Bubble 2.0?

Now on at Web 2.0 is a panel discussion by a group of venture capitalists with the question -- is it a new bubble? Panelists include Safa Rashtchy of Piper Jaffray, Lanny Baker of CitiGroup, William Janeway of Warburg Pincus, and Danny Rimer of Index Ventures.

According to the group, the big difference between what will happen during this growth phase of the Internet and the last one is revenue. While last time there was a blind faith that building an audience would result somehow, someday, in revenue -- this time people know that it is possible (and Google proved it) to build a very profitable business around that audience. So companies have to prove that they know how to make money.

So what are these investors looking for as an investment in Web 2.0? Bill Janeway - "the integration of what has traditionally been back office, batch processing and analytics with real time network generated data..." Danny Rimer - "...the use of the Internet to introduce disruptive technologies... companies that are upsetting traditional economics..." Lanny Baker - "...it is still about building the largest audience..."

Bill - "Web 1.0 was about experimentation. The Bubble allowed us to overbuild the network, we funded enormous productive waste - and waste, trial and error, is a virtue. This set of proofs allowed us to create Web 2.0. This time around, the cost of capital is substantial which transforms the opportunity for experimentation. There will be a lot of people creating cool concepts but they will likely be acquired by big companies that have a proven audience and revenue... With extraordinary execution a few new companies may emerge... but otherwise, 'successful' companies are more likely to be acquired than to go public."

Brewster Kahle at Web 2.0

Brewster Kahle at Web 2.0,
originally uploaded by Ted Shelton.

Brewster Kahle wants you to know that it is possible today to take all (published) human knowledge available to all of humanity, everywhere in the world. He is talking about his project to put the world onto the Internet. You might remember Brewster as one of the early Thinking Machines employees. Brewster's organization The Internet Archive has text documents, movies, audio recordings... all available for free.

Joe Kraus at Web 2.0

Joe Kraus at Web 2.0,
originally uploaded by Ted Shelton.

Joe Kraus, founder of Excite, is here at Web 2.0 launching his new company -- he is demonstrating the product now, something he calls an "application wiki" -- Lotus Notes, eat your heart out, the wiki is definitely coming to a corporation near you soon.


UPDATE: The name of Joe's new company is JotSpot

Canter Pumps Laszlo

Anyone who has followed Marc Canter over the past few years, either on his blog or otherwise, knows that he has been very critical of the company that he founded, MacroMedia. But it is strange to see him wandering Web 2.0 following the announcement that Laszlo will open source their rich web development environment and trying to convince everyone he speaks with to use Laszlo. The most interesting thing about the announcement is the preemptive strike against MacroMedia's own development environment for Flash. I expect it to be a successful tactic in that battle, by the way.

FoxNews Changes Their Article

FoxNews has modified their article on the debate to correct their duplication of Vice-President Cheney's Gaffe last night of mentioning "Factcheck.com" instead of "Factcheck.org" -- in the revised article, FoxNews states:

Cheney said that the allegations are false and directed voters to read the truth about Halliburton at FactCheck.com; although he probably meant FactCheck.org a project of the University of Pennsylvania that independently evaluates politicians' claims. Ironically, FactCheck.com forwards visitors to the Web site of left-leaning billionaire and Bush administration critic George Soros."

But in the original article published shortly after the debate, FoxNews had repeated the VP's error and written:

Cheney said the Halliburton allegations are false and directed voters to factcheck.com, a project of the University of Pennsylvania, to read the truth.

I have used a product called Furl to store a copy of the original FoxNews article here and the live copy of the FoxNews article can be found here.

While media can take advantage of the fluidity of the Internet to change their articles without notice or apology, we the media consumers can also be vigilent in observing and recording this funny business.

After reading Fox's summary of the debate and counting the number of times that the piece promotes Cheney's points in the debate, and doesn't mention Edward's points I didn't need to see them change this article to know that they were a mouthpiece for the Bush-Cheney campaign. But seeing the way they chose to make this change, speaks volumes of the editorial integrity of the FoxNews team.

UPDATE:

Boing Boing has an interesting note on this -- that the owners of factcheck.com are a for-profit advertising service based in the Cayman Islands and that they redirected their URL to George Soros "...to relieve stress on the service and to express a political point of view," as they were being deluged with hits within minutes after the end of the debate. Also interesting is the note that factcheck.org posted which says in part "...we did post an article pointing out that Cheney hasn't profited personally while in office from Halliburton's Iraq contracts, as falsely implied by a Kerry TV ad. But Edwards was talking about Cheney's responsibility for earlier Halliburton troubles. And in fact, Edwards was mostly right.

FoxNews links to factcheck.com

Duplicating VP Cheney's error, Fox News links to factcheck.com in their article on the debate. Will Fox change their page to reflect the Veep's intended website link? Here is my Furl'd version of the page in question with the link to factcheck.com -- if you notice Fox changing their site, let me know! Wouldn't that be a clear indication of partisinship? Or would they simply claim that they were making a correction?

FactCheck.com -- George Soros?

I like millions of Americans, am following VP Cheney's suggestion and typing factcheck.com into my browser... so why is the headline Why We Must Not Re-Elect President Bush: A personal message from George Soros. Here is an interesting web hijack. Has the press picked up on this yet?

UPDATE: Martin Tobias explains that VP Cheney should have directed people to factcheck.org...

Canter On The Future of the Web

Marc Canter has just been rapping on the future of the web -- I almost think he belongs at a conference called web 3.0 rather than web 2.0 as he is describing a world of the far future.

Marc wants an infrastructure for social networking, content sharing, and global search that is ubiquitous, open source, free, peer-to-peer...

This is a brave new world that he describes (""...and such people in it!").

I am struggling with how one builds a business model in this world. Marc's answer is that the entrepreneur creates a compelling user experience and that people will pay for that. On the other hand, my experience of the world has been that people are willing to use "good enough" if it is free or cheap(er). Isn't that part of why the PC won over the Mac?

Standing at Web 2.0

Standing at Web 2.0,
originally uploaded by Ted Shelton.

Yes, I am at Web 2.0 in San Francisco. Shortly after taking this photo of Marc Canter and Steve Gillmor standing at the back of the first workshop, they dragged in some more chairs. At least the Nikko is NOT one of the hotels that has locked out employees. Marc points out that it is a GOOD thing that people have come out for the conference and that it is standing room only at 9:00 in the morning...

Web 2.0 Conference

I will be spending the next three days at the Web 2.0 conference in San Francisco. If you are going to be there, look me up!

CAL's Reaction to the Debate

I went over to the UC Berkeley campus to watch the debate. It was actually hard at times to hear the President's replies to questions because the audience was laughing so hard. I don't believe the President intended to be a comedian. But from the perspective of this audience, albeit a liberal leaning one, George Bush did not come across as presidential, nor did he succeed in sounding even as if he had serious answers to many of the questions asked. On the other hand, viewers left this location believing that John Kerry had succeeded in appearing serious, presidential, and smart about how he would lead the country.

Perhaps this is just a case of viewers having their own views reaffirmed. But there could have been a lot of other reactions to Bush -- boos, silence, disgust. But laughter? That was a surprise.

flickr on blogpulse

flickr on blogpulse,
originally uploaded by Ted Shelton.

Still a relatively small percentage of "all blogs" but it is interesting to see how BlogPulse shows the growth in buzz for Flickr against other interesting web 2.0 phenomena like typepad...

More Paparazzi on Flickr

Rich Karlgaard, Forbes, and Guy Kawasaki, himself (Garage),
originally uploaded by Esthr.

Esther (make that Esthr) Dyson, snapping photos of Rich Karlgaard and Guy Kawasaki in Hong Kong at the Forbes CEO conference.

Steve Jurvetson hanging out with Skype founders

Kayaking the Baltic Sea,
originally uploaded by jurvetson.

Only in an industry like the Internet would the "stars" play the role of paparazzi, taking (and publishing) photos of other "stars" -- here on Flickr. Steve Jurvetson (Yes THAT Jurvetson) posting photos of his current trip to Europe, and in this case a photo of Tim and Niklas (of Skype fame) on a kayak trip in the Baltic sea... DFJ is an investor...

The Late Great NYT

It is surely a sign of how bad things have gotten for the New York Times that they have become the butt of jokes... just heard the second one in a week today when Bob Bozeman spoke this morning at the Keiretsu Forum meeting about his experiences as an early investor in Google. Bob was talking about an early article that appeared about Google in the NYT and said,

"I don't know if any of you have read the New York Times, but it seems to be a known newspaper..."

which got a big laugh. Sad that this paper, once holding the highest journalistic standards in the world, has declined to such a degree that it is the subject of such jokes.

Colorado

Colorado,
originally uploaded by Ted Shelton.

I am using a new tool called Flickr for storing, organizing, and sharing my photos. Here is a photo of a vineyard in the Eastern Colorado desert...

War on Terror

Ever since the President stated on one day that we could NOT win the "war on terror" and the next day flip-flopped with a statement that we would win, I have been thinking about what it really means to "win the war on terror."

In order to define how a war can be won, the enemy being fought must be defined. Is this war on terror a war against the tactic of terrorism, regardless of who uses it? Or is it a war on the idealogy of muslim extremism? Or is it a war on a specific group like Al Queda?

Outright, we can reject the proposition that this is a war on a single enemy such as Al Queda. Al Queda has splintered into many subgroups and muslim extremisim is not limited to the Al Queda organization.

But the notion that we are at war against muslim extremism falls down on two counts. Perhaps most important is the fact that world governments have identified non muslim groups around the world as terrorist groups under the "war on terror." So both the United States and our allies in this war have identified a broader enemy. Secondly, though, it would be difficult to make a case that we can "win" a war against a set of ideas, such as those espoused by muslim extremists. If, for example, we had said during World War II that our goal was to "win the war on fascism" we would have to admit that we either had lost, or that we are still at war today. There are still dozens of fascist regimes in the world and these governments have killed millions just in Africa over the last few decades. One might say that fascism has been contained, but not defeated. Given that muslim extremism is not a political movement so much as it is a religious movement, and thus trans-national, it would be difficult if not impossible to "contain" this set of ideas the way that fascism can be contained within narrow national borders.


But given the first point, that the US and others have defined non muslim extremist groups as enemies in this war on terror, we must conclude that the war is not solely against a set of ideas. Which leaves one to conclude that we are waging a war against the tactic of terrorism.


DEFINITION OF AN ENEMY

There is a basic discontinuity between the categories of activity that the words "war" and "terror" encompass. War is an activity, the object of which is an enemy. Terror is a tactic which can be used by anyone. It simply doesn't make sense to talk about a war on a tactic. For example, could one speak of a "war on hand-to-hand combat?" Or a "war on spying?" It just doesn't make sense.

Perhaps the closest examples that our civilization has in which we reject a particular tactical approach to combat are weapons of mass destruction -- chemical, biological, and nuclear -- and genocide. Through a series of treaties, the countries of the world have sought to criminalize, in some global sense of crime, the use of these kinds of weapons or the elimination of a civilian population. One could say that we are now criminalizing terror as well. But it would be difficult to define any of these tactics as an "enemy" at least one that a "war" could be fought against.

Furthermore terror is fundamentally different from genocide and WoMD in at least one major way -- terror can be utilized as a tactic by a single person or a small group. Genocide and the creation of WoMD requires a large entity, typically a state. Certainly there are examples of small groups employing chemical weapons, such as in the Tokyo subways. But the mass production and utilization (thus the mass in WoMD) requires a large infrastructure. The crossover problem here might be in the concept of a briefcase nuke -- but today the origination of materials for such a device would still have to come from some national entity -- whether sold or stolen.

By contrast, one can gather a few dozen devotees and some easily acquired munitions and take 1000 school children and their parents as hostages, as was recently done in Russia. The easy accessibility of terror as a weapon makes it a tactic that cannot be managed through the existing notion of treaties and global national cooperation.


SO WHAT CAN WE DO?

President Bush had it right, the first time. A "war" against "terror" cannot be won. We can identify particular groups that have specific plans against the US and we can defeat those plans and groups. But we will never eliminate terror as a tactic.

1) There will always be people in the world who disagree and even hate western civilization and the US specifically. However, our national policies and the ways in which we interact with the rest of the world can serve to fuel or calm this hate. We should focus more energy and money on these issues.

2) Terror will continue to be a tactic used against the US and other civilized societies. We need to develop defenses against the introduction of terrorist elements and we need to have more refined ways of reacting to terrorists. This must be done while respecting and protecting our core beliefs in civil liberty and freedom of speech.

3) Organizations which promote terror are genuine enemies and should be fought. But there are different kinds of battles against different kinds of threats. States which harbor and promote terrorists can be battled through economic isolation, physical isolation (blockade) and ultimately through regime change as a last resort.

Transnational organizations such as Al Queda must be battled by evolving the tools we have available to fight organized crime. Many of the organizational and operational techniques, and even the activities (drug and gun running) overlap. The end goals of an Al Queda vs. Columbian drug runners are different but their methods are alike.

4) Finally, effective implementation of these methods to contain and reduce terrorism will only work through effective global cooperation.


I don't feel that I have done more to advance the world's thinking on these issues -- just advanced my own thinking. This process, however, does give me a framework for examining the decisions that we have made over the past few years -- for going to war in Iraq, and even Afghanistan, for the laws we are passing, and the statements that politicians are making. Time to think more on all of these things.

Essayist vs. Diarist

The New York Times recently referred to bloggers as "web diarists". When I saw this article I immediately reacted negatively -- I don't think of what I do on my blog as being a "diary" -- nor are most of the blogs that I read "diaries." The next day I happened to hear a piece on NPR about the art of essay writing. Essay writing seems to me to be much more like what I expect from blogs. Perhaps the medium has matured to the point where it is valuable to distinguish one type of blog from another -- diaries are certainly one important category, but not the whole story. Diarists, essayists, news aggregators, collaboration venues... each uses blogs as a technology but shouldn't they be distinguished from each other in how we refer to them? Diary blog, essay blog, news blog, collaboration blog?

Mobile Apps at the Edge

The world is changing. My generation, which has accepted the mobile phone into our definition of reality defines it in the terms that we understand -- a telephone that happens to be in our pocket. The next generation, which has grown up with the mobile phone as an existing part of their reality, will make it into something entirely different. elastic space lists some of the fascinating social applications that always-on, location-aware mobile devices are making possible. Thanks to Marc Cantor for passing this on...

More BlogOn Wrap-Ups

A few other people had... issues with the way BlogOn was staged. Sean Bonner was a bit nicer about it in his blog:

I think a lot of the panels were aimed at people who maybe weren't as dialed in on all the subjects being discussed. To someone with limited knowledge on the world of blogs it was probably very interesting...

He has a slightly different proposal on how to solve the conference problem, one that I would be willing to try :-)

So I'm proposing this - let's actually do it and see what happens. We'll pick a hotel in some city with a big lobby with wifi access and a date, and that's it. No panels, no time limits, no structure, no sponsors trying to push their products. Just the people and the lobby. We'll publish the list of attendees as soon as they sign up and that will be the conference. A long weekend, or a few days during a week. I don't know if it will work, but if anyone thinks it's an interesting idea post here, or trackback and if enough people actually think it's worthwhile I'll see what I can do about setting it up.

Marc Cantor echoes Sean's call for a "lobbycon" but calls it the "Open Source Conference" writing "WE (the people) need to just find someplace to hang out - BOTH in meatspace and virtual space and show eher the REAL power is." And Mike Rowehl has some good observations as well, pointing out that none of the presenters bothered to use the wiki provided by BlogOn organizers. Mike has a list of on topic questions that he wished had been addressed at the conference.

Hopefully the conference organizers will get involved in this blog dialog and tell us what they plan on doing differently next time.

Lets Reinvent Conferences

Frankly I felt that BlogOn was a waste of time and money. While I was sitting in the afternoon session (Track B luckily, as from all reports Track A was just a series of advertisements from sponsors) and blogging, reading RSS feeds, and watching the IRC channel stream by I recalled a post from Supernova by Martin Tobias -- Supernova Thoughts in which he writes

Unfortunately, many of the sessions had an erie unproductive quality to them. The Gillmor Gang noted this as well. These days most conferences provide a wifi network and much of the audience is on their laptops during the sessions. But SuperNova, true to it's name, was OVER THE TOP in this regard. Nearly EVERYBODY was frantically typing away in e-mail, IM, or their blogs during all the sessions. Leaving the poor people on stage to wonder if anyone was listening! The CEO of Skype called in on a POTS line. It was erie to be in the audience looking up on stage at powerpoint slides being driven by an assistant with the dis-embodied voice coming over the PA. And of course he couldn't hear questions and the mikes didn't work well, so the Q&A was a disaster.

I think that there are two challenges to the modern conference. Let me call these problems (1) Revenue Vs. Content and (2) Polyphonic Channels.

Revenue Vs. Content
Every conference organizer struggles with a balance between (a) providing content that attracts interesting paying attendees and (b) the value that this interesting paying attendee audience offers to potential sponsors. There are four ways that conference managers leverage the interesting paying audience in order to extract money from sponsors -- advertising (such as a logo on the conference bag); demonstration areas where sponsors have tables or booths to promote their company or product; special presentations in which companies have the opportunity to draw an audience to a demonstration of their product and talk by their representative; and (most insidiously) content participation, either in the form of keynote presentations or panel participation.

A particularly bad trend has been to present conferences, such as BlogOn, in which all of the sessions are panels. While this is a boon to conference organizers (more speaking slots to curry favor with sponsors) it is a disaster for attendees. Most panels are run as general investigations of a topic -- the moderator asks softball questions of each panelist, the conversation leaps from issue to issue, the result is a conversation that is a mile wide and an inch thick. This might work at a conference where the audience knows little about the topic. But at a conference like BlogOn the audience often knows MORE about the topics under discussion than the panelists.

Solution -- focused presentations by individuals that are in-depth and offer the opportunity for Q&A with a specific individual. Where a panel is scheduled, the topic should be specific (ideally divisive), panelists should represent opposing views (or at least a range of views), and the moderator's job should be to keep the conversation on topic, not dominate the conversation with his or her own questions.

Polyphonic Channels
At the modern conference we have wi-fi access allowing side bar conversations via IRC, wiki, blogs, IM, and email. Half the people in each session are typing away furiously on their laptops, more engaged in the blogosphere than in the meatspace. The challenge for conference organizers is how to bring these separate threads of conversation together, instead of allowing them to splinter. Can IRC, blogs, and wiki add value to the ongoing sessions in real time?

The suggestion was made at one point in the BlogOn general session to display the IRC channel on the main screen behind the panelists. Let everyone see the conversation amongst the attendees that was happening simultaneously with the panel discussion. For a variety of reasons this didn't happen, but the idea pointed in the right direction. For example, why should audience members go up to a microphone to introduce themselves and ask a question (which most often devolved into a statement... you know what I mean if you have been at one of these...) Why not have questions asked on the IRC channel and allow the moderator to sort out which of these really consitituted an on topic question?

Solution: This will require experimentation, but conferences such as BlogOn is the perfect place. Use technology to make these conferences a conversation amongst all attendees, not just a presentation by a minority.

Business of Blogging

Steve Boyd, Jason Calcanis, and Henry Copeland are talking about the business of blogging -- still this major problem in the format. By having a "moderator" who knows less about the business than most of the audience we end up with a discussion that is a mile wide and an inch thick.

More BlogOn Transcripts

Here is one on Business Transparancy and on The Transformation of Corporate Communications. The panel on blogging local media has not been posted yet as a transcript but was one of the more interesting. What I took from it was that local print media is dead -- wiped out by venues like Craig's List (Craig was on the panel to talk about this). But blogging offers a new mechanism for the content of local media to reach the local audience.

First Interesting Presentation at BlogOn

Shel Israel, a self-described recovering publicist, is running a panel on how social media is transforming corporate communications. A number of interesting items -- the business of "public relations" is celebrating its 100th anniversary this year. The press release was invented 98 years ago. Shel points out that 72,000 journalists have lost their jobs since 2000 and that as a result, the press release, once intended for the press, is now a primary news source in itself. The Internet allows companies to bypass news coverage, and provide information directly to its customers.

Shel is providing some case studies that show how effective press releases have been for his clients in driving business. I wonder of Shel has heard of Cluetrain -- he is making the case that the Internet allows markets to become conversations.

BlogOn Transcripts...

Amazingly, there are already transcripts for this morning's sessions online. Thanks to Mike Rowehl for these links: Defining Social Media and The Dark Side of Social Media

Initial impressions of BlogOn

BlogOn has attracted a set of very interesting attendees. In many cases the attendees know as much or more as the panelists. So why create panels in which a set of people blather on about topics in which the attendees all already agree? In other words, the conference is low value add, at least so far. Hopefully it will improve...

BlogOn 2004

Blogging from Chris Shipley's BlogOn conference. Fortunately for me the conference is being held at the Haas School of Business at UC Berkeley - about a 20 minute walk from my house. All conferences that I want to attend should be held here :-)

The first panel is underway and is entitled "Defining Social Media." Interesting group of speakers including James Currier (Tickle Inc), Dan Gillmor (San Jose Mercury News), Reid Hoffman (LinkedIn), Michael Sikillian (Lycos), and Jim Spoher (IBM). The panel is moderated by Ross Mayfield of Socialtext. I just got here (and was a little late) so I need to start listening instead of typing :-)

Microsoft Mole?

Colly Myers almost destroyed Symbian when he was its CEO. He continues to say some of the same things (in this recent interview with The Feature) now that he leads IssueBits. According to The Feature Colly "...believes that OS-level applications have their place -- namely in extending the system level functions of a handset, but that Java applications make more sense for everything else" and he "....believes that the true mobile economy lies in services, and small Java applications are more akin to services, and more appropriate for cellular hardware / bandwidth than OS-level applications."

These are the same things that Colly, then CEO of Symbian, was saying to me two years ago, when I was the chief strategy officer for Borland trying to convince Symbian that they needed a development tools partner. Two years later, the world looks the same to me (and I guess to Colly) -- why doesn't Colly recognize that:

• High-speed, reliable bandwidth is necessary for handset service-based applications to work and we don't have that now and won't have it for 10 years;
  
• there will always be a set of applications, or at least pieces of applications, that need to be on the device, not the network, and they need to be high performance -- think Doom as an obvious example and extend from there;
  
• 80% of all Java developers use the language as a SERVER development environment, not a client development environment. There are numerous problems with the quality of Java as a client side development tool, starting with standards;
  
• and then there is the problem with the size of the development communities. There are something like 2 million Java developers in the world (that is, professional developers, paid full time to write code). 20% of them use Java for real client side applications -- so we'll be generous -- 500,000 developers. There are 5 million developers using Microsoft tools, and 80% of them use MS for client side applications. That's roughly 4 million developers.

Is Colly trying to help out Microsoft? Convincing the non-MS world to ignore the need for a native device-side application development environment is tantamount to handing the market for handheld computing devices to Redmond.

Strange advice from T-Mobile

I have recently been having some problems with one of the GSM phone on my T-Mobile family plan -- it stopped receiving SMS messages. It could make and receive calls, send SMS messages but never received messages. So I called T-Mobile customer support.

I was quickly passed the dummy script of solutions and was passed on to technical support. The technical support person asked me to shut off the phone and wait while he "adjusted some settings." In a minute he asked me to restart the phone. Sure enough messages started coming through. That was strange enough in itself but the next part was stranger.

The tech support person asked me how often in a 24 hour period did I power cycle the phone. I told him that I never turn the power off. He then recommended to me that I shut off the phone at least twice per day! He assured me that he did this himself, and that this would give me much better service. He explained that when you turn your phone on, it registers with a particular cell tower. Throughout the day you may roam around and connect to multiple towers, but the first tower remains your registration point and the way the network finds you. However, as the day goes by, more and more people register at a given tower. The most recently registered devices get the best service...

Is this making sense to anyone out there?

pulver.Communicator Beta Test

Jeff Pulver has granted special permission for me to blog about my experiences as a participant in beta test of his company's new pulver.Communicator software product which I will be doing over on my IP Inferno blog.

Powell Does San Francisco

Opening with the comment that he was surprised to see so many Republicans on the west coast, our new blogosphere member Michael Powell gave a speech tonight at an event organized by the Progress & Freedom Foundation. A few non-members seemed to have snuck in including Tim O'Reilly, Joi Ito, Craig Newmark, myself... maybe it was actually a blogger conference...

Michael's comments were fascinating. Here are a few:

he described himself as a libertarian,

effectively said that he is against government control of content in the media, though expressing his obligation to enforce the indecency act (a part of the Criminal Code, he observed, passed in the 1920s...),

stated that 80% of all spectrum (including licensed) is unused 80% of the time and that he feels more should be done to free up spectrum for varied uses,

feels that when spectrum is licensed that it should be "like a driver's license" -- that is, the government shouldn't tell companies what to do with the spectrum, "just don't kill anyone..."

on VoIP he noted that the number one thing that the industry should be focused is on avoiding the common carrier taxation present with PSTN, but that the few requirements (presumably 911 access, etc) that the government ultimately should impose will not be burdensome on this emerging technology area...

When asked whether the FCC should be abolished he commented that "this crowd is suddenly looking a lot less friendly!" But he did express frustration with the code under which the FCC had been founded...

He also mentioned that he had spent three hours with government attornies trying to explain to them why it should be OK for him to blog...

Speaking of blogging, I expect with so many bloggers attending, not to mention journalists such as Dan Gillmour, Paul Kapustka, etc. in attendence, that others will provide a more in-depth report. I'll provide links as updates when I see other's comments.

Nokia Won't Control Symbian

Graeme Wearden, writing for CNet's News.com reports that "Nokia's attempt to win a majority stake in Symbian has been blocked by three fellow shareholders that have increased their holdings in the company." Industry observer TechDirt seems to think this is a good thing, posting the comment "...it is likely a good thing for the future of Symbian, as the less it appears like a Nokia puppet, the better its chances are of winning deals."

I couldn't disagree more. The 800 lb. gorilla that Nokia must worry about in this marketplace is Microsoft. With apologies to my friend David Levin, continuing to have Symbian as a dysfunctional semi-independent entity dragged in numerous directions simultaneously by multiple licensee/owners will never result in a strong answer to the unified strength of Redmond.

2004 SDForum Visionary Awards

I had the privilege of attending the 2004 SD Forum Visionary Awards last night, in Atherton, CA. This year's honorees were Craig Barrett, Marc Benioff, John Chambers, and Scott Cook. The event honors the "business leaders shaping Silicon Valley" and in some ways the most suprising thing about the event was that, after 20 years, people like Craig Barrett and John Chambers hadn't already been recognized by the group. This is more understandable when the "SD" of SDForum is dissected -- it used to mean "Software Developers" and it clearly doesn't anymore... Scott joked in his acceptance speech that "tonight must be the revenge of the suits..." but that is getting ahead of the story.

SDForum Executive Director Laura Merling was the MC for the evening, making opening remarks and keeping things moving. She seemed a little in awe at the powers that she had brought together on one stage. Not only was the list of honorees an amazing who's who of Silicon Valley, but each person was introduced by an individual impressive in their own right.

Yahoo founder Jerry Yang was first up, introducing Craig Barret. Amongst his praiseful comments for this truly great business leader was the observation that Jerry was "jealous" of Craig because Craig had received a PhD from Stanford (Jerry dropped out to start Yahoo). It is particularly interesting to note in looking at Barret's background that he joined Intel in 1974. Thirty years with the same company is unusual in our industry, especially today.

Craig used his acceptance speech to talk about American competitiveness. He expressed concern that we are not investing enough in education or in basic research. He talked about some of the things that Intel is doing to support education and he made an interesting comparison -- he pointed out that the US Government spends the same amount of money, $5 Billion annually, on basic science research, that Intel spends on semiconductor R&D. He joked, "and Intel is just not that big of a company. On top of Intel, there is Microsoft's R&D, Cisco's, etc..." Craig also took time to rib Jerry Yang, suggesting that it would be possible for Jerry to buy that PhD he was missing from Stanford and that Craig would be happy to negotiate with Stanford on Jerry's behalf.

CNet founder Halsey Minor was up next, to introduce Marc Benioff (who was not able to attend...). Halsey told a funny story about his email to Marc after the recent SEC troubles... "I told Marc to go into his back yard, dig a deep hole and throw his blackberry and his cell phone into the hole. Then he should fill the hole up with dirt again and out of this hole an IPO would grow..." But Halsey reserved most of his time to talk about the innovative Salesforce Foundation into which Marc has dedicated 1% of the company's profits, 1% of the company's stock and asked the company's employees to donate 1% of their time. This non-profit organization is dedicated to supporting tech educational projects in public schools.

Ex-Cisco employee, and now venture capitalist Pete Solvik introduced his ex-boss John Chambers next. Pete gave quite an impressive introduction for John, pointing out that when he joined Cisco as the head of sales, the company had just $70 million in revenue. His success in growing Cisco led to his appointment as CEO in 1995, and since then, John has increased revenues from $1.2 billion to almost $19 billion. When John took the podium, he picked up where Craig Barrett had left off, expressing enormous concern for US competitiveness. In particular, he spoke against the proposed FASB rules regarding stock option expensing. He said that Cisco has done an analysis of the real value of granted stock options against the proposed FASB expensing formula over the past 10 (or 20?) years and the analysis came out showing that the proposed FASB method would have been 300% wrong. He didn't say whether that was on the high or low side... He also talked about a commitment that Cisco is making in their 20th anniversary year to dedicate a cumulative 20 years of community service -- roughly 5 hours for every Cisco employee.

Finally, venture capitalist Ann Winblad introduced Intuit founder Scott Cook. Scott was his usual modest self, although in Ann's introduction she recounted a comment that Scott had once made to her that it should be an obligation to always behave modestly even if one didn't feel modest. It was hard to watch Scott be modest in his acceptance of the award without wondering if it was only an act that he had perfected. But Scott deserves to be immodest about his accomplishments, since founding Intuit in 1983. And he took his time at the podium to talk about leadership and one's moral compass. He closed his speech and the evening with a reminiscence from Harvard Business School -- he recalled that on his last day in one particular class the professor did not provide a case to work on but spent the time discussing moral choices that we make in our lives. The professor observed that many, if not most, of the world lives from hand to mouth and is sometimes forced to make decisions that they regret morally, in order to feed their families. But he pointed out to these soon-to-be-minted business school students that they had no such issue. They were the ones that were privileged on this planet to know that they would always have the ability to provide for themselves and their families. And so there was never a time when they should face a moral question and make the wrong decision. Scott posed this lesson to all of us in the audience as well -- we are the privileged ones, and we have no excuse for not making the right moral decisions in our businesses and in our lives.

A truly impressive event, and memorable evening. Thank you to Craig, Marc, John, and Scott for your leadership and inspiration.

Rational Exuberance

Perhaps we all remember Greenspan's prescient "irrational exuberance" speech made back in 1996, before he become goggle-eyed over technology as a productivity improver... With the latest 1/4% interest rate rise and general positive comments from the Fed on the economy, can we now expect a period of rational exuberance?

While I cannot say anything in particular about companies that are presenting here at MDV, I can say that I am feeling some rational exuberance myself - silicon valley inventors are at it again and the powerful combination of factors that make this such a dynamic generator of new technology and new companies are, I think, poised to unleash some very exciting new trends...

So maybe the long boom is back?

Moto/MS Get it Right (Smartphone)

Third try is a charm, the rest of the Smartphone world should really start worrying about Microsoft now. It looks like the new Motorola MPX is going to be VERY hot. Here is a fansite with photos and a description. There are 14 pages of comments so far -- it is worth going through all the pages as "Bengalboy" answers readers questions and posts more photos of the device and its capabilities throughout... THE MOTOROLA MPX

JavaOne Blogger Meetup

I'll be at the JavaOne Blogger Meetup on Monday -- how about you?

The IM Wars

Yahoo decided to change the API for connecting to their IM service. Jim Hu of ZDNet writes "Yahoo to Trillian: Talk to the hand." Of course the change blocks other 3rd party clients such as GAIM, and the one I use on my mac Adium.

But the egg is on Yahoo's face as Trillian has already released an update to fix the problem -- according to publisher Cerulean Studios

So why continuously change the interface if it takes less than half a day for the third parties to patch their software? Someone over at Yahoo needs to get a clue -- this is a war they are going to lose. Yahoo should learn to love the 3rd parties instead of harrasing them.

Congrats to Benioff

$1.7 Billion. That is the current market cap of market innovator Salesforce.com in the second day of trading on NASDAQ. And what a coup to have scooped up the symbol CRM -- as the Wall Street Journal said, "that would be like Porsche asking for the symbol CAR." Marc and his team have proven that the application service provider model is a viable business model, if not the future of software... or should I say, the future of no software? I expect to see more companies follow in this company's footsteps.

But don't be mistaken by the name of the company or even the ticker symbol -- the magic here is not a new approach to salesforce automation of even customer relatoinship management. The secret sauce is a multi-tenant industrial strength application hosting environment. This infrastructure investment could be the launching point for hundreds or thousands of new applications - now to wait and watch Salesforce (and their development API division SForce) to see if they can break out of the narrow application specific market that they have succeeded in so far, and provide a broader platform for applications.

FCC Chairman Endorses IP Inferno

OK, not exactly. I think what he said in his keynote speech here at Supercomm was that "the IP market is on fire!" Which does sound like an endorsement of my proposition that IP is the fire burning down the traditional telecom industry..."

All quiet...

Its quiet over her because I am posting the results of Supercomm interviews over at IP Inferno... Come on over and read about the WiMAX Forum, Motia, SkyPilot, and Peerio... And more to come.

Taking the Plunge

It has only been a month since we shut down CallTrex and I have alreated started a new adventure. The good folks at Mohr, Davidow Ventures have asked me to join them as an "entrepreneur-in-residence." This is an exciting opportunity to pursue some of my own ideas and to learn more about how the venture community works, from the inside. I am here for my first day, learning about what an EIR can do to support a venture partnership. It will be an exciting few months!

Russell Beattie on Nokia

Long time mobile watcher Russell Beattie has a great post on what is wrong over at Nokia. If you follow mobile devices and Nokia in particular, this is a must read. I have only one disagreement with him -- he suggests that Nokia exit the S40 business. Its sometimes easy for gadget wonks like us to forget that most of the world still wants *free* phones -- well, subsidized by operators. Nokia has to have the world's cheapest phones in addition to the world's best phones. It is a delicate balancing act -- maintain the volume with operators and the public so you remain the most important guy on the block, but produce the best mid-range and high-end phones to earn real profits. But without the volume business, Nokia would have less distribution power for the high-profit phones. I mean, would anyone have agreed to carry N-Gage at all, if it wasn't for Nokia's overall market presence?

Deja Vu All Over Again

Just in time for summer, BusinessWeek has rediscovered digital convergence! You know, the coming "Big Bang!" in which the computer industry, consumer electronics industry, and communications industry all merge. Let's turn back the clock and look at a few other times they have "discovered" this phenomenon...

July 2, 2001 -- Technologgy's Unholy Convergence (doesn't sound like nearly as much fun as a Big Bang)

June 23, 1997 -- Is Digital Convergence for Real? (I guess it wasn't...)

For extra credit, how about an examination of BusinessWeek's other lead story -- Wounded, Nokia Comes Back Firing. Where have we heard this before? How about in BusinessWeek...

January 22, 2001 Is Nokia's Star Dimming? (short answer, no it didn't)

August 10, 1998 Nokia: Can CEO Ollila keep the cellular superstar flying high? (short answer, yes he did).

So is it just me, or are there certain stories that the mainstream media has decided sell papers (magazines in this case), and they just roll them out every few years as if they suddenly had a new idea? I can almost hear the folks sitting around the newsroom, "Hey, we haven't run that stupid digital convergence story in a few years... no one will remember the last time we ran it so lets prop up an issue with the usual sweeping statements updated with a few new quotes from the usual suspects..."

I am almost to the point of joining the blog-only news groupies...

This Compromise Stinks

I rarely wander from the beaten path of technology on this blog, but now that I have been firing up IP Inferno as my outlet for tech related commentary and news, I might comment a little more on non-tech. What has me in a lather today? This terrible ruling by the US Supreme Court.

I respect you if you think that the word "God" should be in the US Pledge of Allegiance, and I respect you if you think that it should not be in that Pledge. As citizens we can all respect each other's right to believe in a God (or Gods) or not and express our opinions on what the government should and should not do about those beliefs.

But the Supreme Court is the place where decisions should be made, sometimes hard decisions, on what the relationship between Church and State should look like in the 21st century US. The Justices have abrogated their responsibility to this nation by ruling that Michael Newdow cannot sue his daughter's school because he "...is in a protracted custody fight with the girl's mother."

This ridiculous side-step of the core constitutional issue comes at the wrong time for the US. We need to be demonstrating to the world that our system of government works -- that it is possible to balance the powers of executive, legislative, and judicial branches and to emerge with a government by, for, and about the people. In this ruling, the court has demonstrated that it is, once again, willing to step away from a difficult issue.

We should be engaging more Americans in the debate about the relationship between church and state, not trying to bury the issue under legal technicalities.

Another State Taxes VoIP

Thanks to Andy Abramson's VoIP Watch for the link to this Seattle Times article --

Washington state regulators yesterday determined that Portland-based LocalDial, which offers Internet phone service, is a telecommunications company and must start paying access charges like any other phone company.

The case is interesting in that it only determines that VoIP is a phone service in a narrow case -- where it is used for the backhaul of voice communications between a caller and call recipient who are both using POTS.

Nokia vs. Sony?

While the talk was about how Nokia's new clamshell phones might be too little, too late -- no one seems to have picked up the other interesting tidbit in this Reuters article, that Nokia is coming out with their own MP3 player...

"...plans events at its headquarters in Helsinki and in Asia, where it is expected to launch one or two fold-away phones, a music player without a phone keypad, a lightweight communicator model..."

Just tucked in to the middle of a paragraph, between the "buzz lacking" fold-away phones and the expected replacement for the brick. Will this "music player without a phone keypad" even be a phone? or will it be an add-on device that connects via bluetooth to your phone?

Nokia seems to have increasingly fixed its eye on Sony, competing to define the digital lifestyle. Lets hope that both companies realize that these devices eventually all need to be open and programmable...

What's the punchline?

Someone failed to tell Guy Kewney over at eWeek about Vocera before he wrote his article, Voice over WLAN Still a Joke That's Not Funny. And I suppose he also failed to do any background research into the matter and missed the recent tests by Vonage of Voip over Verizon's EV-DO network. Not to mention the trials that IDT Corporation currently has underway of VoiP over Wi-Fi in the Ironbound neighborhood of Newark, New Jersey. So why does a reporter blast a technology based on a trade show floor demonstration? Is there something going on here, other than sloppy journalism?

Delays in ITALK2U

I spoke with John Jarvis, CEO of LitFiber, by phone this morning regarding the delay in release of the "Final" edition of ITALK2U. John told me that they are hard at work adding the capability of bridging to a POTS network -- their revenue model for the product. He expects that a new release will be available on their web site by the end of the week.

VoWLAN is back...

As regular readers of this blog know, I have been concerned about the evolution of the acronym for VoIP over wireless networks. My primary concern has been a marketing one -- we are still in the process of explaining to consumers what the heck Wi-Fi is, now we need to explain to them voice applications over these wireless networks... so we start confusing them with VoWLAN.

But I recently saw an article in the respected CMP publication, Mobile Pipeline that used the term VoWLAN (the article is here) so I wrote to editor David Haskin and asked why he used the term VoWLAN. His reasoning is persuasive. Repeated with permission, his email reads:

It's an entirely subjective decision. My thinking was that WiFi (Wi-Fi, actually) is a brand created by the Wi-Fi Alliance that refers to a specific type of wireless technology. WLAN is a more neutral term. It likely won't happen, but if an entirely new wireless LAN technology emerges, I'd rather not be guilty of promoting one technology over another, even if it's subtle.

I certainly have to agree with David. With WiMAX growing in importance and Wi-Bro on the horizon and ever more wireless options emerging, VoIP over wireless will not be limited to Wi-Fi. VoWLAN now makes much more sense to me. Oh well, think of it as a full-employment program for marketing departments...

Why HP and PalmOne will be the last 2 PDA makers

Steven Bush, founder of Brighthand, has this interesting article on the evolution of the PDA market -- Then there were two. The article begins 20 years ago, with the innovative Newton being dreamed up in a lab at Apple and lightly sketches a few historical points on the market's evolution. More interesting is his analysis of the market today, and where we will be in the near term. He observes:

The "Big Three" Pocket PC manufacturers of just a few years ago -- HP, Compaq and Casio -- has dwindled down to one, HP. And the "Big Three" on the Palm OS side -- Palm, Handspring and Sony -- is now down to palmOne.

While acknowledging that other manufacturers such as Dell and Garmin still exist, he believes they will be niche players. What's missing from the article is an analysis on how and why we ended up where we are.

On the Palm front, my view is that Palm made good decisions about partnering -- licensing their OS when Apple had made the wrong decision on this point so many years before. However, they made two mistakes. The first was execution. While the licensed the OS, it remained too tightly connected to their hardware business. By the time they made it a truly independent business, the market was already in decline. And far too much time and energy was spent in this process. Not to mention the process of spinning off from 3Com or being acquired by 3Com. Corporate restructuring may be necessary but it can be very disruptive.

The second mistake was around innovation. Palm became stuck in their approach to the PDA market and change was a monolithic process. New operating system releases were painful for the company and for licensees. The company was not able to take some of the base ideas and technology and use it for adjacent device categories like mp3 players or smart phones, both of which started growing much faster than the core PDA market. This inflexibility and inability to innovate limited licensee growth. Palm's competitor, Microsoft, hasn't succeeded here either, but MS has the drag through revenue and relationship with the desktop and laptop platform that Palm had to compete against. Palm needed more of a constellation of devices supporting the same set of APIs, if not running the same OS.

On the Pocket PC front, rather than saying HP, really we should say Compaq was the winner here. This is a story of early commitment to a market, innovative engineering, hard work, and smart marketing. Despite Dell's proven approach in the PC and Laptop market of gutting cost throughout the engineering to delivery cycle, Compaq/HP has been able to hold their ground in this segment of the market. I attribute this to the innovation necessary so far in the PDA segment and for this reason I would not count out Dell in the future. Once Microsoft publishes a universal reference platform that can be made cheaply in China and is appealing to consumers, Dell will be back in the game. As long as consumers are looking for innovation in the device, Compaq/HP will continue to lead.

But as I have written elsewhere the PDA market is in a period of terminal decline. Perhaps it is more appropriate to say a period of transition -- the things we do with a PDA are not going away. Just the idea that Palm was born on, a personal digital assistant. Perhaps the old adage is true, that it is always that characteristic which gives you your strength which is also your weak point. Palm succeeded because it eschewed the general programmability model of the Newton and focused on providing core functionality and doing a great job in that limited area. Now the market is moving in three directions, away from the core value proposition that Palm was built on --

(1) even more special purpose consumer electronics (mp3 player) though I expect this market to drive toward high volume and low cost rather quickly.

(2) general programmable device with a very small form factor -- smart phone. In this market I expect to see the greatest challenge coming from integration with the rest of the computing stack. Here Symbian is the only player with any significant volume.

(3) integrated platform, running the same OS, from smallest device to largest server -- Microsoft and Linux are the two options today.

So what should Palm do? Ditch PalmOS. Start making devices based on Linux. How about the Palm user interface on top of Linux? Start making devices in other categories outside the PDA -- Linux MP3 player, Linux Video recorder, Linux Smart Phone...

Assault on Smart Phones

For every action there is an equal and opposite reaction... my physics professor tried to teach me something like that. Now I see what he meant. It hadn't occured to me that professional technology industry consultants would advise against the adoption of new technology. Luddites or Amish maybe. But thanks to Cory Doctorow, I now see how short term economic thinking warps some consultants brains... Cory points out an article from the Register entitled Symbian loophole 'threatens operator revenue' which details a report from consultancy Mako Analysis. Of the Symbian OS, Mako is reported as having said

"The increasing sophistication of high-end mobile devices opens up a range of additional problems and will continue to undermine the data revenue streams of mobile operators at a time when they desperately need them to be increasing."

At Mako's web site a full article is available on the topic. Mako explains that with the Symbian OS "...a savvy user can... completely bypass a range of services that are normally charged for by their mobile operator." Mako outlines four categories of services that mobile operators hope to charge for that could be impacted -- messaging, mobile music, gaming and phone personalization.

I don't suppose that Mako is aware that you don't even need Symbian -- with Java midlets, people have been avoiding operator's high prices on SMS for a few years with programs like this one.

At the same time another Register article warns of a University of Surrey study that shows that "Mobile phones drive us mental." The study warned that "...the incessant demand for instant communication heightens stress in the workplace, makes people angry and can prove to be an annoying distraction."

So perhaps instead of simply warning against smart phones, Mako should be arguing that we should do away with mobile phones altogether! Of course that would result in a somewhat larger impact on revenues for their clients...

A more useful role for a consultancy would be to advise mobile operators on how to transform their business models to take advantage of the relentless and unstoppable pace of technological innovation, as opposed to suggesting that it can in some way be halted.

VoWiFi it is!

Thanks to all the readers who sent me suggestions on how to solve the problem of the horrible acronym for voice over wireless networks.

The winner is in! First use goes to techdirt where on March 18, 2003 mmasnick ponders "...VoIP over WiFi (or is that VoWiFi?)..." in this post on the economics of wireless. Techdirt has used the term 15 times since that first use, most recently for this article on giving the homeless VoWiFi...

Lets keep up the momentum and make sure we aren't having to write VoWLAN in future blogs... and having to explain over and over again what it means...

Peerio Interview

Some time ago I wrote about Peerio444 as a competitor to Skype and raised a number of questions about their product and business model. This morning I was able to have a brief conversation with CEO Dmitry Goroshevsky and I have posted the interview on my IP Inferno blog. Enjoy!

Does Nokia have their COOL Back?

I recently wrote in this blog that the issue is not about how cool the phone looks and I still believe the basic premise -- that the next evolutionary step for phones is dependent upon programmability. But two announcements this week from Nokia definitely show that the good folks in Finland are hard at work to prove that they are still the thought leaders in mobility.

First is a very strange new technology which allows a mobile handset user to flash a message across a room to another person via a set of leds embedded on the back of the phone. The BBC has a good photo of the new phone, dubbed the Nokia 3220. The Register explains that this will "change the face of waving as we know it" and Joi Ito imagines what it would be like to have them in an audience, "it would be like a chorus of Hecklebots." More information is available at Nokia's web site

The second annoucement is more interesting in that the long term implications are deeper... Dan Gillmor writes just that "The project is young, but the possibilities are fascinating" while Marc Canter writes simply "This is Killer." What are they both talking about? Nokia's new initiative LIFEBLOG. What the heck is a Lifeblog? Here is what Nokia has to say:

Nokia Lifeblog is a PC and mobile phone software combination that effortlessly keeps a multimedia diary of the items you collect with your mobile phone. Lifeblog automatically organizes your photos, videos, text messages, and multimedia messages into a clear chronology you can easily browse, search, edit, and save. Nokia Lifeblog does the work of organizing the items you create and receive, and you can also add notes throughout the day, or tag and update your favorites so they're always on your phone.

The Nokia 7610 imaging phone will be the first to have the Lifeblog software. The 7610 is a tri-band phone with a megapixel camera, running the Symbian operating system. The phone also comes equipped with bluetooth, an MP3 player, and the standard Symbian productivity applications (email, web browser, etc).

Nokia definitely has a good claim on cool for this summer.

ITALK2U Final Now Available?

John Jarvis sends news that ITALK2U, the P2P VoIP Skype competitor, is now out of beta and available with "...all of its features..." -- However the link he sends still has the test version. So I assume he will be updating soon... when available I will download and post my experiences.

IP Inferno

I have been working on a new project, IP Inferno in which I attempt a new approach to the blog editorial model. Blogs seem to fall into two broad categories, either (a) regurgitated, if idiosyncratic, news feed or (b) the personal voice of the blogger (as interesting as that might be). With IP Inferno I am trying something new -- attempting a roundup of the news and comment on a particular topic, albeit with an editorial slant. I was inspired by a publication called The Week which describes itself this way:

The Week is a witty, informative, important, and completely indispensable digest of the best reporting and writing from the U.S. and international press. In just 40 pages, it will bring you up to date on what’s happening at home and abroad, and what the experts are saying about it.

With IP Inferno I aspire to this formula but with the narrow topic of advanced IP applications such as VoIP, Wi-Fi, and Wi-Max. Why "IP Inferno" as a title? IP is the inferno that is burning down the traditional telecommunications industry... Enjoy!

V oWLAN With an emphasis on the OW!

As in OW! Why are you hurting me with these terrible acronyms? Om Malik's V oWLAN coming on strong is the first time I have seen the acronym in use... stands for Voice over Wireless Local Area Network... This is a very important technology and deserves a better acronym. A google search turns up only 3 references to "V oWLAN" so it is NOT TOO LATE... VoIP is bad enough but we are stuck with that one. Here are my suggested alternatives:

• VoWIP (Voice over wireless IP - at least its close to VoIP)
  
• VoWiFi (Voice over wireless fidelity -- more consumers will understand)
  
• VWN (Voice wireless networking -- pronounce v-win)
  

More suggestions welcome -- lets just try to stop this new acronym before it gets any further...

How high can ARPU go?

ARPU or Average Revenue Per User is the way that mobile operators judge how well they are doing in mining expansion opportunities within their current customer base. This is especially important in western markets where mobile phone use is virtually ubiquitous so no new growth will come from expansion of the customer base. It looks as if the news is good for operators who have bet on next generation services, if you believe the results of a JD Power and Associates survey reported on the BBC. "It is quite amazing really that people are spending more on their mobile than on gas or electricity bills," Gunda Lapskim, a JD Power director, is quoted as having said. Much of this spending is on services beyond voice. But how much will people pay for communication services even if entertainment is included? How high can ARPU go?

According to the survey, the average monthly bill rose by 14% since 2003 -- an average of 534 British pounds per year. If the annual increase continued at 14% for the next 10 years, ARPU would grow to almost 2000 pounds per year. Even allowing for inflation, this still suggests that people would be willing to spend as much on their mobile bill as they would for a new desktop computer... every year.

Here is the full JD Power press release in which the rankings of UK operators are also disclosed -- Virgin is number one amongst pre-pay customers and Vodafone is number one amongst contract customers. "Image" competes closely with "Call Quality/Coverage" as the most important factor...

The issue is not about how cool the phone looks

Martin Geddes blogs Finland, Finland, Finland offering opposing views on whether Nokia can get its cool back (not to mention growth, profitability, etc). What I find interesting about this discussion is that here (and elsewhere - Techdirt and BusinessWeek) the debate is about industrial design -- do Nokia phones look and feel cool? But in my opinion this is not at all what the next evolution of the device is all about...

Nokia made a really smart move -- they jumped on the digital bandwagon early, when a lot of their competitors (and leader Motorola) stuck with analog. The question in my mind is whether or not Nokia will make the next jump from phone to computer.

The handset industry has approached the problem of increasing features in handsets from a consumer electronics perspective -- pack the electronics tighter, pre-wire the features, and focus the device on a particular demographic.

Two years ago I was at the Nokia Mobile Internet Conference and heard Jorma Ollila's keynote speech in which he said that in the future every phone would be unique. That is, you would have a phone that suited your needs, I would have one that suited mine, and 500 million other people would have their own idiosyncratic versions of the "perfect" phone.

The only path to this vision is by making the leap from thinking of the phone as a consumer device to thinking of it as a computing platform -- infinitely programmable to provide whatever feature set a given user wants -- even different feature sets at different times of the day (work vs evening).

Nokia's purchase of Symbian solidifies their intent to own this new phase, but will they understand enough about this alien world and will they understand it fast enough? Microsoft is moving quickly, and we could wake up one day with Windows ubiquitious in our pockets the way it already is on our desktops.

Wi-Fi -- just like Bathrooms and Napkins...

In the continuing saga of the Cometa Networks shutdown, eWeek reports that Cometa customers are scrambling to find alternatives. In the article, Peter Hoedemaker, vice president of retail at Tully's Coffee,is quoted as saying

"Everybody is still trying to figure out the economics of [Wi-Fi]."

Note to Peter -- the economics are in selling coffee.

Perhaps he should go check out this post at Wi-Fi Networking News, outlining Wayport's new pricing plan. Wayport is converting from the common Wi-Fi model of sharing variable revenue and cost with their location partners to a flat fixed fee, allowing the partner to decide how much (if anything) to charge.

In a clear swipe at T-Mobile’s arrangement with Starbucks, Borders, and Kinko’s, in which, according to many sources, the cell company bears the cost of the network and operations and shares revenue with its venues, Wayport’s CEO Dave Vucina said, that a retail partnership “shouldn’t be about how much they can get for free from the provider but should be more about their core business and driving enormous traffic for their core business.”

So Peter -- think about it this way -- you provide a bathroom in Tulley's and that costs you something every month, even though not all of your patrons use it. You provide napkins, even though not everyone takes one. Why not build Wi-Fi into the base cost of operating a Tully's outlet and offer patrons free access just as you do with bathrooms and napkins?

Will Telephony go to Zero (dollars)?

A reader of this blog anonymously posted a comment to one of my earlier posts, How Cheap Can It Get?, asking if the price to make a phone call might one day drop to zero. The answer is YES and that day is already here.

How can you make a free phone call? Download Skype, go to a coffeeshop with free Wi-Fi access, and dial anyone else who has a Skype phone.

While we are still a few years away from ubiquitous free calling (and free Internet access for that matter) this day is likely to come sooner than later

Jeff Jarvis has a report on an article by Eli Noam, a Columbia professor, in which he argues that:

the entire information sector - from music to newspapers to telecoms to internet to semiconductors and anything in-between - has become subject to a gigantic market failure in slow motion. A market failure exists when market prices cannot reach a self-sustaining equilibrium. The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes.

Eli seems to take this as a negative, while I tend to think in terms of Joseph Schumpeter's concept of Creative Destruction -- the deconstruction of these industries is enabling an entirely new generation of technologies an industries to evolve.

In the future we will pay for certain aspects of connectivity -- reliability, security, and performance. Like drinking water, in the western world basic access will be ubiquitous (it may just taste funny) and you will pay for the higher quality bottled stuff. Telephony will become just "...a voice application, completely indistinguishable from any other kind of application that can run on an IP network..." (Michael Powell, Chairman of the FCC)

Should I Stay or Should I Go?

The provocative title of a recent Crain's Chicago Business article is Should Moto sell its cell phone biz? Now may be best time to hit the exit though the article goes on to state what most analysts believe -- that Motorola needs an Asian partner to take over manufacturing while continuing to be a design center:

No Motorola business needs bold action as badly as its largest, the $11-billion cell phone manufacturing unit. Now a distant second in a business it once dominated, Motorola has operating profit margins less than half those of its biggest rivals. Cell phone manufacturing is migrating to low-cost Asian producers able to churn out cheap phones for the mass market. Cell phones themselves are morphing from a sophisticated technology into a household product subject to shifting consumer tastes and falling prices.
...
Decisive action on the cell phone business could take one of two forms: an outright sale of the business, or a deal with an Asian manufacturer to take over Motorola's handset production while Motorola continues to develop and license the technology and its brand name. A pair of big European cell phone makers have cut such deals in the past month.

But does this make sense? The interesting problem for all of the handset manufacturers is that virtually ALL of the growth in this market (60 million units) will be in China. According to China View (Xinhua online)Lucky Goldstar has already surpassed Motorola in the worldwide CDMA handset business and is also number one in the critical Chinese market. And they have there eyes set firmly on the GSM prize.

Motorola could hollow out their handset division, handing over manufacturing to China the way they have handed over software to Microsoft. But what is left? The Motorola brand name? Dell would have more success managing this kind of business. If Motorola truly can't figure out how to manufacture mobile phones cost effectively at an $11 billion annual run rate, maybe they should exit the business.

Firefly.. softphone and network but not P2P

A reader anonymously wrote in to suggest that I give Freshtel's Firefly a test drive. While it looks like another nice option, competing with FWD and others, it doesn't appear to be P2P... am I missing something? I believe that there is an important distinction between the VoIP providers with centralized arhchitectures and a P2P architecture. The three providers I have found so far in the later category are Skype, ITALK2U, and Peerio -- anyone know of others? Of course each of these has drawbacks starting with the reasonable argument that Skype shouldn't be considered P2P at all... (see earlier post on Why Skype is No Different...)

Review of ITALK2U

Alec Saunders sent email with a link to his review of ITALK2U and a comparison to Skype. Thanks Alec! In part he writes:

iTalk doesn't yet support conference calling, or encrypted calling, and doesn't have the Skype missed calls list, but other than that appears to be a functional clone of Skype. It's also a bit more standards based, in that it supports H.323, rather than a proprietary signalling protocol, but it uses a proprietary codec, which makes that somewhat moot. Voice quality is similar to Skype, which is to say very good, but I don't know how well it will handle dial-up. The codec seems to be some kind of a learning codec, in that quality improved over the duration of the call. MSN messenger is the same way.

Click on over to Alec's blog for the rest of his rundown and screenshots.

Another Skype competitor

Here is another competitor to Skype in the peer to peer VoIP world -- called Peerio it appears to have a number of advantages over Skype... with a few caveats though. First of all it is open source, second it has a developer API which will easily allow others to build Peerio compatible applications, third it claims to be entirely serverless (as opposed to the directory architecture required by Skype) and fourth it is based on H.323 and SIP standards.

Now for a few caveats... their web site definitely leaves a lot to be desired with lots of holes to be filled (although the promise is there). More problematic is the half-hearted approach to open source. On the site they write:

Despite our efforts, there are two necessary exceptions to the open source principle:

1) The source codes for the Peerio444™ core will not be released.
2) Peerio444™ will not function in embedded systems and is limited to standard PC use (x86 and PowerPC).

Why is that?
The source codes for the Peerio444™ core will be kept proprietary so that we can avoid spawning hundreds of proprietary commercial systems (see Linux) that could jeopardize our ability to maintain a Forever Free platform. To be Forever Free we must protect the system from profiteers. Support and maintenance of the Peerio 444™ core will be limited to our research and development team.

This is like saying that you can do any work on the car except for modifying the engine -- we have welded the hood shut to prevent you from making modifications to anything inside that compartment.

This flies in the face of good open source policy for a whole bunch of reasons but I'll just mention a few here:

• At anytime Peerio can change the definition of what is inside the core and what is outside the core, endangering other projects that have been built on Peerio.
  
• The argument that this protects the system from "profiteers" is spurious -- by contrast placing assets in the open source community creates a level playing field
  
• Most importantly, Peerio will defeat its own strategy by holding back this key element of the product -- open source only works as a viral means of distribution when it is truly open.

Part of the point of open source is that by using it, a developer is no longer dependent upon the whims of a given company for the future of their development project -- The developer knows that the core building blocks will always (Forever?) be available. By holding back this key element as proprietary property Peerio eliminates that key advantage of open source and will significantly reduce the number of companies and individuals willing to invest in the future of the project.

On another front, I have been meaning to test the beta of ITALK2U which has been out for awhile from Endoreal/LitFiber. I downloaded one version and couldn't get it to work, but have been meaning to download a newer version. If anyone out there has had any success, please let me know.

How cheap can it get?

Already it is significantly cheaper to use VoIP providers like Vonage for your telephony needs, but now there is a price war between the low cost providers! According to this NetworkingPipeline story, Vonage Cuts Prices for Internet Calling

The company insisted it was not launching a price war in a market that is just starting, saying that the price cut reflected its decreasing costs in doing business.

Right. And as the article goes on to point out, AT&T announced their CallVantage plan just 6 weeks ago with an introductory price of $19.99 a month for the first six months. I am guessing that would have slowed Vonage's customer acquisition rate.

More time to blog...

After almost 7 months of work and a considerable financial investment, Fred Ball and I along with the founding partners have decided to turn out the lights at CallTrex.

The immediate cause of death was our inability to close follow on financing to help grow the company. A call center model only works at a significant scale of operations. Below a certain threshold, fixed costs represent too large a part of the financial model and it is impossible to make money. We were operating at about one-third of the scale that we needed to be to start generating top line profit. At least another $300,000 was needed to arrive at this first milestone. A number of angel investors moved in the direction of funding the business but pulled back at the last minute. Others simply moved too slowly. In the end, the Board of Directors expressed a lack of confidence that we would close this angel financing round in time and approved a plan to shut down operations.

As in so many cases, there were a set of underlying causes of death that led up to this end point. A large number of people had warned that selling to the small and medium business market was fraught with peril -- this certainly proved to be the case. Customer acquisition was slow and expensive and we never reached a scale where a larger distribution partnership made sense. In addition we suffered from technology problems which could have been solved with more resources, but we found ourselves spending money to fund the call center operations and starving the technical team. Technology problems sometimes meant the loss of customers which further slowed our growth rate.

Despite all of these challenges, CallTrex had a unique value to offer the marketplace, with an innovative system for connecting our customers to their remote staff and allowing that remote staff to provide a great service to our customer's callers. It is sad to see it go. As we have notified our customers that the service will be turned off, we have received some terrific praise on how great our service was.

I will be taking some time off and thinking about what I want to do next. Definitely spending more time with my daughter -- 7 months old and doing great!

Asterisk Use Accelerates...

The adoption of a technology outside the initial core group of visionaries is an important milestone on the path to greatness or abandonment. Recently a number of folks have pointed out that Pulver's "Free World Dialup" now supports Asterisk -- you can read about it here on -- Pulver's own blog . A comment over in North American Bandwidth news:

Soon, protocols will be irrelevant since all VoIP devices will support all of them.

An interesting point -- though it misses a key issue. Translation can replace standards as long as the standards are transparent and processor speed is cheap and plentiful. This is true for all open protocols -- think currencies, human language translation... But not so for closed, proprietary protocols. As an open-source VoIP offering, Asterisk makes it easy for anyone to support since their protocol is published. Translation for Skype, on the other hand, might prove much more difficult.

On another front, I spoke to someone who was told by Global Crossing that they are now doing tests to certify Asterisk. If they decide to formally support Asterisk, this will be an even stronger indication that we are on the road to wide adoption rather than oblivion...

COMMENT 5/8/2004 1:40:50 AM Roland Tanglao (www) said:

Hi Ted:

Yes, it can be difficult to translate and emulate a closed protocol like Skype, but it's not impossible.

If Skype doesn't interoperate and coexist with other VoIP protocols but in spite of this still becomes popular with the mass market, somebody will reverse engineer it!

Corporate Cockroaches

One should never underestimate the lowly cockroach. If any creature could survive a nuclear holocaust, it would likely be cockroaches. They have a capacity for survival that surely puts them in the Darwinian All-Stars. A few days ago a friend of mine (who works for a very large company) and I were talking about the people that somehow survive layoff after layoff inside his company. "They are cockroaches!" he exclaimed. A kind of corporate cockroach. Through a combination of hoarding information, avoiding accountability and spending their work time on building a network of relationships these individuals find cozy cracks and crevices to survive the reduction in force bombs that explode on a regular basis.

One can't entirely blame the cockroach, however. If corporations made their employees feel a little more secure in their positions, perhaps they wouldn't feel the need to spend their intellectual energy on how to protect themselves instead of on how to get their jobs done. Or is society to blame because we learn to attach our own sense of self-worth to the work we do, so losing a job can be a more terrible blow to self-confidence than virtually anything else?

Whoever is to blame, a manager's task is clear -- take out the RAID can and exterminate the beasts. Watch for those three signal events -- hoarding information, avoiding accountability, and inordinate amounts of time "networking." Businesses have to be able to have "roles" and not "faces" as another of my friends recently stated. We each play a role within or organization. Part of our job should be making sure that someone else can play that role if we move on. And we should look to our teams as people playing roles as well. The moment you believe that a particular person is essential, rather than a role being essential, you should recognize that you have a problem.

Will VoIP kill the telco star?

A nod to pop music group the Buggles* in the title of this Red Herring website post on VoIP -- Will VoIP kill the telco star the latest article pointing out how mainstream telephony is fumbling the opportunity to emerge as winners in the new IP based world that is rapidly emerging...

A particularly interesting point made in the article -- a report of one individual's experience in switching over to VoIP -- the phone company did nothing to try and keep this business:

Qwest did not handle the transaction well, failing to complete the hand-off of my old telephone number and cutting me off from the world for several days. Rather than competing for my business – there was no call asking if they could find a way to keep my business after I requested the number be moved – they made it difficult for me to stay connected.

I love the comment from the Qwest customer service person as well when the reasons were explained for the switch:

Wow, that's a lot of savings every month.

The author reports savings of 87% on his total phone bill.


*(Video killed the Radio Star on their Age of Plastic album)

Too late to close the barn door...

Great blogging of the VON show by industry pundit Paul Kapustka. I like his post today in particular about the strength in numbers approach to the regulatory questions being asked of the VoIP industry. When VoIP was a flash in the pan with a few startups playing, the ancient telecom companies might have been able to deal the industry a fatal blow with some heavy regulatory action. But now that there is real momentum and many large players getting together to create a political lobbying power, it is reasonable to believe that the cow is long gone from this barn...

Why Skype is No Different

Great link found on Lance Tracey's Blog on why Skype is no different from other VoIP services. A thoughtful analysis by Aswath Rao on what Skype really is and is not, and how its technical architecture embodies faults that undermine the P2P marketing message. Excerpt:

Some have expressed reservation because Skype is proprietary. There have been previous instances where proprietary consumer items have found wide adoption without incurring huge collective cost. VCR is one of the examples that come to mind. But in this case there are some differences:

• Alternatives, based on standards are available
  
  
• Skype uses mostly well-known and open technologies; only the protocol semantics is proprietary
  
  
• Even though Skype (for that matter VoIP) is naturally a “product” and not a “service”, Skype views it as service. For example, they do not allow an enterprise to use their own GIS, instead of the global one, even if communication will be restricted to internal use alone.
  
  
• As I am told, there is no way to directly address another client, even if the IP address is known. Windows Messenger from Microsoft has the same limitation, whereas NetMeeting allowed direct communication.

In this respect also, they are just like other VoIP providers. It is disheartening to see that even those whose middle name should be P2P, think like this.