Tag Archives: telecom

GPS, as Political Issue

Posted on July 23, 2002 | Leave a comment

This article in Wired focuses on some interesting military strategic issues around Galileo, the new European satellite navigation system that is supposed to provide consumers around the world with navigation services that supplement and improve on the accuracy of the existing Global Positioning System (GPS) beginning in 2008. The goal for Galileo is to make Europe independent of non-European space infrastructure for strategic and commercial applications associated with space systems. This drive for autonomy is rooted in the idea that space is an essential part of a nation’s infrastructure in the 21st century, just as railways were in the 19th century and roads and power grids were in the 20th. The problem is that Galileo has been assigned two small frequency bands, E1 and E2, which the US military wants the ability to jam if necessary. But because these bands bracket the US GPS, jamming signals in them might risk obstructing a new US military GPS signal called M-code, which will be broadcast in two parts at the edges of the existing GPS band. Some are worried that putting encrypted signals onto the E1 and E2 bands, where it can hide in the M-code’s skirts, may make them unjammable, neutralizing a key tactical advantage for the US military.

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Posted in Public Policy, Tech, The Future

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Truly Anonymous Surfing?

Posted on July 23, 2002 | Leave a comment

This article in Wired talks about a new method for masking online identities to provide ultra-anonymous Internet access. It was developed by Hacktivismo, an offshoot of the hacker collective Cult of the Dead Cow (cDc), and is called “Six/Four”, named after the June 4, 1989 massacre in Beijing’s Tiananmen Square. Six/Four combines peer-to-peer technologies with Virtual Private Networking (VPN) and “open proxy” connections, which allow one computer to establish direct, secure communications with another over the Internet. Traditional VPNs take the information along a single path from Point A to Point B. Six/Four’s route is more circuitous, sending its tunnel through a series of computers on its peer-to-peer network before heading to the public Internet. Data goes from Point A to Point K to Point Z to Point G, only eventually winding up at Point B. Each link in the chain only knows the link immediately before, not the final destination. Since every server along the way requires separate search warrant in order to view that computer’s logs (if they even still exist) to get your IP address, the approach adds layer after layer of anonymity between client and server. One developer says “It’s like a highway that’s redesigned for every Brinks truck that rides on it.”

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Posted in Public Policy, Tech, The Future

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Internet/Television Convergence: Program Tivo over AOL

Posted on May 2, 2002 | Leave a comment

This article says that AOL and Tivo are partnering to offer services that call for San Jose, Calif.-based TiVo to integrate AOL features like instant messaging (IM) and live chat into its new TiVo Series2 DVRs, and both companies are working to provide AOL members who are also TiVo subscribers the ability to schedule recordings on their TiVo from the AOL service.

TiVo already supported web controls: http://tivo.lightn.org/, but it seems that simplifying this software and integrating with AOL would lead to a higher rate of adoption.

This appears to me as a signal that AOl and TiVo are coordinating their efforts to attack Microsoft’s convergence strategy. Personally, I was hoping that AOL would work with Sony for this instead. Microsoft has pulled their UltimateTV business, and is focussing instead on XBox to get into your homes. AOL should recognize this change in strategy and team up with Sony’s Playstation division. Web services as we know them on the desktop and web services as they will be applied through home appliances such as the playstation will create a large amount of integration value – exactly the strategy that Microsoft used to take over your desktop. If Microsoft succeeds at home, too, then we are all doomed. 🙂

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Posted in Media, Tech, The Future

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Centralized network computing will win

Posted on March 24, 2001 | Leave a comment

I know it’s a big debate right now, but centralized network computing will win in the end.

Centralized network computing is the term used to describe a system of networked web servers (or a single web server) that provides integrated applications and storage for multiple users who can access the system through distributed terminals. The system can be geographically distributed or not, but will share a common (integrated) network of applications, probably using a software interface standard to encourage and enable multiple independent application development teams.

Centralized networks are inevitable because of self-reinforcing competitive advantages. Economies of scale and market forces will lead to substantial change in the way we compute, and the systems we use now are simply the seeds that will grow into (and merge together to form) global centralized information service providers. There are already some very strong indicators that this trend is happening, and the potential points to this trend being a very long one.

  1. There are economies of scale in processing Load balancing can optimize processor utilization and provide both faster interactivity and reduced hardware investment.
  2. There are competitive advantages in information and application aggregation Integrations can break down the walls between programs, improving functionality through better integration and data sharing. You can analyze data in more dimensions and with more flexibility. Development rates can improve as it becomes possible to support separation of more software components and the people that work on them.
  3. Load balancing improves transmissions Transfer rates improve because fewer nodes are required and data traffic can be optimized. Information served to you from a server on your edge is more reliable and fast than information sent to you from another server through your edge.
  4. End-user transparency The front-end possibilities under centralized computing are not limited beyond that of other systems. This implies that there will not be a selection bias away from centralized systems because end-users will not prefer or recognize the difference between systems. That is not to say that they will all be the same – only that they all could be. The opportunity set in one system is available in the other.
  5. The outsourced storage industry exists This implies that there is a willingness to adopt on the part of the owners of data.

You can see the markets already rewarding companies that are moving to take advantage of this trend. Many of these companies are providing application services along with ISP connectivity, and they are capturing traffic. This traffic is investing time and thought into signaling their own preferences. Some examples include personalizing page layout and content — often even using system-wide wallets and e-mail. Giving users what they prefer is a huge competitive advantage. The time it takes to personalize a competing system is a high transaction cost – especially relative to the low cost of inertia.

Eventually, you will be using only a browser. All your computing will occur on a centralized system and be sent to your browser for translation into your interface. All of your applications will be centrally hosted, so your profile and applications – essentially everything you do on your computer – will be available to you from any machine, at any time.

Multiple systems will compete for scale, reducing marginal costs and creating meaningful and irreproducible competitive advantages. This race will likely be won permanently by 2050. Before that time, ASP services will consolidate rapidly along with economic cycles. the early players will rely on loss leader models to attract user bases, and will transition to profitability as the scale reaches the tipping point. The companies that make it to profitability first and reinvest in their technology platform will improve their integration, breadth, and quality to further support their competitive advantages.

In the first decade or two of this trend, there will probably be dozens of smaller companies that are able to enter and gain market share against their larger competitors. These companies will have competitive advantages most likely based on data storage, traditional media integration, wireless adoption, software platform architecture, applications suite integrations, and possibly international comparative advantage. After 20 years, the marginal advantages possible from these characteristics will not pose a meaningful threat to the aggregation and scale advantages of the top few market participants.

Consolidate or die will be the mantra of information companies.

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Posted in Brain in a jar, Early Stage, Investment, Just for fun, Media, Science, Tech, The Future

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Competition in the information age

Posted on February 22, 2001 | Leave a comment

Consolidation is the result of economies of scale – essentially horizontal integration, vertical integration, and resource sharing. These methods create competitive advantages in powerful ways that make it difficult for smaller players to compete in the same markets. There is nothing necessarily wrong with this trend, but it creates large barriers to entry and often leads to larger profit margins than would be otherwise possible.

In the information age – yes, now – this effect is greatly increased, and the limitations of transportation and capacity have been eliminated. The ability to integrate and share resources is much easier, and new extra-strength synergies are created. For example, if a website allows you to shop for both books and music, then it is possible to tailor your music shopping experience based on your book purchasing preferences. This is a very simple example of a much more powerful trend. It may be impossible to enter into any sort of competition with large information companies after the next 20 years.

You can already see it beginning to happen: Yahoo builds from scratch any web business that seems to make sense. Then because of its existing market coverage, and the ability to integrate new businesses with existing businesses and data, Yahoo is able to capture so much synergistic value that they gain an insurmountable competitive advantage. In this way, I think that Yahoo and the other major aggregators and integrators are great companies.

There are risks. Big ones. And the FTC may not be able to do anything about it.

It may be inevitable that the consolidation will lead to a stable equilibrium under monopoly – where there would be no reason to be a competitor because the types of services being provided rely on historical information and broad business integration that is impossible to recreate or beat. Then this monopolist would have virtually limitless pricing discretion, and the ability to manipulate markets and cultures in unprecedented ways. Humanity, in many ways, would be at the mercy of the monopolist. (I hope that its leaders are benevolent democrats with philosophically sound motivations and long time horizons – but what if they are not?)

The only way to eliminate this market dynamic is to eliminate the factors that make it possible, namely, the opportunity to use your market dominance in one field to create dominance in another field. More specifically, eliminate the competitive advantage created by archival data. This can be accomplished by sharing archival data freely. But what about my privacy? Good question. We have a big problem here. The private information about you and your preferences plays a large role in creating the value that leads to this consolidation. If you want to eliminate this competitive advantage, then you either eliminate the value or you share private information.

There is another way.

What if users owned their own archival data? Amazon could still track my click streams, and do whatever they wanted with them. But I would also be tracking my own use, and have control over my own preferences and historically available data. Amazon would quickly learn that the personalization algorithms produce much more valuable customization using the users’ data than the Amazon archives. Market entry for this standard benefits from this implication. Now what happens if you go to a small competitor – one with little history, but better value than the others? They would be able to provide you with services that took advantage of your archival data, just as the monopolist would have. Competition is restored, and the advantages for humanity are regained as well.

Somebody should create a standard – probably using an XML document editable from within your browser. I’d love to help. Somebody has to do it eventually, and the sooner the better for all of us (except the monopolist, of course!)

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Posted in Early Stage, Economics, Freakonomics, Investment, Media, Public Policy, Science, Stocks, Tech, The Future

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