24 September 2008

IBM's new standards participation policy

IBM has announced a new policy with regard to standards particiption. There are a couple of interesting things around this. Notably, this policy was developed by IBM employees using a Wiki. Quoting the policy:

The tenets of IBM's new policy are to:
  • Begin or end participation in standards bodies based on the quality and openness of their processes, membership rules, and intellectual property policies.
  • Encourage emerging and developed economies to both adopt open global standards and to participate in the creation of those standards.
  • Advance governance rules within standards bodies that ensure technology decisions, votes, and dispute resolutions are made fairly by independent participants, protected from undue influence.
  • Collaborate with standards bodies and developer communities to ensure that open software interoperability standards are freely available and implementable.
  • Help drive the creation of clear, simple and consistent intellectual property policies for standards organizations, thereby enabling standards developers and implementers to make informed technical and business decisions.

To me, it will be interesting to see how quickly IBM moves to adhere to this policy. Suppose there was a consortium that did not meet one of the tenets (eg. the first one) that was in an area of vital business interest to IBM. I wonder how they would respond?

SMS vs. telephone calls

I found this item over at Nielsen, especially in light of this earlier item on this blog.

Given this data, is it any wonder that carriers would try to hike rates? After all, text volume seems remarkably inelastic given prior price increases. Economics suggests that they would raise prices in this case!

19 September 2008

Is It the Dawn of the Reregulation Era?

I found this article over at BusinessWeek interesting (even if it didn't explicitly discuss telecom). I think this article supports R.B. Horwitz's contention that regulation is often introduced at the behest of the regulated industry to stabilize markets. Pure capitalism results in large uncertainties and almost demands periodic business failures as a form of market discipline. Regulation works to ease those pressures and, if done well, provides a predictable marketplace (which is generally supportive of investment).

So, if this article is correct, the recent market turmoil may usher in an era of increased regulation. Will telecom be included in this trend?

17 September 2008

Spectrum trading

Spectrum trading is one of my areas of interest. So, it should come as no surprise that this article caught my attention. How is this different from the current broker-based approaches to "spectrum trading"?

15 September 2008

State of the Internet according to Akamai

I found this report interesting (free registration required). It reports data as seen by Akamai, which serves many of the Internet's web sites. While the data are interesting, there are some notable countries missing ... Russia, for example ... so, while of interest, it may of limited value.

11 September 2008

Regulation of Text Messaging?

In this previous post, I had discussed rising text message rates in the US. According to this article in Forbes, it has gotten the attention of Sen Herb Kohl (D-Wis) as well. Here is the announcement from his website. While specific action is unlikely in this session given the upcoming election, Forbes notes a possible connection with the EU's action on mobile phone price regulation.

While Kohl blames this on industry consolidation, I believe that there are other interpretations that should be considered. For one, the price increase is for a-la-carte messages, not for packages or bundles of messages. Second, carriers often offer cheap or free messages between users in their networks as a way to increase switching costs for users. Should they be prevented from doing this?

08 September 2008

Next Gen Broadband in the UK

This report, published by the UK Broadband Stakeholders Group, provides an upper and lower estimate of the cost of deploying fiber-based broadband throughout the UK: from GBP5.1 to GBP28.8 (US$9B to US$50B), depending on the architecture used. The lower estimate is for fiber to the cabinet, while the upper one is for fiber to the home. The report itself (available here) is a good example of a carefully done cost study.

Cloud computing

In his recent book, The Big Switch, Nicholas Carr makes the case for the emergence of cloud (or utility) computing as the next means by which we will process information. In this item, Joe Weinman asserts 10 laws of cloud computing:

Cloudonomics Law #1: Utility services cost less even though they cost more. An on-demand service provider typically charges a utility premium — a higher cost per unit time for a resource than if it were owned, financed or leased. However, although utilities cost more when they are used, they cost nothing when they are not. Consequently, customers save money by replacing fixed infrastructure with clouds when workloads are spiky, specifically when the peak-to-average ratio is greater than the utility premium.

Cloudonomics Law #2: On-demand trumps forecasting. The ability to rapidly provision capacity means that any unexpected demand can be serviced, and the revenue associated with it captured. The ability to rapidly de-provision capacity means that companies don’t need to pay good money for non-productive assets. Forecasting is often wrong, especially for black swans, so the ability to react instantaneously means higher revenues, and lower costs.

Cloudonomics Law #3: The peak of the sum is never greater than the sum of the peaks. Enterprises deploy capacity to handle their peak demands – a tax firm worries about April 15th, a retailer about Black Friday, an online sports broadcaster about Super Sunday. Under this strategy, the total capacity deployed is the sum of these individual peaks. However, since clouds can reallocate resources across many enterprises with different peak periods, a cloud needs to deploy less capacity.

Cloudonomics Law #4: Aggregate demand is smoother than individual. Aggregating demand from multiple customers tends to smooth out variation. Specifically, the “coefficient of variation” of a sum of random variables is always less than or equal to that of any of the individual variables. Therefore, clouds get higher utilization, enabling better economics.

Cloudonomics Law #5: Average unit costs are reduced by distributing fixed costs over more units of output. While large enterprises benefit from economies of scale, larger cloud service providers can benefit from even greater economies of scale, such as volume purchasing, network bandwidth, operations, administration and maintenance tooling.

Cloudonomics Law #6: Superiority in numbers is the most important factor in the result of a combat (Clausewitz). The classic military strategist Carl von Clausewitz argued that, above all, numerical superiority was key to winning battles. In the cloud theater, battles are waged between botnets and DDoS defenses. A botnet of 100,000 servers, each with a megabit per second of uplink bandwidth, can launch 100 gigabits per second of attack bandwidth. An enterprise IT shop would be overwhelmed by such an attack, whereas a large cloud service provider — especially one that is also an integrated network service provider — has the scale to repel it.

Cloudonomics Law #7: Space-time is a continuum (Einstein/Minkowski) A real-time enterprise derives competitive advantage from responding to changing business conditions and opportunities faster than the competition. Often, decision-making depends on computing, e.g., business intelligence, risk analysis, portfolio optimization and so forth. Assuming that the compute job is amenable to parallel processing, such computing tasks can often trade off space and time, for example a batch job may run on one server for a thousand hours, or a thousand servers for one hour, and a query on Google is fast because its processing is divided among numerous CPUs. Since an ideal cloud provides effectively unbounded on-demand scalability, for the same cost, a business can accelerate its decision-making.

Cloudonomics Law #8: Dispersion is the inverse square of latency. Reduced latency — the delay between making a request and getting a response — is increasingly essential to delivering a range of services, among them rich Internet applications, online gaming, remote virtualized desktops, and interactive collaboration such as video conferencing. However, to cut latency in half requires not twice as many nodes, but four times. For example, growing from one service node to dozens can cut global latency (e.g., New York to Hong Kong) from 150 milliseconds to below 20. However, shaving the next 15 milliseconds requires a thousand more nodes. There is thus a natural sweet spot for dispersion aimed at latency reduction, that of a few dozen nodes — more than an enterprise would want to deploy, especially given the lower utilization described above.

Cloudonomics Law #9: Don’t put all your eggs in one basket. The reliability of a system with n redundant components, each with reliability r, is 1-(1-r)n. So if the reliability of a single data center is 99 percent, two data centers provide four nines (99.99 percent) and three data centers provide six nines (99.9999 percent). While no finite quantity of data centers will ever provide 100 percent reliability, we can come very close to an extremely high reliability architecture with only a few data centers. If a cloud provider wants to provide high availability services globally for latency-sensitive applications, there must be a few data centers in each region.

Cloudonomics Law #10: An object at rest tends to stay at rest (Newton). A data center is a very, very large object. While theoretically, any company can site data centers in globally optimal locations that are located on a core network backbone with cheap access to power, cooling and acreage, few do. Instead, they remain in locations for reasons such as where the company or an acquired unit was founded, or where they got a good deal on distressed but conditioned space. A cloud service provider can locate greenfield sites optimally.

05 September 2008

Autsralia's National Broadband Network

In an earlier post, I had discussed Australia's plans for construcing an (apparently) subsidized broadband network. According to this site, proposals for this network will be due in November 2008. Do you think this is a reasonable approach, or should broadband be privately provided by market incentives?

Peering and Transit article

Interconnection in telecom is one of the more challenging aspects of telecom. This item from TLF is an article/anecdote that captures some of the dynamics of this problem.

U.S. 3G Adoption Rivals Europe

Those of you who like to keep score might find this item interesting. It would be interesting to take comparative look at pricing for these services as well. In any case, I guess it pretty much renders moot the discussions about the different airtime charging schemes (caller pays vs. mobile pays) and multiple standards!