Code Benders

Posted by Taus March 30, 2006

John Dvorak’s opinion piece about the telecom industry is bordering on the ridiculous. I think he should stick to gadget reviews and leave business analysis to someone else.

While there is some truth to the notion that Washington (including the FCC) is slow and in some cases motivated by personal power, in general the Telecom Act of ’96 was successful. His suggestion that Cisco should be embarrassed for selling products that its customers wants is just plain dumb.

Yes, telecom is consolidating. Yes, in the near future there will be only a handful of big service providers. But, so what? How many mega telecoms do we need? The answer is: it doesn’t matter.

The market will solves these problems over time — even with an imperfect government. The Internet has proven to be far too potent and flexible to be contained, even under the most oppressive circumstances (i.e., China).

How about the top 5 reasons why Big Telecom will lose the battle over hijacking the Internet:

• Google, Yahoo and eBay (Skype)
• Microsoft and Linux
• Intel, Samsung, Airspan Networks and the rest of the WiMax Forum
• Comcast, Time Warner Cable, Cox and the other cable MSOs
• 2 billion+ citizens living within democratic nations

I’ll echo the sentiments made in my commentary regarding AOL’s decision to charge mass emailers. When large service providers make business decisions that are not in the best interest of their customers, they lose those customers. If the mega telecoms decide to start charging more to get VoIP packets, they will simply be adding fuel to the fire — further driving customers away.

I say, let them. Let them charge for emails and VoIP packets and IPTV and whatever else they want. Within days, the CLECs and other younger nimbler upstarts will seize the opportunity to provide more value. More competition. More choice.

Posted by Taus March 15, 2006

Amazon just announced the launch of its new S3 service, which allows developers to utilize their highly-scalable storage systems. Of course, web-based storage is not novel. This does appear to be an evolution away from ISP hosting services in favor of content distributors. Yes, believe it or Amazon is a content developer, not just an e-tailer.

This is a bold move by Amazon and seems to be targeting scrappy entrepreneurs in the so-called Web 2.0 segment of the developer community. Why? Well, any well funded startup with fiduciary obligations to its shareholders would never leave its data store on Amazon — albeit a world-class system. More likely, this will serve as a platform for the most fragmented base of web developers, who want scale and reliability, but can’t afford a massive system.

If so, the pricing model seems right. Amazon will be charging $0.15 per GB-Month of storage used and $0.20 per GB of data transferred.

There’s not much money in hosting, so why bother? The answer reveals the true value to Amazon. In essence, by inserting itself in the data layer of these applications, Amazon manages to one up Google, Yahoo and MSN. Rather than simply crawling and indexing sites li’ke the other search engines, presumably Amazon will have access to a richer level of detail, including whether content is fresh — not compared to the last indexing a month ago, but compared to an hour ago. And, whereas search engines struggle to accurately index sites that use sessions, Amazon will have clear insight in to true nature of the site and the content that is available.

It’s surprising, in fact, that Google did not get this app out before Amazon. But, I am guessing that Google, Yahoo and MSN are watching this move closely and will react swiftly.

Posted by Taus March 15, 2006

AOL and Warner Bros. announced that they are collaborating on a new, broadband content network, In2TV.

More precisely, In2TV will offer free, on-demand download of television shows, including Warner’s historical archive of classics. The service, which is available exclusively through AOL’s site, will offer a range of classics shows such as Welcome Back, Kotter, Growing Pains, Lois & Clark, and others. The firms said they will also include interactive features and viral videos.