Tag: technology

Breaking up the tech giants

Is there a good argument for breaking up today’s tech giants?

One of the stark realities of the technology industry is there is no third place – if you aren’t the biggest or second biggest in a mature market then you need to get out.

With internet businesses it’s now appearing there may not even be room for second placed businesses as increasingly each market segment is dominated by one player.

For Silicon Valley’s leaders, having a monopoly is their nirvana. As PayPal founder Peter Thiel once wrote, competition is for losers, which is ironic given his fortune is based upon challenging the banking and payment oligopolies.

So with attitudes like Thiel’s, and the massive power of companies like Amazon, Facebook and Google, it’s not surprising there are now calls to break up the tech giants.

There are some compelling arguments for this, the splitting of Bell Labs in the 1950s spawned the birth of Silicon Valley and the breaking up of AT&T created the conditions for development of the internet and mobile network. Monopolies stifle genuine innovation.

For customers, the argument is moot. Very rarely does a monopoly result in anything but poorer service and higher prices.

Even for shareholders, there’s a good argument for breaking up monopolies. A company with massive market power is often over staffed and poorly managed and the splitting of Standard Oil in the 1911 gave rise to dozens of new oil companies who returned far more to investors than the staid giant ever would.

It’s hard though to see how companies like Google, Facebook and Amazon could be broken up. Unlike telephone networks, oil refineries and gas stations it’s difficult to separate assets or products. Breaking up Google, for example, may only result in more monopolies over smaller markets.

However in the tech industry, a monopoly may not be permanent thing. Forty years ago IBM was the untouchable incumbent and twenty years ago it was Microsoft. Both today are shadows of what they once were as markets overtook them.

So perhaps it’s too early to call for the breaking up of today’s tech giants because, like Microsoft and IBM, their success is based on a fleeting technological moment.

Being an industrial revolutionary

The World Economic Forum’s Nicholas Davis on being an ‘industrial revolutionary’ in the digital age.

“The future isn’t pre-determined, technology doesn’t come from some outside force. It’s created by us. Some people have more power than others in that system, such as the big tech entrepreneurs, but at the end it’s people and organisations that have the power.”

Nicholas Davis, the World Economic Forum’s Head of Society and Innovation, was discussing at the recent Sydney CeBIT conference how we can take control of the digital economy and where workers fit into an increasingly automated world.

Technology and online platforms aren’t neutral system, Davis observes. “It’s not just about how we use them, but the values that are designed into the systems, technology is not just a neutral thing. During a conversation like this if I put my iPhone between us, it’s proven that reduces our memory of that discussion and our sense of connection.”

Politics and addiction

“The purpose of the technology, the design of it, affects us in different ways.” Davis says, “if we design technologies for addiction, if we design business models that involve us being sucked into systems at the expense of other things in our lives, then that is a value choice that companies make and that we as users are trading off in our lives.”

“In understanding that technology is not neutral then the question is how we, as revolutionaries have that political discussion? I don’t mean political like ‘Left’ and ‘Right’ but these are value decisions that we need to engage with.”

“The difficulties about having discussions about technology is not getting sucked into a left-right divide and letting one group of people own innovation, but to say what do we want, How do we get there and how do we avoid the mistakes of previous industrial revolutions where the environment suffered, kids suffered and vulnerable populations suffered.”

A change in thinking

“One of the biggest problems is we don’t have regulatory or even democratic institutions where we can make collective decisions about technologies,” says Davis.

“The average AI researcher, at the top of their game anywhere in the world, would only understand a small percentage of the AI space. So how do you expect a politician or a voter, to come to grips with it.”

One of the key discussions missing in the public sphere is around automation and concepts like the Universal Basic Income, Davis believes. “We should have a serious chat about giving everyone the space to build up their skills.”

In the development policy, Davis sees growing inequality and applying last century’s thinking to today’s challenges as among the biggest risks facing governments and communities.

Rippling beyond business

For business, the imperative is to recognise the effects of decisions on the wider community.

“The big thing for business is understanding the technology decisions you make have a ripple effect beyond your company, you need to look forward to new ways of value adding.”

Davis warns we are seeing a backlash against innovation and technology with concerns about privacy and security growing.

“So much of the world is build on their use of data. Most companies and organisations don’t have good data hygiene or ontology to classify their information. People say data is their greatest assets – some say it’s the new oil – but it’s also their greatest liability. So understanding information security at the board level is critical.”

The power of individuals

For individuals, Davis believes the power lies with us in the choices we make as consumers.

“Don’t underestimate your own power, but also don’t underestimate that more and more products around us are designed to influence our behaviour in ways we need to be aware of.”

“In most cases, if the product is free then you and your data are the product, understand that and on what terms is important.”

Conscious choices

“Understand the externalities of these services as well. Appreciate the effects it has on your family, your mental health, on the ability to connect is important. Being able to make conscious choices about these things.”

“Supporting open data standards and competition – not just accepting Android or Apple for instance – rather than allowing politicians and big business to fight over these things.”

So in Davis’ view being an ‘industrial revolutionary’ in the digital era is a matter of being an informed, and empowered, consumer. Will that be enough?

Harnessing refugee talent

Techfugees shows what can happen when migrants and refugees are given access to technology and capital.

Last week saw the inaugural Sydney Techfugees Meetup at the Australian offices of TripAdvisor, an initiative that not just assists new arrivals to the country but shows the importance of keeping a society diverse.

Techfugees is a UK founded initiative harnessing the international tech community’s skills to assist with the global refugee crisis, the Australian offshoot was set up in 2015 with the aim of helping refugees settle into the Australian community.

Moving countries is stressful for most people and migrants often face problems accessing services and capital. For refugees who’ve been traumatised by dislocation and war, the problems are even greater.

Having had four hackathons, the Sydney meetup was an opportunity for the organisers to showcase their work and five new projects that addressed problems facing immigrant communities.

A refugee’s story

Kicking off the event was a brief presentation from Mahir Momand, former refugee from Afghanistan and now the Australian CEO of Thrive, a microfinance business for refugee businesses.

Momand’s story tells us much about the refugee story, born in Afghanistan his family fled to Pakistan after the 1979 Soviet invasion. Twice he returning to his home country before having to flee each time after his charitable work incurred the wrath of the Taliban.

For migrants and refugee families, microfinancing an important idea, with few assets or business links in their new country is hard for them to access capital so this is an important way to stimulate employment among groups that tend to be entrepreneurial. This is one area where an concept designed for developing communities applies just as well to advanced economies.

Presenting the apps

The groups that presented at the meet up were diverse, One Step App offers walking tours which aims to build bridges between the immigrant and established communities while Cinema of the Oppressed looks at using video and other creative tools to help alleviate depression and isolation among new arrivals.

On a more functional level, Water Democracy is developing a cheap and accessible device to purify water in disadvantaged communities while mAdapt uses mobile technology to increase refugee access to essential reproductive health services.

Upload Once, the first project to present, is intended to keep a new arrival’s documentation in one place to make it easier for them to maintain and access important records which is essential for dealing with the bureaucracy when arriving in a new country.

Bringing in diverse skills

All of the Techfugees projects showed the diverse range of needs and talents of refugees and new immigrants.

In these troubled, and scared, times it shouldn’t be forgotten how refugees and immigrants have been the strengths of most the successful Twentieth Century economies – most notably the United States and Australia, countries which are erecting greater barriers at the same time they are congratulating themselves for their successful immigrant societies.

With technology changing the workforce, harnessing the talents and work ethic of displaced people could well be one of the strengths for this century as well. Techfugees is a small taste of what could be done.

Retail’s evolving face

The retail industry’s evolution tracks how technology is changing our lives.

On the back of last week’s discussion about Amazon’s Australian expansion, I spoke to Sydney community radio station 2SER-FM this morning about the challenges facing suburban shopping strips.

Like the rest of the world, Australia’s suburban and small town retail strips have been doing it hard for a generation. While technology has a lot to do with this, it’s not online commerce that’s the killer.

The decline, recovery and shift of the suburban retail strip really started in the 1960s as people moved to the suburbs and started shopping at supermarkets – the technology driving that shift was affordable motor cars and refrigerators.

Around the developed world, the removal of tram (or streetcar) systems during the 1950s and 60s also hurt the inner city shops as local foot traffic declined. In Sydney it’s striking that fifty years after the removal of the tram system those suburbs that developed around them are still easily recognisable.

Shifting back to the city

In the 1980s another shift happened. Suddenly in the inner city became fashionable again for affluent and young residents and a new generation of shopkeepers sprung up attracted by relatively cheap rents.

The shift we’re now discussing is that generation of the 1980s and 90s has been dispersed as rents become increased or shops are demolished for apartment blocks that cater for the populations moving back into the inner cities now suburbia isn’t so fashionable.

Like all shifts this has consequences – just as the corner grocery store and local butcher was forced out of business by supermarkets in the 1960s and 70s, today the indy fashion store or old fashioned immigrant run cafe is being displaced by high priced gelato shops and restaurants catering for whatever the current food fad is.

The push against consumerism

With increasing rents, tenants increasingly become upmarket brands although the upper end of the market though is not what it was as the middle classes – particularly in cities like Sydney, San Francisco, Singapore and London – find soaring property prices make it harder to indulge in luxury items.

So high rents are driving shopkeepers out of business and in Australia at least, the perverse incentives in taxation laws and investment regulations means that landlords have a positive disincentive to drop their asking prices, which means vacancies increase.

Renew Newcastle successfully skirted landlords’ reluctance by ‘licensing’ space rather than leasing it from landlords. This allowed land banking property developers and valuation conscious commercial owners to let out space without formal leases that created legal or financial issues.

Regional challenges

It will be interesting to see how Newcastle will perform as that land banked buildings are being developed into apartments and, the developers hope, high rent shops.

For other regional areas the news isn’t as great with technology in everything from mining to agriculture automating more jobs out of existence. Much of the decline in country towns and regions during the Twentieth Century was due to the mechanisation of farming.

Pervasive broadband promises some hope for regional communities but at present both jobs and wealth are being increasingly concentrated into major population centres. This however may be a transition effect exacerbated by governments propping up financial sectors after the 2008 economic crisis.

It’s interesting too that the financial sector now is undergoing an automation revolution not dissimilar to that of the twentieth century agriculture industries, something that’s bad news for cities and governments staking their future on those sectors.

Technology driving change

A lesson from the last hundred years is how technology changes our communities, the arrival of refrigeration and the motor car allowed suburbs and supermarkets to develop. While tractors and trucks radically changed the structure of rural communities.

With the rise of new technologies in everything from agriculture to transport and manufacturing, we’ll see similar changes to our societies and businesses in coming years.

The changes faced by today’s retail business are part of an evolving economy, just as the horse and tram dependent city of hundred years ago looked very different from car dependent suburbias of the late 20th Century, tomorrow’s cities will look very different from today’s.

De-hyping the hype cycle

One of the useful tools in describing how technology is accepted by the market and society is the Gartner Hype Cycle.

Developed by the consulting firm, it describes the typical pattern of a technology product where at first it is ignored, then hyped before falling into the ‘Trough of Disillusionment” before maturing to find a productive role in the marketplace.

The curve though isn’t perfect – many products crash without making the ‘plateau of productivity’ and every technology has its own unique timeframe. Gartner’s role as technology analysts as commercial considerations come into play as well.

Given those imperfections, it’s worthwhile tracking how some of the technologies did on the hype cycle and how Gartner’s predictions went and on Imgur, Anton Tarasenkno has posted all the the Gartner end of year hype cycles from 2000 onwards to give us that opportunity.

PDAs and Smartphones

The ‘Personal PDA’ illustrates how technologies evolve and the original concepts become a dead end.

In 2001, the Personal Digital Assistant – devices like the Palm Pilot, Sharp Zaurus and HP iPac – were the productivity must have for connected workers and Gartner flagged them to be on the ‘Plateau of Productivity in between three to five years.

They never made it. The entire category crashed due to to poor product releases, confusing software wars – the buggy mess that Microsoft Windows CE scared many consumers away – and the rise of smartphones.

PDA’s vanish from the Gartner cycle in 2003 and three years later Smartphones make an appearance grinding their way up to the ‘Plateau of Productivity’.

There is a fair argument that smartphones are an evolution of the PDA – although not one of the PDA vendors or operating systems actually made it onto successful smartphones – but it does seem a bit of a sleight of hand simply to substitute one for the other.

As it turns out though, the 2006 prediction for the smartphone was spot on given the iPhone was released the following year.

Cloud computing

The evolution of ‘cloud computing’ is an interesting tale in itself. At the time of the 2000 Gartner hype cycle is was being described as Application Service Providers (ASPs) although the concept and technology could claim to be the descendent of the much earlier time shared mainframe computing systems leased out primarily by IBM.

In the 2000 Hype Cycle Gartner has ASPs just past the ‘Peak of Inflated Expectations’ and this was a fair call as ASPs were dragged down by the general ennui following the Tech Wreck a year later which saw the technology close to the ‘Trough of Disillusionment’.

ASPs then vanish for four years before reappearing as ‘Software as a Service/ASP’ in 2005 on the grind up to the ‘Plateau of Productivity.’

Portal mania

In the early days of the World Wide Web, portals were hot. On the public web, Yahoo! and MSN were expected to be the go-to destination for surfers while within large organisations, the intranet page was expected to be the centre of all corporate knowledge and the first place employees were expected to log into in the morning.

For the 2003 hype cycle, Gartner’s analysts certainly believed in portals with twelve different types of portals or related technology listed. The following year, the number had grown to fifteen.

Interestingly, the most advanced portal technology on the curve, ‘mobile access to portals’, was stuck climbing out the trough for both of those years. That probably indicates even Gartner’s enthusiasm for the term and the technology was enough to prevent the idea being overtaken by search and social media.

Looking to the future

While it’s entertaining with the benefit of hindsight to look at where Gartner’s predictions of more than a decade ago, it is worthwhile considering what the company’s analysts are predicting this year.

Virtual reality is the tech clawing its way up out of the ‘Trough of Disillusionment’ while augmented reality is hurtling towards the depths. Both are flagged to be mainstream on a five to ten year horizon.

At the ‘Peak of Inflated Expectations’ sits Machine Learning with the connected home and Blockchain approaching the top. Towards the start of the curve are technologies like Quantum Computing and human augmentation, both are flagged to be more than ten years away from gaining mainstream adoption.

Picking apart the Gartner Hype Cycle is a useful exercise in understanding the limits of the idea as well as reminding us of just how difficult it is to predict how technologies will mature and be accepted by society and industry.

 

Why Cyber matters

‘Cyber’ has become a buzzword, but it does have some serious meanings for managers and business owners

This is the unedited version of an article that appeared two weeks ago in The Australian.

Cybersecurity is becoming an important responsibility for executives and directors. Often shortened to ‘cyber’, it’s easy to dismiss cybersecurity as just being the latest IT industry buzzword however ensuring information systems are secure is now firmly a management issue.

Information breaches have become embarrassingly common in recent times with events ranging from Target exposing forty million of its customers’ records in 2013, a breach which cost the company $162 million dollars, through to national security embarrassments like the Snowden revelations.

Exacerbating the risks to businesses is the dependency upon information systems to normal operations and the damage from denial of service attacks such as the outage across much of the US last weekend can be debilitating and costly. The recent Australian census saga that cost taxpayers thirty million dollars, is an illustration of how costly poorly planned responses to service interruptions and security breaches can be.

Compounding the risks for Australian executives are the breach disclosure laws tabled in Federal Parliament last week which threaten 340,000 dollars fines for individuals and 1.7 million dollars for corporations that fail to act quickly on data privacy failures.

In such a high risk environment business leaders need to be proactive says Leonard Kleinman, the Asia Pacific and Japan Chief Cyber Security Advisor for security software firm RSA, “the legislation is aimed at organisations that I’d call ‘wilfully blind’ or like to employ the concept of ‘plausible deniability’.”

As that period of ‘wilful blindness’ and ‘plausable deniability’ comes to an end, executives and directors have to start taking their responsibilities in protecting data far more seriously. The challenge lies in understanding the risks.

“What a lot organisations – both private and public – haven’t done well is their ‘Crown Jewels assessment,” says Glenn Maiden, Principal Security Consultant at Canberra’s ?Shearwater Solutions. “It has to be contextualised. My crown jewels might be credit card numbers but for that may not be the interest for foreign intelligence agencies.” Then understand where the risks are for those critical data and processes.

In understanding what those ‘crown jewels’ are, it’s important to consider what is valuable within the organisation. While to the marketing team the most valuable information may be customer data, to the COO it may be ensuring continuity of service while to external parties it could be pricing details or legal correspondence.

“The things I’ve suggested in the conversations I’ve had with organisations is simple stuff; review things like your instant response strategies – can you start an investigation quickly,” says RSA’s Kleinman. “It’s probably good to review your contracts. If you have a cloud services providers that experiences a breach, how are they going to go about doing the notification?”

In a world where subcontracting and outsourcing is normal business practice, the risk from third party vendors is real and goes beyond cloud providers. The disastrous Target hack being due to an air conditioning contractor’s compromised system and Edward Snowden himself wasn’t a direct government employee.

Privacy and security breach notifications are only part of the broader cybersecurity picture though and the field is becoming more complex. Last weekend’s massive denial of service attack that compromised many US based online services was caused by the Mirai botnet, that exploits vulnerabilities in cheap internet of things devices.

With business processes becoming increasingly connected and automated, management concerns are extending to the security, integrity and reliability of devices being used in their organisation. Even if the business critical sensors being officially purchased are of high quality, everything from smartphones to connected kettles being bought into the staff tearoom could be a potential risk to the corporate network and a business’ reputation.

It would be a mistake however to think cybersecurity is purely a technology problem however. “Ultimately insider threats are about people,” says Senior Vice President of Nuix’s threat intelligence and analysis, Keith Lowry. “These are all people who used tools or technology to do what they did and they got away with it because others were focused on the technology rather than focused on the people.”

As the business world becomes more dependent upon data and connected systems, the governance of networks and their security is going to be increasingly the responsibility of business leaders.

Security as a people problem

Security is more of a people problem than a technology issue believe’s Nuix’s head of threat intelligence Keith Lowry

Are we focusing too much on technology and not enough on people when it comes to insider threats? Talking to Keith Lowry, the Senior Vice President of threat intelligence and analysis for Nuix, it’s hard not to come away with the impression there is too much emphasis on technology and not enough on human factors when looking at IT security risks.

Lowry gave a briefing to journalists at Nuix’s Sydney office last week discussing the types of insider threats organizations face.  “Why is it, despite all the money we’re spending, we seem to be losing the cybersecurity battle?” he asks.

“The majority of insider threat programs that I’ve seen begin with the foundation of technology when in reality the foundation of a counter insider threat program should be about people,” he stated as one of the reasons why organisations are struggling with security their networks.

Supporting his belief that people are a problem is a 2015 survey by information security company Clearswift that found more than a third of employees are willing to sell their company’s private information.

All of the six examples he cited illustrated the problem facing managers, each breach was as much a failure in managing people as it was technology not being implemented correctly.

Naturally the Chelsea Manning case was one of the headline cases, “Manning was a failure of leadership.” Lowry said, “what’s really interesting is before his unit went to Afghanistan was deemed by a psycologist to be unfit to deploy. They took him anyway.

Two of the other examples, alleged Chinese spy Hao Zhang and Russian intelligence agent Anna Chapman are classic espionage tales while Edward Snowden is a continuing tale that may well define our public security policies for a generation.

Of the examples, Aussie twosome Christopher Hill and Lukas Kamay along with US student Glenn Duffie Shriver are the two that should worry organisations the most.

Duffie-Shriver was sentenced to 48 months jail after being recruited by PRC intelligence officers while studying in China.

Born in 1981, Duffie-Shriver is part of a generation that’s far less loyal to organisations believes Lowry and, coupled with economic pressures such as student loans, they may be far more likely to be tempted by offers such those alleged to have been offered to the American scholar.

The Aussie example is probably more concerning for managements as Hill was passing Australian Bureau of Statistics data ahead of its public release to Kamay who arranged trades. Their insider trading scheme netting Kamay seven million dollars.

Kamay and Hill present a far more typical risk to most organisations as employees motivated by greed, addiction or some vulnerability are much more likely to steal data. This is certainly a human, rather than technology, problem.

Ultimately the focus on technology, foreign hackers and government agencies in protecting an organisation’s data is missing the greatest risk of all in our businesses – the people. How we manage and treat staff is essential to securing information.

Time to rethink IT security

Last weekend’s webcam launched cyber attacks are a warning that we need to take security seriously

Last weekend a cyberattack launched from compromised webcams crippled a number of high profile services. In response, the Chinese manufacturer has withdrawn the devices from the market.

That dodgy webcams should have been used to launch a massive DDOS doesn’t surprise anyone who’s spent any time in the home automation field. These problems are endemic in the Internet of Things.

In the early 2000s I became involved in a home automation company through my IT support business. Basically we were kitting out Sydney’s harbourfront mansions with state of the art technology.

Very quickly I realised something was wrong. Almost all the home automation and CCTV systems were running on outdated, insecure software. The leading brand of home security systems used servers running on an old version of Windows 2000 at a time when malware was exploding.

It wasn’t a matter of if, but when, these systems would become hopelessly compromised given the networks they were running on were shared with the home users.

The real concern though was when I raised this with the vendors, installers and designers – no one cared. It was clear security wasn’t a concern for the market and the industry.

We could have patched the systems and boosted their security policies but given the shoddy software being used – mainly DOS batch files – and the assumed file permissions we’d have completely broken the systems and it would up to us to fix it given the attitudes of vendors and clients.

After realising this problem was industry wide I pulled the pin on that business venture as I wasn’t prepared to carry the legal risk and moral obligation of helping install dangerous equipment into people’s homes or businesses.

I’ve since watched as the Internet of Things has become fashionable with the knowledge that the industry’s cavalier attitude towards customer security hasn’t changed.

Now we’re at the stage where script kiddies can launch massive attacks from compromised webcams – God knows what the serious bad guys like state sponsored actors, criminal organisations and commercial spies are up to with these things – which shows the industry’s robotic chickens have come home to roost.

What last weekend’s events show is we have to demand better security from our technology suppliers. That though comes at a cost – we’ll pay more, we’ll have to sacrifice some convenience and we’ll have to spend time maintaining systems.

Are we prepared to wear those costs? Is the tech industry prepared to move beyond it’s ‘good enough’ attitude toward security? Are governments prepared to legislate and enforce proper design rules?

We may not have a choice if we want to enjoy the benefits of technology.

What’s next for small business – trends in the modern workplace

What are the technology trends affecting businesses of all sizes?

This week’s The Future is now – Trends in the Modern Workplace webinar was an opportunity to look at the trends affecting small and micro businesses.

What’s notable is almost all the topics affecting small business are being felt by their corporate cousins. It shouldn’t be surprising the technology and social trends affecting society are equally being felt

Now the webinar is over, I’ve posted the presentation to Slideshare with the commentary below, we cover established trends like the shift to mobile then ponder the future of business with artificial intelligence and virtual reality.

The presentation ties up with the post I published a few days ago that provides the commentary to the slides.

Lessons from the CIA investment fund

Dawn Meyerriecks, the CIA’s Deputy Director for Science and Technology, gives an interesting insight into the agency’s investment philosophies

One of the little discussed reasons for the US tech industry’s success is the role of military and intelligence spending by the government. Not only are various agencies funding research and enthusiastically buy technology, they are also being strategic investors in many companies.

In Sydney last week Dawn Meyerriecks, the CIA’s Deputy Director for Science and Technology, gave an interesting insight into the agency’s investment philosophies at the SINET61 conference.

The conference was aimed at drumming up interest in the technology security industry along with showcasing the connections between Australia’s Data61 venture and the US based Security Innovation Network (SINET).

SINET itself is closely linked to the United States’ security agencies with chairman and founder Robert Rodriguez being a former US Secret Service agent prior to his move into security consulting, venture capitalism and network-building.

Compounding the organisation’s spook credentials are its support from the US Department of Homeland Security along with the UK’s Government Communications Headquarters (GCHQ), so it was barely surprising the Australian conference was able to attract a senior Central Intelligence Agency officer.

Investing in flat times

“Flat is the new up,” says  Meyerriecks in describing the current investment climate of thin returns. In that environment, fund managers are looking for good investments and the imprimatur of the CIA’s investment arm, In-Q-Tel, is proving to be a good indicator that a business is likely to realise good returns.

“If you can predict a market – and we are good predictors of markets – then the return on investment is huge,” she says.

“In-Q-Tel really leverages capital funding for good ideas. We get a twelve for one return, for every dollar we put in it’s matched by twelve dollars in venture capital in emerging technologies.”

Attracting investors

For the companies In-Q-Tel invests in along with those that supply technology to the organization, the CIA encourages them to seek private sector investors.

“What we’re telling our supply chains is you go ahead and tap into the capital markets,” Meyerriecks says. “If you can turn that into a commercially viable product then will will ride the way with the rest of the industry because it’s good for us, it’s good for the country and it’s good for the planet.”

Adding to the CIA’s attractions as a startup investor are the opportunities for lucrative acquisition exits for the founders, she believes. “Not only are we using that venture capital approach for emerging technologies but our big suppliers are sitting on a ton of cash.”

Diversity as an asset

Another lesson that Meyerriecks believes will help the planet, and the tech industry, is diversity. “Globalisation has show isolationism doesn’t work,” she says.

“Back in the day when I was a young engineer the best way to make sure your system was resilient was to harden its perimeters. the best ways to be ‘cyber resilient in the old days was by drawing the barriers to keep the bad guys out.”

“The best way to be cyber-resilient in the old days was to draw big boundaries around yourself to keep the bad guys out. The latest studies look at other things because you want to be resilient, you want high availability.”

Now, system diversity is seen as an asset.“Biologically the three factors that contribute to resilience are the ability to adapt, the ability to recovery and diversity,”  Meyerriecks says. “We look to deliver high availability among components that may not themselves have high reliability.”

The future of investment

“I think we’ll see commercialisation still driving investment for applied R&D in particular,”Meyerriecks said in a later panel on where the agency is looking at putting its money.

“The big game changers will be around the edge, taking SDN (Software Defined Networking) to its logical extreme giving everyone their own personal networks, not just in data centres but at the edge of the network.”

“I think there’s lots of things that the commercial industrialisation of the technology and physical system are going to force us to grapple with on many levels.”

Risks in managing identity

An interesting aspect of Meyerriecks’ talks at SINET61 was her take on some of the technology issues facing consumers and citizens, particularly in the idea for individuals having their own personalised network.

“This opens up a whole range of things, ” she suggests. “Do I eventually not just be an IMSI or EIMI (the mobile telephone identifiers) but do I become an advertising node, does that become my unique ID? Do I a become a gaming avatar?”

“Then we get into the whole Big Data area. Computational anonymity is a phrase we use. At some point people start saying ‘this is crossing the line’ – it crosses the ‘ooooh’ factor.”

Changing Cybersecurity

“I think the definition of cybersecurity will be expanded to much more beyond wheat we’ve classically thought about in the past.”

Meyerriecks’ presentation and later panel appearance was a fascinating glimpse into the commercial imperatives of the United States’ intelligence community along with flagging some of the areas which concern its members as citizens and technology users.

The US security community’s role in the development of the nation’s tech sector shouldn’t be understated and Meyerriecks’ observation that private sector investors tend to follow the CIA’s investment path underscores their continued critical role.

Ditching the old tech – Lessons for the iPhone from the Apple iMac

Apple’s rumoured changes to the iPhone 7 are causing disquiet among customers, but they could mean opportunity.

“I’ve been betrayed, I’ll never buy another Apple product again!” was the cry in 1998 when the company announced their new range of iMacs and portables wouldn’t support the long standing Apple Development Bus (ADB) system and floppy disks.

At the time Apple had been in decline, only the year before Microsoft had bailed the company out with a few conditions that had deeply irritated the company’s loyal customer base.

Many of those customers – mainly in education and graphic design – had invested deeply in ADB compatible equipment and their irritation at abandoning that investment for USB based kit was understandable.

Today we’re seeing similar protests about the rumoured dropping headphone jacks from the upcoming Apple 7 device, customers aren’t happy about the possibility being forced from a well established standard to a less reliable and likely more expensive system.

Unlike the computer world of 1998 today’s marketplace is very different, Apple is no longer a quirky and niche product but the most profitable of the tech industry’s giants – as Microsoft was back when Steve Jobs swallowed his pride and accepted Bill Gates’ bailout.

However most of Apple’s profits come from one product line, the iPhone. While the iPhone is probably the only truly consistently profitable smartphone, it competes in a fiercely fought for consumer market.

Already in China, one of the company’s most profitable markets, the iPhone’s market share is falling in the face of good quality but slightly cheaper Chinese and Korean devices.

Should Apple push those consumers too far by shifting the iPhone to a more expensive or proprietary system then the competing Android devices may well pick up market share and dent Apple’s fat profits.

However history shows that these hardware shifts do happen and older technologies are supplanted by more expensive, but better, inventions regardless of how much users have spent on the status quo. A century ago the automobile started replacing a millenia of investment in horse drawn technologies.

In the case of Apple abandoning the ADB back in 1998, it was the spur to adopt the USB standard which up until then had been buggy and unwanted as Bill Gates himself had found.

As history shows, Apple thrived after ditching the old technology despite the complaints at the time and if the company resists the temptation to lock users into a proprietary system there is no reason to think the same can’t happen again.

Apple mouse (with ADB connector) courtesy of Wikipedia

The cost of the cloud: How the disrupters are being disrupted

Cisco, Autodesk and Microsoft’s cutbacks and pivots show technology companies are not immune from disruption

A common factor when talking to tech companies is their talk of disrupting industries, they themselves are not immune from change though.

This week networking giant Cisco announced they would cut seven percent of their workforce, nearly 5,500 employees, as the company deals with the shift to software defined networking equipment continues.

Industry commentators are warning Cisco are not alone as software and cloud based services change the tech industry with Global Equities Research’s Trip Chowdhry estimating the sector may shed up to 370,000 positions this year.

Today I had the opportunity to ask Autodesk’s Pat Williams, the company’s Senior Vice President for Asia Pacific, about the challenges facing companies transitioning to the cloud. At the beginning of the year Autodesk announced they would be cutting ten percent, over 900 jobs, as part of a structuring plan.

“I think there was a model that we had that as we moved to a subscription business that said we would see a bit of a drop in revenue and we realised our gross margins would be pressed,” he said.

“What we were trying to do was right-size the business,” Williams continued. “Sometimes you need to do that. It was a very intentional forward looking move we made.”

Autodesk and Cisco are far from the first tech companies to suffer from the software industry’s shift to the cloud. Microsoft have been probably been the business most affected by the change.

Cisco themselves have been dealing with this shift for a decade as well, with a major restructure in 2011 that saw 6,500 jobs cut.

What is clear in a transitioning industry is that Microsoft, Cisco and Autodesk are far from alone in making cuts. As Autodesk’s Williams points out, it’s probably best for managements to be doing this proactively rather than waiting for the changes to force their hands.

The stories of Cisco, Autodesk and Microsoft show all industries are facing changes. Assuming you’re safe in any sector is brave thinking.