Category: Internet

Apple and the argument for hybrid cloud computing

The argument between cloud computing purists and hybrid advocates continues with both sides suffering setbacks

There’s two different philosophies about cloud computing, hybrid and ‘pure’. In recent days the hybrid school hasn’t been doing so well, but the matter isn’t settled yet.

Pure cloud computing means doing everything in the cloud with all your software running over the net with the data stored on other people’s computers and everything is accessed through web browsers.

Hybrid cloud is where some of the work is done on your computer or smartphone with data often being synchronised between the device and the cloud storage.

Most smartphone and tablet computer apps do this and increasingly software like Microsoft Office and Apple iLife have a hybrid cloud computing angle.

Apple’s hybrid cloud service, iCloud, promised Apple users the ability to work on any device – laptop, desktop, tablet or smart phone – with the synchronised with central servers. Every Apple product you own can then access your iCloud data.

Recently though stories in the The Verge and Ars Technica report how Apple’s developers and customers are becoming steadily irritated by the lousy reliability of the company’s iCloud service.

Incumbent software and hardware vendors like Microsoft and Apple are pushing the hybrid idea for a good reason, it allows them to maintain their existing PC and laptop based products while being able to offer cloud services like their competitors.

For Microsoft and Apple, along with companies like Oracle, Dell and MYOB, the hybrid cloud gives them an opportunity to wriggle out of what Clay Christensen called The Innovator’s Dilemma.

Customers actually like the hybrid cloud as many distrust ‘pure’ cloud offerings as they don’t trust the providers or their internet connections. Basically they like to have a copy of their data stored in house.

The problem with the hybrid cloud is that it’s complex as Xero’s founder Rod Drury, one of the ‘pure cloud’ evangelists, said at his company’s conference last year, “hybrid technologies are cumbersome and add far more complexity into software. Cloud technologies are the right technologies.”

Complexity is what’s bought Apple’s iCloud unstuck as even some of best developers struggle with getting their programs to work with it.

All is not well for the ‘pure cloud’ evangelists either, as the shutting down of Google Reader has shaken many technologists and made them question whether the cloud is as safe as they would like.

Added to this uncertainty about the cloud is lousy service by providers, arbitrary shutting down of user accounts and the corporate boycott of Wikileaks – all of which have forced people to reconsider the wisdom of saving all their data or running applications in the cloud.

So the debate between the cloud purists is by no means over and it may well be that some form of hybrid, even just for local backup to your own computer, may turn out to be the common way we use cloud services.

What is for sure though is cloud software is biting deeply into the revenues of established software companies as people find the attractions of running programs and storing data on other people’s computers outweighs the risks.

Like all relatively new concepts it’s going to take a while for us to figure out how to use cloud computing most effectively in our business. The first step is how we manage the risks.

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Dodging an internet apocalypse

If the internet is destroyed by a digital apocalypse, we can be sure the tech industry’s cockroaches will survive.

There’s nothing a like a little hiccup to the internet to bring the tech charlatans and other coackroaches out of the woodwork, although wiser heads are now starting to prevail.

Sam Biddle’s article in Gizmodo, the last link in the above paragraph, is a good overview of how the internet wasn’t “shaken to the core” by a childish spat between two groups of self-righteous geeks.

It’s worthwhile keeping non-events like this in mind the next time you read a breathless article about an evil hacker, cyber terrorist or rogue regime threatening to bring the online world down.

What’s really disappointing with hysterical stories like this is there are real risks to the internet, ranging from telephone exchanges burning down, divers cutting subsea cables to solar flares toasting the planet’s electronics.

Interestingly, 2013 is predicted to be a year of intense solar activity. So we might get to test some of the doomsday scenarios.

Fear, Uncertainty and Doubt (FUD) is the main marketing tool of the technology scoundrel, events like the online squabble of the last few days bring out those scoundrels.

The irritating thing with these people is their snake oil rarely addresses the real risks we have to deal with.

Watch out for them, they want to scare you into buying something.

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The high cost of new media experiments

The BBC’s expensive exit from their Lonely Planet investment shows the costs and risk for old media empires as online business models evolve.

The BBC yesterday sold Lonely Planet to US media company NC2 Media. Their £80 million loss on the venture puts them in good company as established media struggle to find new online channels and revenue streams.

While the losses aren’t trivial, they are not quite in the league of News Corporation $545 million loss on MySpace or Time Warner’s billion dollar adventure with AOL.

All three stories show how tough it is for ‘old media’ adapting to a new landscape.

The problem is there for ‘new media’ as well, most ventures struggle to make money and many of the success stories like Huffington Post rely on a combination of free content and a greater fool buying them.

No-one has really figured out what the new media revenue models are; not the established publishers or the online upstarts.

Lonely Planet’s online success was due to their forums which, like most web discussion boards, can feature discussions politely described as “robust”.

This was always going to a problem for the BBC’s public service management culture and it resulted in the shutdown of the Lonely Planet Thorn Tree forums over Christmas.

So it’s not surprising that the BBC has decided to end its experiment and now the corporation’s management is dealing with the criticism of those losses.

While it’s easy to criticise the BBC for the deal, at least the broadcaster was attempting something different online, doing nothing is probably a poorer strategy than buying MySpace or Lonely Planet.

Over time, we’re going to see a lot more experiments and many will be public embarrassments like those the BBC and News Corporation have suffered, but there will be successes.

Someone will crack the code and they will be the Randolph Hearsts of this century. It could one of the Murdoch heirs, it could be the owners of NC2 Media or it could be some young, hot shot developer working in a Rio favela or the slums of Kolkata.

But it will be someone.

It’s an exciting time to be in business.

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Latently obvious – the importance of data networks

The internet of things is going to see more emphasis on reliable and fast network connections.

One of the big buzz phrases of 2013 is going to be “the internet of everything” – where machines, homes and even clothes are connected to each other.

In the near future, we’re going to be more surprised when things when things like cars, washing machines and home automation system aren’t connected each other.

To get all these things talking to each other requires reliable communications with low latency – quick response times – so technology vendors are seeing big opportunities in this area.

Last night Blackberry launched its new platform and the beleaguered handset company’s CEO Thorsten Heins was adamant in his intention to focus his business on the internet of machines where he sees connected cars and health care as being two promising areas.

Blackberry isn’t alone in this with the major communications providers and telcos all seeing the same opportunities.

Cisco has been leading with their role in ‘the internet of things’ and much of their Cisco Live conference in Melbourne two weeks was spent looking at the technologies behind this. The company estimates the “internet of everything” will be worth 144 trillion in ten years.

Rival communications provider Ericsson sees the revenue from this sector being worth $200 billion by 2017, so it’s not surprising everyone in the telecommunications industry want to get a slice of it.

The question is though how to make money from this? Most of these communications aren’t data heavy so metering traffic isn’t going to be the deliver the revenues many of these companies expect.

If offering priority services with low latency is the answer, then we hit the problem of ‘net neutrality’ which has been controversial in the past.

Whichever way it goes, businesses will want to be paying a premium to make sure their data is exchanged quickly and reliably. For many organisations data coverage and ping speeds are going to be the deal breakers when choosing providers.

The ‘machine to machine’, or M2M, internet market is something we’re going to hear more about this year. It’s clear quite a few executives are staking their bonuses on it.

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Will Google Deals be the next service to join the graveyard?

Google Deals was an attempt to compete with group buying services like Groupon, that experiment has failed and another tombstone for Google’s Graveyard should be on order.

Google’s graveyard of discontinued services is getting crowded, with Google Reader being one of a dozen services to bite the dust in last week’s springclean.

As Google ruthlessly cut services that don’t make the grade, the question is ‘which ones are next’?

Towards the top of the list has to be Google Offers, the group buying service that was set up in a fit of pique after Groupon spurned the search engine giant’s $6 billion acquisition offer.

Google Offers has only rolled out in 45 locations across the United States over the last two years and the deals in recent times have become increasingly desperate, here’s a recent New York deal.

an example of how Google offers is dying

Schmakery’s Cookies may well be fine products, but getting one free cookie isn’t exactly a jump out of your seat experience and it shows just how Google are struggling with this service.

That Google are struggling with Offers isn’t surprising though, the daily deals business relies on sales teams working hard to acquire small business advertisers. Small business is a sector that Google struggles with and running people focused operations is the not the company’s strong point either.

Google’s exit from the group buying market may be good for Groupon and other companies in the sector. The Economist makes the point that Google’s presence in these markets distorts the sector for other incumbents while scaring investors and innovators away.

This is rarely permanent though as companies like Google and Microsoft often suffer a form of corporate Attention Deficit Disorder – Knol is a good example of this and Seth Godin describes what happens “when the 800 pound gorilla arrives”.

Eventually the 800 pound gorilla finds there aren’t a lot of bananas, gets bored and wanders off.

Which is what has happened with RSS feeds and Google reader. Now the little guys can get back to building new products on  open RSS platform while Google, along with Facebook and Twitter, try to lock their data away.

For Groupon, the departure of Google from the deals business may not be good news as it could mean smart new competitors enter the field. Either way, there’s some challenges ahead for the owners of group buying services.

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You call that a graph?

A good chart can help tell a story, all too often though graphs are designed to mislead.

One way to illustrate a story is with charts. All too often though misleading graphs are used to make an incorrect point.

A Verge story on Groupon shows how to get graphs right – clear, simple and tells the story of how the group buying service’s valuation soared and then plunged while it has never really been profitable.

The vertical axis is the key to getting a graph right, cutting off most of the y-axis’ range is an easy way to mislead people with graphs. In this case you can see just the extent of Groupon’s valuation, profit and loss over the company’s short but troubled history.

Since its inception, The Verge has been showing other sites how to tell stories online, their Scamworld story exposing the world of affiliate internet marketing sets the bar.

Using graphs well is another area where The Verge is showing the rest of the media – including newspapers – how to do things well.

For Groupon, things don’t look so good. As The Verge story points out, the company’s income largely tracked its workforce which grew from 126 at the start of 2010 to over 5,000 by April of 2011. Which illustrates how the business was tied into sales teams generating turnover.

The spectacular growth of Groupon and other copycat businesses couldn’t last and hasn’t. The challenge for Groupon’s managers is to now build a sustainable business.

For investors, those graphs of Groupon’s growth were a compelling story. Which is another reason why we all need to take care with what we think the charts tell us.

Graph image courtesy of Striker_72 on SXC.HU

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On being a good Internet citizen

What are the hallmarks of a responsible digital business?

I grabbed a quick coffee with Zendesk founder CEO Mikkel Svane and his Australian manager Michael Hansen in Sydney yesterday where they told me about the company’s story to date.

While I’ll be writing in the interview up in depth in the next few days one thing that stood out was Mikkel’s comment about Zendesk being a good internet citizen.

Those traits of being a good online corporate citizen include open APIs, a transparent culture and giving customers full access to their data.

Online companies have to embrace those principles if they are going to succeed and it’s the key to the fast growth of businesses like Zendesk and other cloud based services.

These principles have been the underpinning of the success of companies like Twitter, Facebook and Google.

What’s interesting with those companies is how they’ve moved away from those principles as they’ve grown and the pressures to ‘monetize’ have increased.

Abandoning those principles opens opportunities for many new players to disrupt the businesses of what have become the market incumbents.

With the pace of business accelerating, the assumption that companies like Google, Facebook and Twitter will retain their positions might be tested as the market moves to providers they can trust.

Those principles of being a good internet citizen may prove to be more important to online businesses than many of their managers and investors believe.

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