The term "bit-trickle" defines a new wireless Internet world - using wavebands which were once popular for pagers, to drip data for update purposes into mobile devices.

11:31:41 AM    comment   

At the start of this year, I wrote an article about utility computing that came to be published in the spring edition of the MIT Sloan Management Review under the title The End of Corporate Computing. In it, I argued that advances in networking and related technologies like virtualization and web services are going to radically transform the way information technology is supplied to businesses. Companies are going to shift from the traditional, fragmented model of client-server computing, which requires them to buy, assemble and maintain vast quantities of complex and inefficient computing machinery, to a centralized utility model, in which computing assets are rationalized, standardized and consolidated and what we've come to call "IT" is supplied over networks as a service from central utility plants. The economic advantages of the utility model are so great, I argued, that the transformation of IT is inevitable. (Hewlett-Packard recently published excerpts from the article on its web site.)

When I wrote the piece, I assumed this shift would play out slowly, as the utility model battled against a status quo propped up by the entrenched interests of both suppliers and corporate IT departments. But now I'm not so sure. I may have been thinking too conservatively. In just the last few weeks, we've seen, particularly on the software side, growing signs of a sea change. As consolidation, commoditization and weakening demand turn traditional packaged software into a rust-belt industry, dominated by a couple of big suppliers looking to milk the installed base, innovation and growth seem to be shifting quickly to the software-as-a-service (SaaS) arena. Pushed by diverse utility upstarts like Google (on the consumer side, so far), Salesforce.com, RightNow Technologies, 37signals and Rearden Commerce, traditional software makers are now jockeying to position themselves as players in the SaaS world.

Yesterday, for example, Microsoft put software services at the center of its strategy, or at least very near the center. It announced that its diffuse business units would be collapsed into three groups, including a "platform" organization combining the Windows operating systems with the MSN web site. Ray Ozzie will become the company's services guru, helping to coordinate the shift to a services model across the three groups. "Our goal in making these changes," explained CEO Steve Ballmer in an email to staff, "is to enable Microsoft to achieve greater agility in ... executing our software-based services strategy." It remains to be seen eactly how far and fast Microsoft will go down the services route - and whether it can figure out a services business model that will deliver the kind of rich profits its packaged software has long provided - but the dramatic reorganization shows that it recognizes the old model is dying.

Also yesterday, David Berlind reported on an interesting conversation he had with IBM's Ken Bisconti on the company's aggressive plans to establish IBM Workplace as what I would call a utility interface - a unified access point, or portal, for software services delivered over a network (from either a company's own servers or those of an outside host). Each user's portal can be customized with different service "components" depending on the person's job. "The components can be custom-built components designed to give you access to the parts of a particular business process that your [sic] authorized to have access to, or they can be canned>thin clients as a service, a display grid at $1 per day.") It's on the hardware side, perhaps, that the status quo will prove toughest to displace, though even here I see indications that things may move faster than I originally expected. But more on that later.

11:26:57 AM    comment   

I just read a note in CableWorld by Paul Kagan referring to George Gilders “vision” that in the future TV will die, regardless of delivery medium simply because people will watch only what they want to watch.

How wrong he is.  Why he is wrong is a lesson in basic business.

It was Aaron Spelling I believe who said that “TV is the path of least resistance from complete boredom”.  Which is another way of saying that its easier to watch TV, than to sit there and do nothing.

Which describes exactly how people make most of their choices in life. They take the easy way. They take the path of least resistance.

There are certain things in life we all have to do.  There are certain things in life we choose to do. Then there is everything else. The things we do to kill time.

In every case, all things being equal, we choose the path of least resistance.

Understanding this concept is key to making good business decisions.

When Broadcast.com was around, we understood that our strength came from being the path of least resistance for out of market sports that weren’t available on national TV. If we had the option of offering a football game that was going to be on national TV in the evening, it wouldnt matter  how good the game was, no one was going to choose to listen online because it was easier to watch on TV.

If that same game was on during a weekday afternoon when most people were at work, we knew that we would get a great audience because it was easier for people stuck in their offices to listen on their PCs than it was to try to sneak out of the office and get to a TV. Offering content for which the path of least resistance was watching or listening online was a key to our building an audience.

The Path of Least Resistance is a key to why HDNet Films is offering our slate of films in a variety of day and date options. 

For the couple who wants to go on a date, going to a theater is often the path of least resistance to making an easy, relatively inexpensive choice to spend the evening together.

For the family who wants to see the movie, but can’t make it out of the house for whatever reason, offering it on HDNet Movies or through day and date delivery of a DVD is the path of least resistance for them to see the movie.  We feel that people will pay a premium to be able to stay at home and watch those movies, either by subscribing to HDNet, or by paying more than the traditional retail price of a DVD. It’s easier to pay a premium for access to the movie than to deal with the kids screaming about not being able to go.  It’s this reason that we gear the movies we make to an adult audience. Enough can get out of the house to see the movie, preferably in a Landmark Theater. Enough have kids, can’t get out and have disposal income, so they are more likely to order the DVD or subscribe to HDNet Movies in order to see the movies they want to see. We want to offer our movies in the path of least resistance for our target demo.

The path of least resistance is why I think Amazon.com, IPod and Google have been so successful.

I buy everything from books to electronics to toiletries on Amazon because it’s easier than schlepping to the store. They show up in the mail as quickly as I am willing to pay to have them show up. 

I got my Ipod, gave Itunes my credit card, and it takes me seconds to sample and download music. To the extreme that I even downloaded songs from the Wiggles so that my daughter could listen to them while I was working.  It was the path of least resistance to keeping her occupied so I could get my work done.

Google one upped Yahoo a few years ago by making it simple and easy to plug in a search and get results. Yahoo made us scan through their home page to make a search and often took us to directories and other intermediaries. Google was the path of least resistance for simple searches.

TiVo has been successful because it has made it so easy to record the shows we want to see. The show comes on, you hit  a button. You decide if it’s just this show, or you want to subscribe for the season. The path of least resistance for timeshifting.

In business, one of the challenges is making sure that your product is the easiest to experience and complete a sale.

I will give you another example. I buy a lot of consumer electronics. When I have a good idea what I want, or if it’s big and I don’t want to have to drag it from the store, I buy through Amazon.

Other times I like to shop and kill time and see what’s happening in the consumer electronics world. Two of the places I shop will let me take the product right to the checkout counter. That’s easy. Another, that I used to shop at, made me tell a clerk what I wanted, who in turn went to the inventory room. I then had to go to the sales line where they would meet me with the merchandise. Two lines. One or both was usually more than a few people deep. I don’t go back there any more. It might have been easier for them, but it was slow and painful for me.

Moral of the story, make your product easier to buy than your competition, or you will find your customers buying from them, not you.

Which brings me back to George Gilder and a topic I think will be fascinating to watch play out.

George and others seem to think that unlimited choice is the holy grail of TV. It’s not.

The reason it’s not, is that it’s too much work to page through an unlimited number of options.  It’s too much work to have to think of what it is we might like to watch. We are afraid we might miss something that we really did want to watch.  Put another way, its way too hard to shop for shows in a store where the aisles are endless. Its stressful and a lot of work.  Which is exactly why when we channel surf, or when we surf the net, we all end up surfing the same 10, 15, 20 channels/sites over and over again. It’s the path of least resistance.

It’s also why websites do anything they can to game the system on search engines to get top ranking. They know that no one is going to page through the thousands of results  the search returned. Users will pick from the first page or they will  pick one of the sponsored ads long before they choose to browse through even a couple pages.

So when Gilder thinks we will only watch exactly what we want to watch, he is dead wrong because we don’t know what we want to watch as often, if not more often than we do know.

When we get to a point that there are thousands of on demand TV choices, we won’t approach TV programming guides like we do a search engine, looking for a specific target.  That’s too much work.  The smart on demand providers will present their programming guides more like Amazon.com. or Netflix.com. Both of which do a great job of “suggestive programming.”

We will get a personalized page with options that it thinks we might like based on our previous viewing decisions. Then different categories of shows, within each we will see best rated, most viewed and newest added, along with “play lists” suggested by branded guides who make recommendations. All of these simple options will make it easy for us to make a choice with some level of confidence.  We won’t feel like we are missing something and  we will know that if we don’t like the show, we can quickly go back to a point that makes it easy to find another selection.

Aaron Spelling was exactly right when he said that TV is the best alternative to boredom, future providers of on demand content will hopefully remember this when devising their user interfaces, and every business should remember it as well.

Everyone follows the path of least resistance.

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11:21:13 AM    comment   

When was the last time you recieved a live multicast feed across multiple networks over the internet? What’s a multicast stream? It’s a stream of bits that can be just about anything, a software program,  a movie, a game, a tv show. It doesn’t matter.

When a file or live event is multicast, rather than having a copy of the program delivered, uniquely from each source to each destination (unicast delivery), the stream of bits is replicated through the routers on the network so that one copy exists on the network at any given time. The router basically grabs the stream and provides it to the users on its network segment that want it.

The value in doing this is that the bandwidth savings are huge. For live events it’s the only way to truly conserve bandwidth. For on demand, it even blows away Bit torrent type peer to peer delivery because the routers are always there to act as the peers on any network segment and you can control and monitor the distribution more cleanly.

But a network of multicast enabled networks, linked together to form a more efficient internet doesn’t exist. At least that I know of.  But it almost did.

Back in the late 1990s, Darin Divinia and our engineers were working hard with UUNet and other networks to test and optimize multicast tunnels on their networks and to peer them with some level of QOS so that Broadcast.com could deliver live events and files more cost efficiently.

We also worked hard with Microsoft Windows Media and Real Networks to deliver live events via multicast. We even had seperate links for users who were on multicast enabled networks to click on so they could pull a multicast feed of a live event at a higher quality. I think we may have even gotten as high as 12 pct of users on some events. It was one of the most important projects we had going.

But unless it has been hibernating somewhere without me knowing about it, the project died when I wasn’t at Yahoo to champion it any longer.

This isn’t to say that an internet with multicast tunnels routed throughout the net to any end user cant happen. It’s just to say that it isn’t anywhere I can find it right now. Without it, there is no such thing as bandwidth efficient LIVE internet TV. Without it, there is no equivalent to broadcast TV on the internet. Without it, there is no possible way broadcast TV, defined as what we see on major networks that own broadcast spectrum, ala ABC, CBS, NBC, WB, UPN, etc. is going away anytime soon. 

The internet can’t support the equivalent of broadcast TV because the internet can’t broadcast. It can deliever individual (unicast streams) streams, but that’s it. This is why AOL streaming 350k simultaneous Live8 users was a big deal.  Instead of a single 300k video stream that every one tuned into, every viewer had to have their own 300k stream. That’s a boatload of bandwidth and is expensive. 

What happens when 80mm people want to watch the SuperBowl? What happens when a measly 4mm want to watch  a show? What happens when they want to see the show in 1080i HD?

As long as there are TV shows or events that can capture audiences in the millions, the only place to deliver those shows live will be on good old fashioned cable, satellite or broadcast or some other broadcast spectrum delivered TV. It ain’t gonna be the net anytime soon. That’s why broacast TV ain’t going away.

And while I’m on the technical side of TV, it’s going to be very, very interesting to see how IPTV plays out on networks.  Traditional TV delivered on cable like networks is basically multicast. It’s always on and viewers just turn the channel to tap into the channel feed. There is enough bandwidth for each channel, and the network can support an unlimited number of viewers.

In the IPTV world, a TV signal for a channel is only delivered if someone has requested it. So if no one is watching VH1 Classics, the channel is not delivered over the network , saving bandwidth. Bandwidth conservation is particularly important in a world of ever expanding digital services including HDTV, where the capital isn’t available or it doesn’t make sense to add more bandwidth to the network.

But the problem with IPTV is the N+1 Disaster. In an IPTV world, there isn’t enough bandwidth reserved on the network so that if every channel is requested, it can be delivered. Which means that it’s possible that someone could change to a channel, lets say BET Jazz, be the first to want to watch that channel in a while, and they would get a message saying it wasn’t currently available, try back later.

That is the N+1 Disaster.

Networks can statistically optimize so that the chances of this happening are reduced, but they cant ever elminate it. It’s going to be interesting to see what happens, when it happens.

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11:20:27 AM    comment   

Business 2.0: The Radicati Group, a Palo Alto-based market research firm, predicts that nearly 123 million consumers will check e-mail on their handsets by 2009, up from just 6.5 million this year. At an eye-popping growth rate of more than 100 percent a year, Radicati expects mobile e-mail to become a $2 billion market in just four years. If mobile e-mail becomes a multibillion-dollar market, it will prove that in the wireless world, it’s the applications that are simplest to use that make the most money.

11:15:21 AM    comment   

Oh now keeping in with this week’s previous posts, here are some “mandatory Google update.” In case you were looking here is a little job posting for Google TV. Also there is news that Google is leasing 270,000 square feet in a Chelsea telecom hotel. That’s 111 Eight Avenue by the way. This would be a perfect place to peer with the big networks, and light up that dark fiber, and put GoogleNet to work.

.. concentration of interconnected networks would allow Google to offer its new voice-over-Internet service, Google Talk, more efficiently and at lower cost because it would be able to connect directly to the networks of many of the world’s leading telecom firms that are also housed there.

11:14:30 AM    comment   

- Gaming is going to be the number one revenue earner (in value added services), and will surpass ring tones (on ringtones, read our earlier post)
- But there is no definite estimate on the market size. The analyst estimates are like $350 million by 2009. But Gondal thinks it can in the range of $150-250 million in two or three years.
- More marketing and promotions expected (in the sense, gaming is going to marketed like a consumer product)
- Non-carriers to gain strength (As of now, it's carriers who call the shots, not developers, so there can be a situation where the developers also have a voice)
- Mobile broadband (M3G) is going to take off (and that will drive gaming)
- Content will drive adoption of 3G broadband
- Most important is customer profile. Interestingly, most of the people who download games do not come from cities like Delhi and Mumbai, but from smaller places like Western Uttar Pradesh, Bihar and interiors of Maharashtra and Gujarat. The age group is 15-26 years.
- Will plain SMS-based games gain currency? Gondal thinks not. According to him, you need to generate several millions of SMSes to make money.
- Piracy is still a problem. There are discs available with 2000 ringtones or 200 games in markets like Delhi's Palika Bazaar.
- Will ethnic themes like Ramayana and Mahabharat work for gaming? Gondal thinks it may not. Gaming is for a different audience. Also ringtone audience is different from the gaming audience. [ContentSutra]
10:54:25 AM    comment   

The legitimate and undeniable coolness of some of British luxury cell phone maker Vertu's design innovations as well as their use of insanely fancy materials is made a non-issue for most of us by their equally insane price tag. But flourishing one of these big-ticket items (some models go for upwards of 10K) at a polo match is the kind of thing that future trophy wives and fellow plutocrats alike take note of.

Now Vertu's targeting the micro-market of luxury car racers, owners, and their admirers with its Ascent Motorsport Limited Edition cell phone to "celebrate" their participation in The Porsche Michelin Supercup and the Porsche Carrera Cup Asia. Crafted from Liquidmetal and petrol-resistant automotive leather (get it?) and featuring its usual needlessly elaborate, Swiss-watch grade innards, the phone's price isn't even announced stateside yet. But, of course, that's all part of their 'if you have to ask you can't afford it' cache. So hurry and pre-order, anyway: they're only making 997 of them.

Vertu Ascent Motorsport Limited Edition [Ployer]

10:45:17 AM    comment