tag:blogger.com,1999:blog-12934720922217933542024-02-07T05:56:56.430-05:00The Infernal OptimistCommentary on technology, media and business.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-1293472092221793354.post-75464221717019244322017-05-21T08:32:00.000-04:002017-05-21T08:33:29.993-04:00Apropros of the PC Forum reunionIn 2005, a rich patron sent me to PC Forum 2005.<br />
The quid pro quo was a trip report.<br />
One of my favorite writers had died just prior my departure.<br />
<br />
Trawling through my files the other day, I found this.<br />
The statute of limitations probably applies.<br />
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<b><span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;">M</span><span style="font-family: "timesnewromanbdms"; font-size: 9.000000pt;">Y </span><span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;">T</span><span style="font-family: "timesnewromanbdms"; font-size: 9.000000pt;">RIP </span><span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;">T</span><span style="font-family: "timesnewromanbdms"; font-size: 9.000000pt;">O </span><span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;">PC F</span><span style="font-family: "timesnewromanbdms"; font-size: 9.000000pt;">ORUM </span><span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;">2005
</span></b><br />
<b><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">L</span><span style="font-family: "timesnewromanms"; font-size: 9.000000pt;">OU </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">M</span><span style="font-family: "timesnewromanms"; font-size: 9.000000pt;">AZZUCCHELLI
</span></b><br />
<span style="font-family: "timesnewromanitms"; font-size: 10.000000pt;"><i>In memory of Hunter S. Thompson
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 10.000000pt;"><i><br /></i></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The hot sun beat down on the Fairmont Scottsdale Princess and the polished concrete in the copiously-
fountained courtyard felt like an Itanium processor without a heat sink. I figured I could find all the cold
tequila I wanted once I got through the registration process for PC Forum 2005. PC Forum – a cloying
combination of smug success and naked ambition that Esther Dyson’s been running for over 20 years as
some fevered crossbreed between the Oprah Winfrey Show and a Stuart Smalley self-affirmation
meeting. This year the conference theme was “The World-Wide World – IT Ain’t Just The Web
Anymore!” OK, so Yahoo! donated! some! punctuation! but when was IT ever only about the World
Wide Web? Just because the high-tech market went on some peyote-fueled binge a few years ago doesn’t
erase 40 or 50 years of history. Or maybe it does – and now we get to read Mark Cuban’s revised
version.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I navigated the maze of 50” Sony LCD high-definition televisions that would be used for software
demonstrations later in the conference, found the registration desk, got my stinking badge, a tote bag that
looked like it would be right at home on the shoulder of any Botswanan tourist, and some program
material. Then I went to the front desk of the hotel to check in so I could dump the stuff in my room and
hit the pool before things started.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I knew things were going bad when the chirpy front-desk clerk looked at me like her Zanax had just given
out as I gave her my name, the conference name, the name of the person I was subbing for, Warren
Harding’s name, and then a really dirty look. No record of me existed. Luckily I didn’t have to reach
over and rip her lungs out because Brodie Crawford, Esther’s main man, intervened and then things were
cool. I made a beeline for my room, changed into my bathing suit and flip-flops and did the rest of my
prep work on a lounge chair by the bar at the main pool.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Sunday 3PM: The World Wide World
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The Sunday session is typically where PC Forum wears its social conscience on its sleeve, so Esther
welcomed us all (“us all” being about 60% of the attendees – more would arrive later to be there for
Monday’s main event), told us that “IT is expanding”, and asked the audience to “focus outside of white
engineers in silicon valley” (of which more later). Then we got to hear from Howard Gardner, Andy
Stern, and Jerry Yang, a real one-of-these-things-is-not-like-the-other trio.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Howard Gardner, professor at the Harvard Graduate School of Education, is known (by certain strata of
society) as the developer of the theory of multiple intelligences, which posits that (in humans, at least)
individual intelligence is not uniform and can develop in specialized areas. Why this was surprising in
1994 to anyone exposed to cognitive science is of minor historical interest, but Gardner’s ideas did get
some traction, so much so that he discovered a government project in Australia attempting to correlate
intelligence type with racial and ethnic origins.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Not wanting to be associated with a possible new eugenics trend, Gardner has created a “good work
project” – examining how people use intelligence in a “pro-social” way. This project has interviewed
1200 people (selection criteria not explained) to elicit their opinions on excellence, ethics and meaning
and their desire and ability to do “good work” as defined above. One interesting common theme among
young interviewees was that “I can’t do good work now, because no one else is doing it and therefore if I
do it I will be at a competitive disadvantage (</span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">paraphrase mine</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">)”. There was a clear implication by
Gardner that this was an ethical or moral bad thing, with much head-nodding in the crowd.</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span></div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Perhaps lost on a successful, tenured Harvard professor was the fact that some in the audience don’t know
where their next months’ mortgage payment is coming from, and can’t figure out how they can afford to
put their children through school or if they’ll ever be able to retire. Perhaps it was lost on a good chunk
of the audience as well.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Gardner also discussed the issue of trust in society and the concept of “trustees”, publicly-acclaimed
persons of stature who would hold the public trust and cited, interestingly, the recently late George
Kennan as an example. Compare that with a recent poll in Cambridge, MA that named Alan Greenspan,
Oprah Winfrey and Jon Stewart as current “trustees” in the eyes of those polled. He suggested that “good
work”, say in an NGO, might help 200 or 2,000 people, but that bad laws can hurt 200,000 or 2,000,000 –
the lesson being that those prone to good work build as big a power base as possible to counteract the
effect of those in power with a propensity for “bad work”.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Next, Andy Stern, President of the Service Employees International Union, asked a truly important
question: “How are we going to reward work in America?” Not for the Carly Fiorinas of the world (to
use a timely IT example) who get $100M to decimate (or, arguably, deliver the </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>coup de grace</i> </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">to) an
American high-tech pioneer, but for the rank-and-file (increasingly defined as everyone beneath the
highest levels of corporate management) who have to cope with an increasingly challenging environment
to survive.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Sterns’ facts are compelling: thirty years ago, GM was the largest employer in the US, 1 in 4 private
sector workers were union members, and one GM union job could support a family. Today, Wal-Mart is
the largest employer in the US, 1 in 12 private sector workers are union members, and it takes two to
three Wal-Mart jobs to support a family (how many of those workers do you think are of a mind to do
Gardner’s “good work”?). To Stearns’ credit, he was forthright in his criticism of past (and current)
union behavior focused solely on collective bargaining, declaring that, in the main, unions were “male,
pale and stale”. However, he was not apologetic in claiming that unions were historically the most
effective anti-poverty and wealth distribution system – without direct government expense.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Stern’s provocative closing suggestion was that, since the US is running an international trade surplus in
services (and since services appear to be a growth segment of the US economy for the foreseeable future),
we consider finding a way to use this surplus to implement job security programs for US workers.
Needless to say, many audience eyes were glazed over at this point but a surprisingly large portion gave
Stern a warm reception.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Jerry Yang, Taiwanese immigrant, raised by his grandmom, founder of Yahoo! – a guy who stuck his
thumb in the Internet pie and pulled out a billion dollar plum – should have been a great segue from
Gardner and Stern. Instead, he fielded some softball questions from Esther (who has always been a
softball pitcher; however, she seems to have gone from fast-pitch to slow-pitch over the past decade).
This yielded such wisdom as “In the next ten years (Yahoo!) can try to do what we really wanted to do
ten years ago” and “(Yahoo! has to) strike a balance in China (regarding censorship)”. I don’t think that
Esther’s approach was colored by Yahoo!’s announcement, that day, that it had acquired Flickr, in which
she had invested. Not at all.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">Sunday postscript: IAC announces it is buying Ask Jeeves for almost $2B. The search weenies are going
to be impossible for the rest of the conference...
</span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The alarm clocks in our rooms had the worst user interface ever conceived. I felt like putting one in a
FedEx box and shipping it to Don Norman. At breakfast Monday, we all discovered that we felt the same
way. Good. I knew I was drunk when I went to bed but I worried I had become stupid as well.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Monday is the big show at PC Forum. You can tell by the massive influx of CEOs, CEO wranglers and
other PR people intent on wringing every last bit of positive spin from the audience, especially those on
deadline. Great sport can be had by engaging one of the luminaries in a side conversation and then
fending off the PR cleanup detail, usually represented by attractive young women oozing ambition.</span><br />
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<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 8 AM: Tales From The Worldwide Trenches – How IT Companies Operate Globally
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">On paper, a great panel. Steve Ward, CEO-to-be of Lenovo is to lead off. But wait – didn’t Lenovo used
to be Legend? And didn’t Legend used to be owned and run by the People’s Army? Now this spawn of
Estridge and Mao is about to move its headquarters to New York and is talking about listing on the
NYSE. What would George Kennan say about that?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Ward did his best to present the very image of a modern CEO, which is to say, he was boring as hell. We
learned a) Lenovo will work in English, and b) that the two sides need “a shared vision”. Duh. Anne
Mulcahy didn’t fare that much better. She dished out some more global management pablum and let slip
one interesting factoid that Xerox’s acquisition of Tektronix revealed interesting differences in the
business practices of Fuji Xerox when dealing with Tek versus Xerox – details not disclosed, of course.
John Schwartz of Sun scored a few points by articulating some of what Steve and Anne had been groping
for – that, to be global, a company has to immerse themselves in the local market, not view it as a colony
(by merely chasing cheap labor, for example). I almost felt optimistic for Sun after John’s comments.
Almost.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 8:55 AM: “Write Your Own Ticket To PC Forum” Winner
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The winner turned out to be Peter Glaskowsky, someone whose work I followed for years when he was a
senior contributor to </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">Microprocessor Report</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">. Peter spoke for about five minutes about virtualization,
laying out the advantages (which anyone who has studied computer architecture should know by heart)
and some disadvantages (mainly that virtualization enables fascist DRM policies). While his talk sailed
right by a good section of the crowd, he unwittingly placed a land mine for Scott Charney of Microsoft
on the next panel. He also contributed a lovely anecdote: when he told his librarian girlfriend about his
impending trip to PC Forum and the conference focus, she replied “if these IT folks are going to focus on
my stuff, please ask them to fix my computers first”.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 9 AM: Security And Identity: You Talking To Me?
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">We learned from this group that “security thinking is permeating all aspects of IT” and that “security is
the fastest-growing segment of IT”. All of the panelists subscribed to the maxims that perfection is
unattainable and that the eternal struggle between usability and security will persist. However, I fell off
my chair when Scott Charney of Microsoft said “there will always be users who double-click and enable
actions that disable their machines” – hello? Why are users to blame here? Isn’t this an operating system
problem? Wasn’t he awake during Peter’s talk on virtualization? Oh, wait. He’s from Microsoft. Never
mind.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Then John Thompson from Symantec compared pervasive computing to driving an automobile, and
suggested that, just as the government imposed regulation in the name of auto safety, we might be better
served with similar regulation in the name of computing safety. Charney chimed in and asked the crowd
“how many people would favor an RFID mechanism that limited cars to the posted speed limit when
traveling?” No hands went up – not one. Say, how’s that software registration project going in
Redmond, Scott?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Was Thompson over the line when he compared computer security decentralization with the spread of
democracy, and implied either that there was no turning back or that there were sinister motivations for a
move to more centralization? I can understand the defensiveness of Scott and John – after all, one
represents arguably the most pernicious monopoly created in the last century and the other has a business
model that is based on cleaning up after it. Small wonder that Jayshree Ullal from Cisco appeared as if
she were traveling at another flight level – she did get off a great turn of phrase, though, when she blamed
part of the usability problem of security software on “too many nerd knobs”.</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span></div>
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<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 9:50 AM: The Brain: Prediction and Intelligence
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Twelve years ago, Jeff Hawkins was the lunchtime speaker at PC Forum. We (yes, I was there...) heard
him describe a novel theory of brain function that modeled intelligence as the ability to predict bits in
serial bit streams. Fast-forward twelve years. The theory has progressed, and has started to be reduced to
algorithms that can exhibit behavior associated with intelligence. According to this theory, there are four
essential attributes of the non-reptilian part of our brain:
</span><br />
<ol style="list-style-type: decimal;">
<li style="font-family: 'TimesNewRomanMS'; font-size: 11.000000pt;">
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The neocortex is a memory system<br />
(“You don’t need a neocortex to live but life is more interesting with one...”)
</span><br />
</li>
<li style="font-family: 'TimesNewRomanMS'; font-size: 11.000000pt;">
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The neocortex builds a model of the world through exposure to sensory input
</span><br />
</li>
<li style="font-family: 'TimesNewRomanMS'; font-size: 11.000000pt;">
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The neocortex predicts future events by analogy to past events
</span><br />
</li>
<li style="font-family: 'TimesNewRomanMS'; font-size: 11.000000pt;">
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Human behavior is a by-product of prediction
</span><br />
</li>
</ol>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The concept has been prototyped using a hierarchy of conditional probability distributions and a belief-
propagation system. Using a three-level hierarchy, the prototype system is capable of simulating visual
recognition of a 90-symbol set of black-and-white line drawings and variants thereof. This is a very
impressive result.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">According to Hawkins, this Heirarchical Temporal Memory (HTM) is:
</span></div>
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- <span style="font-family: "timesnewromanms"; font-size: 11pt;">Broadly applicable to a wide-range of problems
Fundamental technology</span></div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"> - Can be made faster and deeper than human memory<br /> - Can be extended to “exotic” senses (SONAR, LIDAR, etc)
Is non-threatening (it’s just memory)
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
</div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">There is a research institute (The Redwood Neuroscience Institute, </span><span style="color: blue; font-family: "timesnewromanms"; font-size: 14.666666984558105px;">www.rni.org</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">), a book (<i>On<br />
</i></span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Intelligence</i></span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">, Jeff Hawkins, Times Books 2004, ISBN 0-8050-7456-2) and a start-up (Numenta, </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><span style="color: blue;">www.numenta.com</span>) working to further develop these concepts. While I try to curb my enthusiasm about
such things (and, if behavior is a by-product of prediction based on past events, then by what mechanism
am I writing this? Is there, biologically speaking, truly nothing new under the sun?), HTM has the
potential to take engineering work based on neural networks to a significantly higher level. You gotta
root for it.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Wow. Something that might be mistaken for real technology at PC Forum – can we keep up the pace?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 10:40 AM: Afternoon Overview: Company Presenters Present Themselves
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Nope. If Esther was trying to get beyond “white engineers in silicon valley”, she only succeeded in the
silicon valley part. Talk about pale, male and stale. Ten startups (well, nine startups plus Opera), ten
male CEOs. Each given two minutes to set the stage for a 30-minute presentation later in the day. The
first one, Jeremy Jaech, CEO of Trumba, did a pitch that was so bad that he (or more likely, his PR firm)
should have been taken out to the courtyard, weighed down with stones and tossed into the fountain. I
take that back. The PR firm should have been drowned for the pitch – Jaech should have been drowned
for the business model – calendar consolidation. Maybe a nice feature, probably not a whole business.
But what do I know?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Or how about EVDB, which has raised perfectly good venture capital to “become the </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">de facto </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">standard to
help people discover events they might be interested in”? Like Dave Barry says, “I am not making this
up”...or Grouper Networks, “a peer-to-peer file-sharing network with built-in community and privacy,
and an operating plan that might help keep it legal”? And people wonder why the wheels are coming off
the US technology car.</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span></div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I noted three presentations that might be worth my time (well, the readers time, actually): Opera
Networks, Rearden Commerce, and Brightcove.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 11:20 AM: Health Care: No Patient Left Behind?
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">This panel got off on the right foot when Carol Diamond of the Markle Foundation noted that “Healthcare
IT is automating things that don’t work well”. Caroline Kovac of IBM piled on by noting that, in a
trillion dollar system (US healthcare, all in), there’s probably $450B of waste. Larry Augustin of
MedSphere noted that 100,000 people die each year in the US due to preventable medical error – 7,000
due to illegible handwriting (</span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>there’s</i> </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">a case for Catholic schooling...).
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Lonny Reisman of Activehealth Management weighed in with a timely comment on the Terry Schiavo
case – what led to her initial cardiac arrest was a low potassium level, a very critical symptom that should
have been, but was not, caught during prior examinations. Could better patient recordkeeping (abetted by
IT) have prevented this whole legal mess and, incidentally, saved the woman’s life?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Augustin described his new business, which combines healthcare IT and the open source software model
by taking a patient record system, VISTA, that was developed at taxpayer expense by the VA, and
bringing it to market.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Much handwringing ensued. Dawn Lepore of Drugstore.com was a no-op on the panel.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 2 PM: Company Presentations
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;"><b>Rearden Commerce</b></span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><b>.</b> I knew this company as Gazoo, and its CEO, Pat Grady, when I worked on the
Street five years ago. Can’t say the new name is much better – it’s both polarizing (depending on your
opinion of Ayn Rand) and unoriginal (Rearden Steel was Steve Pearlman’s name for WebTV while in
stealth mode). Also, Pat’s personality is abrasive – but, he’s put $3M of his own money into this project,
and tenacity counts.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Rearden may be on to something. In the time since I last saw them in a San Francisco storefront, they
have developed a solution for enterprises to enable and manage employee purchases of services (travel,
hotel, car, shipping, etc) based on an extensible service-oriented architecture. The initial solution is sold
as a subscription, and has attracted the attention (and dollars) of several large customers including
Whirlpool and Motorola, who replaced about a dozen home-grown applications with the Rearden
solution.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Rearden has partnered with HP, which will resell Rearden Employee Business Services (EBS)
applications as part of HP’s business-process outsourcing product line. The Rearden Commerce
framework is also being evaluated by several partners as a means to develop applications beyond EBS.
Rearden itself has the opportunity (and strategic challenge) to take this technology wider (as a
connectivity and commerce platform) and deeper (as a developer of additional vertical applications).
</span><span style="color: rgb(0.000000% , 0.000000% , 100.000000%); font-family: "timesnewromanms"; font-size: 11.000000pt;">www.reardencommerce.com</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanbdms"; font-size: 11.000000pt;"><b>Opera Software</b></span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><b>.</b> The publicly-traded, Swedish supplier of web browsers, viewed as a contender for
number two in the US before Firefox released last year. Jon von Tetzchner, Opera’s CEO, did a good job
positioning Opera against the competition, and highlighted its key differentiator of comparable behavior
across platforms ranging from desktop PCs to cell phones. Opera can probably hold share in the
embedded browser segment, but it’s hard for me to see how, without substantial marketing expense, the
company can significantly increase its share in the US market. Especially since it costs $29 and Firefox is
free. </span><span style="color: rgb(0.000000% , 0.000000% , 100.000000%); font-family: "timesnewromanms"; font-size: 11.000000pt;">www.opera.com</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">.
</span></div>
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<span style="font-family: "timesnewromanbdms"; font-size: 11pt;"><b>Brightcove</b></span><span style="font-family: "timesnewromanms"; font-size: 11pt;"><b>. </b>Jeremy Allaire parleyed a mediocre web database product (Cold Fusion) into a small
fortune, got his company acquired by Macromedia and took the CTO job after Norm Myerowitz moved
on. Now he’s raised capital from General Catalyst and Accel to create what is effectively an iTunes
video store for independent content producers. So, no major-label content? Hmm...</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11pt;"><br /></span></div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">We saw a mock-up of the service, which featured a selection of Warren Miller ski videos. Allaire asked
who in the room knew of Warren Miller, and most of the pale, male hands shot up (mine included). We
were treated to a barrage of Flash eye candy as we were taken through a purchase and got to watch part of
the video. Yawn. I think that Apple, Direct TV, Comcast, Time Warner, Disney, Viacom, the rest of the
cable MSOs and my daughter’s guinea pigs are all working on similar projects.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">So, from the back of the room, I asked Jeremy if he intended to exercise editorial control over content, or
let this system find its natural market, that is, porn. Answer: no porn. Prediction: no business. The big
guys are going to have major studio content. Without porn, Brightcove gets Warren Miller films. If I
went to a street corner in downtown Phoenix, and I asked 1,000 people if they’d heard of Warren Miller,
maybe I’d get about 5 positive responses. So Brightcove is going to have to work very hard to aggregate
a large enough collection of marginalized content (Lithuanian language lessons, curling videos, etc) to
break even.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The good news is that Brightcove’s VCs, if they come to their senses in time, will only flush $5.5M. Or
maybe Jeremy is hoping that Dan’l Lewin, who was standing behind me, will snap this turkey up for
Microsoft before anyone figures out what kind of bird it really is. </span><span style="color: rgb(0.000000% , 0.000000% , 100.000000%); font-family: "timesnewromanms"; font-size: 11.000000pt;">www.brightcove.com</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Monday 6:30 PM: Cocktail Reception and Dinner, Emily Levine
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I needed several drinks to wash some of the howlers I’d heard throughout the day from my mind. But
that still couldn’t dull the persistent yammering of the PR folks and startup CEOs trying to pitch their
deals to anyone who looked like a potential investor. I finally found a guy who had enough empty glasses
in from of him to indicate the seriousness of his intent, and we enjoyed a fine dinner together. He turned
out to have attended every PC Forum, and we began to trade stories. He also turned out to have been
Regis McKenna’s first general manager, and did a lot of work for Apple in the early days. Here’s my
favorite excerpt from his side of our well-lubricated dialogue:
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">When Apple was planning to run their first full page ad in the Wall St. Journal, the original version only
featured Steve Jobs as the inventor of the personal computer. When shown the mock-up, Mike Markkula,
CEO of Apple at the time, turned white, and said, “there is another Steve you guys should meet”. And so
Steve Wozniak was added to the photo and body copy, and the ad ran featuring the two Steves. A few
days after the ad ran in the Journal, my new-found friend’s phone rang at work. It was the receptionist
telling him that “some old lady is on the phone yelling about the Apple ad”. Foolishly, my friend took the
call and found himself talking with Mrs. Wozniak (as in ‘mom’), who proceeded to chew him out
vigorously, saying “my boy did all the work and why is that Steve Jobs getting credit for it?”
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">And that, gentle readers, made the day entirely worthwhile.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">After dinner we were entertained by Emily Levine, best described as a cross between Bette Midler, Lilly
Tomlin and Wallace Shawn. She did a good job recapping the days’ events and pointing out the
humorous inconsistencies therein. This was followed by the traditional PC Forum jam session, which
was an unassailable argument against that particular tradition.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Back at my room, there was that stupid alarm clock again. The wake-up call desk was jammin’.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 8 AM: Friction Can Be Good!
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">If you’ve been around the block more than a few times, you’re familiar with a style of management book
writing that takes a current phenomenon and tries to spin it into a story for the ages. So when I saw that
</span></div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">John Hagel (the third) and John Seely Brown (the first) had written a new book (</span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">The Only Sustainable
Edge</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">, John Hagel III and John Seely Brown, Harvard Business School Press 2005, ISBN 1-591-720-0), I
had a good idea of what to expect from this session (thank you, neocortex...).
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Turns out that both John’s have been spending time in what we used to call the Far East, with Toyota and,
of more novelty, the Chinese province of Chongqing (nee Chungking), home to 10.2 million people.
Chongqing now accounts for over 50% of worldwide motorcycle production, having reduced the export
price of motorcycles from $700 to $200 in the last ten years. The bulk of the session was goggle-eyed
reporting of the methods used to achieve this.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">One cannot argue with the success of Chonquing (certainly not Honda, which has been forced out of the
Asian motorcycle market as a result), and one has to admire the ingenuity of the Chinese in organically
developing a design style and a manufacturing and supply network that has taken advantage of the current
Chinese environment to achieve an optimal result. But many of the John’s “requirements for productive
friction” are not all that revelatory: the need for performance metrics, highly-motivated people with
relevant skills, focused action points and pattern recognition are all concepts that been used and taught
for many years. Furthermore, anyone who tried to transplant the Chongqing model to another culture will
immediately bump up against problems in infrastructure – labor laws, intellectual property laws, cultural
differences, etc. In fact, the Chinese themselves will erode the efficiency of Chongqing as its society
continues its (cultural only, we hope) march toward the West. Wasn’t it Norman Augustine who once
said that the best way for the US to compete was to export lawyers?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">A memorable term did surface: </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>innovation blowback</i></span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">. This is what happens when, say, a US company
treats an emerging country as merely a market rather than a source of innovation. Then the smart people
in that country take the products or services, improve them, and export the improvements back to the US
to the detriment of the original supplier. Sound familiar? Now we have a good name for it.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Then came the more entertaining metaphors including the Chongqing “motorcycle reference
implementation” as another example of the open-source concept in action, and the prescription that the
key to IT is SOA plus virtualization plus social software, all coming together to create a shared virtual
collaborative workplace. I don’t know if this prescription will kill anybody, but at least the handwriting is
legible.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 8:40 AM: Presence In The Enterprise
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">By 8:40, the three cups of coffee I’d downed to jumpstart my consciousness had begun to kick in, so I
was particularly attuned to the message of the next panel. And the message was: Me! Me! It’s all about
Me! I want others to know where I am! I want others to know what I’m doing! So that they can find
ME! But only when I want, because my schedule is Mine! And no one is more important than Me!
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Or are they? Richard Schwartz, CEO of SoloMio, justifies his business model by noting that it increases
the number of billable events to a wireless carrier. So instead of a non-answered call which costs me
nothing, I can look forward to a SoloMio mediated call, which costs me something. What part of me is
that about, exactly? My wallet, I guess...
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The other members on the panel, Charles Digate of Convoq and Johannes Ernst of NetMesh, discussed
their respective technologies and benefits at length, but what struck me was the inordinate complexity and
cost to manage something that is probably better managed by turning one’s cell phone or PDA or PC off.
Digate managed to get in a howler: “...Flash, which as we all know everybody has...”.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I suppose that the escape clause in my argument is the word “Enterprise” in the session title. And I won’t
argue that business communications is sometimes frustrating. But I would argue that these and other
proposed solutions are, like healthcare IT, automating things that don’t work well. And yesterday’s
enterprise technology seems to become today’s consumer technology.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
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<span style="font-family: "timesnewromanms"; font-size: 11pt;">This panel was all the more ironic thanks to </span><span style="font-family: "timesnewromanitms"; font-size: 11pt;"><i>The New York Times Magazine</i></span><span style="font-family: "timesnewromanms"; font-size: 11pt;">, which on March 20
published a piece titled </span><span style="font-family: "timesnewromanitms"; font-size: 11pt;"><i>Bad Connections</i> </span><span style="font-family: "timesnewromanms"; font-size: 11pt;">by Christine Rosen, where she argues persuasively that
“personal technologies like our cells (</span><span style="font-family: "timesnewromanitms"; font-size: 11pt;">sic</span><span style="font-family: "timesnewromanms"; font-size: 11pt;">) and TiVos have put us out of touch with the manners and mores
of public life.” She would have enjoyed observing the behavior of the gadget-laden at this conference.</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11pt;"><br /></span></div>
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<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 9:30 AM: Fast Data In The Enterprise
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Disclaimer: Stan Zdonik and are old acquaintances and better friends after this conference. It turns out
we’ve led eerily parallel lives. Please note, however, that if he dished drek it would have been duly
reported.
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">StreamBase Systems was formed out of research Stan did with Mike Stonebraker at MIT and others to
apply familiar SQL approaches to real-time streaming applications. StreamBase has developed a stream-
processing engine that provides low-latency, fault-tolerant SQL operations on data from trading systems,
credit transaction processing systems, communications networks and other sensor arrays, allowing
optimization of the kind and amount of data that must be stored. They also provide a graphical
development environment to model the data streams and the operators thereon.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">There are several very neat tricks employed to make this work: one is to break up the continuous stream
of data into “time windows” of fixed length and apply operations on the window. Of course, the results
have to be correlated and relations that cross window boundaries have to be accounted for. A storage
hierarchy is employed to maximize performance – nothing completely new here except that it’s
economically feasible to think about terabyte in-line databases, which certainly helps.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">As you might imagine, the financial and intelligence communities are all over this. I suspect that other
organizations involved in electronic commerce will be enthusiastic supporters as well. Stonebraker is a
known quantity to VCs, so StreamBase quickly attracted investment from Accel, Bessemer and Highland,
and should have the resources needed to prove their business model hypothesis.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">In our conversations over drinks later, I suggested to Stan that moving to operations on time-based data
might be like the motion from arithmetic to calculus was for numbers, which leads naturally to the
question of what new operators (beyond SQL) will emerge from this development. He said he’d think
about this, but first he had to go to a meeting in Nashville, in his role as President of the International
Bluegrass Music Association.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">So, the “potentially important new stuff at PC Forum” count goes to 2.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 9:50 AM: Strategy In Practice – Interview With Ann Livermore
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The only question that need be asked about this session: would HP’s stock price go up after it was done?
Answer: not in my book, and apparently not in the market either. Here was a room full of people that
were arguably more knowledgeable about HP’s situation than most, and Ann was serenely justifying the
HP/Compaq merger by citing their server volume leadership. This is like captain of the Titanic serenely
observing the part of the horizon that wasn’t sporting any icebergs.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Now, I understand that, as a senior executive in a major US corporation, you can’t air dirty laundry in
public, but to not acknowledge that the company is, at least, undergoing a period of uncertainty is equally
irresponsible. On the other hand, Ann didn’t have to dodge any hard questions, because they weren’t
asked. Esther wasn’t throwing softballs, she was lobbing Nerf balls.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">After this dismal performance, one person in the audience told me “I just spent seven figures on storage
products from EMC because I couldn’t get HP to sell me anything. And HP is our preferred provider.”
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
</div>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The 10:15 break was welcomed by all.</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span></div>
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<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 10:45 AM: Open Source: A Working Model, Not A Movement
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Open source might not be a movement, but according to Mitchell Baker of the Mozilla Foundation,
“proprietary software is an evolutionary aberration”. That certainly got the audience’s attention, and so
began a discussion of trends in open source.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Larry Augustin, not on the panel, actually did the best job of describing the phenomenon (</span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">my
paraphrase</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">): First, open source was only games, and people said “that’s fine but those open source
zealots will never make a compiler”. Then everyone started using gcc, and the naysayers said “that’s fine,
but those open source zealots will never build an OS”. Then Linux started gaining ground, and the
nattering nabobs of negativism said “that’s nice, but open source will </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">never </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">be used to make
applications”, and now we have Apache, Sugar (an open-source CRM tool), Firefox and VISTA, to name
a few.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">So, maybe, when an application becomes generic enough, its evolutionary destiny </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">is </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">to become open
source. If so, then what is the future of the software industry? One obvious implication is that new
software businesses will be nichier, and therefore smaller. No more Microsofts (even without the Justice
Department being asleep at the switch) or Oracles. The big companies will look more CA, gaining their
size from aggregation, not million-unit software licenses. There will also be services businesses that add
value to generic open source applications by performing customization, installation and training. But
that’s a 40% gross margin business, not a 90% one.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Then there’s the issue of testing. Even if you assume that an open source mechanism can deliver
adequate functional testing (a topic of some debate), it’s very hard to imagine an open source community
with the resources to do comprehensive compatibility testing.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Enter SpikeSource. Its business model is to offer the resources, on an outsourced basis, to anyone
needing such testing. SpikeSource can also manage patch distribution, which evokes images of
Marimba’s “push” technology, which evokes images of Kim Polese, Marimba’s photogenic CEO...and
guess who’s running SpikeSource? That would be Kim.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I’m thinking: is there a giant meta-neocortex running the Universe that recognized a pattern and predicted
this? Or, maybe I’m just getting hungry...
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 11:25 AM: Contest Winner
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Oh, the contest. Haven’t mentioned that yet. See, we were all supposed to vote on the company most
deserving of $50,000 in CNET advertising, based on their presentations Monday afternoon. And the
winner is...Endeca, which enables focused searches through large databases. Endeca’s running $10M
quarters, so I question the impact of their prize. Was the voting influenced by the IAC news Sunday?
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 11:30 AM: New Directions in Search: Mirror Mirror On The Wall
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Endeca’s win provided a great segue into the final panel. Representatives from several search companies
discussed the direction of search technology and the search business. An issue was the evolving
definition of “relevance”, from just page counts to results based on personalization and context (and if
you are leaping ahead to thinking about a potential problem, that too much personalization and context
can lead to narrow result spaces and the creation of “personal silos” of information, then blame your own
neocortex, not mine...). Another was presentation, both on the traditional desktop and in portable
devices. I am personally interested in the non-traditional desktop, but that is another story...
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">As this panel ran long and my stomach began to garner more of the focus of my autonomous nervous
system, I headed for the door but remember thinking “who would have predicted that PC Forum 2005
would end with a discussion of Library Science? And why weren’t any librarians on that panel?”</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span></div>
</div>
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<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Tuesday 6:00 PM: Joint Dinner Reception With Flight School
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
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<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">You may have noticed a gap in the timeline from noon to 6 PM. I admit it, I couldn’t bring myself to
participate in a discussion of either a) Education, or b) User-Generated Metadata. I knew that (a) would
degenerate into well-meaning bloviating and I had done enough metadata generation of my own in the
past two days to avoid (b). I opted instead for the non-judgmental company of the waitress by the pool.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Flight School is Esther’s attempt to leverage some of the energy (and wealth) generated by IT to other
purposes, in this case aviation and “mobility”. There were some conference attendees overlapping, and
the idea of a joint dinner was a good one.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Our dinner speakers were Bruce Holmes of NASA Langley Research Center and George Butler, producer
of </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">Shackleton’s Antarctic Adventure </span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">and </span><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">Pumping Iron</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">, among others. George gave us a sneak peak of a
new film he’s made about the Mars Exploration Rovers, coming soon from a major studio whose name
we all promised not to tell. It’s awe-inspiring, and makes you proud to be a geek.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Bruce talked about current NASA issues. He shunted questions about Hubble aside laying all the blame
on Congress. He talked about interplanetary issues, including creating public-sector and private-sector
spaces in Earth orbit and beyond. I asked him how this zoning plan for the solar system would play out
if, by the time we got back to the moon, the PRC was there as our welcoming committee. No good
answer to that one either. Most of the conversation then turned to private aviation, a topic of obvious
interest to the entrepreneurs and pilots in the audience. A lot of the conversation focused on personal
aviation, and what could be done to make personal aviation faster, safer, and more flexible.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">The entertainment portion of the dinner program continued during the question-and-answer session when
a long-time PC Forum denizen, co-creator of a seminal application, a nice guy, but noted for his ability to
become almost mind-numbingly incoherent in conversation, asked a question that veered off course into
the semantic troposphere and was simultaneously shot down by both participants and Esther, all claiming
microphone trouble.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">After the dinner session broke up, I found myself talking to Cameron Burr, son of Donald Burr, founder
of People Express. He’s working for his dad, who has partnered with Robert Crandall, former CEO of
American Airlines (and RI native) to create a new non-scheduled, point-to-point air taxi business called
Pogo using the next generation of low-cost very light jet aircraft (VLJs) that are in development now from
companies like Adam and Eclipse.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Bruce Holmes, Cameron and I ended up (where else?) at the bar trading airplane stories and wrestling
with the finer points of strategy for Pogo. I probably learned more than I was supposed to, but isn’t that
the point?</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><i>Postscript: Wednesday 7AM Breakfast
</i></span><br />
<span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">I ran in to Esther at breakfast. She was prepping for her Flight School debut, but managed to pop her
head up from her laptop to be sociable. I told her about the previous night’s conversation, and then
opined that, if private aviation follows the paths described, we were likely to end up with a bifurcated
travel system in the US akin to “taxis and buses” on a national scale. I suggested that an unintended
consequence of this bifurcation could be reduced flexibility, and perhaps opportunity, for those only to
afford “bus” travel. This in turn could have a negative impact on travel and location-based entertainment
businesses, like Disney.
</span><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">Esther looked at me and said “well, we can’t all be rich”. </span><i><span style="font-family: "timesnewromanitms"; font-size: 11.000000pt;">Certainement, mademoiselle Antoinette</span><span style="font-family: "timesnewromanms"; font-size: 11.000000pt;">... </span></i><br />
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"><br /></span>
<span style="font-family: "timesnewromanms"; font-size: 11.000000pt;"> -30- </span></div>
</div>
</div>
Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-81105176989007128532017-02-12T11:16:00.000-05:002017-02-12T19:50:06.689-05:00Why Are They Twittering? A Modest Proposal.Twitter just reported another in a string of 'disappointing' financial reports showing:<br />
- year-over-year revenue growth below 1%<br />
- effectively flat user growth (4.5% yer-over-year vs 3.3% 3Q year-over-year)<br />
- average revenue per user (ARPU) fell 4%<br />
- global ad revenue flat, US ad revenue down 7%<br />
- stock-based compensation up1%, marketing expenses up<br />
- operating loss on $771M<br />
<br />
TWTR is hitting new lows on the news, but the company still has an $11B market cap.<br />
<br />
This valuation reflects classic "there must be a pony in here somewhere" thinking - shareholders are generally loathe to watch their investment (or stock options) burst into flame, so it is not surprising to see intense amounts of flailing and bloodletting while players scramble to patch the leaks in this Titanic.<br />
<br />
Just before this report, I had the opportunity to explore Twitter's future with a bunch of undergraduate business majors. Not one of the 30 or so students (who should be squarely in the company's target market) claimed to be a regular Twitter user. Not one of them said they would pay a subscription for the service. When asked to imagine what Twitter might do differently, their responses were not much different from what Twitter management is proposing - but when I asked how successful any of those moves might be, I got shoulder shrugs. <br />
<br />
One brave soul suggested that Twitter close down, not unlike Michael Dell's approach to Apple during that company's darker days. While I can see the merits in that option (it's certainly better than watching the company's cash pile shrivel to zero), I think there is something about Twitter that keeps everybody from just throwing up their hands. But that something may not be, as they say, "monitizable".<br />
<br />
Where Twitter has consistently shown value and differentiation is as a lightweight, organic, slippery communications conduit for transient social events - from fluff like the latest Kardashian antics to<br />
more meaningful events, like Arab Spring. This makes sense given its embrace of lightweight clients built around SMS messaging. <br />
<br />
Twitter has tried to get celebrities to pay the freight with 'promoted' tweets, and there is probably a niche market in the PR industry for this that is sustainable, but not at the scale dreamed by Twitter investors. Likewise, there may also be a news industry niche as a headline aggregator. Both of those niches, however, are coming under more intense fire from competitors.<br />
<br />
One Twitter response is video. Not only is Twitter late to this party, but stuffing a Twitter feed with video a) requires a bigger client that is harder to make ubiquitous), and b) gums up the lightweight, casual Twitter interface that is one of its key differentiators.<br />
<br />
So, Twitter may ultimately be one of those good ideas that is not a good business. If the world values the original idea, a non-shutdown option presents itself: <i>turn Twitter into a non-profit</i>.<br />
<br />
Making Twitter a non-profit organization would preserve the parts of Twitter that society seems to value, while freeing it of the constant struggle to justify its existence to Wall St.<br />
<br />
It is possible? Maybe. What if:<br />
- A majority of Twitter shareholders agree that this is a good idea (or at least a way to salvage<br />
something from their investment)<br />
- The IRS lets shareholders contribute their TWTR stock to a new tax-exempt non-profit<br />
foundation and take a deduction (at their basis, not an inflated value)?<br />
- Substantial additional reductions in headcount get operating expenses to a level that<br />
can be supported by interest on Twitter's existing cash (around $3B) plus some donations<br />
from foundations interested in freedom of speech and communications around the world?<br />
This would imply some R&D to make messages hard to stop.<br />
<br />
That organization would have a comprehensible mission, and the hope of a sustainable future.<br />
As opposed to Twitter, which has an incomprehensible mission, and a dubious future.<br />
<br />
<i><br /></i>
<i>Full disclosure: I'm an extremely casual (a few times a year) Twitter user. It doesn't work on my dumb phone. I tried on my desktop, and the content wasn't compelling compared to my Facebook feed. I get my stupid Presidential tweet fix from Facebook re-posts. I'm not trying to build a business based on "followers", so that aspect is also irrelevant. After this experience, I am reminded of nothing so much as Biggus Dickus's query in Monty Python's </i>Life of Brian<i>: "Why are they twittering"?</i><br />
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<br />Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com1tag:blogger.com,1999:blog-1293472092221793354.post-82732483295908454442012-08-16T09:19:00.000-04:002012-08-16T09:19:38.728-04:00Found while following Apple/Samsung anticsA long, long time ago, I put my feet up and imagined what could happen given the trajectory of several technologies. I'm not claiming anything, but I continue to be chagrined about the dysfunctions of the US patent system and the definitions of "novelty", "obviousness", "prior art", and "skilled practitioner".<br />
<br />
This was published in 1998 (click near the page number for larger view):<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7ng7q4x02rXTwK-xQIL-nrZ8nHoGzgrksHrBM0G1v1fT55M63CuUMYQP09vch7tF73RAFMJ3bOZfXBrBGpSjj9XVXzz63BuPMHoLsyheTdSZ67nJqhsB3cEy2250kTznuG7t7n0JsZPrP/s1600/CM0998.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7ng7q4x02rXTwK-xQIL-nrZ8nHoGzgrksHrBM0G1v1fT55M63CuUMYQP09vch7tF73RAFMJ3bOZfXBrBGpSjj9XVXzz63BuPMHoLsyheTdSZ67nJqhsB3cEy2250kTznuG7t7n0JsZPrP/s640/CM0998.png" width="494" /></a></div>
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Now, back to my popcorn.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-38575032789086833502012-06-19T15:20:00.003-04:002012-06-19T17:51:48.320-04:00Scratching the SurfaceIt requires a certain critical mass for me to emit a blog post. Yesterday's unveiling of the Microsoft Surface devices has prompted copious product commentary, but I think the big story has little to do with speeds and feeds, or competition with Apple.<br />
<br />
The Surface announcement is the best demonstration of the systemic weakness of the Wintel ecosystem, ever. While multiple sources of pressure have been building to strain this long-standing duopoly, Microsoft's decision to manufacture its own tablet device may well push the water over the edge of the dam.<br />
<br />
In addition, as a Microsoft shareholder, I'm concerned about the impact of this announcement on the company's overall performance. More on that later.<br />
<br />
First, the industry impact. If we set the wayback machine far enough, we can go back to a time when personal computer manufacturers actually added substantial value beyond the semiconductor components supplied by Intel and its competitors.<br />
<br />
A company called Compaq, for instance, distinguished itself in the business market by spending significantly on R&D to make Intel-based hardware reliable and serviceable enough to be taken seriously by enterprise customers. They were able to charge a premium for their work.<br />
<br />
Compaq's competitors, like Dell, were happier to take Intel reference designs, which were not quite as robust, bend some metal around them, and compete on price. Intel and Dell responded by labeling Compaq solutions "proprietary" and simultaneously adding features into their reference designs, reducing their value to commodity levels. Dell and its ilk won.<br />
<br />
Intel was also working hard to migrate more and more value of a PC into its chips. They were fairly successful at this, ultimately capturing most of the value in a PC and leaving table scraps of margin for their OEM partners. Years ago I imagined that Intel might just go ahead and put the OEMs out of their misery, but it dawned on me that Intel was brilliant in outsourcing the misery - why would they want it?<br />
<br />
The other winner at the head of the PC food chain was, of course, Microsoft. They basically collected a tax on every Intel-based unit sold by every company except Apple. Life was good in Redmond.<br />
<br />
Meanwhile, at the end of the value chain. PC companies were fighting over increasingly smaller scraps. The shakeout killed Micron, Gateway, and, ultimately, Compaq. IBM had the good sense to see the handwriting on the wall and rebuild its company around services. Now HP and Dell are trying to catch up.<br />
<br />
Meanwhile, Wintel-based product design has suffered from a combination of consumer malaise and OEM fear, resulting in underspending in R&D. Above the chip level, Intel has maintained a leisurely R&D pace, with the ultrabook reference design a recent example. But, as we all know, Apple spoiled the party by creating a new category and nailing it with the iPad and its app ecosystem. Android tablets piled on. Wintel OEM response has been ham-fisted at best, partially because neither Intel nor Microsoft was ready with a fast response.<br />
<br />
But Wintel OEMs are also fighting for their survival, are being pulled in multiple directions from external and internal forces, and are shedding resources like clothing on a hot day. Microsoft must have felt that, left to their own devices, it would take so long for OEM partners to come around that it would be impossible to play catchup.<br />
<br />
In addition, Microsoft could do the same bill of material arithmetic everyone else was doing and conclude that, for some devices, ARM had a place and an Intel premium was not worth paying.<br />
<br />
The result - Microsoft takes matters into its own hands. It uses an ARM processor to compete on price, and an Intel processor to ride its Office monopoly. These are not dumb moves.<br />
<br />
But, Microsoft has hit its OEM partners squarely in the face. This is not a Zune. nor is it a Microsoft mouse, each of which could have complemented an OEM product. If successful, Surface devices will take lots of dollars away from mainstream OEM products.<br />
<br />
Intel probably views the ARM-based Surface as a minor annoyance. They have seen Microsoft move to other processor architectures before (NT on Alpha, anyone?), and know they can usually play the long game and win business back.<br />
<br />
But the PC OEMs are a different story. I'd hate to be at HP while I watch the last vestiges of any proprietary advantage in tablets with WebOS walk out the door. I'd like to think that Google might use this event as a reason to really woo PC OEMs with a non-balkanized version of Android, but I'm not holding my breath. Besides, Google would have to come up with a unified Android app marketplace that OEMs could white label, and share revenue. That could happen. And pigs could also fly.<br />
<br />
It's no sure thing that Microsoft will make Surface work. But let's suppose they do. As a MSFT shareholder, I can therefore look forward to some increased revenue, and lower gross margins as hardware gross margins become a more significant part of the Microsoft product mix. And I'm wondering, why in heck isn't there a new arms-length company being formed to do this, so margins aren't diluted across the enterprise? Intel continues to outsource value chain misery, and here is Microsoft jumping to take it on. <br />
<br />
For an outside observer, the new array of moving pieces created by this announcement is awe-inspiring in its complexity and unpredictability. The Surface announcement party may be over, but the real fun in Wintel-land is just beginning.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com7tag:blogger.com,1999:blog-1293472092221793354.post-60198870152283863542012-04-17T18:55:00.000-04:002012-05-07T08:47:57.672-04:00Rational Economic Behavior and the Internet: Why You Want to Pay Per Packet<div style="color: #231f20; font: normal normal normal 10.5px/normal Helvetica; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: left;">
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><i>Originally published in 2010.</i></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><i>Verizon has raised my rates since then. Grrr.</i></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><i>This bolsters my argument.</i></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><i><br />
</i></span><br />
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">It’s always dangerous to give me spare time, an Internet connection, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">and a calculator. </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">I have been thinking about this particular issue for </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">many years — any kind of “all you can eat” model has always struck </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">me as suboptimal, and my reaction to the growing popularity of flat rate </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Internet connection pricing based on connection speed is the same </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">as my reaction when Pets.com offered free shipping on 50-pound bags </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">of dog food back in the day: <i>buy all you can, ‘cause this deal can’t last</i>.</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Internet customers (at least in the US) seem to have figured this out. </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Their usage of bandwidth continues to grow at very high rates while </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">flat-rate pricing is the norm. This is rational producer and consumer</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">behavior; there is neither disincentive to produce “fat” content or applications </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">nor disincentive to consume them. This has been a lurking but </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">invisible problem in the wired world, where bandwidth is relatively </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">cheap. But the problem has become visible recently in the wireless </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">world, where bandwidth is more expensive (because it is more scarce). </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">We have all seen reports of wireless carriers struggling to keep up with </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">network demand created by the latest smartphone or media application.</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">It costs real money to upgrade networks to keep pace with this demand, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">and those costs are ultimately borne by the subscriber. So in the US, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">we have carriers trying to raise their rates to offset increases in capital </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">and operating expenses to the point where consumers are beginning </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">to push back, and the shoving has come to the attention of the Federal </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Communications Commission, which has raised the possibility of treating </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Internet network providers as common communications carriers </span></span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;">subject to regulation.</span></div>
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</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">I believe that flat-rate pricing is a major source of problems for network </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">carriers and consumers. In the carrier world, the economics are known </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">but ignored because marketers believe that flat rates are the only plans </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">consumers will accept. But in the consumer world, flat rates are rising to </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">incomprehensible levels for indecipherable reasons, with little recourse </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">except disconnection. Consumer dissatisfaction is rising, in part because </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">consumers feel they have no control over the price they have to pay. This </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">is driven by their sense of pricing inequity that is hard to visualize but </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">comes from implicit subsidies in the current environment. The irony is </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">that pay-per-use pricing solves the problem for carriers and consumers.</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<b><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;">The Current State</span></b></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Let’s do some arithmetic. I went to the statistics page on my router, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">where it reported that in the past 47 days I had sent and received </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">around 15 million Internet packets. I rounded that up to 20 million,</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;">then derived the following:</span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span></span><span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">20 million packets in 47 days</span></span><br />
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">425,532 packets/day</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"> - 12,765,597 packets/month</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">How big is a packet? Like many questions, the answer is, “It depends.” </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">After a little research, I determined that my average packet size was </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">somewhere between 557 </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">and 1,500 (an average rich-media </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">packet size) bytes. Then I made some assumptions about my traffic:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span><br />
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">- </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">557 bytes (60% of traffic)</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">1,500 bytes (40% of traffic)</span></span><br />
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>934 bytes (weighted average packet size)</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Now I had an average packet size, and I had my packet traffic per </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">month. So how many bits is that?</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">7,474 bytes (weighted average bits/packet)</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">12,765,957 packets/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>95,412,765,957 bits/month</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Whoa, that’s a lot of bits. Let’s scale it down to manageable </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">significant digits:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">90,993 Mb/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">11,374 MB/month</span></span><br />
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> -</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>11 GB/month</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">This exercise revealed that, in a typical month, I shipped about 11 GB </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">over the Internet (the vast majority was downloaded but for this discussion </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">we will focus on total traffic). Verizon, my provider, charges </span></span><span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">me about US $64.99 per month, or about $2.17 per day for 25 Mb/sec </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">download speed.<span style="font: normal normal normal 6px/normal Helvetica;">2 </span>Some of you might say, “Hey, $2.17 per day is cheap.” </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">My response is “Compared to what”? Let’s take a look on what I </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">actually consumed:</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$64.99/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>$2.17/day</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>$5.85/GB transferred (actual)</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Is $5.85 per GB a good or bad deal? Let’s compare that price based on </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">actual usage to the theoretical price I could be paying if I used all of </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">my monthly bandwidth:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">26,214,400 bytes at 25Mb/sec peak rate</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">3,276,800 bytes/sec</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">11,796,480,000 bytes/hour</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">11,250 MB/hour</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">11 GB/hour</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>0.0107 TB/hour</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> -</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>0.2575 TB/day</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">8 TB/month</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Now, all the carriers disclaim their peak performance numbers; they can </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">be degraded by traffic congestion, phases of the moon, whatever. Let’s</span> <span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">pretend that I could actually see the above (and, to be fair, my FiOS </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">service has been generally reliable). That would mean I could transfer </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">8 TB in a month, compared with the 11 GB that I actually transferred. </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">That changes the transfer price dramatically:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$64.99/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 6px/normal Helvetica;"> </span>$5.85/GB transferred (actual)</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$0.008/GB transferred (theoretical)</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
<div style="color: #231f20; font: normal normal normal 10.5px/normal Helvetica; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: left;">
<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Clearly, I should be consuming more. Even rounding up, the price gap </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">between $5.85 per GB and $0.008 per GB is substantial. And herein lies </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">the problem. Since the rate I pay is flat, <i>everything in the gap between </i></span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><i>11 GB and 8 TB looks free to me. </i>But I assure you it does not look free </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">to Verizon. If every FiOS subscriber tried to download 8 TB a month, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">cries of panic would echo throughout the land. A similar exercise </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">for wireless data plans would show higher prices but a smaller gap </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">between actual and theoretical because the theoretical limits are lower. </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Some wireless carriers explicitly prohibit extended peak bandwidth </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">use for just this reason.</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<b><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;">A Monthly Bill I’d Like to Get</span></b></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">What if, instead of increasing the maximum download speeds for a </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">flat rate, a carrier tried this: pay $0.0000025 per packet — period. The </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">resulting bill would be:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$31.91 for 11 GB transferred/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$63.82 for 22 GB transferred/month</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> - </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">$22,979 for 8 TB transferred/month</span></span><br />
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">A pricing strategy like this might lower the monthly bill for an average </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">customer as well as allow for some increased consumption without </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">breaking the bank. It would provide the consumer a way to lower costs </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">just by reducing consumption. There would be a substantial disincentive </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">for order-of-magnitude increases in consumption; if the data were </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">really that valuable, this would prove it. Otherwise, consumers would </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">have to think of options:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"> 1. Do without.</span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"> 2. Find a way to make the data more efficient.</span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"> 3. Find a cheaper substitute.</span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"> 4. Get someone else to pay.</span><br />
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</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">All these options are used by producers and consumers today and form </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">the basis of advertiser- and business-supported messaging. There is no </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">reason to suspect that a motivated advertiser wouldn’t pay to transmit </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">its car ad to a serious prospect. Web site and content creators would be </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">obliged to consider data transmission costs and build more efficient </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">products — or offset their higher costs with direct payments, advertising, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">or some other explicit subsidy. Carriers could use variable pricing </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">per packet to adapt consumer usage to network capacity variances and </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">expansion.</span></span></div>
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<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: large;"><br />
</span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">This past June, AT&T, wireless provider for Apple’s iPhone, became </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">the first major mobile phone company to stop offering new smartphone </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">customers a single monthly price for unlimited Internet access.<span style="font: normal normal normal 6px/normal Helvetica;">3 </span>That </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">may signal an industry shift to charges based on how much people use </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">their phones to access videos, music, and data. AT&T expects the new </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">pricing to boost sales. Verizon followed in July. </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Newcomers to AT&T can pay $15 per month for 200 MB of data or 2 GB </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">for $25. AT&T says 65% of its smartphone customers use fewer than </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">200 MB per month, and 98% use fewer than 2 GB. Just 3% of AT&T’s </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">smartphone customers account for as much as 40% of its data traffic. With </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">the limited airwave spectrum available for wireless broadband, other </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">providers may switch to usage-based pricing, including Sprint and </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">T-Mobile. Other businesses may be getting the message as well. Silicon </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Alley Insider recently reported on the rumored new Apple iTV with the </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">headline, “Apple's New iTV Could Finally Force ISPs to Give Up on </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">All-You-Can-Eat Internet Access and Jack Up Your Bandwidth Bill.”</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font-size: large; font: normal normal normal 6px/normal Helvetica;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">In short, rational economic behavior would prevail in a pricing environment </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">free of implicit subsidies. This would prove beneficial to content </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">producers, content consumers, and the infrastructure providers that </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">move the bits around. When I look at the problems created and looming </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">by current flat-rate pricing — and consider the advantages of usage </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">pricing — I believe it’s only a matter of time before usage pricing </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">becomes the standard.</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;"><br />
</span></span></div>
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<span class="Apple-style-span" style="font-size: large;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">In the meantime, use all the bandwidth and transfer all the bits you </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">possibly can. </span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: large;">This deal is too good to last.</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: small;"><br />
</span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: small;">Footnotes:</span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span class="Apple-style-span" style="font-size: small;">1 - Slaptijack. “Average IP Packet Size.” </span></span><br />
<span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif; font-size: small;"> Facebook Note, 18 March 2010 (www.facebook.com/note.php?note_id=377237673965).</span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">2 - Verizon offers Web mail and other </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">services for this price. For simplicity, </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">I have ignored all bundled </span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> services </span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">in </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">this example.</span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">3 -</span><span style="font: normal normal normal 5px/normal Helvetica;">3 </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Lieberman, David. “New AT&T </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Smartphone Users Won’t Get One-</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Price Net.” <i>USA Today</i>, </span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> 4 June 2010.</span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">4 -</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"><span style="font: normal normal normal 5px/normal Helvetica;">4 </span>Frommer, Dan. “Apple’s New iTV </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Could Finally Force ISPs to Give Up on </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">All-You-Can-Eat</span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> Internet Access and</span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> Jack Up Your Bandwidth Bill.” Business</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">Insider/Silicon Alley Insider, </span></span><br />
<span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> 23 August </span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">2010</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;"> </span></span><span class="Apple-style-span" style="font-size: small;"><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">(www.businessinsider.com/appleitv-</span><span class="Apple-style-span" style="font-family: Times, 'Times New Roman', serif;">metered-broadband-2010-8).</span></span></div>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com2tag:blogger.com,1999:blog-1293472092221793354.post-82991268607145566152011-10-14T17:26:00.000-04:002011-10-14T17:26:20.703-04:00Remembering Steve Jobs<div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">I was lucky to have had the opportunity to meet and work with Steve Jobs when I was an analyst on Wall Street covering the PC industry. Mine was a lone voice arguing that Apple could recover from its "beleaguered" state prior to Apple's acquisition of NeXT. Steve's return with that acquisition added an ironic dimension that evolved into one of the great corporate turnarounds in history.</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;"><br />
</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">While I had engaged him from a distance through Apple investor relations and conference calls, my first one-on-one meeting with Steve came just after Apple had reported its first profitable quarter since his return. Apple had scheduled an analysts meeting in Cupertino, and all of us dutifully shuttled out to hear what Apple management had to tell us about the company's plans for the future.</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;"><br />
</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">When I was introduced to Steve, he recognized me from my public efforts on Apple's behalf, and thanked me for my support during Apple's tough times. Those of you who know me can imagine my response. Figuring I might never get the chance again, I told Steve, "Thanks for not f**king it up."</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">My host wilted. </div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">Steve grinned.</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;"><br />
</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">Shortly after, Apple included a quote from me in a press release announcing its advertising strategy for the iMac. This was one of the only times a non-Apple voice was included in an Apple corporate release, and I'm sure it would not have happened without Steve's approval. While many have described Steve's darker side, many of us can cite examples of gracious behavior like this.</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;"><br />
</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">I remember vividly Steve's personal demonstration to me of Mac OS X prior to its announcement, and his focused energy directed at convincing me that the "lickable" new Aqua interface was the greatest thing in the world. Many have seen Steve live on stage or in a video announcing new products; I can only say that it was even more impressive up close, and I enjoyed all my professional interactions with him throughout my tenure on the Street.</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;"><br />
</div><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">When I heard of his passing, my immediate thought was:</div><blockquote style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 12px; line-height: 21px; padding-left: 5px; padding-right: 5px;">Talent hits a target no one else can hit;<br />
Genius hits a target no one else can see.<br />
-- Arthur Schopenhauer</blockquote><div style="color: #575757; font-family: Arial, Verdana, sans-serif; font-size: 14px; line-height: 21px; margin-top: 0px; padding-top: 0px;">Schopenhauer didn't live to see Steve Jobs, but maybe he predicted him.</div>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com2tag:blogger.com,1999:blog-1293472092221793354.post-42344219165129923762011-08-31T15:48:00.000-04:002011-09-01T14:00:03.917-04:00Remembering My DadMy father died yesterday. It wasn't a complete shock - 20 years ago he was diagnosed with prostate cancer and treated with then-new therapies that bought him more time than anyone expected. He used that time well. This year, cancer returned in a much more aggressive mode and won its battle for dad's body. His family was fortunate to be with him in his last days to say goodbye.<br />
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My mom, brothers and sister filled dad's hospital room with stories and laughter to the point where nurses were poking their heads in to see the party — and we encouraged visitors to add their voices to the conversation. Over the course of many days, I was reminded that my siblings each had a unique relationship with dad, but all of those relationships were based on the same values we learned by repeated example: curiosity, integrity, loyalty, uncompromising excellence and love.<br />
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Dad's varied accomplishments in life derived from his unwavering adherence to those values. They enabled him to become an outstanding competitor, leader, craftsman, husband, father and grandfather. My mother's expressions of love and loss for her partner of 57 years were an equally compelling commentary on the meaning of marriage.<br />
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I loved my dad. I miss his presence already, and will remember his lessons forever.<br />
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Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-11279733703068094262010-05-17T12:06:00.000-04:002010-05-17T12:27:01.784-04:00Thoughts on Bill Gates' Legacy<span class="Apple-style-span" style="font-family: 'MS Shell Dlg'; font-size: small;"><span class="Apple-style-span" style="font-size: 13px;"><i><br />
</i> </span></span><br />
<table border="0" cellpadding="0" cellspacing="0"><tbody>
<tr><td colspan="3" style="font-family: arial, verdana, helvetica; font-size: 12px; font-weight: normal;" valign="top"><i>Written June 25, 2008 for SearchWinDevelopment.com</i><br />
<blockquote><i>I met a traveler from an antique land<br />
Who said: "Two vast and trunkless legs of stone<br />
Stand in the desert. Near them on the sand,<br />
Half sunk, a shattered visage lies, whose frown<br />
And wrinkled lip and sneer of cold command<br />
Tell that its sculptor well those passions read<br />
Which yet survive, stamped on these lifeless things,<br />
The hand that mocked them and the heart that fed.<br />
And on the pedestal these words appear:<br />
`My name is Ozymandias, King of Kings:<br />
Look on my works, ye mighty, and despair!'<br />
Nothing beside remains. Round the decay<br />
Of that colossal wreck, boundless and bare,<br />
The lone and level sands stretch far away.</i><br />
<br />
--Percy Bysshe Shelley, Ozymandias</blockquote>I sincerely hope that Bill Gates' legacy is yet to be created, because what passes for common wisdom about his contributions to the computer industry will either fade from memory or be relegated to the arcana of business scholarship.<br />
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Readers may raise Microsoft as an objection to my argument. My trite reply is: Thomas Watson and Google. The former built a computing colossus but has faded from everyday IT awareness faster than most would have predicted. The latter is the current darling, a young star yet to experience the ravages of success and time.<br />
<br />
People talk about the "genius" of Bill Gates. I find this an overly fawning accolade when I compare him to Einstein, Feynman, Hawking and their (rare) ilk. There is no "Gates algorithm" left for computer scientists to ponder. Yet, he was an unequivocal business success. Is there a different dimension of perception or behavior that warrants the genius label when applied to his accomplishments in the industry?<br />
<br />
Maybe. Unlike Einstein's quest for a theory of general relativity, Gates had plenty of competitors racing to make small computers pervasive. But he came from a socio-economic background that enabled him to aggressively follow his dream. He had family connections that put him in contact with the highest levels at IBM at the time when the IBM PC was being developed. He had the great sense to say "yes" when IBM asked if his company had an operating system for their fledging PC. He was, shall we say, shrewd, in his acquisition of MS-DOS. He was equally shrewd in his proposal to IBM that allowed Microsoft to resell DOS to IBM's competitors. And he was triply shrewd when he convinced PC manufacturers to pay for DOS regardless of its residence on their PC products. The fact that the U.S. Justice Department was asleep at the switch during this period made this last move ultimately effective for Microsoft's development. If this be the definition of business genius, then Bill qualifies in spades.<br />
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</tbody></table>When the Justice Department finally took action against Microsoft, the company had the opportunity to remake itself into smaller, more agile pieces. It did not. Perhaps Bill's biggest business failing was not seeing why this might be a good thing. Microsoft is struggling today, in part, because of its bulk. Furthermore, the bloom is off Microsoft's rose, so the public market has a higher tendency to punish the company for its perceived missteps. This punishment cannot be meted out to the division or product line that is truly responsible, so value is destroyed across the entire enterprise.<br />
<br />
IBM is hailed as a company that recovered from the brink of death, a place where many feel Microsoft, at current course and speed, could be headed. IBM's recovery only happened after a parade of less-than-capable CEOs drove its Board to bring on the highly-capable Lou Gerstner. Perhaps Microsoft has not had enough CEOs to develop a corporate sense of what defines inadequacy at the top. Therefore, I suggest another candidate for Bill's biggest failing is his long-standing and apparently continued support for Microsoft's current CEO.<br />
<br />
Where my respect for Bill Gates is unbounded is in his decision to use almost his entire fortune for the common good. Unlike so many Silicon Valley "successes" who seem to require personal fulfillment by recreating Japanese palaces or building ever-larger sailboats, Bill's actions in the future could make a real difference in the lives of millions of people and the planet we all share. That legacy might endure.</td></tr>
</tbody></table>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-64519778287570664422010-05-08T07:38:00.000-04:002010-05-09T08:15:52.626-04:00A (Different) Passage to India<div class="MsoNormal"><i>Written July, 2007</i></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Though I have traveled extensively, the Indian sub-continent had escaped my footfalls. So, when a company upon whose Board of Directors I sit was contemplating an acquisition, which included an Indian facility, I enthusiastically volunteered to make the visit to determine if the operation was as described. Arrangements were made for my departure to Mumbai from New York at 8:30AM on a Monday morning, returning in time to report prior to the closing of the transaction.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Or so I thought. My youngest daughter had thoughtfully borrowed some travel books on India for me to read, and I finally got around to examining one while sitting in my car around 5PM on the preceding Friday. I noted with interest a section headed “Passports and Visas”, anticipating that it would include a lengthy description of requirements for those other than myself. Silly me. The words on the page read, “every US citizen traveling to India must have a valid passport and visa”. Panic ensued. Hasty phone calls to my sponsors and hosts surfaced conflicting information about how long the visa process would take, putting the finely tuned schedule at risk.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><o:p><span class="Apple-style-span" style="font-weight: bold;">Monday / Tuesday</span></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">On Monday morning, I took my baggage and headed to the Indian consulate in New York. I was prepared for the worst. My mood was not improved by lugging two bags around in the pouring rain, or milling about the dripping subterranean entrance to the visa office waiting for a consulate employee to provide a token to allow me to stand in line. Nor was I encouraged by the horror stories shared by my fellow millers. However, by 9:30 in was in line, paper number in hand, by 9:45 I handed over my passport and some cash, and was told that I could pick up my visa by noon. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">I ducked into a nearby coffee shop to kill time and stay dry, then returned to the consulate to retrieve my visa and met my driver to head for JFK for an 8PM flight. My mood improved considerably when I discovered that a business class ticket on British Airways entitled me not only to use of the well-stocked lounge, but also a complimentary massage. Since it had been a while since my last business class trip, I thanked airline competition for this and took full advantage. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Bolstered by the massage and several bloody marys, I finally boarded the plane at 8PM for my 8:30 flight. Once again, I was stuck by the changes in business class travel since my last trip. I had read about the “flat bed wars”, where airlines competed for business on the totality of their seat recline, and was eager to benefit from that skirmish. However, I was not prepared for what I encountered next. Instead of the familiar two-by-two seating, I was delivered into a maze of the airline equivalent of cubicles, one of which contained my seat. Moreover, my seatmate (cubicle mate? pod mate?) faced me, separated by a motorized divider reminding me most of the “cone of silence” from the old Get Smart television show. I cannot say this is a complete improvement. For me, what little benefit comes from sitting in an airplane seat for ten hours or more is the chance to interact, even for a short while, with my fellow passengers. This new configuration effectively eliminates that interaction. It also turns the flight staff into contortionists as they try to pour drinks and serve food over and around the partitions. As I was watching a glass descend from a disembodied hand over my divider, I had a flash of empathy for my daughter’s guinea pigs at feeding time.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">On the other hand, if sleep is your priority, this setup delivers. Unless you or someone else has to make a trip to the rest room mid-flight, in which case you are either a hurdler or hurdlee, given the lack of pathways resulting from closely spaced prone or supine bodies. Moral: get the aisle pod, or practice your gymnastics before you leave.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">My outbound flight connected through London Heathrow without incident, but probably set a record for longest distance between connecting gates. Ensconced in my new pod, I was enjoying the view of (for me) new territory, when it dawned that shortest route from London to Mumbai would probably take us directly over Baghdad. The red line on the moving map display confirmed this, and I was relieved when we veered left and then right as the pilot negotiated a path between Mosul and Tehran toward our destination. Finally, after about 18 hours elapsed time from JFK, I could see the lights of Mumbai and we touched down at around 1AM.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span class="Apple-style-span" style="font-weight: bold;">Wednesday</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The target of my sponsor’s intentions uses a cheetah as its corporate mascot. This made to easy to spot my driver, holding a stuffed one, in the throng at the arrivals point. On the short walk to the car, I noted that the temperature (high) and humidity (high) were as described in my daughter’s book, and was thankful for the air conditioning in the car. We left the airport, and headed for my hotel. On the way I was able to catch a few glimpses of the local area, which reminded me initially of my visit to Peru years ago – the same kind of bi-modal wealth distribution was apparent after passing the Intercontinental Hotel and a row of humble shops within five minutes. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Darkness and jet lag prevented me from further detailed viewing, but I did note the increased vegetation as the trip proceeded – then a checkpoint with oil drum barriers and collection of what I hoped was a toll. Past the checkpoint, we were escorted by a pack of enthusiastic dogs who followed us for half a kilometer or so. After encountering another guarded gate, we proceeded up an assortment of paved and unpaved roads until we reached the hotel. Check-in was uneventful, my room was nicely appointed (although the large flat-panel television on the wall required the application of a hotel slipper in its mount to become parallel to the wall), and I was quickly asleep in a rather comfortable bed.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Morning was a slightly different story. I drew the curtains and took in a panoramic, if not attractive, view of the major construction under way around the hotel and building skylines on the horizon in all directions. The weather appeared partly cloudy – pleasantly surprising because this was supposed to be monsoon season. I was to have water poured on that naive observation soon enough, but meanwhile I was having a bit of trouble getting my shower to pour any water at all. So I resorted to the tub, where I found water, but not the hot variety. Jolted awake but clean, I went down to the lobby for lunch with my host.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Over a very nice Indian buffet lunch, I learned that most of the area surrounding hotel (a very extensive piece of property) was owned by an individual who had struck a deal with the Indian government, in the interests of preservation, not to develop more than ten percent of his holding and not to sell any of the land. So he is building high-rises on the ten percent and offering 999-year leases on other parcels. I noted that beating the system seems to be a global pastime.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We then proceeded to my hosts’ offices, and I found myself traveling back toward the airport, through the lightly populated area from the previous evening. This turned out to the Aarey Milk Colony, formerly the primary source of diary products for Mumbai, now less so. Some limited cattle farming remains, but recently an IT industrial zone has been added into the mix. So one can add “programmers” to the list of cows, dogs, pigs and goats roaming the area, along with villagers living in conditions that were quite poor but by no means the worst I encountered.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The offices are housed in a four-story building close to the airport, in an area that can be generously described as “developing”. The building is one of the nicest in the adjacent few blocks, originally built for a bank, and slightly renovated so as to qualify for the same favorable treatment as those in the IT zone mentioned previously. The building and offices are quite modern, and redundancy has been addressed. There is a diesel generator for backup electricity, and multiple backups for Internet and phone connectivity. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">A major bus station is very close, and a light rail station is rumored to be in the works. Busses are the favored mode of public transport in Mumbai. Fares are low, even by Indian standards (fare for a 2 kilometer trip might be $0.25 or less), and busses are frequent. The two major commuter train lines in the city are stressed to their limit, always overcrowded and are to be avoided if at all possible. Many of my host’s employees commute by bus, although a significant number ride motorbikes, and a few have private cars. Road traffic in Mumbai rates further discussion later.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">I spent the afternoon with software engineering management. This included project and quality managers. I heard a detailed presentation about the organization, and about the processes currently in place. As noted prior to my visit, I was impressed by the company’s process maturity relative to its size and age. The employees I met with were attentive, engaged in conversation, and appeared willing to take feedback. They responded to my questions without becoming defensive, and we ended our meeting with a wide-ranging discussion of global IT issues.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">At 5:45, I left the office to make a quick stop at my hotel and then continue to a dinner meeting in southern Mumbai. This was to be a treat for me – thirteen years ago I attended a Harvard program where an Indian gentleman was in my “living group”. Though we had shared many experiences during our time together, and communicated infrequently by e-mail in the time hence, we had never been able to reconnect in person. So it was with pleasurable anticipation that we arranged to meet at the Bombay Gymkhana Club, where he was a member.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">At about 6:15 we left the hotel for a thirty-kilometer drive in Mumbai’s rush hour, which I would describe as the worst traffic I have ever encountered, except that it got even worse later in my trip. Indian roads are generally unsigned, unlined and Indian driving is best described as a freestyle event. The good news is that the vehicles are generally small. Three-wheeled “rickshaws” and commercial vehicles abound, and the typical American driving view of a large metal SUV backside is mostly absent. It is replaced by painted invitations on trunk lids and rear doors for drivers to use their horn, and use them they do. This is a far cry from cities like New York, where a misplaced honk can result in a $350 fine.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Given the road capacity, and the incredible number of vehicles, and the Brownian motion of those vehicles, I was amazed that a) we made reasonably good time, and b) I did not see a single accident along the way. Later I was told that drivers in Mumbai are the best in India and that “if you can drive in Mumbai, you can drive anywhere”. The person saying this was referring to India, but I would extend her comment to the entire planet.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We arrived at the Gymkhana about 7:50, well in time for my 8PM meeting. Suffice to say it was a very pleasant reunion, which included a wonderful story I had not heard of my dinner host’s trip to Harvard, including an unspecified illness, admittance to a Massachusetts hospital, and favorable treatment by a Pakistani doctor there who offered to help him escape the implausible (to them) financial tentacles of the US health system. Though this happened 13 years ago, the story is amazingly topical, pinning both the social and political irony meters. I made a note to send my friend a DVD of Michael Moore’s “Sicko”. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">My return from the Gymkhana (which sports a cricket pitch that must be among the most valuable undeveloped pieces of land in the world) was uneventful, even by new-to-Mumbai tourist standards, and quick. I hit bed at about midnight and was immediately asleep.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><o:p><span class="Apple-style-span" style="font-weight: bold;">Thursday</span></o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">I did not want to seem the ugly American, so had not made a fuss over the hot water situation in my room. But I did discreetly ask my host if this was a cultural or a plumbing issue, and he had someone call the hotel. They said they would take care of it. I guess the plumber didn’t get the memo. Once again shocked into consciousness and cleanliness, I met my driver and we made our way to the office. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">The morning’s meeting was with the marketing staff, which included people working on web search-engine optimization, direct mail and other lead generation, and marketing collateral. This group represented more diversity of background than the software engineering group, which was not surprising given the relative youth of the software industry in Mumbai. However, I found the same openness and willingness to learn that I had encountered with the previous group. The search engine optimization activity is mostly manual but extremely effective, resulting in #1 results for many relevant keywords with no direct payments to Google, MSN or Yahoo. This expertise should be translatable to my sponsor’s products. On the other hand, a wider gap exists between the Indian marketing activity and the American market. This is mostly due to limited experience with American cultural and language issues. I suggested several ways for improvement in these areas, and am confident that others ideas can be developed and adopted. We also spent time discussing the lead process, and the need to change the group’s current definition of “qualified lead” to be more in line with standard practice. This process change is underway.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">For lunch, a larger group of us ventured to a Gujarati restaurant (Gujurat is the Indian state north of Maharasthra. Mumbai is the capital of Maharasthra). Several of my hosts are of Gujarati decent, and were eager to show off their version of “grandma’s cooking”. The restaurant was in a large shopping mall in Goregaon, whose development has exploded in recent years due to the rapid growth of the Indian IT outsourcing industry. Construction cranes were everywhere, and the multitude of English road signs suggests the high number of direction-hungry American drivers on the road.</div><div class="MsoNormal"> </div><div class="MsoNormal">After lunch we did a complete mall crawl, which proved once again that the US still leads in brand marketing. Any American would feel completely at home here, which isn’t necessarily a good thing.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We returned to the office where I met with the administration group, and learned of the ways that my hosts use to recruit and hire in Mumbai. As one might expect, these are substantially different than in the US. One useful differentiator is that my hosts run a</div><div class="MsoNormal">product company. Most Indian IT employees are in service businesses, and many desire work in product companies. As one of the few software product companies in Mumbai, my hosts are able to use this attribute to offset negative perceptions, such as their small size or unknown brand. Another issue is that my hosts must run their US support and sales in US real time, which means that a majority of their employees work the Indian night shift. Several methods are used to make this attractive and palatable, including salary differentials, commuting differentials and office benefits. For employees who are deemed “keepers”, my host will sponsor and pay for a US green card. This is a five-year process, which helps minimize turnover. My hosts have developed a close relationship with the US consulate in Mumbai, and can smoothly navigate this process.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Last I met with the sales group. In many ways, this was the most “American” group, which is not surprising. An effective salesman must become like his or her customers, and an Indian salesperson targeting the US market is no exception. Furthermore, some of the sales culture is universal, including the thirst for, and grousing about, leads and quotas. This group was much more concerned with performance than grousing, and excited about the prospects for growth in both the US market and internationally. We spent the latter part of the meeting exploring possible scenarios for international expansion, and the challenges and benefits that could result. For our hosts, a benefit includes the possibility of work beyond the Indian third shift, which they see as both an aid for recruiting and lateral movement.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Dinner was with another large group at a local Chinese restaurant. We had a wide-ranging discussion about business and culture, as befits a gathering of this type. I was presented with gifts of Indian dress, and a large carving of the Hindu god Gamesh. Gamesh is the god of prosperity, and is typically acknowledged by Indians at the start of new ventures. Since I had accomplished my sponsor’s mission, my host suggested that I spend Friday touring Mumbai, and suggested an itinerary that was busy but seemed doable. </div><h1><span class="Apple-style-span" style="font-size: medium;">Friday</span></h1><div class="MsoNormal"><o:p>I awoke to clouds. Since another call to the hotel had been made, I was eager to check on the hot water situation. There was some progress – I had hot water in my sink. I wondered if there was a Hindu god of hot water I could appeal to as I took yet another chilly shower. </o:p></div><div class="MsoNormal"><br />
</div><div class="MsoNormal">I went to the office and spent some time with my host discussing business development issues, and then left for downtown escorted by two of my host’s female Indian employees and our driver. The plan was to grab a snack, see the Gateway of India, the Taj Mahal Hotel, take a boat across the bay to the Elephanta Caves, return for a drink at the Taj, and meet for dinner before my flight. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Like many plans, this one was disrupted by the weather. As we were heading south, the sky opened up on us, providing a typical tropical downpour. I’d seen this weather before, but not in an urban area of 13 million. The combination is dramatic – road flooding begins quickly and what was slow traffic becomes glacial. But the rain let up and I had a good tour of the older, wealthiest part of Mumbai, some of which is spectacular, and the part most Americans see in the tourist guides. Since we had lost some time, I suggested we try to go directly to the caves, which featured carvings dating back to the 5<sup>th</sup> century.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We got tickets and boarded the small passenger ferry to Elephanta Island. I noted that there were maximum loads posted for “fair” and “foul” weather, and that the safety equipment consisted entirely of old tires draped around the hull for use as life preservers. But we weren’t the only passengers, and everyone else seemed game, so off we went into the bay. We passed a large Indian naval installation, and were reminded not to take any photos only after all of the passengers had snapped everything in sight. As an American, I was interested to see a large collection of Russian-built warships in one place. We also got a good view of the oil tankers and supertankers offloading – one really doesn’t get a good sense of the size of a supertanker until passing it at about 5 knots – it takes a long time.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We reached Elephanta Island after about an hour of peaceful cruising. The weather was gray, with a slight drizzle, and there were not a lot of tourists about. This was a problem for both the vendors lining the walk to the caves, and for the dogs and monkeys who beg or steal from unsuspecting visitors. I watched a monkey relieve a tourist of a just-purchased ear of roasted corn and was impressed by its well-practiced finesse. The walk to the caves is uphill for about half a kilometer. The caves are impressive, especially considering their age – they were carved by hand and essentially on-the-fly – no CAD systems or power tools to make the job easy. The quality of the sculptures is also very high. By the way, the island and caves were “discovered” around 1400 by the Portuguese, who ended any chance of completing the project by using it for target practice. Yet another example of progressive foreign relations.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">As we were admiring this antiquity, the sky opened up again, and this time, the rain wasn’t stopping. We were thoroughly drenched, which wasn’t horrible since the air was warm, but I was getting a bit concerned about our boat ride back. We boarded the last boat off the island, close to or exceeding the “foul” passenger limit, and began chugging back to Gateway of India. The rain got harder; the wind started getting stronger, from the southwest. This meant we would be beating our way back – not so bad in two foot seas, but potentially very, um, interesting in 3 foot seas or better. More rain. Wind picking up. Lightning visible ahead. One or two waves broke over the deck, but it didn’t feel like we were shipping any considerable water. The pilot was doing a great job, keeping our bobbing motion to a minimum. Should I now mention that a group of young Indian males started teasing my female companions, and that our driver began a heated defense, and had to be calmed down by the ladies? I had visions of the Gilligan’s Island opening crossed with a western bar brawl and me ending up in the soup – but calmer heads prevailed. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">We climbed out of the boat at the Gateway of India and went across to the Taj Mahal Hotel – not to have a drink and pretend we were VIPs, but to find the rest rooms and use all their towels to try to get dry. We squished our way across the very nice lobby, shivering from the air conditioning. Outside, the rain persisted, and our driver brought the car around to take us back north. Heat on full blast, rain on full blast, traffic at a dead stop or close to it, we made the return trip to the office in about three hours. </div><div class="MsoNormal"><br />
</div><div class="MsoNormal">After bidding my guides a fond farewell, my host and I had a quick dinner before he dropped me at the airport for my return trip. My clothes were mostly dry by then, although my shoes were still pretty soggy. I figured they could dry out in my pod.</div><div class="MsoNormal">This had been a worthy travel experience – my business and social missions had been accomplished, and I got in a side order of travel adventure.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">Mumbai is a confluence of contrasts – it is at once modern and ancient, luxurious and squalid, thought provoking and mind numbing. It is a driving force in India’s future, and I look forward to getting to know it better.</div><div class="MsoNormal"><br />
</div><div class="MsoNormal">That said, I was very happy to arrive in London and have my first hot shower in four days at the British Airways arrival lounge. I grabbed a cab to my hotel in the West End, changed into truly dry clothes, and promptly walked over to the Savoy, where I sat contemplating the incredible range of contrasts I’d experienced in my journey, including the current moment, over a drink at the American Bar.</div>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-75696799018774403072010-03-16T13:04:00.000-04:002010-03-16T20:06:38.583-04:00A Trick Of The Tail<div style="text-align: justify;"><i>The New York Times</i> published an article on March 16 titled "<a href="http://www.nytimes.com/2010/03/16/books/16archive.html?emc=eta1">Fending Off Digital Decay, Bit by Bit</a>", which talks about the challenges involved in preserving digital source material. Reading this brought back memories of discussions I have had with several people concerning my misgivings about the enthusiastic embrace of the "long tail" in electronic commerce.<br />
<br />
When I first heard about the aforementioned tail used to describe the impending cornucopia of digital goods promised by the Internet, I had some nagging doubts. Perhaps it was my usual reaction to hyperbole, but it might have had something to do with ignored economic realities. <i>Wikipedia</i> captures the problem concisely:<br />
<blockquote style="text-align: left;">"<span class="Apple-style-span">Given a large enough availability of choice, a large population of customers, and negligible stocking and distribution costs, the selection and buying pattern of the population results in a <a href="http://en.wikipedia.org/wiki/Power_law" style="-webkit-background-clip: initial; -webkit-background-origin: initial; background-attachment: initial; background-color: initial; background-image: none; background-repeat: initial;" title="Power law"><span class="Apple-style-span" style="color: black;"><span class="Apple-style-span" style="text-decoration: none;">power law</span></span></a> distribution curve, or <a href="http://en.wikipedia.org/wiki/Pareto_distribution" style="-webkit-background-clip: initial; -webkit-background-origin: initial; background-attachment: initial; background-color: initial; background-image: none; background-repeat: initial;" title="Pareto distribution"><span class="Apple-style-span" style="color: black;"><span class="Apple-style-span" style="text-decoration: none;">Pareto distribution</span></span></a>."</span></blockquote><blockquote style="text-align: left;"><span class="Apple-style-span">(<span class="Apple-style-span" style="font-size: small;">h</span><a href="http://en.wikipedia.org/wiki/Long_Tai"><span class="Apple-style-span" style="color: black;"><span class="Apple-style-span" style="text-decoration: none;"><span class="Apple-style-span" style="font-size: small;">ttp://en.wikipedia.org/wiki/Long_Tai</span></span></span></a><span class="Apple-style-span" style="font-size: small;">l</span><span class="Apple-style-span">).<span class="Apple-style-span" style="font-family: Tahoma; font-size: 12px; white-space: pre;"> </span></span></span></blockquote></div><div style="text-align: justify;">Most of the popular "long tail" evangelism focuses on the first part of that sentence, and ignores the next clause: "negligible stocking and distribution costs". The long tail acolytes assumed zero or very low costs because, "bits are cheaper than atoms". Turns out that is only partially true, and completely false if the bits "degrade".<br />
<br />
In physical inventories, there is a cost of maintaining a stock of anything. This comprises the cost of the space to house the good and any environmental treatment to maintain it. Then add in the cost of accessing it, packaging it and delivering it (what we all complain about when we see "shipping and handling").<br />
<br />
For digital goods, these costs may be lower, but they are not zero. There is the cost of space on a storage medium, and the cost of power to keep that medium active and the bits accessible. Movement to non-rotating storage will reduce the holding cost, but not the access costs. There may be packaging costs (licensing a particular format), and there are delivery costs (currently implicitly, and asymmetrically, shared by consumers and producers, a topic for another post). For most suppliers, these costs are hard to make explicit because consumers assume that bits are free.<br />
<br />
As the <i>NYT</i> article points out, digital inventory ages, but in a different way than physical inventory. Bits generally don't become obsolete, <i>but their media, formats and environments do</i>. This is a much more insidious problem than rotting fruit, which can be replaced by a like copy with full confidence that human mouths have not changed. In fact, the aggregate cost of transcoding and migration to current media can make the real cost of older digital content prohibitively expensive, if the price reflects true cost. The only other option is for the vendor to eat the fixed cost and suffer reduced margins. <br />
<br />
Even if this is possible, the bits may not be useable in the current environment. I recently threw away a few hundred CDs of "educational" software that were perfectly readable, but also perfectly useless because it was not economical to recreate the operating system environment they demanded. If I were a vendor, it would be just as silly to keep these CDs in stock, except as drink coasters. More likely I would trash them, and their ripped and rotating counterparts.<br />
<br />
Today, if you hear someone gushing about digital content enabling "the long tail", you are probably listening to someone who has never had to manage inventory to make a profit. I would put the long tail diagram in the same category as the Laffer curve - something that looks nice on a napkin, and would be great if only it worked in the real world.</div>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com2tag:blogger.com,1999:blog-1293472092221793354.post-3556350766414600962010-02-27T10:34:00.000-05:002010-02-27T12:24:02.370-05:00A Journey is Not a MissionIn several recent consulting engagements with large enterprises, I was stuck by the constant use of the word "journey", as in "the order-to-cash journey", or "the SOA journey", or the "business strategy redesign journey". I remember felling a little queasy upon first hearing this usage. Lately, I have watched this language permeate the business press and smaller organizations.<br />
<br />
A quick trip to the Merriam OnLine dictionary reveals:<br />
<br />
<b><i> Journey:</i></b><br />
<span class="Apple-style-span" style="font-size: small; font-style: normal; font-weight: normal;"> 1. an act or instance of traveling from one place to another<br />
(see trip)</span><br />
<span class="Apple-style-span" style="font-size: small; font-style: normal; font-weight: normal;"> 2. <span class="Apple-style-span" style="font-size: small;"><i>chiefly dialect</i></span><span class="Apple-style-span" style="font-size: small;"> : a day's travel</span></span><br />
<span class="Apple-style-span" style="font-size: small; font-style: normal; font-weight: normal;"><span class="Apple-style-span" style="font-size: small;"> 3. something suggesting travel or passage from one place </span></span><br />
<span class="Apple-style-span" style="font-size: small; font-style: normal; font-weight: normal;"><span class="Apple-style-span" style="font-size: small;"> to another</span></span><br />
<br />
I suspect that the third definition is what is mostly meant by people using the word, but I have encountered situations where the "urgent internal communications journey" fit the second. <br />
<br />
In any case, the management consulting world has convinced many people to use the word journey instead of the word mission. This must stop. <br />
<br />
Again, from Merriam: <br />
<br />
<b><i>Mission:</i></b><br />
<span class="Apple-style-span" style="font-style: normal; font-weight: normal;">1. an act or instance of sending</span><br />
<span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> 2a. a ministry commissioned by a religious organization</span><br />
<span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> to propagate its faith or carry on humanitarian work </span><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> b. assignment to or work in a field of missionary enterprise </span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> c<b>1</b>. a mission establishment </span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> <b>2</b>. a local church or parish dependent on a larger religious</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> organization for direction or financial support </span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> d. <i> plural</i> : organized missionary work</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> e. a course of sermons and services given to convert the</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> unchurched or quicken Christian faith</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> 3. a body of persons sent to perform a service or carry on </span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> an activity: as</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> <b>a</b> : a group sent to a foreign country to conduct diplomatic or </span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> political negotiations</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> <b>b</b> : a permanent embassy or legation</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> <b>c</b> : a team of specialists of cultural leaders sent to</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> a foreign country</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> 4a. a specific task with which a person or a group is charged</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> b<b>1</b>. a definite military, naval, or aerospace task</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> <b>2</b>. a flight operation of an aircraft or spacecraft in the</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> performance of a misison</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> c. a preestablished and often self-imposed objective or purpose</span></i></b><br />
<b><i><span class="Apple-style-span" style="font-style: normal; font-weight: normal;"> 5. calling, vocation </span></i></b><br />
<br />
Given these definitions, journey seems to be a much friendlier word, without the nasty semantic baggage of task and the implied related concepts of goals, schedules, risks and resistance. I can only surmise that its users are either Orwellian, or subconsciously replacing mission with journey to gain popular support with the troops because they themselves can't deal with the notion of a mission.<br />
<br />
Journeys are pleasant, mostly, and non life- or career-threatening, mostly. The endpoint is usually known, and easily accessible because some prior explorer or pioneer (likely on a mission) has found and documented the route. <br />
<br />
Missions, on the other hand, are laden with risk. While the goal may be defined, there is no guarantee that it can be achieved. There are often obstacles (ranging from hostile natives to uncooperative department heads) between the team and the goal. The cost of failure is usually more than moaning about a non-refundable ticket. <br />
<br />
Which of the two sounds more like the effort to promote SOA in a large enterprise?<br />
<br />
Language matters. <br />
So the next time some managers start talking about a journey, tell them to call a travel agent.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0tag:blogger.com,1999:blog-1293472092221793354.post-41522032779274176352010-02-13T09:46:00.001-05:002010-02-13T14:56:24.233-05:00The Untethered LifeI remember when voice mail changed my life. In the early 80s we were building a company with global ambitions, and I was traveling a lot. The way I figured out if anyone was looking for me at the end of a long journey was to call the office and ask my assistant. This worked well if a) the assistant was doing their job (and mine was great, thanks Gail!), b) the assistant was at the office, and c) a phone was available for calling in. <div><br /></div><div>As we continued to grow, the number of people traveling or working remotely grew, as did the administrative burden to support messaging. Then we hired a VP of sales from a larger company, who implemented an exotic new technology he had used successfully to manage his prior sales force - voicemail (those old enough to remember, it was Audix). Suddenly, (a) and (b) didn't matter so much. Whenever and wherever I could find a phone, I could call voicemail to see if anyone was looking for me.</div><div><br /></div><div>This development had positive and negative consequences. Our admin people had reduced message taking/relaying overhead. Traveling employees didn't lose messages, and could respond in a timely fashion. But employees in the office began using "send this call to voicemail" as a way to ignore calls completely. This behavior was further encouraged by the "send all calls to voicemail" button on their new phones. It could be argued that communication in the office got worse as a result of this technology.</div><div><br /></div><div>For the youngsters reading this, note that email was just beginning to emerge around this time, there was no public Internet and cell phones didn't exist. We will get to them later.</div><div><br /></div><div>For all its faults, I loved voicemail because it was completely in service to me. Not only was the communications asynchronous, the network connection model was intermittent. This meant that time spent in transit was used for thinking. Thinking about how the next meeting was going to play out. Thinking about how our strategy should change in the face of recent competitor's moves. Thinking about where the family might go on our next vacation. These were ideas that I had to surface, remember and prioritize, not a response to someone else's external stimulus.</div><div><br /></div><div>Then GTE invented AirPhone. Suddenly, if I had a flash of insight at 35,000 feet, or needed to respond to an urgent inquiry, I could make an outbound call from the plane. Since this only worked on domestic flights, the most time it could have ever saved was about 6 hours. This came in handy a few times when I was working as a Wall Street analyst and was able to get back to a reporter on deadline, but, other than that, there was never anything I was doing that was so important it couldn't wait until I landed. Since calls were only outgoing, I still was able to concentrate my thinking -- or read a trashy novel.</div><div><br /></div><div>I was issued my first cell phone (a Motorola StarTAC) in the late 90s when I went to Wall Street. This was considered an essential business tool because a) everyone else thought that they were more important than you , b) a mayfly's lifetime was considered long-term, and c) you got paid on perceived results for clients who subscribed to (a) and (b). Even in this world, most of my cell phone calls were outgoing, either as a response to a voicemail message or another external event. That's probably because cell phones had not become pervasive - one's cell phone number was still considered a novelty, and the number of last resort. </div><div><br /></div><div>By the time I left Wall Street, the first Internet bubble had popped, and Blackberry had become "crackberry" for Street types in the big shops. Having subordinates tied to mobile email is a great way to assert dominance and hide insecurity, so it's perfect for Wall Street. Meanwhile, the wireless companies were doing a good job of convincing the public that life just wasn't good enough unless you had a cell phone. How else were Mom and the kids going to keep track of their busy lives? And what if Aunt Em got mugged while stuck by the side of the road with a flat tire?</div><div><br /></div><div>My wife succumbed to the wireless marketers, and got us a family plan with Verizon for herself, the kids, and her parents. My phone was still subsidized by my business. What was interesting was the difference in usage patterns between the adults and the kids. Whereas my wife and her parents had a similar reaction to cell phones as I, my two daughters, and all of their friends, were using this technology to augment, and many times replace, face to face social interaction. I'm not going to dwell on this topic - plenty is written elsewhere. But I will note that the combination of an alway-on Internet and always-on mobile devices has reduced, if not eliminated, the large chunks of think time I described above for what is now almost two whole generations. This has at least changed, and some might argue, diminished, the quality of leadership and management in many organizations.</div><div><br /></div><div>Time has marched on and I have been inexorably drawn into new Internet technology as Google and Facebook have emerged as dominant players. I was never really into text messaging and therefore had a hard time understanding the excitement over Twitter. Then I lost the job that had subsidized my cell phone, and I had to consider my options for a replacement.</div><div><br /></div><div>Economics played a big part in my decision, but so did my history. I just don't need to be always on and always connected to self actualize and accomplish my objectives. So a pay-as-you-go AT&T phone has replaced my far more expensive cell phone and contract. Most of the time the power is turned off. Lately I have been advised to join Twitter as part of my job-hunting network building. After joining via the Internet for a few weeks, I can only admire Monty Python's prescience in <i>Life of Brian</i> when Biggus Dickus asks "why are they twittering"? Paying text fees on my cell phone for this is a non-starter.</div><div><br /></div><div> </div><div>The most significant change in my untethered life came courtesy of Apple. My old Palm V was getting creaky, and I needed something to replace it. I also had an ancient Windows laptop that was making sounds like knives being sharpened. The solution? Not an iPhone. An iPod Touch. This device has all the Internet connectivity I need, when I need it, via WiFi. It allowed me to stop carrying a laptop, which has made airport security just a little less heinous and has made my old arm joints happy. And it, too, is mostly turned off.</div><div><br /></div><div>But the iPod isn't perfect. I still have to carry a few USB sticks around for file transfers. And the screen, while beautiful, is cramped when I want to read a long document or cluttered web site. What I really wanted was a bigger iPod Touch with a decent filesystem. Apple seems to have countered these objections with the iPad. I'll have a little more to say on that in a future post.</div><div><br /></div><div>Meanwhile, I am happy being untethered. I still seem to get all my calls and emails (and you are reading this), but when I'm mobile I connect to the Internet when needed, and am free from the financial obligation and interrupt-driven behavior of the always on life.</div><div> </div>Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com1tag:blogger.com,1999:blog-1293472092221793354.post-87363420028322443632010-02-03T15:39:00.002-05:002010-02-03T23:44:49.245-05:00IT, Biotech and Patents: When Worlds CollideSome of you know I like to "throw the long bomb", in that I think about what could happen at the limit, or the end-game, when I prognosticate. This is a handicap on Wall Street, where being too early is exactly the same as being wrong. And it's either mind-expanding or migraine-inducing, or both, when thinking about how our Universe will wind up (cue Peggy Lee singing "Is That All There Is?").<br /><br />But recently I've been spending time around non-IT folks, specifically, people involved in start-up life sciences and biotechnology ventures. Their perspectives on intellectual property issues are very different than my experience in IT. Thinking about the current state of these two different worlds has caused me to imagine what might happen to both if they proceed at their current course and speed.<br /><br /><i>DISCLAIMER: I am not a lawyer, nor do I play one on TV. These opinions are my own and if you get harmed by taking them as gospel, then shame on you.</i><br /><br />For software, the patent system has become so unwieldy as to be useless. Many have opined on this. It is currently almost impossible to write a new line of code that doesn't infringe on some software patent somewhere. I don't think that's what Jefferson intended.<br /><br />Patents were written into the Constitution to promote the development of new ideas by providing a government-granted monopoly for a fixed period, after which the ideas would pass into the public domain. We as a country benefited from the advancement of knowledge, and inventors benefited from the fruit of their labors. Life was good.<br /><br />But life then was also slow. The pace of technology development was slow enough that a 17-year patent lifetime made sense. Moreover, the target environment of a technology improvement was also slow to change. Prior to the PTO's allowance of software patents, the target environment was mostly the physical world (we are excepting design patents from this discussion). Our physical world changes slowly enough that 17 (or now 20, to sync up with the rest of the world) patent lifetimes made sense. For example, a drug providing a certain therapeutic benefit in humans is likely to provide that same benefit 20 years hence - evolution just doesn't work that fast.<br /><br />Things are really different in the world of software. There is no physical world target, just a physical embodiment of an abstract computing machine. Any software technology makes assumptions about the state of development of all of the layers of abstraction all the way down to the hardware abstraction layer. Each of these layers is not subject to any natural law governing its rate of change. Depending on market conditions, each layer is constantly evolving at different, yet increasingly rapid rates.<br /><br />Ultimately, hardware needs to be built to instantiate the lowest layer of abstraction. This hardware is subject to physical laws. Back in the day, the pace of electronics development was leisurely enough that 17 years was a generation. We can argue about the actual pace of electronics development today, but I don't expect anyone to claim that the pace is slower than it was when ENIAC roamed the earth.<br /><br />So, with electronics and software technology driving sub-two year product cycles and 3-5 year total technology refreshes, how are new ideas promoted by granting inventors 20 years of monopoly on novel, useful and non-obvious inventions with a 3-5 year utility? It's plain that patent owners benefit, but it can be argued that the rate of innovation might actually slow as the effort and resources required to navigate the patent minefield overwhelm the effort and resources required for invention.<br /><br />Intellectual property lawyers have added to the problem. Since discovering this fertile yet unplowed ground, an army of lawyers has built careers around patent law. Smart litigators have made large sums in the courts, which has attracted more litigators and has also driven corporations to get better at playing defense. But the resulting friction loss for individual companies and industries is considerable, measured in both cash and time. I built a successful, innovative software company in the 80's without filing a single software patent. This was partially out of my belief that they were wrong, but, more importantly, my corporate counsel did not think that they would increase the chances of successfully executing our corporate strategy. Today, I would be advised that a multi-million dollar IP program might not be sufficient. Is that really progress?<br /><br />Many others are asking questions like the ones posed above, and I suspect that we are on a slow trajectory toward changes in patent law that sharply restrict the number and kind of software patents granted. At least I hope so.<br /><br />Regardless of the patent situation, in my IT world the game was always about getting to revenue and profitability in a 3-5 year timeframe and an expense of $5M to $10M, plus or minus. Today, web startups can get farther on less, for reasons that could be the subject of another discussion.<br /><br />As I am learning, the world of life sciences and biotech is way different. Although revenue and profitability are still goals, the expense of research and development is generally much higher and there is the added fun of government approvals and clinical trials. It is not unusual to spend $500M and take 10 years to get a drug to market. The good news is that successful drugs can generate billions of dollars at fat margins. If you think of the market as a casino,IT startups are the $5 blackjack table and this stuff is baccarat.<br /><br />In this world, patents matter a lot more than in IT. They represent an option on success, which can have substantial value before a company delivers dollar one of revenue. It is the rare IT startup that gets bought for big bucks while its product is still in development, but it is common for drug startups to be bought before Stage III trials are complete. The selling company bases a substantial part of its value on its IP portfolio, and the buyer is willing to pay for monopoly power in a market segment for a period long enough to generate substantial returns.<br /><br />When patents in the life sciences area are for things like medical devices or molecules, they fit snugly into the patent framework established hundreds of years ago. Unlike IT, medical devices or drugs have a relatively stationary target, i.e. animals or humans (there are some interesting exceptions, like HIV/AIDS and fast-mutating bacteria, but hold that thought for a paragraph). So a long patent life allowing recovery of enormous development expense seems to make more sense in this world than in IT.<br /><br />But when I hear people in this world talk about things like genomics, custom sequenced DNA, designer drugs and synthetic biology, I hear "software". The ultimate instantiation might be a molecule or cell, but, to manage complexity, layers of abstraction are being developed and ideas are being captured and manipulated at these higher levels. This is analogous to a Java program ultimately executing on an iPhone. Only the hardware is different.<br /><br />If patent law changes to reflect 50 years of development in IT result in shorter-lived or substantially diminished monopolies for software, and life sciences technologies start to look more and more like software, then it's going to be hard to argue that they should be treated differently, unless patent law further changes to explicitly consider development costs, which could result in different lifetimes for patents in different fields.<br /><br />Given the glacial nature of changes to the patent system, it is not unreasonable to consider this may be the "golden age" of IP law for life sciences and biotech. There could be substantial turbulence ahead.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com1tag:blogger.com,1999:blog-1293472092221793354.post-78929682374687030572010-02-03T15:39:00.001-05:002010-02-03T20:31:32.829-05:00HelloFirst off, the name of this blog is also the title of a very funny book by an only-recently-discovered college classmate, Linda Jaivin. Please go buy it <a href="http://www.harpercollins.com.au/search/index.aspx?kw=jaivin">here</a>, or at your favorite bookseller.<br /><br />Second, the title describes my outlook fairly well. I am basically an optimist, but my Roman Catholic upbringing tempered with some Jesuit education adds a lovely frisson as guilt and cynicism duke it out for outlook-tempering rights in my daily life.<br /><br />Third, I've done a lot of stuff, been a lot of places, and like to keep busy doing things rather than writing about them. However, my current situation affords me the luxury of time to respond to numerous requests in the manner of "hey, you should write a blog".<br /><br />So, what the hell. Stay tuned.Lou Mazzucchellihttp://www.blogger.com/profile/06433422870345865172noreply@blogger.com0