Author: Paul Wallbank

  • Dispelling the internet of snoops

    Dispelling the internet of snoops

    Last October New York lawyer Michael Price bought a new TV and what he read in the accompanying paperwork disturbed him.

    In “I’m terrified of my new TV: Why I’m scared to turn this thing on” Price described how Samsung’s privacy policy worried him, particularly the way the voice recognition data was handled, “Please be aware that if your spoken words include personal or other sensitive information, that information will be among the data captured and transmitted to a third party.”

    Disgraced former CIA director David Petraeus told a venture capital conference in 2012 that security agencies will track people through their dishwashers and Price pointed out a smart TV listening to a room’s conversations fits Petraeus’ vision nicely.

    At the time of its publication at the end of October Price’s story received some coverage among the information security, privacy and internet of things community then sank until last weekend when a tech site picked it up.

    At that stage, the story took on a new life with media outlets around the world running stories on how Samsung TVs are spying on customers.

    For Samsung the story is was major embarrassment and they were quick to point out they don’t actually collect data.

    To be fair to Samsung, they aren’t alone in having products that can listen to their users; almost every voice activated device has this capability and we can expect everything from smartphones to TVs and connected cars to be able to record voice and, through cameras, our movements.

    The marketing and social media industries, like General Petraeus, are enthusiastic about the surveillance opportunities of these devices; Facebook’s  Share and Discover feature for instance opens the microphone when a user starts typing an update to determine what music is being played.

    In the internet of things, it’s not just a smart TVs microphone that’s a potential problem as pretty much every connected device is generating information that can be used by government agencies, insurance companies and plaintiffs to track hapless users.

    Collecting this data also presents a range of risks beyond subpoenas from government agencies and angry litigants, for the vendors of smart devices there is also the problem of complying with various privacy rules, securely storing customers data and ensuring their business partners also respect user information.

    Samsung tried to manage this risk by adding a ‘don’t say stuff near our TV’ clause in the term and conditions, something that backfired dramatically and illustrates the impossibility of managing risk out of your business.

    While companies will struggle with the legalities of capturing massive amounts of customer data, the public in general have to face the risks of allowing everything from their kettles to their cars collecting information on them.

    The predicament for users is that turning off the ‘smart’ functions – assuming that is possible – remove much of the device’s functionality so the trade off between convenience, security will be a difficult compromise for many people.

    For the Internet of Things industry the task now is to convince the public their devices are trustworthy, stories like the Samsung TV snooping on people isn’t going to help their efforts.

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  • Preparing for the mobile data explosion

    Preparing for the mobile data explosion

    Late last month Cisco Systems released its annual Visual Networking Index that tracks the company’s predictions for the growth of global network traffic over the upcoming five years.

    It’s no surprise this year’s report predicts global data traffic will grow at over fifty percent compounded each year with Cisco expecting 24.3 exabytes to be pushed around the world’s networks each month by 2019.

    Most of that network traffic will come from tablet and smartphones with Cisco predicting data use will grow by up to a factor of five on those devices with devices like wearables growing fourfold.

    This growth creates a challenge for telcos as they invest in capacity to deal with the increased traffic and Cisco sees half of all smartphone connections will be handed off to WiFi networks by the decade’s end.

    Summary of Per-Device Usage Growth, MB per Month

    Device Type

    2014

    2019

    Nonsmartphone

    22 MB/month

    105 MB/month

    M2M Module

    70 MB/month

    366 MB/month

    Wearable Device

    141 MB/month

    479 MB/month

    Smartphone

    819 MB/month

    3,981 MB/month

    4G Smartphone

    2,000 MB/month

    5,458 MB/month

    Tablet

    2,076 MB/month

    10,767 MB/month

    4G Tablet

    2,913 MB/month

    12,314 MB/month

    Laptop

    2,641 MB/month

    5,589 MB/month

    Source: Cisco VNI Mobile, 2015

    Handing half the growth in mobile traffic over to Wi-Fi connections, most of which will be connected to fiber or ADSL services will provide challenges for fixed line operators as well who will see the demand for capacity also explode over the rest of the decade.

    Much of this explains the moves by companies like Telstra to roll out public Wi-Fi services to start locking users into their services. It also gives them, and consumers, an opportunity to understand how networks that mix both cellular and Wi-Fi behave.

    Cisco_M2M_connections_to_2019

    Another aspect of the Cisco VNI survey is the Internet of Things which is going to see exponential growth as industrial and household devices start being connected either directly through the telco networks, across unlicensed radio spectrum or over private Wi-Fi systems.

    While Cisco predicts the bulk of that traffic as being generated by smartphones, the company sees connected devices as growing by 45% per year over the next five years with 3.2 billion sensors connected to the internet by the end of the decade.

    Cisco-2015-VNI-M2M-connections

    Notable in the prediction that Low Powered Wide Area (LPWA) networks – non cellular systems mostly operating in the unlicensed spectrum used by Wi-Fi networks – will provide nearly a third of the connections by 2019. At the same time we can expect many M2M deployments to consolidate traffic locally with much of the data processing down locally before the residual information being passed up the network.

    As usual the Cisco VNI report underscores, and possibly understates, the growth in mobile data usage we’re going to see over the rest of the decade. For businesses, it’s time to plan for managing both the flow and application that smart devices are going to generate in our daily operations.

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  • Where are all the salesfolks’ yachts?

    Where are all the salesfolks’ yachts?

    “All the pieces are now in place,” President of Google At Work, Amit Singh, tells Business Insider in an interview about how the company’s enterprise offerings are competing in the marketplace and, perhaps most critically, undermining Microsoft’s Office products.

    While Singh may be confident about Google’s products, the company’s earnings from its cloud services are trivial compared to its competition.

    ‘Other’ categories

    Google don’t break out their income from their apps services, instead lumping it into ‘other’ revenues which also includes Google Play, Apps Engine and all their other non-search products. In the last quarter that was $1.9 billion, barely 10% of the organisation’s entire income.

    Microsoft also obscure their office software earnings having split its products into the Devices and Consumer licensing division and Commercial Licensing however the last quarter Office’s income was reported it was a seven billion dollar a quarter business.

    While Microsoft’s income from the various forms of Office will have shrunk in the shift onto the cloud, it’s still safe to say it still dwarfs Google’s income from Apps.

    Google’s ‘other’ category is also a general bucket of products that is competing against Microsoft Office, Amazon Web Services and Apple iTunes – with a combined total of 17 billion dollars, ten times Google’s quarterly income.

    Slim pickings

    Another problem for Google are the margins in its cloud services, as Microsoft have found the profits from online products are very slim compared to those from boxed software or advertising. For Google to continue its impressive profits, it’s going to have to find something more lucrative than cloud office software.

    These slimmer margins also have another effect on the business model as Singh would know well from this days of working at Oracle.

    Oracle, like many of the 1980s and 90s software companies, boasted extraordinary margins. This allowed them to pay huge commissions to salespeople, engineers and executives. A single enterprise sale for an Oracle, IBM or SAP salesdroid could pay for a decade of private school fees or a very nice yacht.

    At Google and its partners the idea of being able to pay off the mortgage with the commissions from a single corporate deal raises a hollow laugh; there simply isn’t the money to pay for armies of hungry salesfolk.

    Those thin margins also mean a change to Google and Microsoft’s business models. Shareholders expecting big profits from cloud services may need to be looking elsewhere.

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  • Business in a time of falling technology costs

    Business in a time of falling technology costs

    Personal Computers cost one thousandth of what they did in 1980 reports Aki Ito in Bloomberg Business.

    For the computer industry that’s been both a blessing and curse; cheap systems have allowed computers to become pervasive but at the same time the collapsing prices have destroyed the business models of those who built their companies upon the industry economics on 1980 or 2000.

    Software has fallen a similar amount with computer programs now costing 7/1000ths of what they did 35 years ago. Again this has dramatically changed the structure of the industry with Google and Amazon taking over from Microsoft and Adobe.

    While the computer industry is the starkest example of the collapse in prices due to technological change, it’s not the only sector being affected – almost every industry is under similar pressures as margins get stripped away.

    Anywhere where middlemen are exploiting market inefficiencies are opportunities for new technologies to destroy the existing business models, Uber are a good example of this with the taxi industry.

    With technological change accelerating in all industries, no business or its managers can assume they are safe from shifting marketplaces or new, unexpected competitors.

     

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  • Will mobile banking drive the developed world’s economies?

    Will mobile banking drive the developed world’s economies?

    Microsoft founder Bill Gates suggests mobile banking can revolutionise developing nation’s economies says in a guest post for online magazine The Verge.

    “People being able to participate on their phone, no matter where they live, even if they’re in a remote rural village in Tanzania or Kenya, they’ll be able to save small micro-payments,” Gates told The Verge during an interview in New York. “They can participate on the economy through their phone, but also in the fall when it’s time to pay the school fees, they’ve saved the money for the year. That’s transformative for their family.”

    Gates’ piece appeared at the same time French telco Orange announced a partnership with Ecobank to provide mobile payments in several African countries.

    Bringing banking to the masses through mobile phones is one example of how emerging markets can leapfrog the technological and institutional barriers that have given the western world a head start.

    For poor and remote communities, a combination of cheap photovoltaic (PV) cells and cellular base stations mean it’s possible to connect into the global economy without the need of massive government or corporate investment.

    As Gates points out, this has the potential to dramatically change the economies of many emerging markets.

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