Working for free
February 17, 2007
A quick link before I head off for a week's vacation: In the new issue of Time, Justin Fox looks at peer production, Yochai Benkler, and the Benkler-Carr wager. Fox comments further on his blog.
Server electricity use skyrockets
February 15, 2007
A new study from the Lawrence Berkeley National Laboratory, released today, reveals that the electricity used by server computers doubled between 2000 and 2005. The report, which appears to be the most definitive assessment of data center energy consumption yet produced, underscores the growing importance of energy efficiency in effective IT management. The report's author, Jonathan Koomey, told Technology Review, "I was surprised by the doubling. I expected some growth, but not quite as large."
The increase in power consumption is largely attributable to the proliferation of cheap servers, according to the study:
Almost all of this growth was the result of growth in the number of the least expensive servers, with only a small part of that growth being attributable to growth in the power use per unit. Total power used by servers represented about 0.6% of total U.S. electricity consumption in 2005. When cooling and auxiliary infrastructure are included, that number grows to 1.2%, an amount comparable to that for color televisions. The total power demand in 2005 (including associated infrastructure) is equivalent (in capacity terms) to about five 1000 MW power plants for the U.S. and 14 such plants for the world. The total electricity bill for operating those servers and associated infrastructure in 2005 was about $2.7 B and $7.2 B for the U.S. and the world, respectively.
The estimate that servers account for 1.2 percent of overall power consumption in the U.S. is, as the San Francisco Chronicle reports, considerably lower than some previous estimates, which put data center power consumption as high as 13 percent of total U.S. consumption. It should be noted that the study, underwritten by AMD, looks only at power consumption attributable to servers, which represents about 60% to 80% of total data center power consumption. Electricity consumed by storage and networking gear is excluded. The study also excludes custom-built servers, such as the ones used by Google. The number of servers Google runs is unknown but is estimated to be in the hundreds of thousands.
Related posts:
Avatars consume as much electricity as Brazilians
Welcome back to frugal computing
The all-seeing net
February 11, 2007
There's long been talk of what John Seely Brown dubs "ecological computing" and what others call "pervasive computing" - the use of a multitude of wireless sensors to hook the physical world up to the Internet - but not much has come of the idea to date. That may be about to change, though, as the cost of sensors falls, as scientists learn more deploying them in the environment, and as military and commercial applications proliferate.
The Associated Press today has an interesting article about the work going on at UCLA's Center for Embedded Networked Sensing, which has a big grant from the National Science Foundation to pioneer the deployment of so-called "wireless motes" that can be used to monitor physical spaces. The center's headquarters is covered with
dozens of miniature, low-resolution cameras and sensors. They're wirelessly linked to computers throughout the 6,000-square-foot space, keeping tabs on traffic flow in public areas and monitoring temperature, humidity and acoustics. The building serves as a testing ground for developing and perfecting wireless sensing technology to connect major chunks of the real world to the Internet.
The technology is "quickly catching on," says the article, "attracting the attention of the military, academics and corporations. Just as the Internet virtually connected people with personal computers, the prospect of wireless arrays sprinkled in buildings, farmland, forests and hospitals promise[s] to create unprecedented links between people and physical locations.
Such monitoring also, of course, raises a lot of security and privacy issues, which researchers are struggling to address. Another big obstacle is the lack of standards, as most of the systems built so far are incompatible with one another. Nevertheless, startups in this space, like Dust Networks and Arch Rock, may finally start reaping some big commerical rewards. The walls, it seems, will soon have eyes.
Googlegate in North Carolina
North Carolina's Senate Finance Committee is hastily arranging hearings on the state's use of tax incentives to lure businesses, as public outrage mounts over disclosures that Google was granted as much as a quarter billion dollars in secret tax breaks for a plant expected to employ approximately 200 workers. There's no word yet on whether any Google officials will be asked to testify.
Meanwhile, the controversy in the state reached a fever pitch this weekend, as anti-Google rhetoric filled local papers. In today's Charlotte Observer, columnist Tommy Tomlinson writes:
Google is being modest. For proof, just Google the phrase "unbelievably one-sided deal." You'll get links to the Kyoto environmental accords and a few terrible basketball trades. But what should really top the list, where unbelievably one-sided deals are concerned, is the monumental unarmed robbery that Google is putting on Caldwell County and the city of Lenoir ...
Businesses have all the leverage. I understand politicians have to cut sweet deals. But sometimes the deal is so sweet it'll rot your teeth. And you can bet that Google won't be paying for the dental work.
Also in the Observer is another column, titled "Pop Goes Google's Mystique," by John McBride:
Bullying, like evil, is in the eye of the beholder. Government officials are used to giving orders, not taking them. Maybe some got hacked off when Google pulled rank. But check out this e-mail snippet from Google executive Rhett Weiss to Commerce Secretary Jim Fain: "This legislation has remained cursed with unfortunate and petty dickering from the legislative drafting side."
Petty dickering? Well, yes. That's the way our government by the people and for the people works. Not that Google seems to care. It demanded government officials sign nondisclosure agreements. Worse, many of them did ... I'm not sure we have the right to get mad at Googlers for playing rough - just because they claim to be different than everybody else. Now we know they're not.
In an editorial on Saturday, titled "Google's Greed, Our Gullibility," the Wilmington Morning Star writes:
North Carolina taxpayers could give $260 million to Google over 30 years - more than twice as much as first revealed. We'd pay more than $1 million apiece for 210 jobs, many of them offering middling pay at best. They'd be at a facility somewhat comparable to a power company substation: a bunch of equipment tended by a relatively few humans.
This super-secret giveaway "negotiated" by local officials and the Easley administration basically means that an international corporation that made $1 billion-plus in the last quarter of 2006 will never pay more than a fraction of its share of state and local taxes ... Playing the role of gullible yokels to Google's slick arm twisters, local officials did exactly what they were told - and kept it secret for months. Meanwhile, Google was bullying state officials, who also caved, though marginally less cravenly. We still may not know the full extent of this secret giveaway. Prudent parents may want to lock up their daughters.
Ouch.
In a column in today's Greensboro News-Record, Ed Cone wonders why Google would put its sterling public image at risk to squeeze what for it is a relatively modest amount of money out of a state:
Google's reputation is one of the keys to its financial success. People trust the company, which uses "Don't be evil" as its unofficial corporate motto, to safeguard their privacy and provide accurate, unbiased information as they search the Web and use its other online services. If Google comes to be seen as just another soulless moneymaking machine, it might lose some of its competitive advantage.
And that's what makes the California company's behavior as it negotiated its Tar Heel deal so hard to understand. Google strong-armed the public partners with which it worked on the incentive package, in ways that would be unseemly even for a company that doesn't publish a lengthy Code of Conduct that says things like, "Being a Googler means holding yourself to the highest possible standard of ethical business conduct. ... When it comes to ethical conduct, we believe in erring on the side of caution." Except, apparently, when an annualized amount equal to two-tenths of 1 percent of its profits for the trailing 12 months is on the line.
Others are defending the deal. In a letter appearing today in the Raleigh News Observer, James Fain, secretary of the state's Department of Commerce, writes:
If Google does not locate in Lenoir, the county will have lost the opportunity for up to 210 new jobs at an estimated average wage of $48,000 and investment of $600 million. Without that investment in facilities, the county will not enjoy the economic impact of major construction activity, including the many construction jobs generated during the building phase. Grocery stores, barbers, laundries and other retailers would not enjoy the purchases of the new employees. And if Google does not locate in North Carolina, it will certainly pay no property taxes here ...
We are pleased that Google will join the Caldwell County community, where its presence will make a positive economic and psychological impact. The company's decision is affirming to a community which has suffered huge job losses and attendant despair. And that decision will not cost the state any money that it had before Google arrived.
The Googlegate controversy is unlikely to abate any time soon. Troubling new details of the secret deal-making continue to emerge. Today's Charlotte Observer features a long article describing how public officials leaned on some local residents to sell their homes to make way for the Google plant. The mayor of the town of Lenoir, Davis Barlow, and the county commissioner, Tim Sanders, were among the officials who, according to the paper, went "door-to-door on behalf of the Internet giant Google. In some cases, officials returned to homes four or five times. Barlow and Sanders effectively used the personal touch, avoiding a drawn-out public debate that Google was secretly telling them would scuttle the deal. That personal touch enabled some residents to feel comfortable in selling their property."
Among the people pushed to sell their homes was an elderly couple, Eugene and Violet Anderson. The mayor and other officials, under pressure from Google to secure the land quickly, told the couple that:
They wanted the Andersons' property for a secret economic development project. And they delivered an unsettling message. They told the Andersons, both 86, that they didn't have to sell but would risk being among the last holdouts in the changing neighborhood.
"I figured they'd take it if I didn't sell it," said Eugene Anderson, a retired upholsterer who was born in the neighborhood. "So, I made it easy on myself."
An image is a fragile thing, as Ed Cone points out. In North Carolina, Google's has been shattered.
UPDATE: Paul Teague, of the Caldwell County News-Topic, provides a good summary of the course of the Google negotiations: part 1 and part 2.
UPDATE: Under pressure from Google to finalize the deal quickly, local politicians never even bothered to complete an analysis of the economic impact of the tax incentives, reports the Associated Press.
No jobs on the net
February 10, 2007
Yesterday, I wrote about the influence of computer automation in widening America's growing income gap. In today's New York Times, Floyd Norris reports on a new government study that documents what's been going on in the U.S. labor market over the past six years, since January 2001. It provides an eye-opening account of what happens when business, and in particular media, moves from the physical to the virtual world. For those who might be hoping that the decline in jobs in traditional media will be offset by growth in employment in digital media, the news is not good:
One chart shows the combined categories of publishing and broadcasting, both traditional and Internet-based. Over all, employment is down 11 percent. In those six years, employment in traditional paper-based publishing is down 13 percent. Broadcasting employment is off 3 percent. The traditional industries, between them, have shed 148,000 workers.
Did the Internet make up the difference? Just the opposite. Internet publishing and broadcasting now employs 36,600 people, and that figure is down 29 percent from six years ago. A larger Internet-related area covers Internet service providers, search portals and data processing. It now has 385,000 workers, down 25 percent over the last six years.
In the past information technology tended to reduce demand for low-skilled jobs but increase demand for higher-skilled specialists. Now, automation is moving up the skills ladder, as the Internet and sophisticated software combine to reduce the need for more categories of knowledge and creative workers. One has to wonder what new categories of employment will expand to absorb the losses.
The future of computing demand
February 09, 2007
Sun Microsystems has posted videos of its Analyst Day presentations from earlier this week. Following a tip from CEO Jonathan Schwartz, I watched CTO Greg Papadopoulos's presentation on the future of computing demand (pdf of slides). It's well worth a look.
Papadopoulos shows that the traditional big driver of computing demand - basic business computing - has lost its force. The growth in computing power through Moore's Law now far outstrips the growth in demand from traditional business computing. That means, in essence, that businesses will need far fewer computers in the future to fulfill their demand - a fact already manifesting itself in IT departments' emphasis on server consolidation and virtualization. The big opportunity here is simply to improve your utilization of existing capacity.
But, argues Papadopoulos, there are three new drivers of computing demand that far outstrip the expansion in supply guaranteed by Moore's Law:
1. Rich multimedia content delivered through the broadband Internet (think YouTube and VOIP).
2. High-performance supercomputing (think weather modeling and drug development).
3. Software as a service (think Salesforce.com, Webex and Office Live).
In combination, these three sources will produce an exponential leap in demand for computing - Papadopoulos calls it the "Redshift" - that will far outstrip the increase in supply produced by Moore's Law alone. In other words, you're going to need a lot more computers (or at least a lot more computing cycles). Whereas the focus of those organizations running traditional business-computing operations is cost cutting through consolidation, the focus of those operating the new mega computing operations (like Google, say) is achieving efficiency at massive computing scale (through, for instance, reducing electricity consumption). There's a fundamental split opening up in the market, in other words: two very different sets of customers (one with stagnant demand and one with burgeoning demand) with very different needs.
So how will the new sources of demand be fulfilled? Papadopoulos offers two scenarios, which might be labeled "Sun's nightmare" and "Sun's dream." Under Sun's nightmare, the new mega-scale computing operations follow the Google model and "disintermediate" traditional computer companies. They build their own systems from scratch. The old enterprise computer business turns into a "commodity parts market," as Papadopoulos puts it.
Under Sun's dream, the mega-scale computing giants continue to look to outside suppliers to provide the sophisticated computing systems they need. Google, in this scenario, is an early pioneer of the engineering of mega-scale computing but it is not a model for the future supply of such computing. (A historical analogue for Sun's dream is mega-scale electricity production a hundred years ago - the big utilities didn't all build their own generating systems; they bought them from GE and Westinghouse.)
In Sun's dream, computing (like electric current) becomes a commodity but computers (like electric generators) don't. Those who dominate the computer business of the future, under this scenario, would be the engineering giants, not the assemblers. The winners would not be those who pump out generic cheap boxes but those who are able to build highly efficient mega-scale machines. In some ways, that would mean the future of the computer industry would look more like the mainframe era than the PC era.
Google's Carolina deal
More details are emerging about the deal Google was able to get to set up a data center in Lenoir, North Carolina. The Charlotte Observer yesterday reported that the total amount of the tax breaks and other economic incentives granted Google may be far higher than the $100 million previously reported:
The cost of wooing Google to the state's foothills could far exceed initial estimates, with tax breaks and other public incentives potentially reaching $260 million. That makes it one of the richest packages of recruiting perks ever offered in North Carolina, and one negotiated in strict secrecy.
Today, the paper reports that Google was able to get the breaks without actually having to guarantee much in return:
You can find almost anything on Google, but in its deal to build a computer center in Lenoir you won't find a guarantee to create jobs in exchange for local tax breaks.
City and county governments agreed to give up tens of millions of dollars in potential tax payments to help lure the $600 million project to Caldwell County. But the governments set no job-creation or investment requirements, unlike most similar economic development deals, officials said Thursday. City and county boards in December agreed to waive 100 percent of Google's personal property taxes and 80 percent of its real estate taxes for 30 years, which could be worth up to $165 million. Google said it will create 200 jobs by 2012. And local officials will just have to trust them.
Meanwhile, in a letter to the paper, Google's Director of Global Operations, Lloyd Taylor, defends the deal and counters the criticism:
My job is to build and run Google's data centers, and I'm very happy that we've found a new home for our infrastructure in Lenoir. I'd like to thank everyone who helped to make this possible ... I'd like to briefly touch on two issues about which I've heard a lot of questions and comments recently.
First, I'd like to ask for your understanding. We waited so long to "go public" with our plans both for competitive reasons and because we don't want to create a stir during the early phases of a site selection projects where many sites don't end up panning out.
Second, you've probably read about Google getting "$100 million" in incentives to locate in Lenoir. That entire hypothetical 30-year figure consists of tax reductions that put North Carolina on par with other states. That is, those incentives come from reductions in property and sales taxes which don't exist at all in many other states ...
Even with the reductions, we'll be among the largest taxpayers in Caldwell County. Just this year alone, we'll pay millions of dollars of sales taxes on materials and services needed for construction. Plus, we already have paid over $4 million to Lenoir and Caldwell County to cover expenses and community infrastructure improvements.
But, back to our project. Despite the rains, we've made good progress on preparing the site, and we'll soon start with the construction of the first building. We'll regularly update you on our progress in the coming months.
Google seems to be learning that secrecy may not always be the best policy.
UPDATE: Also today, the Raleigh News & Observer published an editorial blasting the secrecy surrounding the Google negotiations and the complicity of government officials. It begins:
What must Google executives have thought when they reviewed the incentives offered by the state of North Carolina and Caldwell County last year in exchange for the company bringing a data center to Lenoir? That reaction must have been something like an after-Christmas sale when shoppers are standing outside a department store awaiting the opening and one declares, "You know, they're practically giving the stuff away!"
IT, YouTube and the wealth gap
Google has reported, in a financial filing, that YouTube founders Chad Hurley and Steve Chen each pulled down about a third of a billion dollars in selling their video-sharing company to the search giant. That's not a bad payday for a year-old, 60-person firm operating out of an office above a pizza joint. Running a digital sharecropping operation - I mean, a social-production community - can be pretty lucrative.
Hurley and Chen came by their windfall fair and square. They built a better mousetrap. But there's a bigger picture here, too. It's worth keeping the YouTube phenomenon in mind when reading a speech that Fed Chairman Ben Bernanke gave earlier this week in Omaha. The speech, called The Level and Distribution of Economic Well-Being, examined the ever widening gulf between America's rich and everyone else, a worrying trend that Bernanke's predecessor, Alan Greenspan, also frequently addressed. Bernanke noted that
rising inequality is not a recent development but has been evident for at least three decades, if not longer. The data on the real weekly earnings of full-time wage and salary workers illustrate this pattern. In real terms, the earnings at the 50th percentile of the distribution (which I will refer to as the median wage) rose about 11-1/2 percent between 1979 and 2006. Over the same period, the wage at the 10th percentile, near the bottom of the wage distribution, rose just 4 percent, while the wage at the 90th percentile, close to the top of the distribution, rose 34 percent ... The long-term trend toward greater inequality seen in real wages is also evident in broader measures of financial well-being, such as real household income.
If Bernanke had provided data on the 99th percentile of wage earners, the rising inequality would have looked even more pronounced.
The increasing polarization of wealth has long been attributed to "globalization." More recently, though, economists like Jagdish Bhagwati have begun to argue that the biggest driver of the trend is information technology, which tends to displace lower-skilled jobs and push economic rewards to higher-skilled workers. Bernanke picked up on that theme:
Economists have hypothesized that technological advances, such as improvements in information and communications technologies, have raised the productivity of high-skilled workers much more than that of low-skilled workers. High-skilled workers may have enjoyed this advantage because, for example, they may have been better able to make more effective use of computer applications, to operate sophisticated machinery, or to adapt to changes in workplace organization driven by new technologies. If new technologies tend to increase the productivity of highly skilled workers relatively more than that of less-skilled workers - a phenomenon that economists have dubbed "skill-biased technical change" - then market forces will tend to cause the real wages of skilled workers to increase relatively faster. Considerable evidence supports the view that worker skills and advanced technology are complementary. For example, economists have found that industries and firms that spend more on research and development or invest more in information technologies hire relatively more high-skilled workers and spend a relatively larger share of their payrolls on them.
Bernanke also noted some anomalies that economists are still struggling to figure out:
Although skill-biased technical change appears to be an important cause of the rise in earnings inequality, it does not provide a complete explanation for that trend. The hypothesis cannot explain, for example, why the sharp rise in investment in information technology in the 1990s was not accompanied by a higher rate of increase in wage inequality. Nor can it explain why the wages of workers in the middle of the distribution have grown more slowly in recent years than those of workers at the lower end of the distribution, even though, of the two groups, workers in the middle of the distribution are typically the better educated.
Another challenge for the hypothesis of skill-biased technical change, at least in its basic formulation, is to explain the especially large wage gains seen at the top of the distribution. A possible link between technological change and the substantial increases in the wages of the best-paid workers is that some advances, such as those that have swept the communications industry, may have contributed to the rise of so-called "superstars" - a small number of the most-gifted individuals in each field who are now better able to apply their talents in what has increasingly become a global marketplace.
Bernanke, like Bhagwati, focuses on the displacement of relatively low-skilled jobs by information technology. But if you look at more recent trends, you see that software is becoming increasingly more adept at taking over work that has traditionally required relatively high skills - or even, in YouTube's case, enabling the creation of sophisticated goods through the large-scale and automated harvesting of free labor. The next wave of "superstars" may be algorithms - and the small number of people that control them.
All the news that's fit to, uh, nevermind
February 08, 2007
"I really don't know whether we'll be printing the Times in five years, and you know what? I don't care either." That's New York Times publisher Arthur Sulzberger speaking to Eytan Avriel of the Israeli newspaper Haaretz.
The article continues:
Sulzberger is focusing on how to best manage the transition from print to Internet. "The Internet is a wonderful place to be, and we're leading there," he points out ...
Sulzberger says the New York Times is on a journey that will conclude the day the company decides to stop printing the paper. That will mark the end of the transition. It's a long journey, and there will be bumps on the road, says the man at the driving wheel, but he doesn't see a black void ahead.
Just an inky gray void.
Wikipedia's cash crunch
In a speech at the Lift 07 Conference in Geneva today, Florence Devouard, chairwoman of the Wikimedia Foundation, which operates Wikipedia, made an appeal for funds to keep the online encyclopedia afloat. "At this point," she said, according to a report from Philippe Mottaz, "Wikipedia has the financial resources to run its servers for about three to four months. If we do not find additional funding, it is not impossible that Wikipedia might disappear.”
As Wikipedia has expanded, its computing costs have gone up substantially, putting the nonprofit in an apparent pinch. According to another report on the speech, from Bruno Giussani, Devouard said the encyclopedia is currently running 350 servers and needs about $5 million to sustain itself. It raised about $1 million in its recent fundraising drive, she said.
Mottaz says Devouard's warning was "certainly dire" and that "it is another illustration of how difficult it is to find the proper business model in the digital age, and more precisely in this case in what Florence called the 'gift economy.'" Not even gifts scale for free.
Wikipedia has made a pledge to remain free of advertising and sponsorships. That pledge, it seems, may soon be tested as never before.
UPDATE: Devouard also, according to Giussani, seems to have aligned herself with Wikipedia's Inclusionists (who don't want restrictions on what topics are covered in the encyclopedia): "We used to have this notion that information has boundaries, that it's possible to define what information is relevant (and belongs in an encyclopedia) and what is not. But what is relevant to you is different from what's relevant for me." That's interesting because, from my outside perspective, it appears that the Deletionsists, who very much want "to define what information is relevant (and belongs in an encyclopedia) and what is not," currently have the upper hand in guiding Wikipedia's policies.
UPDATE: In a comment on this post, Wikimedia's communications director, Sandy Ordonez, writes: "Ms. Devouard's comment was taken out of context. Wikipedia will not be closing any time soon. Ms. Devouard was simply referring to the ongoing, pressing needs for funds that Wikipedia, like most nonprofit organizations, face."
Good and bad
February 07, 2007
In my commentary on the new Financial Times Digital Business podcast (MP3), I look at the light side and the dark side of the Web, as exemplified by, respectively, the CERN Grid and the botnet. Both draw on the ability to remotely control machines on the Net - though to very different ends - and both have important implications for businesses.
Jobs calls for end to DRM
February 06, 2007
A while back I argued that the big record companies would be much better served by allowing the sale of downloadable songs without copy protection (ie, digital rights management, or DRM). Because DRM has little or no effect on piracy, the only one benefiting from the DRM schemes has been Apple, which with a dominant position in the music player market achieves at least some degree of customer lock-in through the copy protection code embedded in every song sold through the iTunes store. (Each song you buy gets you a little more invested in the iPod platform.) Today, in a long open letter posted on Apple's web site, Steve Jobs calls on the Big 4 record companies to abandon DRM:
Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat ...
Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven’t worked, and may never work, to halt music piracy ... In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves ... So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none.
The reason Jobs has taken this unusual step is, one assumes, because Apple is under increasing pressure from European governments to "open up" its iPod/iTunes system. There have even been threats to ban the system if it remains closed. Over the last few months, the stakes have gone up as antitrust lawsuits have been filed against the company in the US. For Apple, DRM's strategic costs have simply come to outweigh its benefits. So Jobs is formally whacking the ball into the record companies' court. It's their system, he's saying, not ours. Just to drive the point home, he writes at the end of his letter, "Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free."
One hopes that Jobs's missile-like missive may finally get the big labels to realize that DRM is simply a millstone around the neck of their business.
The madness of e-crowds
In a piece about "the madness of e-crowds" at FT.com, Thomas Hazlett argues that the "hype" about user-generated content is obscuring a bigger and contrary trend: that proprietary content and closed databases are becoming ever more valuable. "Deep-pocketed customers" are happy to pay "fat fees for specialised content of keen interest," he says, and closed systems like iPod/iTunes and gaming consoles are minting money. He warns that "our buzz-coloured shades block out key drivers of innovation":
Take wireless. While 2.5bn people were subscribing to mobile networks, the tech spotlight was on … WiFi. While a handy way to make a DSL connection cordless, the disruptive technology claims – that the exclusive rights used for wide area cellular networks were now eclipsed by unlicensed spectrum governed by power limits and regulatory standards – were wrong. Not many folks dropping their mobile subscription to talk from their “hotspot.”
I don't buy his whole argument. As examples of the increasing value of proprietary information, he points to the hefty fees charged by "Gartner, Forrester, Yankee Group, [and] IDC" for research reports. A good argument could also be made that those fees are threatened by the greater availability of free information on the Net (and the greater ability to automatically aggregate and analyze that information). Still, he does a good job of putting some of today's more excited claims into context:
We’ve surfed these waves before. The “user-generated content” business model may have its own My Space page, but it dates to the telephone network of Alexander Graham Bell. “Club goods” allow individuals to gain from cooperative efforts, a standard paradigm in economic theory. Many “commons” sprouting up in the New Economy, where individuals share resources and reap the rewards of teamwork, produce value. But they have some trillions of dollars in productive enterprise to go before they eclipse the workhouse “commons” of the modern economy: the corporation.
Flat panel display
In New York magazine, Emily Nussbaum surveys today's post-modern youth movement, where you're only real if you've cast yourself as a minor celebrity on the Web's infinite screen.
In essence, every young person in America has become, in the literal sense, a public figure. And so they have adopted the skills that celebrities learn in order not to go crazy: enjoying the attention instead of fighting it - and doing their own publicity before somebody does it for them.
What's fascinating is that, in contrast to earlier youth movements, this one is not about rebellion. It's about acquiescence. What we're seeing looks like a mass surrender, pursued with great enthusiasm and packaged for easy consumption.
We’re living in frontier country right now. We can take guesses at the future, but it’s hard to gauge the effects of a drug while you’re still taking it. What happens when a person who has archived her teens grows up? Will she regret her earlier decisions, or will she love the sturdy bridge she’s built to her younger self - not to mention the access to the past lives of friends, enemies, romantic partners? On a more pragmatic level, what does this do when you apply for a job or meet the person you’re going to marry?
The pragmatic questions about future regrets seem beside the point. As Johnny Rotten once put it, "When there's no future, how can there be sin?" Avatars don't age. They exist in two dimensions. Depth is simulated, and time doesn't enter into it. There is no change of death in Sim Paradise. The ripe fruit never falls.
Clay Shirky, the NYU professor, sees an age-old tale playing out:
“Whenever young people are allowed to indulge in something old people are not allowed to, it makes us bitter. What did we have? The mall and the parking lot of the 7-Eleven? It sucked to grow up when we did! And we’re mad about it now.”
Shirky's one of the more astute analysts of the digital realm, but while the tree he's barking up here may be the convenient one it doesn't strike me as being the right one. First of all, I don't sense any strong intergenerational resentment going on. Sure, there's some parental anxiety about shadowy predators and such, but that's hardly inspired by envy. The more common reaction from the older set is some variant on "Look at little Suzy - she can carry on six IM conversations simultaneously!" The idea of free sex produced envy. The idea of free simulated sex doesn't.
Second, I'm not sure I understand how exactly a virtual mall, where you're one of the products, is necessarily superior to a real mall, where there's at least some vague line between the commodity and the self. Hasn't the marketer's message, once you boil it down, always been "Friend me!"? As for that 7-Eleven parking lot, I was there, and it wasn't so terrible. Are people really bitter and mad that their kids get YouTube videos instead of Big Gulps? Sugar water is sugar water.
More intriguing is Shirky's sense that "there may actually be real neurological changes involved.” I'm sure he's right, and that brings us to the really interesting question: What happens when the medium becomes the person?
Cloudwatching
February 05, 2007
Phil Windley notes that Doug Kaye has posted a description of how he's building a podcasting service using Amazon Web Services' utility infrastructure - not just for storage but for processing and messaging as well. "Dynamic computing power on demand," writes Kaye, in regard to Amazon's Elastic Compute Cloud (EC2). "The dream has been realized." (Kaye needs to work Mechanical Turk into this somehow.)
Zoli Erdos reports on another study showing that large companies are embracing software-as-a-service, not just for CRM but also for content management, project management, and other applications. SaaS, he writes, "is indeed becoming mainstream amongst large corporations: '61% of North American companies with sales over $1 billion plan to adopt one or more SaaS applications over the next year.'"
Commenting on the news that Google will be adding a presentation application to its fledgling office suite, Larry Dignan speculates on "the end game":
In the end traditional Office uses – word processing, spreadsheets etc. – will move online leaving Microsoft's shrink-wrapped Office to become a high-end application. Office 2007 already resembles more of a business intelligence tool than a way to type up memos. If Office moves upstream that'll leave an even playing field for Google and Microsoft to duke it out for Web-based productivity tools. It'll be a protracted war with lots of strategy.
It will be interesting to see whether Google offers a YouTube-like service for easily storing and streaming business presentations online. It amazes me that Microsoft doesn't have such a service up and running for Office 2007.
UPDATE: Business Week reports that Google's business suite, Apps for Your Domain, is about to come out of beta. The package, which has been free to beta testers, will now become a for-fee service, with a monthly subscription charge on a per-user basis. Here's what the magazine says:
After months of dancing around with Web versions of e-mail, group calendars, and the like, Google Inc. is finally about to take a big leap onto Microsoft's turf. Since last August, the search leader has offered a test version of an online office productivity software suite, called Google Apps for Your Domain, that lets companies offload e-mail systems to Google while keeping their own e-mail addresses. Soon, it's expected to add word-processing and spreadsheet services to the suite, which includes an online calendar, chat service, and Web page builder. In coming weeks, Google Apps will turn into a real business as Google begins charging corporations a subscription fee amounting to a few dollars per person per month.
"A very ugly picture"
An editorial in today's Raleigh News & Observer criticizes Google for its "rough" tactics in negotiating tax breaks with North Carolina state and local officials - and blasts the officials for "groveling." Government documents released last week, say the editors, paint a "very ugly picture of just what went on behind the scenes as Caldwell County officials and legislators sought to land a Google computer center for [the town of]Lenoir":
Google demanded, for example, that public officials not mention its name during negotiations over legislation to grant some specific tax breaks. The company even wanted those involved in the deal to sign nondisclosure agreements. Incredibly, some Caldwell County officials did sign, as did some lawmakers. To their credit, officials of the state Department of Commerce did not sign. Demands of this sort are outrageous, of course. Google should have known better than to make them, given that the people it was pressuring worked not for the company but for the public.
Even if you look beyond the ethics of demanding that public officials sign nondisclosure agreements, you have to wonder about the business rationale of this kind of corporate bullying. Google, after all, is extremely conscious of its public image and has gone out of its way to portray itself as a company with a pristine moral character, presenting itself as the anti-Microsoft. Did it really think that its pressure tactics, documented in emails to public officials, would remain under wraps?
Google appears to have believed it could accomplish two contrary objectives: keep its plans for building a data center secret, and push big tax breaks for itself through the state legislature. If your main goal is secrecy, you probably don't want to throw your weight around inside a state government. If your main goal is minimizing your property taxes, you're probably going to have to sacrifice some secrecy. In believing it could accomplish both goals, Google displayed an arrogance that belies its public image.
You have to wonder whether saving $100 million over the course of 30 years was really worth it.
Google in Carolina
February 04, 2007
Google's veil of silence trembled a bit this weekend, as the company confirmed that it continues to explore the possibility of building two huge data centers in South Carolina, one near Charleston and one near Columbia, in addition to the one it has already announced it will build in North Carolina. The site near Charleston, a 520-acre plot, is already in the process of being cleared in preparation for construction, according to the Associated Press. The AP report continues:
"We hope to have more details soon," Google spokesman Barry Schnitt said. The two South Carolina properties are not competing for the same project or jobs, Schnitt said. He said the Mountain View, California-based company also is looking at sites around the world. "Some we will begin construction on immediately," he said. "Some may be held in reserve to be used if a site does not work out somewhere else or as business needs dictate."
Google's sudden announcement regarding its South Carolina plans comes on the heels of a story in last Thursday's Raleigh News & Observer, by Jonathan Cox, that was highly critical of the company's aggressive negotiating tactics in North Carolina. Google, according to Cox,
tried to silence lawmakers and pushed - at times with a heavy hand - to influence legislation designed to bring the company to Caldwell County. The company demanded that legislators never speak its name, and had them scolded when word of its interest in North Carolina leaked out, according to records made public this week.
As work proceeded on the bill to remove much of its tax burden, Google threatened to end negotiations because legislative staff didn't write exactly what it wanted. State Commerce Secretary Jim Fain was asked to "prevail upon" the bill writer.
Cox reports that the newly released state documents "reveal a company obsessed with secrecy and not above bullying, tactics that helped get it tax breaks that could top $100 million over three decades." One of the documents quotes an email sent by a Google executive, Rhett Weiss, to the state's commerce secretary complaining about the state legislature's consideration of a Google-pushed bill granting special tax breaks to Internet data centers: "This legislation has remained cursed with unfortunate and petty dickering from the legislative drafting side - mainly refusing to reinsert better word choice. ... Without the legislation being passed with its correct substance, our project will not proceed in North Carolina. ... I always believed North Carolina to be a good state in which to do business. But the legislation's long saga increasingly concerns us. Will creating and operating a North Carolina facility continue to be so hassle-prone?" CNET's Michael Kanellos says Google's actions reveal an attitude of "effete disdain."
Some of North Carolina's elected officials, including legislators, gave in to Google's demand that they sign nondisclosure agreements to keep the company's identity secret. As Cox reports:
That posed challenges for elected officials, charged with conducting the public's business in the open. As the tax measure wended its way through the legislature, some lawmakers began linking it to Google. That prompted a strong rebuke from Weiss. "We respect the legislature needs to conduct its business, to deliberate on bills," Weiss wrote in a June 7 e-mail to Hobart. But legislators must understand that the project likely will be canceled if anyone "mentions the company's interest in the bill, North Carolina, or the project itself."
Based on Cox's reporting, it seems that Google sought to steer the North Carolina legislature's deliberations while keeping its influence secret. That goes beyond tough bargaining. One senses that this story may get a whole lot bigger. Where else is Google using such tactics?
Recent posts
- Working for free
- Server electricity use skyrockets
- The all-seeing net
- Googlegate in North Carolina
- No jobs on the net
Greatest hits
The love song of J. Alfred Prufrock's avatar
Seven rules for corporate blogging
Other writing
The end of corporate computing
Hypermediation: commerce as clickstream
"Powerful" -The Economist
"Lucid" -New York Times
"Engaging" -Financial Times
Order from Amazon
