Motherboards Aren’t The Only Green Technology

In the Hutong
Hugging Trees
2206 hrs.

We’re following green technology VERY closely here in the Hutong…in fact, we’ll have a major announcement along those lines in the coming weeks.

So the fact that Vermont’s governor is coming to China to help promote green industries caught our eye. Talk all you want about biotech. The reality is that the next Great Tech Wave will be coming from companies developing clean energy and other technologies designed to help us live and work greener.

Jim Douglas has figured that out, as has California’s Governator. What continues to mystify me is why China remains so dead set on reinventing the microprocessor, Wi-Fi, 3G, and other technologies when opportunities like Eco-tech – where there are as yet no multibillion-dollar sector leaders – beckon with the promise of both local leadership and global dominance.

If China’s government doesn’t get moving in this direction quickly, they’re going to find themselves playing catch-up in EcoTech the same way they are doing in information technology and communications technology.

Given the magnitude of China’s challenges in that area, that would be a great pity indeed.

Ugly Phones in Pretty Pink Dresses

In the Hutong
Watching “Trading Places” for the 95th Time
2137 hrs.

Nokia introduced its 5070 in two colors each .

And the same for it’s 5700.

Wow. Colors.

See, the phones are still fat, still boring, and still ugly. But they have colors.

This is what they call design innovation?

No wonder Nokia is building a reputation as an “old man’s handset.”

Let’s face it: Nokia phones are only for people who couldn’t give a damn what their phones look like. And it appears the numbers of those people are falling worldwide.

Graduate Level Bloggers – Shaun Beilfuss

Asia Logistics Wrap News and Commentary from Tokyo on Logistics in Asia

Does the very word “logistics” threaten to put you to sleep?

It used to bore the hell out of me.

It doesn’t anymore.

Everyone has heard Napoleon’s quote to the effect that “an army moves on its stomach.” The short old frog would have appreciated the more modern adage that “amateurs talk about tactics, rank amateurs about grand strategy, but professionals talk about logistics.”

Mercifully, Shawn Beilfuss’ blog doesn’t obsess on the minutae of moving stuff from one part of the world to another. Instead, he takes a broad look at logistics, putting it into the context of “everything else.”

Reading Asia Logistics Wrap (ALR) is an eye opener. We all like to toss around big words like “infrastructure” in our conversations as shorthand for the dirty stuff that makes Asia (and the world) actually work, but ALR is a reminder that very serious issues – logistics issues – silently threaten to derail some carfully laid plans in China specifically and Asia generally.

Like any good strategist with a focus, he reaches well beyond his specialty to put it into a broader context. Just reading his posts about “space logistics” was worth it for me. His posts about the growing importance of China’s railways – in a day and age when other developing nations are shunning the iron rail for airports, superhighways, and container ports – are a reminder that transportation – for cargo and for people – in China is going to be very different than it is in Japan, Europe, or North America.

Read Shawn, and read what he’s reading.

TD-SCDMA: Tough Fights and Trough Rights

In the Hutong
Putting away the goose down, pulling out the shorts
2117 hrs

Much has been made of a recent remark by Chen Haofei, Secretary-General of The TD-SCDMA Forum, noting that China Mobile had already invited bids to supply network gear for the operator’s eight-city trial 3G networks based on the locally-developed standard.

(TD-SCDMA, of course, stands for “Time Division Synchronous Code Division Multiple Access.” In the wake of the painful development process around the standard, wags here in the Hutong have termed it the “Tang Dynasty System that Can’t Do Much of Anything.”)

It looked like most of the business – like 90% – would go to local producers, frustrating a friend of mine in the mobile communications industry in Europe.

He was steamed, but I pointed out a few important points:

1. Nothing is real until the gear is delivered, in place, tested, and working. Until then, all bets are off. Quoting my mentor Corb Donohue, in China, the longest distance between any two points is the distance between the high-five and the check.

2. This is only a trial system. There will be plenty more opportunities to get in on contracts. Frankly, what a blessing to be left out of this first mess. Trying to integrate a network using a technology nobody has ever used before in a highly-politicized environment cannot be any sales engineer’s idea of “fun.”

But most important:

3. China does not create these massive infrastructure projects in order to provide a commercial buffet to foreign companies. Whether we’re talking about the Beijing Olympics, the Three Gorges Dam, direct-to-home satellite television, railroad upgrades, airport construction, or telephone networks, regardless of the project you can be assured that the government is going to give every possible penny to local companies first. Once as many contracts and subcontracts as possible are handed to the locals, then – and only then – will they begrudgingly turn to foreigners.

And yet, the announcement of a major infrastructure project always gets a long list of foreigners drooling, and the scrambling begins.

I’d say the best position to be in with the TD-SCDMA trial network is as a close observer in constant conversations with China Mobile. Learn from the mistakes and challenges others experience, and get your people to work on second-generation projects.

Either way, be ready for a fight when the actual network is launched. The challenge in the end won’t be making the sale: it’ll be making any money in the hypercompetitive typhoon the network will create among equipment vendors.

Thinking Blogger

In the Hutong
Feeling tagged
1510 hrs.

Kevin Smith over at The Weifang Radish has honored the Hutong with a Thinking Blogger Award.

Having been duly tagged, I am obliged and pleased to designate 5 blogs that make me think. In no particular order, they are:

1. China Law Blog and Dan Harris – Dan understands that the law is supposed to serve business, which already makes him a rarity. The fact that he practices from Seattle and exhibits a deep understanding of China defies my normal characterization that a Chinahand must live in China.

2. Asia Logistics Wrap by Shawn Bielfuss – Shawn is brilliant – should be teaching at Harvard or Wharton – and you benefit from his brilliance without paying the tuition.

3. Imagethief by Will Moss – Incisive social commentary in China delivered by one of the funniest guys I know.

4. Maneuver Marketing Communique by Mike Smock – Mike Smock makes marketing asymmetric: he enables smaller challengers to upend bigger competition. If business is war, Maneuver Marketing is unconventional war.

5. DiligenceChina by Andrew Hupert – It never ceases to amaze me how many companies leave their common sense and their reasonable care behind when it comes to entering China. Andrew is there to remind us, and he does it brilliantly.

Dammit! Somebody else nominate me. I’ve got about 10 more sites…

Intel Makes Dalian Fab

In the Hutong
Unsure who is suffering more through my son’s piano lessons: him, me, or his teacher
1216 hrs.

One point to add to the increasingly vigorous debate around Intel’s plan to set up a semiconductor fabrication facility (“fab”) in China:

Intel ranks high in my ratings of companies who are China savvy, and make business decisions in China on the basis of what makes commercial sense, not on what makes government officials smile. Simply knowing what I do about their decision-making process on these matters I can tell you that this is not some multi-billion dollar exercise to suck up to Beijing.

Anyone seeking to hurl boulders at this move – and I include our distinguished solons in Washington in this group – had best look at the commercial realities. Leaving aside for the moment that the technology Intel is moving to China is at least two generations behind what is considered to be the state-of-the-art, the market for their products have shifted heavily to China.

Closer to the Customer

The PriceWaterhouseCoopers annual update on China’s semiconductor industry is an excellent source of information on the business, and PWC should be complimented for making this resource publicly available. (Full disclosure – PWC does my taxes.) The most recent report points out some interesting facts:

• China accounts for 25% of the global market for semiconductors.

• Over 86% of the growth in global semiconductor consumption in 2006 came from China, a trend that is expected to continue well into the future.

• At the same time, only 7% of the global semiconductor manufacturing capacity is in China.

Something tells me that the hard-headed people at Intel are purely responding to customer pull in a business environment that is increasingly hostile to imported components.

Washington’s Response

Whether that will be good enough to convince our elected – and appointed – policy makers in Sodom-on-the-Potomac remains to be seen.

They’ll say that semiconductors fit comfortably and cheaply into the belly of an airplane, and that in this increasingly connected world, it doesn’t really matter where you make such high value products.

They’ll say that semiconductor fabrication demands large quantities of clean water – a resource in shrinking supply in China.

They’ll point out that there is no competitive challenge to American dominance of the microprocessor industry from China or from Europe to justify the move.

And that’s before they dive into issues of national security, offshoring American jobs, and support of a country with a political system a lot of Capitol Hill’s denizens find objectionable.

Intel has a fight ahead of them. But I’m betting on the Boys (and girls) from San Jose.

China Retail 101

Investing in China’s Retail Industry, PriceWaterhouse Coopers, New York, April 2006, pdf, 12 pages

PWC’s report on investing in the retail industry in China is, as you would expect from a free 12-page report, a bit of a 50,000 foot overview of the industry, and as an introduction to the business for someone who knows little about retail in the PRC I suppose it’s adequate. It focuses on the regulatory and structural nature of retail, both of which are critical.

But an overemphasis on scale as a determinant of success over other factors suggests a very narrow analytical framework. Yes, retail in China is still in its early stages of modernization, but there is more to success than the number of stores or square feet you are managing. There are a range of factors that could produce success that the report all but ignores.

For example:

• Chinese retailers are not merchandisers, they are real estate companies. Simply introducing strong merchandising skills, from product selection and price balance to display and promotion, can give a store a leg up on its competition. Simply having relationships with suppliers is not enough.

• While the country is moving in the direction of massive chains designed to serve broad swaths of the population, there are also emerging niche opportunities to service different parts of the market.

• The experience of buying stuff in China still, well, sucks, and is largely undifferentiated from place to place. Simply having more bigger stores that feel like, say, Jingkelong, is not going to prove an advantage in the long term. Chinese are looking for a better experience than they have been getting for the last several decades.

So use the PWC report as a starting point, but move quickly to more in-depth analysis.

China’s Technology Future is in the Chips

China’s Impact on the Semiconductor Industry: 2006 Update, Alan S. Morrisson, Ed Pausa et al, PriceWaterhouseCoopers, New York, January 2007, pdf, 76 pages

The PriceWaterhouse Coopers (PWC) Technology Center has been doing a series of reports on the semiconductor industry in China since 2004 and, as an apparent part of a bigger thought-leadership program has been releasing a chunk of their research on the industry to the world for free.

The most recent update, covering 2006, provides an excellent overview of the condition of the industry, and a first-level review of some of the drivers of the business. The focus is quantitative, and while the industry could use some good quantitative analysis, there are enough critical qualitative factors around the industry in China to merit an entirely separate publication. As such, the report is not a comprehensive look at the industry and its prospects.

Nonetheless, I find it invaluable, and highly recommend it.

Libertarians and High-Tech “Engagement” in China

In the Hutong
Getting ready for my trek to Starbucks
1036 hrs

I continue to be frustrated by the rodent-level rhetoric employed by the mainstream political parties in the US vis-a-vis allowing US Internet and technology companies to continue to do business in China. Despite the merits of bipartisanship, most of our elected and campaigning officials tend to ignore the reality those of us who have actually LIVED in China for a while understand instintively: US technology companies operating in China are mostly good for the Chinese people.

I’m not going to go deep into why, but if you want a far better expression of both sides of the discussion, check out this debate between two of the brains at Libertarian think-tank Cato Institute.

It underscores a key point: there are degrees of collaboration. There is a difference between complying with an objectionable law to the minimum extent possible, and doing everything you possibly can under the law to attempt to prove yourself “redder than red” in order to ingratiate your company with Chinese officials.

In reality, I think it is crossing that invisible but tangible line that concerns most of the sensible people who are concerned about the issue.

What is upsetting the blogosphere about the recent ruling in favor of Yahoo! Hong Kong, for example, is that there appears to be a perception that somewhere, somehow, Yahoo! crossed that line in China.

At some point, companies like Alibaba/Yahoo!, Google, and MSN (and possibly Cisco) are going to be called upon to prove that they live on the “doing the least possible” in terms of compliance to objectionable laws, and are indeed doing the most possible to improve things in the PRC.

And this time, it will certainly go beyond those four companies. By applying to build a semiconductor fabrication facility (“fab”) in Dalian, Intel and its activities in China – including its involvement with iCafes – will come under unprecedented scrutiny. That list will certainly grow, and I will guarantee it will reach the door of those companies who are financing China’s technology and Internet industries.

Today, Silicon Valley. Tomorrow Sand Hill Road and Wall Street.

Be ready, guys.

Can China Fly?

In the Hutong
1700 hrs.

When I tell people I grew up in West Los Angeles and Beverly Hills, they instantly begin talking about the movie business.

I always find that somewhat amusing, because when I was growing up I always thought of L.A. as an aviation town.

Santa Monica airport was the birthplace of the modern airliner, home of the Douglas DC-3. Lockheed, Hughes Aircraft, North American, Rockwell, Rocketdyne, McDonnell-Douglas in Long Beach, Northrop, TRW, and General Dynamics were more real to me than the dozen major (and dozens of minor) movie, television, and music production studios within equal proximity.

That was probably due to the fact that my mom had spent most of her career in aviation (first in the secretarial pool at North American, later as an executive assistant at Hughes), and my dad owned an aerospace subcontractor in Santa Monica (he made turbine parts alongside golf club heads.) They met at a coffee shop at the foot of the runway at Santa Monica airport. So jet fumes are kind of in my blood.

A+B ==> A+B+C+E+J+R

So as much as I would like to think that aviation is a high-technology business that America will forever dominate, the reality is far different. China is on a path to become an aviation powerhouse in the next couple of decades. If you don’t believe me, believe Steven Udvar-Hazy, CEO of International Lease Finance Corporation (IFLC), Boeing’s largest customer and despite his last name one of the smartest straight-talkers in the business.

He says the days of the Airbus-Boeing duopoly are numbered, and that challengers from China, Russia, and Japan will emerge within the next 15 years.

Now, before you choke on your coffee, thundering in protest that China has yet to keep in mind that the world’s #3 manufacturer of commercial jets, Embraer, is Brazilian.

And think about a couple of things:

Is It Really About Innovation?

Sure, there are still advances, but not of the kind the industry saw in the quarter century between 1945 and 1970. We went from the DC-3 to the 747 in that period. In the 37 years since, we’re still flying 747s as mainline aircraft. The fundamental technologies – the turbofan engine, the swept wing, the cigar-shaped hull, and the like have all been in place for years. Airplanes tend to get replaced because they’re old, not obsolete. Great comfort to those of us who are white-knuckle flyers, but scant support for the idea that civil aviation is still a fundamentally innovation-driven business anymore.

Outsourcing Rules the Skies

Three or four decades ago, most of the fabrication of an airliner was done in facilities owned by the primary manufacturer. Major sub-assemblies, like engines, interior fittings, and avionics may have been made elsewhere, but the plane maker made the plane. That’s not the case anymore.

Case in point: Boeing’s newest airliner, the state-of-the-art 787 Dreamliner, is being manufactured in pieces around the world, by 48 companies in 7 countries, then assembled at Boeing in Seattle, including:

• Italian firm Alenia/Vought is building the horizontal stabilizer, center fuselage, and aft fuselage.

• Mitsubishi Heavy Industries and Fuji Heavy Industries are building the wing box.

* Kawasaki Heavy Industries is building the landing gear wheel well, main wing fixed trailing edge, and part of the forward fuselage

• Hamilton Sundstrand is building all of the electrical and hydraulic system.

• Rockwell Collins is making the Avionics

• Smiths in the UK is developing key control systems.

• Messier-Dowty in France is building the Landing Gear.

• Panasonic is doing the inflight entertainment system.

• Saab is building the cargo doors.

• Korea is building the raked wingtips.

• Dassault Systems in France is providing the software to help put it all together.

Essentially, Boeing develops the aircraft, sells it, manages the overall program, and manages integration and assembly. That’s still a lot, but it’s a lot less than what it did in the days when it was cranking out the first 747s.

China Could Fly

At some point, most of the worlds airlines are going to come to the conclusion that they’ll be able to buy an aircraft entirely adequate for their purposes from someone other than Boeing or Airbus. In reality, it’s already happening – Embraer and Bombardier have all but chased The Big Two out of the business for airliners with less than 90 seats. But it will happen in earnest when the differences between Boeing, Airbus, and, say, a Chinese aircraft manufacturer become esoteric enough that a large percentage of customers can ignore them.

Sure, maybe Southwest and Singapore won’t be lining up to buy Chinese airliners all that quickly. But in places like sub-saharan Africa, South Asia, and Central Asia there would be a market for a Chinese airliner that offered 10 year old technology in a new aircraft at the right price.

Most of the components could be purchased from companies that currently supply Boeing, Airbus, Embraer, Bombardier, and Tupelov.

In other words, all China needs to do is put together a company capable of superb project management, careful assembly, smart design, and savvy marketing, and they could become a real player in the business.

Of course, that last little bit will be a challenge. Which is why it won’t happen overnight.

And fortunately, China has a willing accomplice in teaching them the tools of the trade: Airbus, who is building an assembly plant in China for the A320 series and setting up a 500-desk design lab filled with Chinese engineers working on the A350.

TD-SCDMA With Wings

I was going to write something snarky about China’s current high-profile jetliner project, the ARJ-21, but I want to reserve judgement. The thing has yet to even fly, but when it does I’m not going to count on its builders (Shanghai’s ACAC consortium) or its local certification authority (CAAC) to tell me how well (or poorly) China has done in its latest effort to build a jetliner.

Instead, I’ll wait to hear from airlines, pilots, and other credible third parties. China has a steep learning curve on it’s way to becoming a global player in the airliner business, and I’m not sure how far along it will be two years from now.

Fifteen years from now, on the other hand…

Doing Business with Big Companies in China

In the Hutong
Watching the markets slide on CNBC
1105 hrs

I recently spoke to the China Entrepreneurs Council in Beijing on how a small firm (like mine) can do business with multinationals and SOEs tens of thousands of times our size.

Without regard to political correctness, I simply passed on (with some comment) the twelve rules of thumb we use to make sure we stay afloat. And so far so good – we’ve had no write-offs after nearly two years in business, having worked with 10 clients with over $1 billion in annual revenues.

Our Twelve Rules:

1. Know Your Non-Negotiables: Before you even make your next sales call, know where you will not compromise.

2. Don’t be a vendor: Be a trusted advisor – the first person they call when they have any problem.
3. Be a Vendor: Get yourself made an authorized vendor. You’ll get paid on time, and it will open up other opportunities with the customer.

4. Hire a “Guido:” Have one person in your company – not you – who is a collections artist

5. Run from large Chinese clients: Unless you can get 80% in advance
6. Seek customers who need to take risks They’ll be willing to bet on you rather than your bigger competition, and they want smarts and capability, not the low-risk/low-benefit solution.
7. Act big, Think Small: Have systems that will integrate into theirs, but never stop being nimble, grateful, and humble
8. Hold your head up… Don’t ever let them make you feel small. Walk away before allowing yourself to be treated badly.
9. …but don’t stick your neck out. Avoid the temptation to overcommit just to get or keep the business
10. Remember that “NO” is the most valuable word in your vocabulary: The more times you say “no,” especially on principle, the better you will do.
11. Your job is to get your customer promoted: Nobody ever got fired for hiring IBM. Nobody ever got promoted, either. You repay the customer’s faith by getting the customer promoted.
12. Don’t drive a better car than the one your customer drives: Otherwise they’ll think they’re paying you too much.

How Many Billionaires?

In the Hutong
Watching as a CNN story about nose-picking in China is censored off my screen.
(And hearing Kristi Lu Stout use the term “snot-rocket” on the air)
1017 hrs.

Reading The Hindu this morning, I cannot help but be impressed at the puffed-chest triumphalism in a story titled “India’s dominance in the billionaires club shocks China.”

One detects in this article – and similar coverage over the past few days – an implicit Indian inferiority complex vis-a-vis China.

As such, I’m happy for India – clearly, as a psychological boost, they needed it.

Show Us Your Money

I won’t, therefore, rain on their party by suggesting that one of the reasons they have more billionaires may well be a growing reluctance among Chinese billionaires to step into the sun.

One wealthy Chinese remarked to me about a year ago that he and others he knew were no longer comfortable with showing up on the increasingly popular “wealthiest Chinese/Asians/humans” lists. In some very public cases, some of the self-declared wealthy have discovered the hard way that China’s tax authorities – and other even less savory characters – are quite interested in these lists as well.

Many of China’s wealthy are, therefore, increasingly focused on hiding their prosperity. Those who owe their wealth to means that either need not or must not – be public are not making them public. There are certainly plenty of places around the world to stash one’s cash – no questions asked.

In reality, there are likely more billionaires than Forbes can identify in China. But that’s not even the greater question.

Where Is It Going?

The real issue here is how those billions are being employed. I’ve gone through a personal political renaissance lately, but I still cannot bring myself to join the people who call for the statutory redistribution of wealth.

I can – and do – ask “what are you doing with your dollars?”

At the very least, Forbes should be examining the extent to which those billionaires are using their money to good purpose (i.e., putting it back into circulation to drive greater economic activity, or investing it in community or philanthropy), and evaluating those efforts.

Only then can we determine if the Forbes list actually means anything – for India, China, or anywhere else.

picoChip: It’s A Little Early for the High-Fives

In the Hutong
Experiencing dizzy spells
1107 hrs.

Interesting little article in EETimes late last week. It seems British semiconductor startup picoChip opened a networking and communications R&D lab at Beijing University of Posts and Telecommunications (BUPT) last week.

All very interesting, as picoChip is basically outsourcing its R&D on 4G wireless technology. With too few hands and too much ground to cover in the world of wireless, picoChip apparently figures it’s better to have to outsource than not to be in the game at all. This points to an important trend: global R&D in China is no longer the sole province of Fortune 1000 technology beheamouths. A broad range of companies, often driven by expatriate Chinese executives, is coming to China to tap the country’s technical labor resource.

What concerns me about the tone of the article is that a mere 7 days after setting up shop, EETimes makes it sound like picoChip has licked all of the major challenges one faces when coming into China and that the place is already showing great results.

On IP protection: “There’s some risk – IP protection is always a concern in China – but picoChip Chief Technology Officer Doug Pulley said so far he has seen only upside.”

This after “a couple of small-scale projects with BUPT” and a week in operation. Let’s see. Tiny startup in Bath, England working in China with a major Chinese university under the wing of the Ministry of Information Industries. Am I the only one who sees the Bambi-meets-Godzilla IPR risk here?

Good luck, picoChip. Really. I hope this turns out really well for you. I also hope you’re going to put some very senior people from Bath on the ground here permanently to oversee things at the lab. And I hope you’ve got outstanding legal advice.

UPDATE: In a superior example of corporate conversation, Rupert Baines picoChip’s vice president of marketing, left us a comment (see below) clarifying a few critical facts that were not evident in the article in EETimes:

1. The lab is to create enabling software only, not do chip design.

2. picoChip’s core IP remains separate from the lab.

3. The work BUPT does is only peripherally important to picoChip’s core business.

Okay, so it probably isn’t all THAT early to be giving everyone high fives. In fact, I’d go far as to say picoChip has structured their venture with BUPT with savvy and intelligence.

I’m going to be watching these guys.


In the Hutong
Dodging buses filled with People’s Representatives
0817 hrs.

As the National People’s Congress (NPC) and China People’s Political Consultative Conference (CPPCC) get going, I cast my eyes once again upon the Stte Administration for Radio, Film, and Television (SARFT,) that much-reviled rump of what once was the mighty Ministry of Radio, Film and Television (MRFTV).

SARFT would really like to see it’s remit expanded, lest it dry up and blow away in the next year, like it almost did ten years ago. We’re going to see another round of government reorganization in the next 1218 months – mark my words, because you heard it here first – and one of the questions that will be bounced around is whether or not SARFT should continue to exist as a separate organization, or whether it should be broken up and chunks poured into the MII, the Ministry of Culture, or simply pushed into freestanding enterprises.

What I expect SARFT to do (or, what I would do if I were Minister, or WIWDIIWM for short, since we appear to be going a little bananas with acronyms today,) is make a play to be formally handed oversight of content on the Internet and all forms of video games. If you are an ambitious cadre looking for stuff to regulate (and this town is full of them, I can tell you,) that’s where I would be looking.

One in ten Chinese is online. That’s a juicy target by itself. SARFT has a great “in” there, too: the growing IPTV sector. Hmm. Television via the Internet? Sounds like a job for SARFTman!

And games? Think of it. There are probably 3 million people playing with a gaming console of some type or another. There are probably 7 million people playing massively-multiplayer online games (MMOGs). Nearly every PC sold in China sells with at least one game on it (Solitaire) and there is no statistic for how many shrinkwrapped games are sold for those computers. Most of China’s Internet users spend some part of their time online playing games. There are 470 million mobile phone users, and every one of them has at least one game on their handsets. The damned things are everywhere, and NOBODY is regulating them.

The push to regulate has already begun. That little spaz the regulators are having about iCafes? That’s ALL about people playing games. Game-related mishaps get more coverage than murders – there was a huge hue and cry after one of my neighbors here in the Hutong, a lonely, overweight 26 year old addicted to his TV and his computer, died over the New Year holiday while playing video games.

So I see SARFT pushing to regulate it all – radio, film, television, Internet, and games. They have to – it is the law of the bureaucratic jungle: expand your remit, or shrink and die. SARFT has spent the last 10 years fighting a rearguard action against its own demise. With a sympathetic administration in place, this is the time to strike.