Aug 292016
 
Australia National Broadband Network CEO Bill Morrow

One of the most stunning examples of Australia’s uncompetitive, post-mining boom economy is its National Broadband Network.

Announced in 2009 to provide high speed data access to the nation to address the effects of thirty years of poor decisions and poorly thought out policies by successive governments, the project was intended to upgrade the telecommunications network and break the near monopoly of the incumbent telco, Telstra.

Sadly the project quickly foundered as the managers of the company set up to build the network made a series of poor decisions that stemmed from their underestimating of the project’s scope and their arrogant hubris in rejecting the advice of those who did.

To compound the problem, the project was politicised by the intellectually lazy and opportunistic Liberal opposition who promised they could build it for less by utilising existing telephone and Pay-TV infrastructure. On becoming government, the then communications minister and now Prime Minister changed the scope to do that and promised a quicker and cheaper rollout.

Last Friday, the folly of the Liberal Party’s plans were shown when the National Broadband Network company, nbn™, issued their updated business plan that detailed a further retreat from both the original project scope and the government’s promises.

The Melbourne Age’s Lucy Battersby illustrated how completely Malcolm Turnbull and the Liberal Party bungled their costings, showing just how mediocre and dishonest the government and Prime Minister have been in estimating the cost of the project.

However, NBN Co underestimated the cost of using existing hybrid-fibre coaxial [HFC] cables laid by Telstra and Optus in the 1990s. Last year it calculated an average cost of $1800 per house. But detailed field work discovered the cost was actually $2300.

In 2013 the Coalition estimated FTTN connections would cost about $900 per premise and this was raised to $1997 in a 2014 strategic review, and raised again in 2015 to about $2300.

In the real world, being out by nearly 300% would cost an estimator or executive their job and for a small business could well see them being put out of business, but in the carnival of mediocrity that marks modern Australian politics, those responsible for such mistakes only thrive, as do the managers of nbn™ who recently awarded themselves fat bonuses.

Adding insult to injury for the long suffering Australian taxpayers and broadband users is that the nbn™’s management have revised the scope again to overcome increased costs and now only 21% of consumers will get a fibre connection as opposed to the 40% claimed when the new government changed the scope.

Those scope changes beg the question why anyone bothered in the first place. Had the network been left with Telstra there’s a reasonable chance 20% of customers would have ended up on fibre by early next decade as the economics of maintaining and installing the technology overtook the older copper system.

Probably the biggest insult though to Australian customers though are the desperate attempts to make the new network profitable with plans to gouge the nation’s telco users as Fairfax’s Elizabeth Knight reported.

Data use per user is anticipated to grow at a compound rate of 30 per cent per cent to 2020.

At first blush these increases in usage might look exaggerated – but wait. Only last year NBN was working off the expectation that this year its existing customers would consume 90 gigabytes per month. But the current rate of consumption is actually 131 gigabytes per month – and rising.

Thus as the years progress towards 2020, NBN not only gets an increase in customers, it get an increase in revenue per customer .Monthly average revenue per user is forecast to increase from $43 this year to $52 in 2020..

 

So Australians will be expected pay more for their substandard connections to help an organisation that has consistently failed to meet its promises and targets. It should also be noted that rising Average Revenue Per User (ARPU) is the opposite of what’s been happening in the real world over the last twenty years as revenues, and profits have fallen.

To be fair, it’s not just Australia that has struggled with rolling out fibre networks. In the US, Google Fiber is going through blood letting and scope changes as the company struggles to meet targets and keep costs under control. That same experience has been repeated around the world.

However when it comes to missed targets, broken promises and the sheer scale of money wasted, Australia’s National Broadband Network dwarfs them all.

Australian taxpayers, voters and telecommunications users should be asking hard questions of their political leaders

 

Aug 232016
 
walking the shop floor is important to business management

Just how broad is the US tech industry? It’s tempting to think that most of the American tech sector is concentrated in San Francisco Bay Area with some offshoots in Seattle and on the East Coast but as this New York Times piece describes, the country has a range of high-tech industry clusters.

Like Silicon Valley itself many of those clusters exist because of other industries, research facilities or companies – Seattle being home to Boeing, Microsoft and Amazon being an example.

Another example of how other industries have influenced the development of industry clusters is shown in the example of Philadelphia.

I hadn’t thought have Philadelphia as having a tech sector until I spoke with Australian tech company Nuix about one of their key North American offices being in the Philadelphia suburb of Conshohocken.

When I observed that Philadelphia wasn’t the obvious place to set up, Nuix’s managers pointed out how the city’s pharmaceutical, medical technology and telecommunications provide a deep talent pool for tech companies along with the city’s location between New York and Washington DC being an advantage as well.

Philadelphia’s civic leaders have contributed to it with their Startup Philly program that offers services and incentives ranging from networking events through to a seed investment program.

VeryApt CEO Ashrit Kamireddi, one of the recipients of a Startup PHL angel round, describes the pros and cons of the city investment program and points out it was the factor in setting up their business there.

Prior to raising a $270,000 angel round led by StartUp PHL, my two cofounders and I had just graduated from our respective grad programs and had placed 3rd in Wharton’s Business Plan Competition. We could have settled our company anywhere, with New York and San Francisco being the obvious choices. For a startup, the initial round of funding is where geography is most critical. Most angels don’t want to invest outside of their backyard, which explains the natural tendency for startups to relocate where there is the most capital.

Kamireddi’s point about capital is critical, for tech startups finding funding is probably the most important factor in where the company is based.

Funding though isn’t the only aspect and for established companies, particularly those in the Bay Area struggling with high costs which is what the New York Times article focuses on in its example of Phoenix, Arizona.

The spread of the US’s tech sector shows the country’s industrial depth and strength, it also shows how other factors affect the spread of technology businesses.

Aug 222016
 
building sydney as a smart city

There’s a mayoral election pending in Sydney and the talk of the city becoming a startup hub is becoming one of the issues.

Over the next few days I’m hoping to interview each of the four major candidates on their policies regarding how they see Sydney competing against the likes of Singapore and Shanghai, let alone San Francisco or London.

In 2009, I was working with the New South Wales state government on their Digital Sydney project which looked at how the state capital could become a global centre, one of the things we found was that the city had many of the attributes successful creative centres had – diversity, tolerance and access to talent.

That project died in the face of bureaucratic ineptitude but the idea still kicks around with last week’s launch of the NSW Government’s Jobs For The Future report which, despite its opening thirty pages of buzzwords and waffle, contains some serious analysis of the state’s reliance on inward facing service industry jobs.

Refreshingly, the NSW Government strategy looks beyond the current mania around tech startups based on the Silicon Valley venture capital model – something the Federal government’s Innovation Statement failed to do – and discusses how to encourage growth and investment in other emergent sectors both inside and outside the inner city startup communities.

While Sydney can be an attractive place to live for the digital elite, it falls down in a number of areas with property being among the most expensive in the world, telecommunications being costly and unreliable coupled with a complacent corporate sector and a stingy investment community.

Making the city more attractive is going to take a number of initiatives that including easing the cost of doing business, improving links between academia and industry along with tapping into Sydney’s diverse immigrant populations.

Some of these factors are within the City of Sydney’s purview but most of them are state or Federal matters. By definition this limits what local politicians can do.

Which doesn’t mean they shouldn’t try to do them and it’s good to see these topics have become issues in the local elections. For Sydney though, one suspects it’s going to business as usual until The Lucky Country’s luck runs out.

Aug 102016
 
http_website_links

Twenty-four hours after the 2016 Census website collapsed, the Australian Bureau of Statistics’ reputation is in tatters as the organisation blames hackers, denial of service attacks and failed routers for the debacle.

While there’s many lessons to be learned from this tale, not least the importance of getting your social media team on board, the key takeaway from this embarrassing saga is to show some public humility and not dismiss informed critics.

Technology was not the problem at the ABS, an arrogant management is what caused the Census collapse.

Given the poor accountability of Australian management it’s unlikely anyone’s career is going to suffer as a consequence of this debacle but it’s a further dent to the reputations of both IBM and the ABS. Quite frankly they deserve it, if only for their failure to listen to the community.

Aug 052016
 
Computer security is evolving in a time of social media

One of the sad truths of today’s online world is that dissidents, lawyers and journalists are ripe targets for governments that want to suppress who they perceive to be their enemies.

At the Black Hat security conference in Las Vegas today, the Electronic Frontier Foundation’s Eva Galperin and Cooper Quintin gave a demonstration of just what lengths governments will go in hacking their opponents.

In When Governments Attack, Galperin and Quintin illustrated how Syria, Ethiopia and Vietnam are all countries whose hacking campaigns they’ve encountered but the particular focus was on Operational Menul, which resolved around the Kazakhstan regime’s attacks on its opponents.

The government of Nursultan Nazarbayev is well known for its corruption, intolerance and global harassment of its opponents as Quintin and Galperin showed. What’s of particular interest to them is the use of off the shelf malware tools.

Using cheap commodity tools has the advantage of not leaving distinctive patterns that may give investigators hints to who has developed the malware. The downside of course is that most anti-viruses can detect these tools.

For the regimes this is not such a problem as most of their targets are relatively unsophisticated, as most of the activists, lawyers and journalists targeted by government agencies or their contractors do not have high level tech skills or use advanced security tools.

Another concern is how private contractors are employed by these governments. An interesting tactic used by the EFF is to commence legal proceedings against US based corporation for operations they’ve conducted against dissidents visiting or living in the United States.

Galperin and Quintin have three conclusions from examining these attacks.

  • Attacks don’t need to be sophisticated to work
  • None of this research is sexy
  • The tools and actors are not sophisticated

While the tools and actors in these sad tales are not sophisticated, the costs to the targets are usually high as they and their families can be subject to terrible consequences.

As we increasingly see both simple and sophisticated software tools available to be used against citizens we can expect to see more abuses by governments around the world. The job of organisations like the EFF is not going to get easier any time soon.

We citizens though need to do what we can to demand safeguards and legal protections from our governments. Those of us in democracies should be making that clear at the ballot box.

Jun 062016
 
Google Apps Logo Ring hires

Ben Terrett, the former head of design at the UK Government’s Digital Service, tells GovInsider why the agency banned mobile phone apps with the British taxpayers saving £4.1bn over the following four years.

Instead the GDS insisted agencies built responsive web sites so pages would adapt to the devices they were being read upon, saving time and money being devoted to developing and maintaining individual apps for different platforms.

Apps are “very expensive to produce, and they’re very very expensive to maintain because you have to keep updating them when there are software changes,” GovInsider quotes Terrett.

For those of us who worry about the increasingly siloed and proprietary nature of the internet, Terret’s story is very good news. Apps are particularly problematic as they stunt innovation, lock users into platforms and give those who control the App stores – mainly Apple and Google – massive market power.

It’s no co-incidence Facebook are currently in the process of restricting web access to their messenger service. Locking users into their app gives them far more power over users and much more control over their data.

On the other hand, the open web means sites are more accessible and not subject to the corporate whims of whoever controls a given silo. It also means that any data collected is far more likely to be commoditised, something Facebook hates.

That government agencies and large corporations are realising the costs, risks and value they are handing over the gatekeepers by developing apps is encouraging. It would be good if they considered the other downsides of giving the web over to a small clique of companies.

 

Apr 242016
 
dinosaur

In the face of a volatile oil price and falling reserves, Saudi Arabia’s new Crown Prince is looking at pivoting the economy to knowledge based industries.

That is a hard task in the face of Saudi Arabia’s religious, cultural and work cultures. This is not a society easily dragged into the 21st Century.

Crown Prince Mohammed bin Salman’s plans seem even more daunting when Richard Florida’s 3Ts of the Creative Class are considered – Talent, Technology and Tolerance.

It may well be easy to buy in the technology, but attracting the right talent to Saudi Arabia is going to be hard particularly given it is one of the most intolerant societies on the planet.

Saudi Arabia though has plenty of challenges, so a few big bets may be in order. Tolerance though might be the deal breaker.