Can one little phone impact GDP?

Sales of the new iPhone could add between a quarter and half a percentage point to annualized economic growth in the fourth quarter according to Michael Feroli, chief U.S. economist for J.P. Morgan.

xTuple's new Mobile Web client (works on the iPhone, iPad and Android's) will interoperate seamlessly with the desktop client. Both will talk to the same PostgreSQL database back end and, by the end of the 4.x series, the entire application will have been ported to the Mobile Web platform. We’re not aware of any ERP vendor that has come close to doing this. One little phone can make a big difference!

As reported by Sudeeep Reddy in the Wall Street Journal:

J.P. Morgan’s equity analysts expect Apple to sell about 8 million iPhone 5 units in the final three months of the year. If the phone sells for around $600, with about $200 of it counted as imported components, then $400 per phone would figure into the government’s measure of gross domestic product. (Even though consumers may not pay that much for the phone, because of subsidies from wireless carriers, Feroli explains that phone-selling companies often report the sales based on the price of the standalone product.)

The bottom line: the iPhone 5 sales could boost GDP by $3.2 billion, or $12.8 billion at an annual rate. That amounts to an increase of 0.33 percentage point in annualized GDP growth. It could be even higher, he says. Even a third of a percentage point would limit the downside risk to J.P. Morgan’s fourth-quarter growth projection of 2%.

Feroli warns that the estimate “seems fairly large, and for that reason should be treated skeptically” but adds: “we think the recent evidence is consistent with this projection.” When the iPhone 4S became widely available last October, he writes, over half of the 0.8% increase in core retail sales came in the categories of online sales and computer and software sales. The two categories together had their largest monthly increase on record. The fourth-quarter sales growth at those stores over the third quarter would have boosted fourth-quarter growth by a tenth to a fifth of a percentage point if due to the iPhone. The iPhone 5 launch will be even bigger than that, he says, making the latest estimate “reasonable.”

OpenSurge can help you grow your business too! Using the latest business management ERP solutions.

What's This Cloud Thing Anyway?

Was recently putting some thoughts together on the tipping point for a business to finally make the plunge and replace their ERP system and it seems that many "experts" and "articles" like to include the cloud or "The Cloud" in this discussion. Recalling an event where Oracles' Larry Ellison expressed his opinion of the the cloud.

 "The interesting thing about cloud computing is that we've redefined cloud computing to include everything that we already do. I can't think of anything that isn't cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women's fashion. Maybe I'm an idiot, but I have no idea what anyone is talking about. What is it? It's complete gibberish. It's insane. When is this idiocy going to stop?" Full remarks

So what is this cloud thing anyway? And specifically related to ERP or business management systems? I think that it breaks down into two simple concepts. The first, my application can be accessed from anywhere and the second, some or all of my software/hardware investments have been outsourced.

Accessed anywhere simply means that if the internet can be accessed, my ERP can be accessed. This is done through a VPN, Citrix, RDP connection; natively through the ERP client or a browser based application with user authentication. Big surprise, nothing really new here. Access of this type has been around certainly longer than "free" internet access at every coffee shop on the planet.

Outsourced software/hardware - certainly a newer concept, but not the outsource part. Businesses have been outsourcing aspects of their operations for as long as there have been businesses. Anybody still doing their office cleaning? So with "cloud ERP" one end of the spectrum would be having a 3rd party facility provide a rack space (no real pun intended) for the ERP server. At the other end of the spectrum is a subscriber relationship where the vendor provides all of the software and all of the hardware. With any outsource relationship, the customer calculates the internal costs and compares them to the outsource price, then picks the one that makes the most business sense. And as anyone who has spent time selling outsourced services can attest - everyone has a different opinion.

Outsource hardware is fairly new, but not so new that it hasn't been commoditized already. Outsourced software, while there certainly has been some enabling technology, is really just a pricing model that's been around since the beginning of time.

Put me in Larry Ellison's camp - "It's compete gibberish".

But if you're wondering if your business has reached the tipping point and its time to consider next generation business management solutions - OpenSurge would be delighted to help.