Horizon of Stars

The iPhone 2.0 is NOT a mobile phone

2008-06-10T19:33:00.004+01:00

One of the big concerns I have with the analysis of the mobile phone (for example Om's round up here) is the implicit assumption the iPhone 2.0 is a mobile phone.

It is not.

The iPhone 2.0 is a mobile computing platform. Why do you think the keynote spent so much time looking at the Apps?

Its the mobile computing platform is the game changer. As a straight phone (even smartphone) the iPhone has great usability but is only so-so in terms of extra features (as many a blogger will tell ad nauseum). But as a mobile computing platform nothing compares.

More importantly, Apple is repeating the iTunes/iPod strategy of building a seamless end-to-end system. In this case it is a seamless end-to-end mobile computing platform. One that includes development, hardware and distribution of the applications.

Apple is pursuing an edge strategy that re-defines the general idea of mobile towards the definition used by Tim O'Reilly in his recent Web 2.0 keynote in San Francisco, 2008. It drives innovation to the edge and upturns the existing industry.

iPhone 2.0 is NOT a mobile phone. It is a mobile computing platform.

Tags: iPhone, mobile phone, mobile computing

The Social Network has little Value in a World of Flow

2008-05-19T12:51:00.006+01:00

Fred Wilson recently wrote a post about how the flow of data is important versus the data itself. Primarily in response to the ongoing bushfire in the blogsphere about Facebook and Google Friend Connect and the larger context of data portability.

The conceptual point of flow versus data is important one to highlight.

It is very easy to confuse the two. To an extent this is an artifact of our language which emphasises objects (nouns) over flow (verbs). But it is also influenced by trying to use an existing frame-of-reference to discuss a new frame-of-reference that is only just beginning to come into focus. This is always going to make everything more difficult.

The web is moving into uncharted territory. Up to now we have been dealing with the conversion of existing real-world into an online equivalent. Now the web has reached the point that it is moving beyond the confines of being a real-world analogy. This is creating vast new opportunities, few of which are known to us now. Data portability discussion exits within this new framework.

To make headway understanding this new framework, we need to converse using language that properly describes this new framework. The language of flow will help us frame problems and hold conversations that enable solutions and new opportunities.

In Wither Social Networks, Arise Communities I pointed out that social networks are glorified contact books. A better way to look at social networks is that the merely describe a connection between two people. They are the pipes, wave-guides, tubes along which guide the flow. What happens at the end points is not part of the social network.

In addition to the guides, we have process points. The process points are where points along a flow something happens to the flow. Whether its received (such as email), or processed (such as Wesabe). A process point is not necessarily where the flow stops, merely where it undergoes some sort of processing.

Facebook's aim is to become the primary process point. They know (or suspect) that merely having a description of a flow network is not enough. They have to be a processing point, but here is their dilemma: Facebook was never designed with being a processing point in mind, merely a description of a flow network. So their strategy is to try and control of the description of flow networks by restricting access while they shift to being a processing point, Facebook Connect being an example.

Bear in mind that the flow network description has little intrinsic value. It is the flows along the network where the value lies. In this Robert Scoble is wrong. It is not the flow network where the value lies but flow along the guides that is important.

So is Facebook right or is Google right? How about neither? Facebook's move is entirely about trying provide themselves with time to become a processing point and less of a pure flow network. Google's aim is to get access to the flow network in order to get access to the processing points. Google looses out if it doesn't know about the processing points. Neither are taking the positions they are merely out of moral indignation. I do find Google's behaviour less obnoxious than Facebook as Google's move is about access where as Facebook's is about control. Not really surprising given Facebook's past behaviour and in the words Umair, evilness.

Ultimately, it is a meaningless argument. The web is shifting so fast that both companies actions will soon be lost in the momentum in the move to flow. The flow based web even looks like it will overtake the Data Portability movement. Rendering the broader discussion irrelevant as well.

Tags: Social Networks, Facebook, Data Portability, Google, Web Next, Web 2.0, Fred Wilson, Robert Scoble, Umair Haque, Web Services

Wither Social Networks, Arise Communities

2008-05-18T17:01:00.004+01:00

A community is an assemblage of people around a common interest. What Hugh MacLeod calls a social object. Social Networks, like Facebook, are glorified contact books. And as Facebook is finding out, people get stroppy when you get between them and their contact books.

A community, on the other hand, behaves differently. The members of a community are there because of the shared interest or bond, the social object. Consider the rise of communities around particular diseases as highlighted in this week’s NewScientist (vol 198, issue 2656). These communities are generating a wealth of data about these diseases that would otherwise be expensive or impossible to obtain. Communities tend to generate data around the particular shared interest beyond simply demographics that you get in a Social Network.

The data is hugely important. As Tim O’Reilly is fond of saying, “data inside” is the new “Intel Inside” (between time point 2.15 to 3:20 in the presentation). The value of web companies is entirely determined by the data they can aggregate and turn into new knowledge. Communities generate large amounts of data by harnessing the network effect. As each member adds more data around the shared interest this creates a positive feedback loop encouraging more people to add more data and so on in a virtuous cycle. A good example of this principle in action is the company Wesabe (also discussed by Tim O’Reilly in his keynote at 2008 Web2.0 Expo).

Social Networks don’t have this positive feedback loop that generates great swathes of data. While they do have network effects this is merely increasing the size social network by members rather than adding large amounts of data. We are even seeing indications now of limits to how far network effects work in maintaining growth of membership. The amount of data in social networks is relatively limited and most of this information is limited to who knows who and simple demographic data.

Social advertising is the “next big thing” in advertising. However, achieving this on a social network has not been easy. An outcome that is not surprising. The effectiveness of advertising comes down to two things: attention and intent. Attention being what is the person doing at the moment. Intent being why are they doing what they are doing at this time. The more closely you can determine the attention and intent of the user the better the advertising can be made to be of interest to the user.

Social Networks do not offer great data to determine attention and intent. Just because you are a 46 year-old climate researcher, does that determine why you are looking for a holiday? An advertiser could assume you are looking for a holiday for yourself but there is no evidence for this. Nor can a social network really say whether you are looking for holiday in the first place. There is little data to indicate attention and intent. Communities on the other hand do offer good data for determining attention and intent. Consider the climate researcher. He joins a community around travel and holidays and asks the question of the community “what is a good holiday as a birthday present for my 16 year old daughter?” Now we know attention (searching for a holiday) and intent (as a present for his 16 year old daughter). Having this data allows the advertiser to very accurately target with information about holidays suitable for a 16-year old girl.

People like being part of a community. We are tribal at heart. A social network is a mathematical abstraction that merely indicates a connection. The tribe will always win over the maths. Communities will win over social networks.

Tags: Tim O'Reilly, Social Networks, Hugh Macleod, Social Object, Community, Data Inside, Attention and Intent, Facebook, Wesabe

The Best Regulation is Information

2008-04-20T14:49:00.003+01:00

With the recent upheavals in the world financial markets there has already been calls to regulate. Arguably these calls are not wrong. The question, rather than should we regulate, is how and what do we regulate?

The financial crisis is one of market failure due to the lack of accurate and timely information about risk. The regulation needs to focus on correcting the issue of the markets providing accurate and timely information about risk.

The regulation needs to ensure that everyone involved in the market has knowledge of the real risk that various instruments and securities have. This will require the regulation of the ratings agencies as they failed to properly provide information on the risk involved in various securities. Or the rating of securities is handled by an independent body charged only with ensuring the risk of a security is accurately measured and information provided to the market.

The second bit of information is where the risk is. Here the accounting rules need to be change to ensure that risk cannot be shifted off-balance sheet so the risk "disappears". Essentially, if there is control and/or liability those risks need to show up on the balance sheet.

Mobilty, Facebook, Twitter and Social Cohesion

2008-04-17T13:19:00.004+01:00

The Economist has an interesting article about mobility and its effect on society. In particular one anecdote of a plumber and a sociologist had a strong resonance.

"Richard Ling, a sociologist at Telenor, the largest Norwegian telephone company, and author of “New Tech, New Ties: How Mobile Communication Is Reshaping Social Cohesion”, was standing on his porch in Oslo one day, saying farewell to a few guests, when a plumber walked around the corner, talking on his mobile phone to what appeared to be his wife. Mr Ling, who had a leak in the kitchen, was expecting him. But the plumber took Mr Ling and his guests aback by walking right past them and into the house, where he took off his shoes and headed for the kitchen, chattering into his handset all the while."

The article goes on to talk about weak and strong social interactions. In this case the plumbers weak social interaction with the sociologist was overcome by the stronger interaction between the plumber and his wife. Or it could easily be the girl at the checkout counter chatting away to someone on their mobile phone while barely paying attention to the task of paying for their shopping. The anecdotes are there and very strong.

Now that strong social interactions are rarely limited by distance, they are easily overwhelming weak social interactions. But is this a problem? I think so. The weak social interactions are often with random people in every day life - bus drivers, commuters, shop assistants, doctors, police, people on the street, customers in a cafe - rather than with people we've selected as being a part of our "tribe". They are unlikely to be similar to us and this variety of social interaction helps us be less insular. In reading the article I was strongly reminded of one of my favourite quotes from Terry Pratchett.

"Individuals aren’t naturally paid-up members of the human race, except biologically. They need to be bounced around by the Brownian motion of society, which is a mechanism by which human beings constantly remind one another that they are... well....human beings."

The dominance of the stronger ties reduces the "Brownian" motion needed to make us human. This loss is what is disturbing about the "mobility" society. We are rapidly shutting out random acts of chance, of serendipity. Nor is it simply mobile phones. Social Networks such as Facebook also produce the same effect. Anything that promotes strong social interactions at the expense of weak ones are culpable.

Services such as Twitter and FriendFeed go towards promoting weak social interactions as a tweeter will not always "know" or have a previous strong social interaction with a follower. I do wonder, however, whether these virtual weak social interactions will again come to dominate over the face-to-face weak social interactions of every day lives.

Banning mobile phones, Facebook and Twitter is not an answer. These services and devices serve a strong purpose of facilitating communication and strengthening social ties. What we need to be aware of is the here and now. To recognise that at certain points the here and now of weak social interactions out weights strong social interactions.

Tags: Social Interactions, Mobile, The Economist, Facebook, Twitter, FriendFeed

Amazon to buy a CDN?

2008-04-15T09:33:00.004+01:00

Amazon is beefing up its AWS offerings. In the end making the menu of services much more enticing. Amazon's has reached a point that a whole startup can be cheaply and easily hosted with robust and reliable services. But that isn't the point of the post.

With S3 video startup's can store and transmit their video. Which if you take off like YouTube quickly becomes costly (for both Amazon and the startup). So how to address this issue? One method would be to use a CDN like system to distribute content to the edge. Amazon has several options 1) build its own, 2) buy an existing CDN or 3) partner with CDNs.

The structure of Amazon's computation infrastructure (particularly with the Zoning) could already allow for CDN like behaviour. The question is whether this is enough. I expect that it would require more development to get a proper CDN like behaviour working.

The second option buy an existing CDN would allow Amazon to avoid having to complicate S3 storage to give it behaviour like a CDN. Rather Amazon would like S3 to the CDN's existing infrastructure. Here I think Akamai is probably the best target for purchase. Allthough Limelight Networks is a possibility as well.

The third option partnerting with CDNs would provide AWS customers with the most choice. They get to choose which CDN they use and AWS makes the link between the S3 and the CDN very straight forward.

Dealing with the video/rich content distribution to the masses is something that Amazon is going to have to work on. It will be interesting to see the finial solution Amazon chooses to pursue.

Tags: Amazon, Amazon Web Services, CDN, Akamai, Limelight Networks

Google App Engine is final leg of the strategy to disrupt social networks

2008-04-09T08:54:00.010+01:00

With the announcement of Google App Engine and the resulting symphony (or cacophony) of conversation a lot has been said about cloud computing and Amazon's Web Services. For all the conversation not much has looked at the Facebook angel in detail.

Google App Engine strikes me less as a competitor to Amazon Web Services and more as the finial piece in the puzzle for creating a web-spanning social network. Google App Engine provides a place for applications to be built and hosted external to any social network. Coupled with Google's APIs for a users social network (the contact API), an identity mechanism (Google Accounts) and the OpenSocial APIs, everything that can be done in Facebook or any other social network can now be done by any application without having to be internal to any social network.

It is an innovative way of dealing with the issues of social networks by explicitly turning the web into a giant social network without walls.

Of course this will mean the very act of surfing could see you have a sheep tossed at you!

Tags: Google, Facebook, Google App Engine, Amazon,Amazon Web Services, Social Network, OpenSocial

Web2 Finance, Mobiles and Two Factor Authentication

2008-04-04T10:57:00.003+01:00

A friend has just had problems with fraud and it got me thinking about two factor authentication and how web2 finance sites such as Mint.com and Wesabe can play a role in making online fraud harder.

The Web2 Financial sites could Email and sms the individual whenever a payment or transaction is done to confirm the transaction before it is committed. Essentially the mobile phone (or email) becomes the second factor of authentication. No need to carry around a separate dongle or bit of hardware in order to make a transaction.

Implementation of this would require the companies to partner with the banks or online payment processors to get the realtime-ness need for the second means of authentication to be effective.

Banks and the payment processors could also do this as well and probably should. I would like to be able to receive an SMS to authorise ATM transactions or when paying by card at a shop prior to being the money being handed over. Not the ultimate solution to card cloning and pin card issues but it would certainly put a crimp in that type of fraud.

Web2 financial services have an advantage over the banks, credit cards and payment processors for the following reasons:

Online banking sites suck - badly
People often have many bank accounts, credit cards and setting them all up is likely to miss something. As the financial sites already aggregate this information they can act as single point for passing transactions through to authenticate
Many online payment processors are merchant focused and never have a relationship with user so can't really send an SMS or email
The financial sites are focused on the user while banks, credit cards and payment processors lack this focus

In the end the more services that offer this type of two factor authentication the better for reducing fraud. It isn't going to make it go away (phone and wallet stolen etc) but it can be reduced without having to roll out great numbers of bits of hardware.

Tags: Mint.com, Wesabe, Two Factor Authentication, Mobile, Fraud, Online Payments, Web2

Transparency and Morality in Business

2008-03-23T14:22:00.005Z

Ross Gittins has an interesting article about the importance or requirement for moral values for a market to function properly. What struck me as interesting was the idea that markets function better when participants are able to judge the actions of other participants against social standards. This jives with what Umair Haque has written about numerous times around the DNA of businesses and the edge economy.

In previous posts, I've talked about the use of transparency of businesses to improve the DNA or the behaviour of businesses. The concept of being able to judge participants against social standards for honesty, trustworthiness etc. provide a strong foundation for judging what information participants need to provide about themselves.

By focusing on the information that allows judgments to be made about a company's behaviour meeting moral standards, we can avoid being inundated with information that is irrelevant and frankly unhelpful in creating better businesses and markets. Businesses are only as amoral as we allow them to be and there is no reason why a business has to amoral.

Tags: Transparency, Finance, Ross Gittins, Policy

iPhone Reverberations

2008-03-07T17:12:00.006Z

It is now several days pass the announcement of Apple’s iPhone software roadmap. We are now firmly far enough away from the reality distortion field we can take stock of what it means and the possible ramifications. John Doerr certainly thinks that the iPhone is the next coming. And I am inclined to agree but I shall come back to my reasoning later on in the post.

The presentation came in two parts; the enterprise features and the SDK. I’ll consider each as both have different effects.

RIM

The enterprise features are aimed at the heart of RIM. Not only has Apple targeted the BlackBerry handsets but RIM’s whole push technology revenue. It is a classic pincer strategy and strangely enough not one that I’ve seen discussed much. By using ActiveSync Apple removes the intermediate steps of the RIM server and NOC. This will be cheaper for enterprises wanting to deploy push email and potentially more reliable, an issue that RIM has struggled with in the last 6 months.

Apple has created a viable alternative to RIM push email technology that is going to have a lower total cost of ownership. The software update is not going to be deployed until June 2008 so I expect that the update will include many other improvements to the iPhone that will make it even harder for RIM. I am interested in whether Apple will work with Google and Yahoo to bring push to the companies’ webmail. In particular push integration of Google Apps would almost make the iPhone a no-brainer for small to medium enterprises.

RIM has six months in which to respond and come up with a strategy to counter Apple. Steady as she goes is not a viable long term strategy. One possible idea is to give the RIM server software away for free/open source it and focus on providing maintenance contracts to enterprises looking for them. But it is not all plain sailing for RIM (and all the other handset manufacturers) as Apple not only announced the enterprise features but more importantly announced the SDK.

SDK

The enterprise features were about selling more iPhones and increasing access to the enterprise. The SDK is about changing the world. The SDK unlocks the power of the iPhone and turns it into a comprehensive mobile computing platform. John Doerr stated it was the third platform and I agree. Does it replace the other two platforms? Not at all. Instead it complements the other two platforms to create ubiquitous computing. Now we have the mobile platform with the computing platform and the cloud platform.

The SDK provides a little something for everyone. For enterprises it allows mobile versions of enterprise applications (ERP, CRM, SCM etc). More importantly the native applications will support offline processing allowing users to continue using the applications when not in range of large of large bandwidth connections. It also allows the applications to send only the necessary data (sync) between the central application and the iPhone version increasing the essential mobility of the platform.

For games developers it provides a mobile gaming console that with the mult-touch interface and 3D accelerometer and high resolution screen offers new gaming styles and game play. The Wii is a demonstration of how a change in interacting with a game opens up new game play. Perhaps the largest stumbling block will be Apple’s historical indifference to games on their platforms. Take a logical step further the iPhone could become a very interesting Wii-like controller for Mac based games. Imagine playing id’s Rage using the iPhone to steer and fire.

Application developers will be able to create applications and mobile versions of their applications that address specific computing needs when mobile. These applications will often be compliments of desktop and web applications. The inclusion of SQLite will do a lot to reduce the issues surrounding EDGE and intermittent connection.

In Conclusion

Like a butterfly flapping their wings only to create a storm, the true impact of the iPhone mobile computing platform is unpredictable. Like Jason said, this will play out over the next two decades. Not having “social” mentioned is hardly a reason to doubt the impact of the iPhone as Fred Wilson does. The point is the SDK is about the how of mobile computing not the what. The what is left up to the developers and users.

All that can be said for sure is how we think about computing and its involvement in our lives is going to radically change just as the PC platform and the Internet Platform changed computing before.

Tags: iPhone, iPhone SDK, Mobile Computing, Apple, RIM

Improving Transparency to Improve DNA (Umair's type)

2008-03-04T09:20:00.003Z

The FT has an article today on Institute of Credit Management releasing tables on the payment performance of listed companies. This again follows the idea of using transparency to reform and improve the performance of businesses.

But it is not enough to have someone comb through annual reports to find this information. In the world of the web, this type of information should be provided in XML form on every companies website. Companies will scream that it is a bureaucratic hurdle but that isn't true. There will be an initial pain as companies adjust their systems to publish this information but then that only creates opportunities for new business to streamline the process.

Publishing information as XML is a trivial exercise and cannot be considered a viable argument. What most companies are really objecting to is the changes that this transparency will require them to make. To borrow Umair is terminology, the transparency will necesscitate a change to businesses DNA. Those that don't change will die.

tags: FT, Disruption, Business, Transparency

When Humans are Removed

2008-02-27T09:04:00.004Z

Ars Technica has an interesting report on a recent music industry conference. What struck me as interesting was an exec of a music label on a panel justifying their existence of labels by the work of "finding" music. To quote:

"anyone who has spent an hour or a day listening to demos understands the labels' place in the food chain"

The iLike CEO pointed out that this is no longer the case. That a label only need to look for musicians with 50,000 friends on MySpace.

What is interesting is how MySpace, iLike et al have turned finding new music from a costly human based activity to a software program. I'm not sure many people in the industry (whether the labels or companies like iLike) realise what is happening. The best analog is what Google did with advertising as Chris Anderson pointed out in his recent article in Wired:

"When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper)"

Did Google realise what would happen by turning advertising in a software application? Probably not. Just as Google unleashed value that was otherwise tied up as costs, so to will a software application(s) for finding new music unleash value otherwise tied up as costs. Music is going to shift back from being a package product to being an experience.

Tags: freenomics, Google, disruption, economics, iLike, chris+anderson, music

Use a Time Slot Method for Train Travel

2008-02-26T11:07:00.005Z

News comes today about First Great Western agreeing to a remedial plan to, well, operate a dependable train service. Rail franchises create a government granted monopoly on a rail line in exchange for meeting certain conditions. It is how the UK government decide to privatise rail travel.

I think rail franchises are the wrong way to organise the delivery of train services. Instead rail lines should be divided into time slots that a company bid for. Obviously lucrative spots would be bid higher and less lucrative spots would be less expensive. The idea is to create system like landing slots at airports. This would allow various train companies to compete on the same line which would drive prices lower and also increase the number of services.

Part of rail franchises sometimes includes revamping railway stations. This could still be done using with time slots by directing the money from the auction of the slots into track and station improvements and/or also charge a "standing fee" for each train.

Monopolies are a bad way to deliver a service. Competition will do more to improve train service particularly if the slots are auction for periods of between 1 to 5 years and any single company cannot by two (three?) consecutive slots so that a user has a choice of waiting for the next train.

The main hurdle to slot base method is the management of arrivals. Systems will need to be in place for dealing with late trains - perhaps by moving them off into holding points until a slot is free.

Tags: Rail Franchise, Rail, UK, Transport

Google's achillies heel - Customer Service

2008-02-25T09:08:00.005Z

Google's rise and rise has created a continued air breathless wonder that can the company do no wrong? Google smacks the ball well and even if their products don't always rocket to a six they rarely have a dot ball. Microhoo! is a reactive move against Google's strength.

But is that really necessary. Time and again customer service keeps coming back to haunt Google. Take Christopher Dawson's attempts to reactive his Gmail account. The action was neither prompt nor informative as to what happened. Nor was Google forth coming about providing basic information on the Christopher's account usage. Information provided by many other service providers.

So is this Google's Achillies heel? It could be. Customer service is going to be more and more important as Google's products move beyond mainstream. So too will be letting users access their own service and usage information. Of course both issues are fixable. The question is will Google put the effort into backing up their services with proper conversation with their users and decent customer service or will the continue to use a man behind a curtin and hope no one pulls the curtin back?

Tags: Google, Gmail

Using transparency to regulate business

2008-02-23T10:00:00.002Z

For a while I've regarded the use of transparency as a better way to regulate than brute force of law. In an interesting piece on lateral thinking in economics Ross Gittins, discusses the work of Dr Guren of Lateral Economics.

Many of the ideas proposed by Dr. Guren are not really new or innovative, if you've been following economics and the open movement. Taxing "bads" as opposed to "goods" are known as Pigovian Taxes. What I did find interesting was Dr. Guren's idea around improving health & safety in the workplace by this method:

Most workers care about workplace safety, but typically lack information about it when applying for a job. Yet the workers' compensation premiums paid by firms provide a good proxy for their past occupational health and safety performance.
We should publish them, Dr Gruen says, and require that existing and prospective employees are provided with information on how they compare with economy-wide and industry-wide average performance.

I already think that salaries should be published by each company. Publishing the salaries and benefits across the organisation, will promote competition between companies for labour. One of the key problems with the labour market has moved beyond flexibility, to information asymmetry. A real market can't exist with this asymmetry whether a market is flexible or not.

But the idea of publishing H&S premiums has got me wondering what other internal information should be published to make companies more transparent and so reduce the amount of regulation and enforcement action needed in the economy?

Off the top of my head I can think of:

Number of harassment claims filed
Amount of energy KWh used by the company

The more simple and available the information the easier it is to counter arguments about cost and burden. The use of open information would have a profound effect on the economy and the regulation of business.

Tags: Open Source, Policy

What will be the effect of an Open Xohm platform?

2008-02-22T13:49:00.004Z

Sprint has announced the opening of the Xohm as a platform through APIs and an SDK. Ostensibly it will allow device manufacturers, application developers and 3rd party service providers to build items which take advantage of the Xohm networks in ways that are difficult and expensive currently.

It is, perhaps, the first example of a telco taking advantage of it's relationship with it's customers or put another way following the Telco2 strategy. It will also allow applications and services to be developed that are mere dreams (if they have been drempt at all) currently. Think games or VoIP services that ask for better quality service for the duration of usage rather than all the time or buying or buying something by snapping a barcode where the bill is attached to your access bill and delivered to your address by Amazon's fulfilment service from an address supplied by Sprint.

It is the next logical step from Google's push for open access to devices and applications for 700Mhz. This could have a rather interesting effect on wireless/mobile market direction. It is hard to compete against open with closed.

I foresee this changing the dynamics of the 700Mhz spectrum usage as well. The 700Mhz was important as it was nationwide and provided better in-door coverage. The in-door coverage, I think, is really a non-starter as by the time the 700Mhz network is established, short range WiMax access points will be fairly well distributed and many in-door areas will be able to roam from WiFi to WiMax. Femtocells and devices that can roam across different wireless networks will also be in abundance.

Sprint's move has made it very likely that who ever the owner of the 700Mhz spectrum is, they are going to have to follow the open access provisions and even go the same distanced to providing an open platform. Now wouldn't it be interesting if Google has won and decided to use the 700Mhz for a WiMax network that follows the Sprint Xohm platform strategy? Makes Sprint a likely candidate for building out Google's network if they have won.

Tags: Sprint, Xohm, Google, 700Mhz, Wireless, WiMax, Disruption, Telco2

Meddling polies should focus on what matters

2008-02-22T08:55:00.005Z

I understand the need for regulation and laws, but it annoys me when polies meddle in areas for the sake of being seen to do some thing. The UK government is threatening legislation to penalise ISPs for not blocking privacy. The really idiotic thing is the UK government has already said their idea falls afoul of UK and EU data privacy laws. So what's going to happen? The government will pass the law, the ISPs will challenge in the UK and EU and the law will be rule illegal. So back to drawing board with the only accomplished is a lot of money spent on lawyers and the government been seen to do something.

Beyond the technical hurdles, there is also the political fallout from the law being overturned plus the damage this will do to a government tettering on the brink. I wonder if this new push has arisen when someone pointed out wholesale kicking off of downloaders is likely to lose Labour votes.

To me, this is massive over-reaction to a relative minor problem. Stopping downloading of content is not going to be a saviour of society nor cure its ills. There are far more pressing problems in the economy that WILL do massive amount of damage to peoples lives - credit crisis, stagflation, deep recession - that the government should be worrying about. Protecting an outdated business model is NOT the governments job.

This legislation has the air of desperation. Of a government looking down a yawing canyon of irrelevance and trying deperately to be seen to be doing something, anything.

Fiddling while Rome(London) burns.

Tags: UK Government, UK, ISPs, Policy

Driving Real Change at Microsoft - Get Rid of Win32

2008-02-22T00:00:00.000Z

Microsoft announced yesterday that it was releasing API and Client/Server interoperability details. Coming on the heals of the Microhoo! deal and Bill Gates publicly saying Microsoft is after the Yahoo engineers it must seem like Microsoft is going all open and friendly. But that misses a big point. Changing culture, particularly one ingrained and strong as Microsoft's, is not going to be as easy as publishing specs and adding a load of Yahoo engineers.

It is possible to change the culture for the better and the Yahoo engineers can play a big role, but they can't do it on their own.

The catalyst for the change is dropping the Win32 kernal and going with a Linux/BSD kernal. The Yahoo engineers then become evanglists and mentors for the adoption of the open-source kernal. The combination of the two provides a greater probability for success than either on its own. In a previous post I looked at why using a Linux/BSD kernal was a good idea so I won't go into the details. The difference between now and then is that having the Yahoo engineers makes the probabilty of sucess so much greater and faster.

Dropping the W32 kernal would be at least as radical shift in corporate strategy as Microsoft's turn around in the late 1990s to the web. We know the company can do radical strategy shifts and this would be the most radical and risky. But without doing something like this Microsoft is always going to struggle in a networked world.

I would honestly like to see this happen. It would be the single biggest threat to Google's dominance by stripping away the competitive advantage that open source provides the company.

Tags: Microsoft, Google, Yahoo, OS, Open Source, Strategy, Disruption

Fighting Inflation in Australia using Super

2008-02-20T11:47:00.003Z

Australia is one of the few nations in the world where the interest rates are rising and rising hard. Commodities boom, over indulgent consumption and 35 year lows in employment have pushed the economy to the limits of capacity.

The debate in Australia is about how to fight the inflation and the recurrent need for the RBA to raise interest rates to combat inflation now outside its 2-3% band. The Rudd Government has brought back fiscal policy to try and help fight inflation by aiming for a surplus of 1.5 to 2% and avoid the RBA rasing interest rates further (unlikely). Although given that for the past 5 years or so the budget surplus has always come in higher that the forecasted 1% its hard to see how a measly 1.5 to 2% is going to make much of difference. It probably needs to be 2.5 to 3%.

The otherside of the debate is how raising interest rates is a blunt policy instrument for fighting inflation, only effects third of households etc. What is missing from the debate is discussion on what other levers that could be provided to the RBA to manage the economy. In many economies there probably aren't many other levers that central banks could use. But Australia has compulsory super for a majority of employed people. The issue is to remove spending from the economy or put another way to increase savings and reducing consumption. Giving the RBA the ability to manage the percentage of income that is paid into super would give the RBA another lever to pull.

The advantages I see in using super contributions this way are;

It increases the savings rate across a very large majority of households
It does not directly effect the price of business investment the way interest rates do
It is spread more evenly across the economy rather than concetrated in the 1/3 of households with morgages
Individuals don't lose the money, it is simply redistribute to return in the future

The biggest problem I see is the mechanics of actually performing the changes. However, this is a solvable problem as it could rolled into financial packages that most if not all businesses use.

Another possible lever is to allow the RBA to change tax percentages about a median point. But I see that being an even tougher operation and also more politically hazardous. It could be a rather useful tool to have in the back pocket though.

Tags: Superannuation, Inflation, Australia

Incentives cause the [financial] rot

2008-02-19T10:28:00.005Z

Umair has a new post about the financial meltdown and in particular how the very people at the centre of the meltdown are walking away with massive payments. I think there is a lot about how the very incentive system used by financial institutions are at the very core of the problem.

The incentive systems are probably the single biggest cause of the problems. These systems are designed to maximise profit - which is not the same as wealth creation. The assumption that serves as the foundation of incentive systems is that the "agents" interests need to be aligned with the "owners". An assumption that I now believe is totally invalid.

The incentive systems need to promote wealth creation and not alignment of the interests. Otherwise why will an executive take a risk that has a long term payoff but will hit short-term profitability?

So how do you fix something so broken. The first is to ditch the assumption of aligning the "agents" interest with the "owners" interest. The second is to ditch the idea that a single person at the level of CEO has much effect on the overall profitability of a company. Suddenly it gets hard to justify paying ANYONE 100m salary. Indeed, CEOs make a mockery of their own job - if the share price goes down its due to the market, but if it goes up its due to the skill of the CEO. Spot the paradox?

Can the market sort this out itself? Probably not. Too much self-interest. This leads to the requirement of regulation. The key is to regulate well but lightly. Some regulation will require the out-right banning of current practices, while others are about increasing transparancy and market efficiency.

Golden parachutes need to be banned. Why a CEO should receive money to leave a job is beyond me. The sub-prime crisis has shown this for the rort it is. Which does lead to the second requirement of having all senior management and possibly contracts above a certain value requiring the agreement of a quorum of shareholders. The current negogiation world is far to cosy.

In terms of increasing transparancy, the renumeration and contracts of senior management should be published. This works fine but it helps to have this put in perspective of the how well the company is paying its employees. So companies should be required to publish the various renumeration bands, the requirements for bonuses at these bands and the number of employees per band.

But perhaps the biggest change is to remove incentive schemes that promote short-term profit over long-term wealth creation. Most of the current methods can and are easily gamed. Whether it is EPS, dividends, profit, revenue or share price increase. Most of these items are reflective of things beyond the senior managements control. So the first step is to only use measures that are effected by senior management actions. More important is only use actions that promote wealth creation (as opposed to profit).

So what measures could be used?

Employee productivity per unit cost
Throughput per unit cost
Employee statisfaction
Revenue growth per unit of productivty
Productivity growth per employee

And there are more. Most of these measures are harder to game but they are all measuring changes that change the long term wealth creation of the company. Funnily enough, most of these would reduce the awards of financial executives.

Incentive systems and the spiralling cost of financial executives is something that needs to be addressed. Otherwise you run the risk of societal unrest. Perhaps more importantly these spiralling costs are also a distortion of the market causing the mis-allocation of resources and dragging down GDP growth.

Throwing money at problems

2008-02-06T09:51:00.000Z

One of my bug bears is people insisting that throwing money at a problem will solve it. Health is a big example. Well want to know what happens when you throw pots of cash at a problem? Just look at the outcomes of the NHS. Despite all the money thrown at the NHS in recent years there has not been a corresponding significant improvement in quality or delivery of care.

There is no point in throwing pots of money at a system until you know that its processes are correct. To steal Umair's terminology, the DNA of the system has to be right. In the case of the NHS, its not. Which simply results in the money going into the system going to waste. This is not an argument about whether health care should be funded publicly or privately, only in how health care is delivered. The processes required to deliver health care. How its funded is a very small secondary issue that is more philosophical than anything else.

You have to fix the fundamental processes, the DNA, of a system before there is any hope of making improvements. This goes for companies, software or government services. In fact every system. Throwing money does little to do this.

And in the case of health care, to re-write the DNA we have to question the basic principles of health care delivery. Is the concept of Doctors, Nurses and health centres really the best method for delivering health care? Do we need Doctors? What for? Should they be the only ones to do diagnosis? Should health care rely on God-like pronouncements of what is wrong. What about Nurses? Could paramedics be made more useful?

Everything we know about health care needs to be questioned. Only then can we begin to build the framework for the effective delivery of health care.

Tags: Health, Operations, Bubblegeneration

Risk modeling in Financial Markets

2008-01-29T10:14:00.000Z

Bloomberg has an interesting article exploring how the banks are changing their risk models. Roger Ehrenberg adds some insight to the article. To me the most fundamental question that needs to be asked isn't what is the best model, but can risk even been modelled?

In all the discussion about risk and its modelling, there is always the underlying assumption that the risk can be modelled. I'm not so sure you can really model the risk. Time and again in financial markets past performance has been shown to not be a predictor of future performance (all the managed funds have that explicit on their brochures) and yet the assumption is that past risk can be used to model future risk. See the incongruence?

The market looks to be an indeterminate, chaotic system. Which to me makes the assumption of normal distribution of risk a little suspect. Being an indeterminate system, it may very well be impossible to model risk using the standard statistical methods.

Tags: Risk, Finance, Credit Crisis

EU energy plan aims to stop carbon exporting

2008-01-23T14:26:00.000Z

The EU has announced its climate change policy. What struck me most is the move to stop the exporting of carbon production to other countries. As I have previously posted this is crucial requirement for carbon trading to actual work in reducing carbon emissions.

Implementing carbon trading without something to address the issue of out-sourcing carbon, the price of goods and services in Europe would have gone up without the beneficial reduction in carbon. As many have pointed out, there is no way of making sure carbon stays on the other side of the planet.

This also changes the dynamics of the up-coming discussions on the next climate change treaty. For one, it does reduce the negotiating strength of the BRIC nations against mandatory caps. It also precedes an alliance of OECD nations which go it alone to implement mandatory emission caps and via the mechanism proposed by the EU in effect force mandatory caps on emissions on the rest of the world as the OECD still make up the bulk of the worlds affluent consumers.

I wonder if this announcement signals the tipping point to worldwide mandatory emissions caps whether BRIC nations want it or not.

Tags: Climate Change

Language and problem solving

2008-01-06T16:36:00.000Z

In the most recent New Scientist (Vol 197 No 2637) there is an interesting article discussing the issue of language and how it frames problems. The perspective of the article was that English's newtonian way of describing the world failed to frame questions properly for quantum and other similar non-newtonian physics. The article even goes so far to say that the lack of progress in non-newtonian physics is because problems are framed via the language with a newtonian world view.

Does the same problem exist in the world of the internet? While I realise the Internet world is great at creating new words, these are still framed by the overall language. A language that is "newtonian". As Internet shifts to flows and systems as opposed to objects and links, do we need to look at how we frame the discussion via language to open up the problem solving juices of the internet community? New next wave of innovation will be less around nouns towards verbs, the doing rather than the being and yet we still primarily use nouns in discussing the web and its evolution. Should verbs that describe process, systems and flow be the primary descriptors of the next web?

The article describes an example of Montagnais phrase "Hipiskapigoka iagusit". It very, very roughly translates to "singing health", a process, within which a medicine man and sick person exist. However, a dictionary written in 1729 translated into something that emphasised the objects and not the process. The web is shifting to loosely coupled processes as opposed to objects. I wonder whether the discussion of Robert Scoble's recent tiff with Facebook, would have evolved differently if the language emphasised process (say maintaining contacts) as opposed to data (the contacts themselves). The discussion was about who owned what objects (the contact data) rather than what the ins and outs of maintaining contacts. Another example is the current discussion going on about whether data is a commodity or not. Again the language is of objects rather than flow. How would this discussion evolve if it was frame by a language of flow (verbs) as opposed to objects (nouns)?

The same questions can be asked of programming. Everyone expresses the need to ramp up parallel programming to take advantage of the distributed nature of the internet and multi-core processes. However, can any real problem be solve properly while the language used to frame the problem is based on objects rather than flow? Does the conceptual framework that underpins object orientated programming preclude successful problem solving in the parallel world? Yes there are languages that focus specifically on parallel programming but I am also talking about the language used to describe and communicate the problem. These will need to respond to the requirements of a parallel world for people to solve problems and communicate solutions.

A lot of questions asked. I don't have the answers and I expect no one will for a while. It is interesting to step away from objects and consider things from a flow perspective. I even think I need to re-visit my recent post of Data Ecosystems and look at it from the perspective of flow rather than objects

Tags: Data, Language, Programming, Internet, Physics, Data Ecosystems

YouTube on Vodafone

2007-12-21T14:29:00.001Z

photo
Originally uploaded by Simon Cast

Hmmm...are you hurting Vodafone? Maybe there was value in the iPhone? Trying to play catchup?

Tags: Vodafone, iPhone