Wednesday, September 28. 2011
Marc Andreessen thinks that the clock is ticking on Oracle and other old-line software and infrastructure companies - Business Insider.
His evidence: not a single one of Andreessen-Horowitz's startup investments use Oracle software. They all use cloud-based alternatives instead.
The thing was that Oracle, BEA, EMC - and even Sun - were not appropriate for startups even 10 years ago, and everyone knew it - but you had to "look big fast" in the high hype world of dotcom share price pimping - and every dotcom with attitude was going to be huge in 2 years, of course - so get the Big Boy systems in now rather than buy a decent SME accounts package now and buy Oracle later when you were bigger. Brave indeed was the dotcom startup who went for the appropriate technology, therefore . What Marc also doesn't mention is that many times these large companies would give you the kit on some sort of for-shares or low interest long life loan basis, so you would be financially daft not to take it.
My main issue with Oracle (and the other big players by and large) is that they have done little in the last 10 years to redress that known weakness - and you would have thought Sun's demise would be a lesson. They saw Hosted solutions coming 10 years ago, so this cannot be a surprise - and thus why no action?
The reason is the fairly standard large company issue - addiction to the current business models, and finding it very hard to invest in new technologies that don't "move the needle" and are unreliable by "tried and trusted" standards. In fact, Oracle innovation has typically been "buying the market" as its innovation ploy - either buying out sector competitors, or small companies with interesting products - and then sadly (and probably even unintentionally) slowly strangling them by underinvesting and burying them in corporate treacle.
(This was part of Marc's argument that there Is No Bubble- he believes the cloud computing revolution has made the titanic valuations of major Web 2.0 companies like Facebook and Twitter completely justified - which we just don't buy)
So my prediction is slightly different to Marc's - I would predict that as the Cloud market grows, and becomes more stable, then Oracle, SAP, IBM et al will increasingly just buy their way in. Give it 3 years or so, and Marc's investments will be using Oracle
And as totitanic valuations being justified, we shall see.....
Tuesday, May 10. 2011
JoltID is the company set up by the founders that has the Skype P2P IP in it, that eBay failed to buy and thus scuppered their attempts to sell Skype easily. One assumes Microsoft bought the IP but I cannot see it in print anywhere (and having seen "Deal Fever" at first hand I can easily believe they didn't....).
Anyway, if they did buy it then my view is that Microsoft overpaid, but it's a rational strategic move so good luck - they will need it, the devil to creating value now is in the execution into the SOHO/SME business market - and execution on acquired companies is not a Microsoft strong suit.
If they didn't, then my view is that they are complete dingbats.....
Friday, April 22. 2011
There is a lot of Sturm und Drang about Amazon's EC2 "Cloud" system collapse over the last 2 days. the main thing it shows me is that most people fundamentally misunderstand networked system reliability. Allow me to make a quick calculation:
- there are c 356 days in a year, 24 hours a day, that is 8544 hours in a year
Also, the sorts of datacentres operating consistently (ie are prepared to sign a service level agreement - SLA - with penalties) at even "Three Nines" are pretty high end, your average cash starved startup sitting on a standrad deal on one cluster of a virtual shared hosting service like Amazon (as far as I recall they don't have an SLA, just Best Endeavours to hit 99.95%*) is probably not going to see even that level of reliability. Assuming they see something like 99.5% reliability, that means you must assume c 2 days of outage a year. Even a fully redundant system like I have described above, at 99.5% will give about 1 days complete outage a year.
In other words, these swans are going to be Black, and they are entirely predictable.
I'm afraid the Cloud industry tends to oversell it's capability for reliability somewhat (what's .499% between friends - well, about 2 days outage a year actually) , you will know its got to Telkco utility levels of reliability when it's provided by massive telecom utility type providers, not run off the back of companies' whose main business is doing something else. If you ever read Nick Carr's book The Big Switch you will see we are in the equivalent of where the 1920's was for electricity, where the industry is moving from fairly unreliable, non standardised services, run by people selling off spare capacity, on to dedicated service providers. No reason not to have Cloud now, (just as no reason not to have electricity in 1920) but you wouldn't bet an entire livelihood (or the farm) on it.
The one thing that Amazon needs to learn though, is telling customers what is going on early and honestly - survey after survey over the last 20 years shows that customers are much more confident, and ultimately happier with you if you tell them - even if it is just that something is wrong - and put in place a comms update plan. Amazon's Cloud apostles dropped off the Twitter radar for hours as this happened, and the initially company clammed up, except for rather legalese communications it seems. No datacentre operator worth their salt wouldn't have system healthcheckers in place so that at least they could tell customers where faults were very quickly, and what their disaster recovery procedures were going to be.
(For the record - we have an Amazon instance, but we don't host the blog or website on it. Our advice remains to use the cloud by all means but also to have your own systems running in hot backup and able to do short term switchover and be able to run the system at normal mean loadings - and ensure any data that you need if it goes down is mirrored)
* I was wrong, one can apply for credits now - but it's money off the rental cost, not business damage.
Update - and here come the Cloud snow jobs - this one is just too (sadly) funny for words but fortunately it's petard is well hoisted on Slshdot - it's on O'Reilly, which does surprise me.
Friday, March 4. 2011
Fifth up on Wednesday at the Financial Times Digital Media & Broadcasting conference was "The Real time Challenges of Media" with a panel discussion featuring:
One of the more realistic discussions of The Cloud that I have heard in a conference (probably because it wasn't a Cloud conference) - some notes:
- Cloud is an "Old New Thing" - it has failed before (think thin Client, Network Computer) for the same reasons it may still fail now
On the evolution of Web TV, which is a specific instance of The Cloud
The irony is that history tells you that apple are the past masters at creating the first Seamless Exoerience in media vale chain after value chain (PC, Music, Smartphone, tablet...DTV next?)
Last discussion was on good old Net Neutrailty, the point was made very clearly by BT that the current UK backbone was sized in the early noughties for low end DSL speeds not broadcast scale High Definition video to a nation, the investment to upgrade to mass big bandwidth now will be huge, and the consumer cannot bear the entire cost. Content providers who use up massive amounts of the network capacity and want real time transport will have to pay more than users with small bandwitdh, low real time synch needs [As has happened with every other utility in history].
Tuesday, January 11. 2011
Loved the "Wisdom of the Clouds" title, it's pinched from Paul Carr's piece on the issues that the Wikileaks affaire brought up - or rather, the way Cloud players rolled over when Sen Liebermann roughed them up and couldn't hand over user data fast enough (Twitter being the honourable exception).
It used to be that if the US government wanted access to documents or letters in my possession they’d have to subpoena me directly. As a foreign citizen there are all sorts of ways I could fight the request – and it was at least my choice whether to do so. As someone living in the US I also had the whole weight of the 4th Amendment on my side. Now, with everything in the cloud, the decision whether to hand over my personal information is almost entirely out of my hands. And unless, as happened with Twitter, the company storing my data decides to fight for openness on my behalf, there’s every possibility that I won’t even hear about the request until it’s too late. That’s just not how things should work in a free society.
We agree totally (see here) and its no accident that many of those most interested in telling YOU to open up run very closed shops themselves. Look at what they do, not what they say!
We would also argue that there is another, older reason to question wisdom of Clouds, and this is simply what happens if it goes away - all that data - gone. There are 3 aspects:
(i) Cloud not accessable from current location - this means potentually a whole lot of work you need to do can't be done. I am amazed at the increasing number of people who look at me as if I'm nuts when I say i use Thunderbird to actually store all my emails on my own hard drive(s), not just for backup but to work when connection is unavailable. It beggars belief that there are people who can't access their email locally, but there you go... the madding crowd and the Cloud and all that.
We have been worried for quite soem time about privacy implications of Cloud storage, especially on free services - though as the Wikileaks affaire proves. its not just free services that can play fast and loose.
Long term readers of this blog will know our recommendation is to go for hybrid services - use the cloud by all means , but keep a hot running local backup. This is borne by our experience over 20 years dealing with networked and hosted services. You cannot engineer these thinsg to be 100% reliable even at infinite cost. at affordable cost they will be a darn sight less fr quite a whiel. (I note the Cloud lobby can no longer claim that Cloud services are more economical)
Another thing we have been looking at is where can you put secure servers, ie ones that can't be pried into by powerful bodies. which countries would host such a service? (Encryption is not enough, as if the host country wants the data badly enough they can get it, and its no guarantee that your encryption can't be broken (or more likely, compromised by man-in-the-middle attacks) if the hoster is in cahoots with said snooping entity.
Sunday, December 5. 2010
Salon puts it very well....
Given that the economic case for Cloud Computing seems to be floating ever further away, and its most punted current rationale is "risk reduction", Wikileaks shows The Cloud's promise of risk reduction is whispy at best and that there is only one way to reduce risk and that is have your own servers, preferably not in the US. And ideally have your own Internet as well....
The correct retort to any Cloud Apostle right now is probably somewhere between a snort of derision and a well placed boot on the seat of the trousers....
Wednesday, October 13. 2010
John Battelle on the "Next Big Thing":
That Google is re-allocating Marissa Mayer here is a sign of a hyper market, to be sure. It is a time for image, as with location there is still very little substance - generation 1 failed, generation 2 are resorting to ever gamier tricks to keep user interest. But to be very publicly Seen To Be Doing Something.....well, just look at the headlines generated today to start!
The holy grail of location is localised, personalised, highly valuable advertising (compared to the appallingly low rates that most social advertising gets)
Well, as readers of this blog will know, we think Location based service opportunities are overhyped (that has never stopped fools from being parted with their money, of course) for the following reasons:
1. Fundamentally, its a feature, not a stand-alone business. Location will be integrated into other things you do (cf Twitter). This means, apart from a few Location companies being bought at fairly low cost, we are not going to see large exits. The real money will be made by people like Google rolling it out into their large distribution channel.
In oher words a small number of small companies will sell at a nice little price, the big guys will build it in as a "stickiness must have" and it will be just another feature in the service mix. Location will be like email - a feature you must offer, but not something you can intrude on too much before people shy away from it. As to the Googleshuffle, whisper it who dares, but Google Search is in need of a major revamp that probably only a fresh head can bring, so that is probably another contributing factor.
As to what the Next Big Thing really is - well, thats obvious, you just look at where the money is* - it's Web TV 2.0. But more on that later......
*Bear in mind that Social Media is still a zero billion dollar industry - there is as yet no evidence that Facebook et al can turn a profit. In theory they can, but whether it is anything like what is required to justify their valuation requires you to believe some far fetched hypotheses, frankly. The only real money made to date has been by large companies paying hype-level prices for social media companies at the top of it's hype curve. Which, of course, explains the Rush for Location
Friday, September 3. 2010
Had to install iTunes to set up an iPhone for a friend the other day, finished it all nearly 100Mb of bloatware and 1 hour later. WTF sez I, what could possibly justify such a huge program just for that? Well, I stumbled upon this Xconomy post about the Why:
If you’re not convinced about iTunes’ cruftiness, let me take you on a tour of the program’s main functions. This is a long list, but bear with me:
As Tim O'Reilly notes, iTunes bloatware may be the undoing of the Apple bid for Global Domination. And it starts insidiously - I wish I'd read Jas Dhaliwal's post on how to avoid megabloatage first:
Please excuse me now - me and iTunes are going to have a little tete a tete about slimming......
Monday, August 30. 2010
The New York Times on Location based services:
Venture capitalists have poured $115 million into location start-ups since last year, according to the National Venture Capital Association, and companies like Starbucks and Gap have offered special deals to users of such services who visited their stores.
The Fist Generation services (Loopt, Dopplr etc) have by and lerge failed to gain traction. So far what has worked with 2nd generation location based services is game based rewards (eg becoming mayor of a place) but these rewards are ultimately about bribery (eg becoming mayor gets you a free offer). Shopkick plays for the endgame by giving you money off coupons when you shop at a certain shop - it's the online equivalent of newspaper coupon clipouts.
But never fear, the CEO of Loopt claims that people born after 1981 (ie below 30) have lower privacy requirements, and thus a larger demographic will emerge year by year:
So, two contradictory views - the NYT arging that the market is limited, the CEO of Loopt arguing that the only way is up. I have another explanation for the people after 1981 being less privacy aware, and this is simply that they are young and have less to lose - as the NYT notes:
In other words, perhaps at (about) 30 people start to have responsibilities, and for various reasons become far less interested in displaying their location.
Wednesday, August 25. 2010
WSJ on the Inconvenient Truth about location based services:
Will business continue to use the service? Several other pieces have to fall into place for the services to become more mainstream, said Sree Sreenivasan, a digital media professor at Columbia University. “You need customers who buy into the technology and are willing to use it, and you need businesses that are savvy enough to use it in a smart way to harness that,” he said.And think of Location generation 1.0 - anyone remember Loopt, Dodgeball and Dopplr?
Still, anyone who is still going when the Dotcom boom 2.0 starts is bound to cash in. Everyone sing after me - Ah, Ah, Ah, Ah Staying Alive
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