An American Tech Backlash?

This morning, SAP head honcho told European tech executives to get off their behinds, and innovate. It was the only way they could get their dependence on US technology and Silicon Valley.

“For each euro in the EU invested in major IT projects, some 75 cents flows into a market outside Germany today. This cannot be the way ahead for Europe,” he warned.

Now since it appeared in C/Net, I am hesitant to make a leap of faith, given their recent sensationalist tricks. But still this is a serious comment, which should be taken seriously. I map his comments to some of the recent developments which leads me to believe that there might be anti-US tech-backlash in the making. Intel got its wrists slapped in Japan and there are rumors that Japan wants to wean itself away from its deep dependency on Intel and Microsoft. Which explains why it has been pushing Linux so hard. And if that is not enough, they are looking to develop their own router, as an option to Cisco.

Alaxala Networks has been set-up for that specific purpose. In South Korea, they are pushing hard for WiBro, which is their version of fixed wireless that will ensure that all the dollar profits from that technology stay within the country. They don’t want another Qualcomm on their hands ever again. China is pushing for its own version of CDMA and Linux.

What’s happening is that these countries are looking at the fat margins of companies like Intel, Microsoft, Cisco and other US tech giants, and thinking to themselves: we are just handing over the money, and we are nothing but contract manufactures using their technology. (Many US tech giants enjoy fat gross margins – around 50%.) In other words, if these companies want to move up the food chain, they have to stop being dependent on the US technology. Scary?