnet ever created."
What bigger than the WIndows or Android assets of the US government?
Re: @ AC - Rearranging deckchairs on the Titanic
"As these phones do more and more the more locked in to the ecosystem users will become and they won't bother switching as a result."
For business users, ever fearful of a need to train employees, you're right. Private users are much less fearful of swapping, and buy what suits them at the time. The kidz swapping from BB to Lumias without even stopping to consider Android shows how quickly consumer sentiment can shift Personally I can't stand the WP interface and all that "tiles" sh1te, so I won't buy a Lumia now, but that's aversion to Microsoft's "like it or lump it" interface not any loyalty to Android. If the UI on WinPho were made less garish, in-your-face, WIndows8-like, then I'd happily consider a Lumia next time round. Likewise Apple. I don't like the price, but I'd be happy to tolerate the UI. In principle it's Apple's decision on pricing that mean another Android is a probable purchase, not any USP of Android.
And Google and Android makers are actively tilting the playing field in favour of other phone OS by the fragmented update and weak post-production support, by pre-installed non-deletable apps, and by the dubious privacy of anything associated with Google. I'd happily consider Sailfish, Tizen, Firefox, or Ubuntu phones if they work well enough and can offer the few basic apps I'd use.
For home users, far from being locked in, I'm seeing less lock in, and more opportunity for OS-makers to get it right, although that's an opportunity where Google, Microsoft, Apple and the rest seem to be falling over themselves to seize defeat from the jaws of victory. In large part that's because in different ways these three businesses are committed to creating products and foisting them on the market without really listening to the market.
Re: "Worst one-night stand EVER"
"A one night stand that founded a people that went to the motherfucking moon. I'd say it was pretty successful."
But for that drunken bit of hokey pokey we'd be on Mars now.
More seriously, I wonder if there were negative behavioural traits that are legacies of our "minority ancestor"?
Re: The media strikes again!
"Maybe this isn't so with the news on the other side of the pond,"
Oh, it is. And we have the same sort of gap between reality and perception of crime and risks.
Re: Another bunch of mugs swallow the vendor's Koolaid
though I doubt the margin numbers are right upfront (I suspect outsourcers make most of their money in the later years of contracts when IT costs have gone down but clients are too tied in to move. A year one saving of anything big would be a bit scary).
Agreed that the normal BPO/ITO model is based on backloading the returns to the outsourcer, but the way this translates is that the vendor usually promises year 1 savings, and takes a loss in years one and two of the contract. It's a rotten business model, but it works a treat because corporate managers fall for it time after time.
Their IT staff are mostly German and impossible to directly get rid of, whereas IBM are planning to move the work elsewhere.
This is usually a big part of the deal, with the salesmen promising vast, risk free savings from outsourcing and offshoring. The redundancy payments are I guess the big cost Lufthansa quote for the setup costs. Unfortunately, when you take into account the lower productivity of most cheap labour, high turnover in key outsource destinations, and the big fat vendor margin, those savings evaporate.
They are really planning to get rid of a bunch of projects as you hypothesise they'll need to do, but German law won't allow them to get rid of the people,
This is a common fallacy outside Germany, that you can't get rid of people. But its not true. A German company I worked for recently got rid of around 10,000 German employees, and the UK based company I worked for before that rationalised its German business from 3,000+ down to 1,600. It does cost a bit more, and it takes a bit longer than in the UK, but German companies can certainly get rid of people if they want to. The German psyche that says that companies should look after employees is rather stronger protection than German law these days.
IBM have enough reusable systems and processes that they can genuinely do things sufficiently more efficiently to make the desired profit (which seems unlikely at the scale Lufthansa must operate).
That's a favourite from the management consultants who write gushing papers about the benefits of outsourcing. But it makes a typical consultant error, in that it assumes that cost savings for the vendor (from re-use of existing systems or code) translate to savings for the buyer. IT departments of all people should understand that the whole point of code, IP and processes is to reduce the cost for the owner, whilst still charging the user as much as they can afford to pay.
In my experience of looking at such matters, the outsourcers allude to such efficiencies and "best practice" all through the pitch, but don't actually have any such systems or code up their sleeve. The business model works best when the customer has broken or inefficient processes, because the game is a margin one. When you make 40% GM, why on earth would you want to make things run at lower cost for your customer by offering them a brilliant, lean system that reduces cost by (say) 35%, and thus reduces vendor profits by a similar figure? In reality the outourcers want to take on whatever shitty processes the customer has, and then charge the customer through the nose to make a few basic changes that don't materially reduce the operating costs.
Another bunch of mugs swallow the vendor's Koolaid
A pity that Lufthansa didn't do a bit more research before believing that an outsourcer is going to do the job better or cheaper than they will themselves. WIth around 115,000 employees I don't buy the argument that Lufthansa lack the scale.
A more pressing concern is that IBM made (4Q13) made gross margins of 40% on technology outsourcing. Let's assume Lufthansa have been made promises about a 20% cost saving (that's the magic number most outsourcers seem to fixate on). If Lufthansa are going to save that money, and IBM are to avoid diluting GTS division results, then IBM need to be able to operate what will be fairly heavily dedicated IT infrastructure for an operating cost fully 60% lower than Lufthansa are currently incurring. Can't see that myself.
Mind you, my employer's board swallowed similar promises, and it did result in IT costs going down. But only because all routine IT costs went up after we outsourced (along with a reciprocal decline in service standards), and desperate IT managers reacted by slashing operationally-needed projects and new systems from the IT investment budget, and called the resultant net effect a "saving". That's not the view of the operating units, but who asked them?
Oh, and another word of advice for the directors of Lufthansa: You know that long, long, detailed SLA you signed, that commits the vendor to deliver all the promises they made? You might as well wipe your German backsides on that. Outsourcers have large, heavily resourced teams who work all day, every day on writing these agreements, and have big bonuses tied to a successful outcome (which includes the vendor not having to pay up when said vendor messes up). You, on the other hand, had a small and under-pressure team of procurement generalists who write agreements like these once every few years at most, accompanied by a team of IT people already under the cosh for being "too expensive", and most of whom actually had an operational role.
Maybe I'm being unfair. But it seems that either Lufthansa's people didn't do their research properly in the matter of IBM versus Cable & Wireless, or alternatively they chose to believe the salesmen's assurance that the leopard had changed its spots. And salesmen, they always tell the truth.
Re: Mightier than the sword
"why don't we disband the british armed services and merely make it a crime for foreigners to invade the UK"
That's already been done, under the guise of various successive "strategic defence reviews" that have left us with no credible land, air, or sea capabilities. And whilst it is easy to argue that projecting force overseas has rarely ended well, we're now at a position where our armed services couldn't defend the UK, and we rely on the assertion that nobody (other than migrants in Calais) wishes to invade us.
Re: joke maybe, but you have a point@ illiad
"if your equipment isnt clean enough to function properly, its no good to anyone..."
That was my point. How will an undergraduate wank into a sock that's as rigid as a carbon nanotube, and as flat as graphene? And in that case grease probably isn't going to do as good a job as a quick cycle in a cheap washing machine.
Re: 5th time warning or else
" Whereas the UK has 3 universities in the world top-five, Germany’s highest is a miserable 49th."
Some very selective stats there, my son. I'm a reactionary UKIP supporter, and I attended one of the top UK universities, but even I will (on the basis of experience) accept that Germany has an amazingly good education system, amongst the highest levels of productivity in the world, and better standards of living than the UK, and probably in most terms the US. Your selective comparisons that favour the UK and Mercania also ignore the fact that Germany has far more stable and balanced public finances than either country, with the US and UK addled with debt. The UK's lead in graduate numbers is based on offering degrees in hairdressing, media studies and similar shite.
Consider this: Who buys a British car for its engineering?
I'd really like things to be different, but they aren't.
- Comment Renewable energy 'simply WON'T WORK': Top Google engineers
- Leaked screenshots show next Windows kernel to be a perfect 10
- Amazon warming up 'cheapo web vid' cannon to SINK Netflix
- Windows Phone will snatch biz No 2 spot from Android – analyst
- Something for the Weekend, Sir? I need a password to BRAKE? What? No! STOP! Aaaargh!