Sean's Blog

Cloudy Future

I first heard the terms "Enterprise Cloud" and "Private Cloud" back when I was running Infoplex.  For the uninitiated Infoplex is a managed infrastructure provider.  Back when "cloud" really broke we were selling managed VM environments, managed storage/backups, geo-replicated data and we even built out our own private MPLS network across Australia to guarantee customers would stay on our "private network". 

My thoughts back then were the same as they are now, the concept of a company building out its own infrastructure and managing that is rubbish.  The entire concept of "Private Cloud" is so stupid it doesn't make sense.  It is a marketing term created by Cisco, EMC and VMWare to position their products as "current" when clearly they are losing relevance.

Cloud is about scale and commodity.  In many respects it is all about the "race to the bottom" when it comes to infrastructure.  More importantly, it is a bell weather, a change in mindset, it is about making the infrastructure unimportant and an afterthought.  That's not a very promising scenario for the companies above, all of whom earn some of the highest margins in the technology industry.

Take Cisco this week and their majro announcement that they said would change the internet forever.  They effectively announced that their new highest end routers had been re-designed, given a new model number, been optimised for video and were now faster.  The product is called the CRS-3 or Carrier Routing System - which basically means its designed for carriers and the backbone of the internet.  This announcement was utterly irrelevant to the average user, but unfortunately Cisco can't seem to understand their new place in the world.

The other one I'm keeping my eye on this week is Brian Madden's VDI Shootout.  I've been watching the tweets flying around about all of the issues they are having with the various technologies.  Wyse Terminals and drivers and streaming desktops hosted on backend server farms - *YAWN*.  What a nightmare?  If you're the average IT Manager with a limited budget and you could invest in VDI or moving your systems to the web, what's the better investment?  Sorry to the VDI fans, but the web has you beaten hands down.  VDI is the answer to a question nobody asked.  I would say in EVERY instance if an application has a web-based alternative, it is a better solution than VDI.

Companies do not care about the underlying infrastructure that houses their systems, they care about accessing the information and storing it safely.  I defy anyone to objectively look at things like Amazon EC2, Google App Engine, Microsoft Azure, Engine Yard, Heroku or Rackspace Cloud and tell me that it is honestly a better solution to be buying network hardware, servers and underlying OS software then installing it all and managing that entire menagerie.  I just can't see how its possible.

Ballmer's Performance

Every morning I wake up, I grab my iPhone, I check out what's happening in the Twitterverse and then flip over to my Bloomberg app to see where some shares I follow ended up overnight.  The three that interested me today were Google, Microsoft and Apple.  One thing I'd noticed is that since the announcement of the iPad back in January and this past week's release date, Apple's shares have gone up over 10%.  It would seem that despite some negative press and wondering aloud by many commentators, the market believes Apple has a winner on its hands and one that will continue to drive new value for shareholders.

That thought about value for shareholders made me realise what a poor performer Steve Ballmer has been as CEO of Microsoft.  When Steve took over as CEO from Bill Gates in January 2000, Microsoft has a market cap of about $550B - $575B, depending on the swings and roundabouts of the market on the day.  Then the bubble burst in April 2000 and over the remainder of that calendar year Microsoft's market cap dropped to a low of about $220B.

From 2002 through 2007, the world had a very prosperous period of wealth creation.  Yes, much of it came from cheap credit and banks over-leveraging themselves, but just the same, the value of companies went up.  At Microsoft, not so much.  At the beginning of 2002, Microsoft had a market cap of about $300B and at the end of 2007, the market cap was about the same $300B.  During that time (fiscal years 2003 - 2007 to account for Microsoft's accounting cycle) Microsoft went from $32B in revenue with net income of $10B to revenue of $51B and net income of $14B.  So during a five year boom, Microsoft's value as a company stagnated and their margins dropped from over 30% to just over 25%.

The past two years for Microsoft have seen share value lowered considerably.  Their market cap took two huge hits during 2008 going from a high of about $340B down to a low of about $170B.  The first hit came during the first four months of 2008 when Ballmer made his play for Yahoo!.  The offer was made in early February 2008 and died in early May 2008 - the failure wiped about $60B of market cap off the high of $340B.  When Bear Stearns collapsed in September 2008 and the world was concerned about a global depression through March 2009, Microsoft got down to its low of about $140B.  Over the past year, the panic selling in late 2008 and early 2009 has been corrected and today, Microsoft sits at about $250B in market cap.

From a product and technology perspective, Ballmer's leadership has been an unmitigated disaster.  That said, it looks as though Microsoft might be turning a corner in this area.  Their cloud computing initiatives in Azure have promise, Windows Mobile 7 looks like it could have an impact, the XBox Live and upcoming Project Natal are giving Microsoft a leadership position in the connected home console market, products like SeaDragon and even Bing are showing signs that Microsoft is regaining some techy "chops".  Personally, I'm a big fan of the upcoming Silverlight 4 and ASP.NET MVC 2.0 platforms that are being developed by Scott Guthrie's team - I think Silverlight 4 is going to be very compelling.

The big question now is, if Microsoft is coming back into the technology game is Ballmer the right leader, or should a technology visionary like Bill Gates be leading the company?  My take is, Ballmer had a chance to make hay while the sun shined in the period from 2003 - 2007 and failed.  He's a money guy and he couldn't deliver great results in an upswing last time.  I think Gates needs to come out of retirement, re-invigorate the organisation, place some technology bets and compete in that space.  I don't think Microsoft are going to be able to leverage their desktop and productivity suite monopolies for too much longer, so the trick now will be for Gates to pull another "Internet Tidal Wave" moment and re-align the business with the cloud.

Ultimately, I think Ballmer will be judged harshly by history.  He will be seen as something that was "wrong" with business during his tenure - neither a founder or investor in Microsoft, he became one of the wealthiest people in the world on his stock options.  By no means will he be considered a failure in the class of Jerry Yang (Yahoo!), Gil Amelio (Apple) or Rick Wagoner (General Motors), but I doubt history will be kind to him.  

I think Ballmer was the perfect #2 man to Gates #1.  Gates could keep the internal techies fighting fit internally with his acerbic comments and incredible technical mind and Ballmer could make people believe whatever Gates was selling.  Unfortunately I doubt there could ever be a situation where Ballmer would stay on and let Gates come back in as top banana, but maybe that's a good thing - right now if you're a shareholder in Microsoft you probably want change.

TextMate: HTML Tag Completion

I've been playing around more and more with TextMate and one of the tricks I've seen it do on screencasts is autocomplete the opening and closing HTML tags you're trying to use.  After much searching, I've worked it out - you hold down shift and control and hit < which will create your open and close angle brackets, then you just type the characters for your tags and it will adjust accordingly.

Neat little time saver.

Techcrunch and Interstitials

I've been introduced twice today to the new interstitials from Techcrunch - once this morning while trying to go through a link on Twitter and the other when I opened my browser and brought up my favourite sites.  Both times the interstitial didn't function properly.  The first one with Twitter didn't take me to the link I clicked on, it dumped me on the homepage.  The second one just sat there showing me the interstitial - clicking on "Skip this Ad" or waiting didn't matter, after about 45 seconds, I ditched Techcrunch and came here to write this rant.

I hate interstitials on the web.  I think it is nothing more than spam and clickjacking.  Even more than that, when a blog like Techcrunch posts EVERY link on Twitter directly and then hijacks my session to an advertisement, that's just complete abuse.  I think that's unethical and something perhaps even Twitter should look on cracking down on - you posted a link to take me somewhere to show me something, don't interrupt it with an Ad!  That's just spam as far as I'm concerned.

Interstitials are a fancy name for commercials.  They divert you away from the content you intended to view and show you something you didn't want to see in an effort to make you buy something.  I hate them on TV, I hate them before movies and I hate them even more on the web.

Interestingly, there's been a debate recently between Jason Calcanais (@jason) and Comscore about making sites pay for an accurate reflection of their traffic.  Without going into the detail, the thing that is related about these two issues is that what sites like Techcrunch and Mahalo have in common is that they absolutely are fully dependent on our "attention".  I go to your site, I "lend you" my attention in exchange for content I'm interested in and if you choose to put some ads around the side of that content, then so be it.  My "attention" and everyone who visits these sites are chopped up and ranked and called a million different things like CPMs or impressions or whatever, but at the end of the day, the "score" is a reflection of the attention paid by individuals to the content presented.  The most important part of this is, the content on its own has no value, the value is the amount of attention paid to the content!  You can write the best blog posts in the world, but if nobody clicks on them, you won't get advertising dollars for it.

I'm by no means some kind of uber-genius who's just come up with this, people like Steve Gillmor have been talking about the "attention economy" for the last five years.  And I mention Steve Gillmor specifically because of his association with Michael Arrington (who runs Techcrunch) and their relationship via the Gillmor Gang.  I would have thought that Arrington would have picked up a few lessons and ideas about the value of attention and ways not to lose it before making a decision on these commercials that have been stuck up on Techcrunch.

Look at TV.  DVRs are massively popular because they allow people to do a couple of simple things: one, record the content so they can watch it when they want; and two, fast forward through commercials.  Some people will talk about digital programming guides and stuff like that, nonsense, those two things are the killer features of DVR.  Traditional newspapers are suffering along similar lines, I can get the content when I want it without the overhead of a whole newspaper.  It boils down to the same thing: my attention is valuable to me and my time is precious, I will reward you with my attention if you make it easy and convenient for me to view content that I'm interested in.  

I find these interstitials/commercials to be a perversion.  It is like paying an attention toll just for the chance to view the content - it is an attention "paywall".  If I don't like the content, I've paid you for it largely in advance whereas if I am on your page and there isn't anything I'm interested I leave and my time on your site is diminished.  I guess the only way now to protect my "asset" in this relationship is for me not to go to Techcrunch as a primary source of information, but as a last resort.

In my "Morning Coffee" extension of Firefox, the first page up was Techcrunch - it got my attention first.  Sites like Mashable, RWW and GigaOm were always towards the end of the tabs, because I felt I was getting my fair share of tech news from Techcrunch.  There are only so many stories about Foursquare and Gowalla a person needs to read. Similarly, if something from Techcrunch popped up along with a similar story on Mashable and RWW, I'd always click the Techcrunch link.  After my experience this morning of having this stupid commercial popup and then waste more of my time to navigate to the story I wanted, I'm going to rethink that strategy - I had to pay money for that, my 3G isn't free for my iPhone.  Ultimately, I'll just have to re-organise my "Morning Coffee" tabs and change how I use Twitter so that people who value my attention more, get more of it.

Controlling Google

One thing that is seemingly being lost in this whole Google vs China debate is the essence of what the Chinese were trying to breach.  it has been widely known now for sometime that Google is a massive information hoarder - in fact, I don't think any government body anywhere in the world really knows just how much information Google is keeping about its citizens.  We now have a situation where the Chinese have tried to infiltrate the honeypot and have seemingly had some success.

Google immediately went on the offensive and threatened to pull out of China, but now most accounts are saying that they are looking to just pull their underperforming search page, while maintaining their profitable international sales and technology groups in China.  So effectively they're now looking at closing their loser search portal, but keeping their profitable business - way to be tough Google!  I hope the Chinese revoke your right to trade there and give you the full on punt.

Much of the "social medial" tripped over itself to applaud Google for having the courage to take on China and while they did allow themselves to be censored, it was never too late to do the right thing, seemed to be the sentiment.  In amongst all of the fawning, I haven't read one single piece where someone has questioned whether or not Google should be allowed to hoard all of that data.  They created a massive target of private information about us users, they refuse to tell us exactly what it is they collect and the descriptions of how it is used is vague at best and insulting at worst - "We use it to provide our customers with a better experience".

I say that the US and European governments should now step in and demand to understand EXACTLY what it is Google tracks, what it does or doesn't do with it and an elected group somewhere needs to put some rules in place to protect people from Google.  They have been breached by a foreign government and people's private information has been stolen.  If this kind of widescale espionage had happened to the US or UK governments there would be considerable gnashing of teeth and public inquiries.  The media would be all over them, demanding resignations.  Now it is a company who aren't elected by anyone, have almost no transparency when it comes to this issue and the "social media" at the very least are rallying behind the company for being such freedom advocates.

There has been ALOT of barbs from people like Jeff Jarvis towards the traditional media about how they've lost their edge and are dying.  Well when do one of these new, Online Media Moguls step up and call Google out about this issue.

What would Google do if they were breached by a foreign government and private citizen information of users was stolen?  We now have the answer - make statements filled with bluster and rhetoric to distract from the real issue and then when the dust settles look for a compromise solution that keeps the ad revenue flowing in, allows them to save face by taking down their search page and run for the moral high ground before anyone realises they've been duped.

Bring Back The IPO Market

The US economy is struggling and as someone interested in the technology sector, Silicon Valley has totally lost its mojo in my view.  I think these things are related - Sarbanes-Oxley Act 2002.

SarbOx was put in place to stop companies like Tyco, Enron and WorldCom from defrauding investors by overstating their numbers and cooking the books.  SarbOx also put some tough regulations in place for the traditional audit firms who were also very culpable in the disasterous frauds of the early 2000's.  The audit firms were "overlooking" some irregularities and were accepting their clients "interpretations" on strange items to curry favour so that they could continue to win lucrative professional services work on top of their audit work.  Basically, ethics were forgotten about by a few companies and their accountants.

Some of the biggest losers from this were pension funds.  That's a sensitive topic and politicians never lose votes by protecting working people's pensions.  As a result, a complete knee-jerk law came into place with SarbOx.  In fact, the US Supreme Court heard arguments back in early December about whether or not the law has created a body that is unconstitutional.  The law is a mess and it is by no means doing what it was intended to do.

Right now, the cost of complying with SarbOx is so high and onerous that most small to medium size companies just can't be bothered.  The auditors are making their fees they lost in professional services back in cumbersome administrative audit paperwork.  The whole thing has made it all too hard for small growth companies to list.

Accounting firm Grant Thornton have released a report that talks about creating a "new" private equity market that is open to small caps and "qualified investors".  The report says there's no need to get rid of ANY of the current regulation by the SEC or SarbOx - in fact, they couch this premise in political expediency, "Let's just get on with fixing the market".  That's a handy position for an audit/accounting firm, it keeps their lucrative audit market intact.

The GT report also seems to point the blame largely at online brokerages and day traders which is crazy.  The decline in IPOs has nothing to do with the growth in online trading.  The GT proposal would require people go back to using the telephone and meeting with brokers before they could invest in this class of stock - how odd that their suggestion to free up the IPO market for small cap companies, which are largely technology companies, has them eschewing the use of modern technology.  From memory, eTrade in 1996 along with Netscape were some of the companies that kicked off the massive increase in IPOs.

My feeling is that the GT report confuses several issues: the dotcom bust, the frauds at WorldCom, Tyco and Enron and the impact of SarbOx on IPOs.  GT implies that having "qualified" investors handle new small caps will ensure that proper research and diligence is carried out.  There is almost a muddying of the water here as though the dotcom bust and the big Frauds were related and simply a lack of proper research by untrained day traders was the reason so much money way lost.  Let's clear that up: the dotcom bust was a bubble caused by speculation, often ramped up by the very same "qualified" investors that GT refers to, but there were really very few cases of fraud.  Conversely, qualified auditors were signing off the statements of Enron and Tyco saying they were legitimate and within the bounds of the accounting guidelines.

SarbOx was created to deal with the frauds, not the dotcom bust.  It has put in place restrictions, hurdles and impediments that are preventing HONEST small and medium size companies from going to IPO.  The companies that were listing in the dotcom era, they weren't lying to anyone - they would often say in the prospectus that they had no future profit projections.  They were however creating jobs, adding value and building things which is something America needs right now.  Repeal SarbOx, give the SEC some clout to deal with criminals who defraud shareholders (be they executives or auditors) and get Silicon Valley back in business.

Chrome OS

I get it... Many people I know are scratching their heads trying to figure out what the point of this Chrome OS thing that Google is doing.  I don't have that problem, I understand the concept.  I just think it is an entirely pointless idea.

Netbooks are an interesting niche market.  By all accounts they are set to take over the world.  Yet last week in LA at PDC09, I was struck by the fact that there were so few netbooks in attendance.  Now, I know that's a "Professional Developer's Conference" and most devs have better machines than that, but a netbook, in theory is perfect for an event like PDC.  You rock up, pull out your netbook, hook into the free wifi, take some session notes on the device, check your email over the internet and basically get all the "goodness" of the small form factor with no loss of capability.  That's the theory.  The reality was that there were TONNES more Macbooks running OS X at PDC than there were netbooks - BOATLOADS MORE!

Then during PDC, Microsoft trots out a new multi-touch tablet with (king of the netbooks) Acer and gives everyone in attendance (except government employees and Microsoft staff) a freebie.  This device is a bit bigger than a netbook, but a fair bit smaller than a mid-size notebook, it has 3G, wifi and every other connectivity imaginable, plenty of RAM and a good sized HDD.  I can flip it over and write on it to take notes.  The next day, PLENTY of people were using them for just that.  Oh and did I mention, it had Office 2010 installed on it, so I had a full productivity suite.

I think the netbook market will continue to flourish and good luck to Google in tackling that space.  Personally, I would have rather seen Google throw their weight behind someone like Ubuntu and have a Linux variant go after the netbook market.  Alas, Google's plans for global domination (without being evil) necessitate them enter the OS market.  Good luck with that - fighting Microsoft on their home turf is brave or stupid, depending on how you look at it.  I just don't think the average person, and let's face it, that's who's buying these things, not the hardcore geeks, can't live in the cloud yet, totally connected to the internet.

The other thing that worries me is the closed nature of this thing.  One of the criticisms Microsoft has always faced is the proprietary nature of their products.  However, they've always openly embraced the developer community.  Google seem to be placing alot of restrictions on this thing.  Can I run Firefox on Chrome OS?  I doubt it.  What about Opera?  Are Opera and the EU going to go after Google? 

The final thing I'd like to know more about is, how are Google going to monetise this.  Let's face the facts, Google are an advertising space wholesaler which drives traffic through search results.  Are they going to do anything special with this technology to make their ads more ubiquitous?  Am I going to have to see Google Ads on my "desktop"?  If not, and they are giving the OS away, then at some point doesn't someone owe the Google shareholders an explanation as to why they continue to waste money on "competitor" products to Microsoft and others without a monetisation strategy beyond "driving more traffic to google.com"? 

The whole thing just seems like vanity, ego and software engineering bravado.  How about rather than spending all of this time and effort on something so fruitless as Chrome OS, why not do some more R&D on the image search as Chris Dixon (@cdixon) pointed out on Twitter today.

Spotlight/Entourage 2008/Snow Leopard Problem

Since updating to Snow Leopard upon its release I've been struggling with my Entourage 2008 Spotlight searching.  I have two accounts and one seemed fine and the other wasn't working at all.

First port of call was to try and rebuild my index.  So within Entourage you go to Preferences and Spotlight and click the Rebuild button.  Nothing happened.  I tried turning off the Spotlight search and re-enabling that.  That didn't work either.

Next I got a little more drastic and went in and removed the index stubs that Entourage creates for Spotlight to search, then I disabled Spotlight search in Entourage (as above) and re-enabled it.  Theoretically this should have forced Entourage to recreate the stubs, but that didn't occur. 

Clearly this was some kind of crazy process issue.  I then went into the Microsoft Office 2008 folder and launched the Sync app just to make sure it was running - nothing.

Finally I put the stubs back and tried to launch the import again using mdimport -r on the ~/Library/Caches/Metadata/Microsoft/Entourage/2008 folder.  It chucked up an error which was interesting.  The error said I should force the import again using "arch -i386 mdimport".  I did that and it seemed to run successfully - I could here the Macbook disk churning like mad.

A few minutes later my Spotlight search was working on both accounts and updating itself nicely.

It would appear that there's something askew with the preferred mdimport (metadata import) in Snow Leopard defaulting to the 64-bit version and this not working well with Entourage which is of course 32-bit.  Once I forced the 32-bit version of mdimport, everything seemed good again.

If it acts up again after a reboot I'll update this post, but ensuring the 32-bit mdimport runs on your Entourage index seems to sort the issue.

Hypocrisy of Australian Telecommunications

I have been a firm believer for some time now that Telstra has needed to be broken up into wholesale and retail pieces.  I also think that a "government controlled" entity should own the basic infrastructure to provide backhaul and the last mile - so effectively the wholesale piece minus mobile.  I believe that telecommunications infrastructure is critical to the country and in Australia it is overly politicised and monopolised to no ones benefit.  I think the wholesale infrastructure should be open to any "carrier" at tiered pricing based on volume purchased.  Finally, I believe that government controlled entity should NOT return a profit to the government's coffers, but be mandated to spend its entire profit on upgrading the core networks and reducing the impediments to wider scale high speed communications technology to rural areas.

I do not believe in the NBN.  I think it is poorly thought out and yet another instance of the politicians becoming too involved in things they don't understand.  When people ask me why I don't like the NBN I usually give the glib answer, "If people in Wagga want faster access to porn, they should pay a higher price." 

In many respects, my two positions seem contradictory, but let me explain.  The problems in the Australian telecommunications industry are to do with issues such as: exchange access, last mile access and quality, pit access and regulated pricing.  None of these will be solved by the NBN, but they would be solved by breaking up Telstra.  I just think dropping some $40b on a new network to solve a regulatory issue seems like dropping a nuclear bomb to kill a mosquito.

In its current form, the NBN is misguided.  It will turn out to be a government spending orgy that results in NBN PoPs in every marginal federal Labour seat in the country.  Every school in a safe Labour area will have more fibre than they can shake a stick at while kids in Castle Hill in Sydney's northwest resort to tin-cans, string and carrier pigeons.  I'm not simply pissing on Labour, I'm sure the Coalition would do the same thing - politicians can't help themselves.  They are measured by re-election (a popularity contest) and sometimes, the important ones are considered in a historical context, but the next election is always closer.

I think the government should go through with breaking up Telstra and regulating access to the wholesale network.  I think the federal government should consider what to do with the national fibre networks of NextGen and Optus as part of the wholesale scheme.  If they really wanted to make telecommunications cheaper and better, they'd probably buy both, plus look at the undersea assets in and out of Australia.  Australians pay a fairly hefty price for internet access because of peering costs on undersea cables to the US, which is where the bulk of the content lives.  If you could eliminate the excessive gouging in that area, you'd be onto a winner.  Ultimately, let that piece of policy shake out and then see if we need to spend all this money.  We very well may need to and if the country needs and wants that, then great, spend away, but right now it seems that the market may sort this out itself.

My last thought is on hypocrisy.  The Howard Government were bitterly opposed by the now governing Labour party when they went through the process of selling Telstra.  The Howard Government made the Telstra debate part of their election platforms.  Labour has decided to break-up Telstra and have set a deadline effectively for doing so that would preclude the electorate from getting a say on a significant decision.  Labour obviously doesn't want to have done to it, what it encourage the labour unions to do to the Coalition during the last campaign on WorkChoices and that's run ads all over the place slamming Labour's decisions on telecommunications - the government is trying to keep Telstra's marketing machine on the sidelines. 

I suppose the part I find most hypocritical though is that Labour were opposed to selling Telstra, yet they inherited the Future Fund which was made up of the proceeds from that sale and now they are breaking up the goose that laid the golden egg so they can spend the proceeds that may not need to be spent to fulfill a poorly constructed election promise that has become bigger than Ben Hur.  It just doesn't pass the smell test with me.