Paul Wallbank | Paul Wallbank - Communications Professional

Reading the golden records – can we avoid a digital dark age?

Changing computer formats mean we risk a ‘digital dark ages’ industry experts warn.

In 1977 NASA’s Voyager mission launched from Cape Canaveral to explore the outer solar system, included on the vessel in case it encountered other civilisations were a plaque and a golden record describing life on Earth.

The record was, is, “a 12-inch gold-plated copper disk containing sounds and images selected to portray the diversity of life and culture on Earth.” It containing images, a variety of natural sounds, musical selections from different cultures and spoken greetings in fifty-five languages.

Most American households in 1977 could have listened to the sounds on Voyager’s golden disk but were the spaceship to return today it would be difficult to find the technology to read the record.

This is the concern of Google Fellow and internet pioneer Vint Cerf who told the American Association for the Advancement of Science’s annual meeting in San Jose this week we are “facing a forgotten century” as today’s technologies are superseded rendering documents unreadable.

A good example of ‘bit rot’ is the floppy disk – the icon used by most programs to illustrate saving files is long redundant and few organisations, let alone households, have the ability to read a floppy disk.

For corporations the problem of dealing with data stored on tape is an even greater problem as proprietary hardware and software from long vanished corporations becomes harder to find or engineer.

As the Internet of Things rolls out and data becomes more critical to business operations, the need for compatible and readable formats will become even more important for companies and historical information may well become a valuable asset.

With libraries, museums and government archives having digitised historic information, this issue of accessing data in superseded formats becomes even more pressing.

It may be that important documents need to be kept on paper – although there’s still the problem of paper deteriorating – to make sure the 21st Century doesn’t become the digital dark ages and our golden records remain unread.

Building the next Internet of Things network

Investment in French networking startup Sigfox shows the need for the IoT to develop new networks.

Earlier this week we looked at Cisco’s claim that Low Power Wide Area (LPWA) networks will handle much of the world’s mobile data traffic by the end of the decade.

French company SIGFOX showed how investors are looking at the opportunity in these systems with a $115 million funding round two days ago.

What’s particularly notable about SIGFOX’s investors is how many of them are telcos themselves with Spain’s Telefonica, Japan’s NTT DoCoMo and South Korean SK Telecom being key shareholders.

Along with the telcos, who SIGFOX hopes will help them expand their footprint outside Spain, France, the UK and the Netherlands, there’s also a collection of industrial companies including Air Liquide and infrastructure giant SDF Suez.

That a diverse range of companies are moving into the LPWA market shows how important the stakes are for providers in securing a position in the the technologies that will define the Internet of Things as industries brace themselves for the massive rollout of connected devices.

Connecting motor bikes to the IoT

Intel and BMW’s connected bike helmet show what’s possible with smart vehicles

One of the obvious applications for smart devices is in motorbike helmets; an article in Intel’s Free Press website describes how they may work in a prototype setup on a BMW BMW R1200GS bike.

The smart helmet, which uses an Intel Edison system, is different from current add on systems in that it directly communicates with the bike’s internal electronics giving a rider a deeper level of control.

“If you need directions, say ‘take me home’ and it’ll queue up directions and give them over audio. But if there isn’t enough gas, then it will redirect you to a gas station first because it can read the bike’s remaining fuel range,” explains Moyerman. “It will also do smart navigation, so if a blind turn is approaching, it’ll give you warning to slow down.”

Creating the prototype isn’t simple as each manufacturer has its own control language, a common problem in retrofitting Internet of Things functions onto devices not designed to connect to a network.

“Putting together a system like that is much more complicated than plug and play. Every vehicle maker has its own data language, which means that there’s no universal standard to interpret the data. The team at Intel worked with BMW’s Bay Area group to translate a R1200GS adventure motorcycle’s own language from the CAN bus (controller area network) to Edison, which then sends it to the smartphone via Bluetooth.”

The same challenge faces car manufacturers as well which increases the risks of vehicle owners being locked into a certain manufacturer’s ecosystem – for instance, buy a BMW and be locked into the Apple HomeKit system.

Regardless of the compatibility problems, we’re increasingly going to see these technologies included with common household items. That many of them are voice activated should give those concerned about the privacy of Samsung smart TVs some pause for thought.

Dispelling the internet of snoops

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.

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.

Preparing for the mobile data explosion

Cisco’s Visual Networking Index predicts massive growth for mobile data use as smartphone use and the internet of things grows.

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.

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.

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.

Where are all the salesfolks’ yachts?

Thinner margins for cloud services mean no more fat commissions for IT salespeople

“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.

Business in a time of falling technology costs

The fall in computer prices shows no business or manager can assume their markets are safe

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.

Will mobile banking drive the developed world’s economies?

Banks and telcos look to transform Africa with mobile banking and payments

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.

Building trust in an age of suspicion

How can businesses regain public confidence in a time of declining trust?

The world’s trust in business, government and innovation is falling reports global PR giant Edelman in its 2015 Trust Barometer.

Surveying 27,000 participants around the world, Edelman follows up with questions to what they call ‘informed publics’; 6,000 college-educated followers of business and news media with a household income in their country’s and age group’s top 25%.

Across the board trust in institutions have fallen with nearly 60% of countries falling into the ‘distruster’ category and the news isn’t good for businesses and governments.

That decline in trust is a striking result given the ‘informed publics’ cohort are their country’s middle class and it shows the stresses being felt in affluent groups.

“There has been a startling decrease in trust across all institutions driven by the unpredictable and unimaginable events of 2014,” the company’s release quotes CEO Richard Edelman. “The spread of Ebola in West Africa; the disappearance of Malaysian Airlines Flight 370, plus two subsequent air disasters; the arrests of top Chinese Government officials; the foreign exchange rate rigging by six global banks; and numerous data breaches, most recently at Sony Pictures by a sovereign nation, have shaken confidence.”

Whether the events of 2014 are responsible for the erosion in trust as Edelman claims is up for debate, the decline of trust in innovation indicates the general atmosphere of mistrust is a much bigger issue.

Trusting innovation

Particularly notable is the Australian result where over half the respondents believe innovation is happening too quickly and that it is being driven by greed. Only some, a piddling 14 percent, see innovation as making the world a better place.

Those results are a concern for a country looking at dealing with a high cost economy. At this stage of Australia’s development it’s necessary for industry and society to be implementing new ways of doing business, not looking back to the past.

One shift that marks a change in society is that online search engines are now more trusted than the media outlets that provide the news, that the population trusts algorithms more than journalists is something that should concentrate the minds of newspaper and magazine proprietors.

Regaining trust

Towards the end of the survey Edelman suggests ways businesses and governments can regain the trust of their communities through ethical business behaviour, taking responsibility to address issues, along with having transparent and open business practices

Other opportunities for building trust include listening to customer needs and feedback, treating employees well, placing customers ahead of profit and communicating frequently on the state of the business.

Clearly building trust is the task of all staff but it starts with an organisation’s leaders to ensure ethics and openness are rewarded. In that light it’s not surprising that trust is declining given the way unethical financiers and opaque politicians have been the main beneficiaries of the post crisis economy.

While a time of declining trust means our institutions are under great stress, it also means there are great opportunities as well for smart businesses and leaders. The challenge is to show the ethics and openness that the public is calling for.

Leaving the Jagger generation behind – Coca-Cola’s journey into milk

Coca-Cola’s move into selling milk is part of a far deeper shift in the consumer marketplace.

Coca-Cola are now selling milk as their markets move away from consuming sugary drinks, how much of this is due to the baby boomer era coming to an end?

Following yesterday’s post on McDonalds and the franchising model, it’s worthwhile considering how other businesses are being affected by today’s changing society.

Certainly the fast food industry is one of the most deeply affected as KFC owner Yum Food starts experimenting with a modernised layouts and menus to counter the drift in consumer tastes.

KFC are not alone in struggling with this as McDonalds experiments with own changes in response to the demographic and market shifts.

McDonalds’, KFC’s and most particularly Coca-Cola’s Twentieth Century success is largely due to the post war baby boom, as the children born during and after World War II reached adolescence – the Jagger generation as described by Irish economist David McWilliams – they indulged themselves in their newfound wealth and personal freedoms that were unthinkable for their parents who struggled through two world wars and a depression.

Coca-Cola was the emblem of that freedom and wealth which made up the twentieth century American dram that the world envied, adopted and copied. Today the world still looks to the United States but its a different America they see.

As the Jagger generation retires and sugary drinks are no longer their first priority their kids and grandkids are looking to different beverages; coffee, energy drinks, bottled water and, possibly, milk which are more in line with their lifestyles.

The task of Coca-Cola, and all the other brands that represented post War American affluence, the task now is to adapt to a very different generation and a society with priorities very different to that of the previous century.

McDonalds and the end of the Franchise era

McDonalds and the declining franchising model of fast food chains are another symptom of a changing economy and society

One of the biggest business innovations of the late Twentieth Century was the franchising model. Now as technology changes that way of working isn’t necessarily the force it was a quarter century ago.

While the concept itself wasn’t new – The East India Company at the beginning of the Seventeen Century was a type of franchise – the model really took off in modern business with the automotive industry where different manufacturers granted franchises to their brands.

After World War II it was the fast food industry that developed the franchise model into a tightly controlled, procedure driven way of doing business.

Building the fast food franchise

The fast food franchise model worked well for everybody; for the brand, it meant they could expand without huge layouts of capital while for budding local entrepreneurs purchasing a franchise meant buying into a proven business model with a known brand name.

McDonalds was the leader in the fast food franchising sector; the company expanded across the US and then globally on the back of the procedures first developed by the founding brothers then expanded by Ray Croc as he sought to roll out an industrial scale burger chain where a cheeseburger in Arkansas tasted the same as one in Alaska.

To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into his vision, working not for McDonald’s, but for themselves, together with McDonald’s. He promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s, the second, the franchisees, and the third, McDonald’s suppliers. The stool was only as strong as the 3 legs.

Croc’s concept was fantastically successful as the franchisees took the operational risks and stumped up most of the capital while McDonalds providing the branding, procedures and supplies.

Many other industries, and fast food chains, copied Croc’s idea and the modern franchise model spread from hamburgers to lawn mowing to industrial safety services. During the 1970s and 80s, a smart, hard working entrepreneurs could do very well buying one of the bigger franchises.

Wobbling franchises

Around the turn of the century though that model started to wobble; during the 1990s the sharks began to move into the franchising industry with many sub-standard systems. McDonalds and the other fast food chains compounded the problem of poor performance by selling too many franchises in a mad dash for growth.

Young entrepreneurs have changed as well; rather than raising several hundred thousand dollars to pay franchise fees to be constrained by a strict set of procedures, today’s keen young go getters are more interested in the opportunities of building new businesses from scratch as startups.

Access to capital is also a problem as today its harder to raise money from a bank unless a business owner has ample home equity or other real assets to secure lending; the risk adverse nature of banks is making it harder for these capital intensive businesses.

Technological change

The killer though for the franchise model seems to have technological and social change; as consumer lifestyles and preferences changed, so too has the underlying demand for both franchises and their products.

McDonalds’ fading in the United States illustrates this change as companies like Chipotle take over from the once dominant chain as technology has made it more efficient to standardise procedures and customise food service.

Once McDonalds was an investor in Chipotle and Quartz Magazine describes how the relationship foundered with one of the key points of friction being differences over the franchising model.

“What we found at the end of the day was that culturally we’re very different,” Chipotle founder and co-CEO Steve Ells said. “There are two big things that we do differently. One is the way we approach food, and the other is the way we approach our people culture. It’s the combination of those things that I think make us successful.”

Just as technology – the automobile created the increasing suburbanisation of America – drove McDonalds’ growth so too is it now contributing to the chain’s demise as chains like Chipotle can cater to a market with different expectations and deliver a product that doesn’t need the mass production techniques of the 1950s.

As a consequence, the big procedure driven model of franchising isn’t so necessary any more. While the concept of franchising remains sound, what worked in the post World War II years isn’t so compelling today.

It’s fashionable to think of companies like newspapers as being the victims of technological change but the truth is most of the businesses we think as being dominant today are the result of advances over the last 150 years, the evolution of McDonalds and the franchising model is just another chapter.

Samsung needs a win with the Galaxy 6 smartphone

Samsung are staking a lot on their new Galaxy 6 smartphone

Having seen its dominance of the smartphone market eroded by a resurgent Apple and a range of upstart Chinese vendors, Samsung has announced it will launch its Galaxy 6 smartphone on March 1 reports the Sammobile website.

The new phone is reported to boast a curved screen measuring somewhere between 5.1 and 5.3-inches a fingerprint sensor and a 20 mega-pixel camera, which compares well to the iPhone 6’s eight mega-pixel camera.

While the proposed specs are impressive, the company has a challenge ahead as consulting firm IDC reported its smartphone shipments dropped 11% year on year last quarter in an market that grew by quarter.

Top Five Smartphone Vendors, Shipments, Market Share and Year-Over-Year Growth, Q4 2014 Preliminary Data (Units in Millions) source IDC Research

Vendor	4Q14 Shipment Volumes	4Q14 Market Share	4Q13 Shipment Volumes	4Q13 Market Share	Year-Over-Year Change
1. Samsung	75.1	20.01%	84.4	28.83%	-11.0%
2. Apple	74.5	19.85%	51.0	17.43%	46.0%
3. *Lenovo	24.7	6.59%	13.9	4.75%	77.9%
4. Huawei	23.5	6.25%	16.6	5.66%	41.7%
5. Xiaomi	16.6	4.42%	5.9	2.03%	178.6%
Others	160.9	42.9%	120.9	41.31%	33.1%
Total	375.2	100.0%	292.7	100.0%	28.2%

*Lenovo + Motorola	24.7	6.6%	19.5	6.7%	26.4%

While the numbers for the Chinese manufacturers are impressive, Apple’s shipments should also worry Samsung given the two companies are fighting for the top end consumers in the European and North America markets.

For Samsung its smartphones form a central part of its Internet of Things strategy so the success of the Galaxy 6 is critical to the company’s future plans, particularly given the lukewarm reception to the Tizen based Z1 phone on the Indian market last month.

Samsung’s China Crisis

With Samsung struggling with both its high end Android smartphones and its lower priced Tizen devices as Chinese manufacturers like Lenovo, Xiaomi and Huawei steal market share, the company desperately needs to hit the mark with the Galaxy 6.

Google as well has a stake in Samsung’s success as the Chinese manufacturers are increasingly turning to open source versions of Android for their smartphone systems. A flagship device for Android to counter the iPhone 6 is desperately needed to keep consumer and developer interest in the Google Play store and for Google’s consumer IoT ambitions.

The stakes are high for both Google and Samsung, the South Korean giant getting a mis-step with the Galaxy 6 could see it following the faded fortunes of its Japanese competitors.