3 December 2008
Recession? What recession? Just follow the money!
This sector is in deep introspective mode right now, as the economists report that the world's major economies -- from the US, across Europe and Asia, plus Russia and China -- are either in or are about to tip into recession. But signs are that there remains a good deal of optimism here in Silicon Valley.
Back in March 2000, NetEvents made a video in which I stood at the top of Silicon Valley's Sand Hill Road -- which contains a high concentration of venture capitalists -- and asked how much longer the bubble could last. This was just before the bubble burst and the silly money evaporated.
So where the money comes from and where it goes are key indicators of the health of the IT industry. This fact drove me to Silicon Valley this week, where the second AlwaysOn conference is being held.
The event, held in a swanky hotel within sight of the Pacific Ocean at Half Moon Bay, is all about bringing together technology entrepreneurs and investors, and debating the issues of joint concern.
Oh yes, and there's tons of networking going on too. Everyone I spoke to said that this was a great opportunity to make deals, either finding start-ups for investment, or finding cash for new commercial ideas.
While there's a considerable amount of scepticism among investors at the current glut of variations on a small number of themes -- essentially Web 2.0, mainly in the form of web messaging and social networking, plus online advertising -- the overall mood remains positive. And there is money around.
I write this from a conference session entitled: 'Is Angel and early stage investing dead?'. The panel of investors onstage are discussing how they make investment decisions.
There's not as much cash available for investment as there was -- long-term Silicon Valley angel investor Ron Conway, who says he's has money in over 200 companies, reckons that "anyone raising capital needs at least 18 months of investment cash" and that, in his opinion, a company with less than a year's cash in the bank is in intensive care.
These numbers are far more conservative than they would have been a year ago, the panel agreed. Investors are more cautious than they were.
However, Conway also said: "The quantity and quality of my deal-flow haven't fallen. Unlike the technology bubble....my pace of investment is staying the same." Others on the panel were in broad agreement, along with a need for start-ups today to be more focused on customers rather than technology, which has often previously been the case. Howard Hartenbaum from August Capital said: "My attention is now directed towards the companies who already have customers." I heard this kind of comment from several people in the investment community during my conversations with conference attendees.
But what's different between this recession and the post-technology bubble period is that the epicentre is not the IT sector but Wall Street, as one panellist remarked. In other words, the money men reckon that the technology sector has better chance of coming through the recession.
As a result, people are looking ahead to the good times but they also realise that investments will go elsewhere such as Russia, China and India.
And what's hot, according to the investors? The answer is green tech, life sciences, mobile technology, digital entertainment, search through crowd-sourcing -- and cloud computing.
Remember, investments can go down as well as up. But then, you probably know that....
29 October 2008
Net neutrality to boost broadband prices?
But before we get into those, let's lay out the facts. The concept of net neutrality means that a carrier will treat all data alike. Whether it's from the carrier's biggest client, whether it's kids downloading illegal software, or if it's just your emails, all data is given the same priority. The principle behind it is that the deepest pockets should not determine which traffic is prioritised; it doesn't mean for example that your voice over IP phone traffic cannot be prioritised.
One of the fathers of the Internet, Vint Cerf, reckons that net neutrality is vital: “It's vital to innovation. Companies like Google and Yahoo, and eBay and Amazon, and Skype, and so on, got their start without having to get permission from any ISP or any broadband provider to offer services,” he said on YouTube.
What the carriers are currently bellyaching about is a proposal from the EU that net neutrality be legislated. In other words, it'll become illegal for a carrier to discriminate in favour of traffic originating from its biggest client.
The proposal is part of a new telecoms package that aimed at overhauling the EU's telecoms laws. EU ministers are due to discuss the proposal in November.
But consultants at Copenhagen Economics say in a survey to be published next week that the imposition of net neutrality would result in higher costs being passed onto consumers, and so depress demand for broadband.
They even provide sample costs: Swedish broadband rates could rise from €33 to €44 in Sweden and from €29 to €39 in Germany. That's quite a rise.
The Centre for European Policy Studies reckons in a report that the mandating of net neutrality would be undesirable. Compromises proposed include by the CEPS softer legislation which would ensure that consumers are informed about a lack of net neutrality.
However, whatever you think of net neutrality -- and I for one am nowhere near alone in being a fervent supporter of the concept -- I can't help wondering why prices would rise so much if the concept were abandoned.
I've always assumed, it would appear incorrectly, that we currently operate under a regime of net neutrality, that my data take their turn with everyone else's, and are dealt with by the Internet's routers in a first come, first served fashion. If the legislation were passed and put into force, and prices rose by one-third as a result, imagine how much money ISPs are making in return for preferring MegaCorp's data over those of smaller companies or, for that matter, yours and mine.
Would legislating net neutrality really make that much difference to prices? And if it would, why haven't the carriers told the rest of their customers -- the disadvantaged ones -- about it?
28 September 2008
NetEvents Portugal 2008
A wide range of vendors attended, and the event kicked off with a keynote by Bernd Schumacher from Nokia Siemens Networks. He argued from both business and technical standpoints that the only way to connect five billion extra people to the Internet was to use IP-based Carrier Ethernet.
While no-one seemed likely to disagree with his argument from a technical point of view, the problem for carriers is, as ever, how they're going to get from here to there.
Right now their networks are full of old and often not-so-old TDM-based equipment. This is stuff that supports circuit-switched voice traffic and is perceived in the industry as being outdated. You'll find the work 'legacy' applied pejoratively to this technology - mainly by vendors of the new stuff.
This means though that there's a huge cost sunk into TDM equipment. To rip and replace would be hideously expensive -- and even if the world economy were as robust as it was two years ago, no carrier can afford simply to chuck it all away and start again. So Schumacher argued that carriers need to build business models that allow them to develop and sell services, thus generating revenues to fund new networks.
The problem is, as Schumacher did acknowledge, that his telco customers have not traditionally been that successful at doing this. Instead, third parties have come along and built services on top of their networks, and so creamed off the revenues. Think Yahoo, Google and YouTube.
Following a light grilling on stage from the moderator and the audience, Schumacher made way for the first plenary debate session. This was on the CIO's perspective of enterprise networking, introduced by Evelien Wiggers from IDC. Along with the panellists, the discussion covered how CIOs can manage the increasingly complex networks of which they are in charge. This includes issues such as device management, which is showing signs of getting out of control as suers continue to attach phones, PDAs and memory sticks to the network.
Debate II asked if the mobile operators have done enough with their recent femtocell initiatives to see off the challenge from Wi-Fi. Introduced by Dean Bubley of Disruptive Analaysis, the panel argued one way and the other, with the wireless vendors such as Trapeze pitching for Wi-Fi, while the likes of Motorola argued that the operators needed to improve coverage - via femtocells.
With Debate III, the event attacked the issue of interconnecting islands of Ethernet across the globe. The question here is how carriers can link up their differently configured and specified Ethernet networks to deliver a seamless and easily managed experience for the enterprise. The debate, under the command of Gartner's Ian Keene, concluded that the key issue was manageability.
The final session of day one was more relaxed, as the irrepressible Steve Broadhead from Broadband Testing leaped onstage and asserted that he hated security - and demanded to know what the industry was going to do about it. The panellists were charged making security too expensive, inconvenient and hard to manage. Naturally given the nature of the topic, there was no hard and fast answer to Broadhead's heartfelt plea.
The event then broke into press/vendor meetings, punctuated by a dinner at the Casa Valha. The next day, with some bleary eyes in evidence, NetEvents Portugal resumed its final plenary session after more press/vendor meetings and lunch. Debate IV's topic asked whether 100 Gigabit Ethernet is ready to roll. Surprisingly, the panel's conclusion was that it is -- more or less. While we won't see mass deployments for a few years, the technology's standardisation is well under way -- it just needs to fall in price from its current astronomical levels.
The final debate before the assembly broke up to head for the airport discussed how data centres could be made greener. While everyone agreed that there more energy could and can be saved, there was also acknowledgement that this had to be balanced with the need for the data centre to be over-sized to allow for expansion, as new technology and tools helps to resolve the problem.
The next events will be held in October in China for the Asian press, while Barcelona, not coincidentally the venue for Mobile World Congress, will see the next European event in February 2009. See here for details.
29 August 2008
NetEvents TV launches new site
New site design
The site changes are more evolutionary than revolutionary -- we've had a lot of positive feedback on the site's look and feel, and don't want to chuck out the proverbial baby with the bathwater. All the same, there were lots of things we wanted to change, especially with respect to the way that visitors navigate our video content.
There's probably a lot more content up on the site than you imagine -- but how can you find it? If you know what you're looking for, you can always use the search facility, which works well. But if you're browsing, it's a bit of a different story.
So we've changed the way that the navigation works while retaining the same basic look and feel, just freshening it up a bit. With the old site, you navigated the content according to the format the content was in. For example, the main tabs were titled Spotlights, Industry Leaders, Webinars, and so on.
We thought we could improve on that by exposing the content itself. So for example, the new main categories accessible from the front page include Telco Infrastructure, Enterprise Applications & Services, Security, and Mobile & Wireless. This means that you can drill down through our content according to what interests you rather than the format it's in.
That said, the baby remains firmly wedged in the bath. If you want to look at content by format, you still can. For example, there's a CxO Perspectives channel, where you can view videos of interviews and keynotes by IT industry leaders. Yet the quality of the content and how you view it on our site both remain the same, as does the ability to view it in any one of six languages -- a unique service which no comparable site can offer.
We're also planning an exciting channel that will see industry execs going head-to-head -- with even more planned for upcoming months.
Your comments on the changes are more than welcomed - especially if you spot any bugs....
More content
And there's more content -- from the start of September 2008, you'll find us posting two documentaries every month, one covering broadly enterprise communications issues, the other covering telecommunications topics.
The first of our double-content months sees a focus on Ethernet. Regular readers will have seen our History of Ethernet documentary starring Bob Metcalfe, inventor of the technology. Now we've looked forward and have a new documentary on the future of Ethernet, which also includes an interview with Metcalfe.
And since Ethernet is such a broad church, we couldn't resist covering one of the most challenging technological developments -- 100 gigabit Ethernet -- in the second of our documentaries.
Check out our front page for more....
19 June 2008
Telecomms industry goes down to the crossroad
Las Vegas is not, I venture to suggest, a place where many sane individuals want to spend too much time -- especially in June when temperatures run into the hundreds (if you think in Fahrenheit), and probably for other, more obvious reasons too.
Yet that's where I find myself today, along with what seems to be half the western world's telecommunications industry.
We're here for NXTcomm08, the telecoms industry show, which finds the sector at a crossroads, as we unveil in our show highlights feature, new on the NetEvents TV website today.
The news feature includes an interview with the show's director about the show, and about the state of the industry and its big issues. Green issues are to the forefront, as of course is the thrust towards all-IP networks.
And it's the drive to IP that forms the backbone of our feature's interviews with the technology vendors. From show award-winner Hatteras Networks with its backhaul-boosting, copper aggregation technology to high-performance routers from Redback, from Aculabs' call routing systems to Sonus Networks' WiMax voice solutions, the emphasis from NXTcomm08 is on IP data. And that's just a handful of the many vendors we sampled.
While it's perhaps a slightly more subdued show compared to last year, according to some vendors, NXTcomm08 suggests that the telecoms operators' drive towards Ethernet continues to intensify. While many vendors and analysts believe that the old technologies will be around for at least a decade, maybe two, it's clear that some of the more nimble carriers -- largely those without a large legacy network and its accompanying customer base to maintain -- will be making that transition much quicker.
As an aside, you might wonder what's meant by 'a legacy network' -- 'legacy' of course being the industry-standard sneer at technology that's more than a handful of months old. In the telecoms business, the rhythm of technology upgrades necessarily moves at a slower pace. But even so, it was slightly shocking here at the show to hear ATM referred to as a legacy technology. It was not very long ago at all in telecoms industry years that ATM with its 53-byte cells was the latest, the greatest, and you'd be seeing it on your LAN before too long. O tempora, O mores!
But I digress. The crossroads for the telecoms industry is the one I mentioned in the last blog -- namely how a service provider can upgrade its network, add services people want to buy, and maintain a viable business model in a climate of falling prices. I'll leave it for you to wonder who the devil is in this scenario (think Robert Johnson).
So if you're interested in what the telecoms industry is about to dish up, NXTcomm08 is a pretty good place to start looking -- and, I self-interestedly submit, you might want to take a look at the NetEvents TV highlights features too.
4 June 2008
Japan's NTT shows the way forward
Just got back from a week in Langkawi, where NetEvents held two conferences back to back.
We were billeted in The Andaman, a large, low-rise hotel snuggled down between the rain-forest and the beach adjoining the bath-warm Andaman Sea. It’s almost invisible until you’re on top of it, and the location, the local wildlife and, above all, the incomparable desire of the people to make your stay a memorable one combine to make it a great venue. Oh yes, and the warm tropical weather...
The first of the two conferences was the company’s inaugural summit meeting for service providers in the Asia Pacific region, which allowed SPs to meet each other to share best practices. It’s an event without parallel, according to the SPs, who were glad of an opportunity to talk to each other without the paraphernalia of a big exhibition.
NetEvents is all about meeting and talking, and that’s what happened at both events, the second being all about the more familiar meeting of vendors and press.
Service providers are often difficult to get in touch with, and I learnt a lot from this valuable opportunity to listen and talk to them. Among the most interesting presentations both to me and to most of the 60 or so attendees I spoke to was the one by Hiromichi Shinohara, from Japan’s biggest telco, NTT.
Here we learnt more about the company’s launch of its award-winning next-generation network or NGN -- alleged to be the first of its kind in the world. It’s analogous to BT’s 21st century network (universally known as 21CN), which has just been officially launched, and offers fibre to the home, which of course enables high-speed broadband access. However, BT's 21CN doesn’t enable fibre to the home but is instead an IP-based backbone network that in the main connects exchanges.
To give you an idea of how advanced NTT's network is, compare most western countries’ ADSL profile, and you’ll find that it’s growing. In the UK, for example, over half the country’s homes now have ADSL-provided broadband access to the Internet. Incumbent telco BT routinely dishes out press releases trumpeting another half-million homes connected -- see here for an example.
By comparison, NTT is way ahead. For example, numbers of Japanese users of ADSL technology, which was once described as an interim technology until we get to universal fibre-connectivity, have been declining. Instead, users are switching to fibre as an access mechanism.
This means NTT reckons it can deliver richer services, for which it can charge more. For example, it plans to offer videophone services, HDTV, video-conferencing and a range of both consumer and enterprise-focused multimedia services. As a result, NTT has been able to increase its average revenue per user or ARPU, a common metric for measuring a telco’s financial performance.
It’s routine for industry observers and analysts to argue that telcos such as BT and NTT ought to add more value to their fat pipes by providing services if they’re to remain profitable in a world where broadband prices fall as demand sky-rockets. If you look at the agenda for the service provider summit, that’s the issue which recurs throughout the event. However, the telcos have not, broadly speaking, been very successful at doing so, often because their networks cannot yet support services such as video on demand. NTT appears to be an exception to this long-standing industry mantra.
While NTT may be first to launch an NGN, depending on how you define “first”, what most at the NetEvents SP summit found interesting is the way that NTT is opening up its network for others to build on by providing a service delivery platform. as part of this process, it set up a forum for third party service providers. In this way, it helps to ensure that service providers help generate revenue for NTT, as well as for themselves. This kind of double-sided business model is one that many telcos are looking at -- and an issue, incidentally, that NetEvents TV will be examining in a future feature.
I hasten to add that I haven’t tasted NTT’s NGN, so have only Shinohara-san’s words to go on. But if the words are translated into reality, then NTT’s model is one that telcos elsewhere might do well to emulate.
20 May 2008
The inexorable march of Ethernet
An IT journalist for over 20 years, communications has always been a fascinating topic. There's so much to go wrong it remains a source of amazement that it all works.
So little time ago, the loading of a network stack filled the PC's memory to the point where there was just enough room to run a stripped down word processor and that was it. Everything was manual. You had to tweak the various elements that talked to the hardware, the bit in the middle known as a shim, and then hope and pray that your application would tolerate the existence of a location that wasn't on the local machine. If not, it was game over, and the machine would just freeze, and it was time for the BRS - or big red switch.
And each vendor had their own way of doing things. Hoping that Novell's stack would talk to IBM's or DEC's was pushing your luck. Assuming, that is, that the thick yellow, 10Base5 Ethernet cable or, later, the thinner, 10 Base2 BNC cable hadn't been unplugged by someone who didn't realise that doing so would bring down the entire network.
And wireless connectivity was a black art, of use only to those who absolutely had to have it, such as people who work in warehouses and hospitals. For the rest of us, it was way too arcane and expensive.
Fast forward to 2008 and things could hardly be more different. Broadly speaking, networking just works. You plug in the cable or fire up the Wi-Fi and it connects.
Everything is standardised, whether you're using a phone, a laptop running Linux, a PC or a Mac. It's taken some doing but the extent to which a TCP/IP stack is now just a TCP/IP stack as opposed to being a product to which vendors insist on adding value by making it non-standard are - thankfully - long gone.
Where am I going with this? It's simply a paean of praise for those who dragged the technology to the point where it is today: among them are the engineers who did the hard work of making it so, the users who insisted with their wallets that vendors interoperate, and the standards bodies who created the detail that makes the interconnected world we now inhabit possible. And there's a big debate going on as to whether it ought to be the same stuff that connects the Earth to future space missions too.
So when you click on a link that connects you halfway across the globe to a server that contains the info you want, think for a second about the magic that makes it work -- and, if your character allows it, marvel at the technology.