A Surprisingly Effective Analogy

Back in my early days at this firm (I started in 1991) I went to my employers and suggested that we should install this thing called a Novell Network. It was not an inexpensive proposition and the powers that be made me perform a cost/benefit analysis before they would write a check. The benefits I contemplated were (i) eliminating redundancy in printers, (ii) a solution for file back-up., (iii) buying less expensive desktops by perhaps pushing vast storage requirements etc to a central/shared location, etc., etc.

I am not sure I could perform an adequate cost/benefit analysis of a telephone but if I told you that you had to run your business without one...you would say I was nuts. About the same standard now applies to office networks...I am not sure what my office would do without one....we would not be geared to do business with the rest of the world.

The first application we put on top of our own network was email. We have evolved to use it as an access device to the Internet, to share files, to co-manage projects together, to control distribution of software including upgrades. The Internet connectivity allows us to access new types of software applications that operate somewhere out in cyberspace...those applications out in cyberspace are constructed to help us work together inside the company as well as with any trading partners outside the company. It is fairly amazing how connectivity has caused us to change the way we do things in terms of speed, clarity, and accuracy.

When looking at the prospects of any new form of data network...whether it is field automation, power grid control, or for drilling project management I go back to our own experience with our own network and contemplate our own evolution. Those engaging in new forms network connectivity will develop complex uses of them (if you don't believe me...go stare at the user interface of your cell phone). But for now...they are, as the analogy goes, just getting started with email. As investors...one doesn't have to be brilliant to understand this...just somewhat knowledgeable of history and human behavior.