Social Network Regulation

Telecommunication companies unbundled the local loop in the past decade to comply with government regulation designed to spur competition in broadband services. The regulation was enacted for allowing competitors to use the last-mile copper, which belongs to incumbent telecommunication companies, in return for a fixed (small) fee. For example, Germany has dozens of broadband providers that use Deutsche Telekom's infrastructure to reach all customers that DT reaches. A customer can switch from DT to another provider if she prefers. Therefore, the governments motive of creating competition in the marketplace has succeeded.

Now lets fast-forward to 2015. Social networking has become ubiquitious. The inevitable shakeout, M&A and standardization forces have linked up all social networks into one huge giant network. People communicate primarily over social networks. The search engine has become second to this the human Gaia - the social uber network. A collective virtual intelligence, call it society 2.0, overlaid over the society we know. Last time a technology, voice telephony, became the flagship mode of communication, government stepped in to regulate it, control it, and overhear if needed. Before last time another technology, snail mail post, became the flagship mode of communication, government stepped in to regulate it, control it, and read it if needed. And so it shall be with be with social networks.

How and when will social network regulation come about?

Reinventing the software development business for the mobile world

Here is Pinch Media's presentation "AppStore Secrets", a data analysis of about 30m downloads of from the Apple iPhone application store. There were several insights in the presentation. The first thing that struck me was the relatively short lifespan of mobile applications compared to PC based applications.

Consider this: According to the presentation, most mobile applications seemed to "die-out" within days. They lie unused, or worse, they are uninstalled within a few days. Not even months. Compare that with Microsoft's MS Office, which usually lives on a PC for its entire lifetime. Usually a new MS Office user increases her usage over the months and years after purchasing it. While MS Office is expensive relative to mobile applications, the former's "per-run" cost may actually be lower than app-store mobile applications.

Fortunately the number of man-hours going into simple mobile applications for things like storing recipes and writing notes is quite small and most applications seem to be coming out of garage startups. I think this will change and we will see the emergence of a conglomeration of developers (e.g. a large mobile development company or even a developers' cooperative) who can amortize the risk and costs of mobile development. This may curtail rags-to-riches stories of 'lone star developers' as success will also be amortized. Still, the synergies of a large developer group working together, sharing code and risk make this a valuable preposition.

High level, reusable and modular tools that can be used to compose applications easily should emerge as the winners for mobile application prototyping and development. Developing everything in C++ from the ground up will not be economically feasible. Instead development tools like Python for the Symbian platform and .NET tools for Windows Mobile will become popular with developers. Given the variety of platforms, a cross-platform tool will have a huge advantage. In my opinion, Adobe's mobile development tools like Flash Lite are well positioned for such high-level and cross-platform mobile development.

iPhone AppStore Secrets - Pinch Media

Sirius XM satellite radio almost went bankrupt. A lesson for paid cellular mobile video?

Satellite radio seemed like a good idea. Crystal clear, ad-free, broadcast distance-agnostic , high-quality audio content for those long commutes, all for about $10 per month. But apparently Sirius-XM, the 800-pound gorilla of US satellite radio, is in dire straits. It avoided Chapter 11 bankruptcy after Direct TV propped it up with funding, probably at the price of being taken over by Direct TV.

But what does this say about users' appetite to pay for content while they are on the move? If paid radio did not fly, then will paid mobile video not fly either? We have a simple analogy here

free FM : paid Satellite radio :: free Digital TV (e.g. DVB-H) : paid cellular mobile video

?

Its tempting to write up the requiem for paid cellular mobile video based on the satellite radio example. But here are some things going for cellular mobile video

1. Mobile VoD allows users to select what they want to see, unlike satellite radio, which is a broadcast medium.
   
2. Cellular video is truly untethered because it is consumed on the mobile device. On the other hand, satellite radio is not carried in the pocket - it is usually built into car entertainment systems. No extra equipment is needed for cellular mobile video unlike satellite radio.
3. Video is inherently a richer and more engaging medium than radio.
   
4. Telecom companies are going to sink a lot of marketing effort into making mobile video a success. Paid mobile video service is one of the most significant use-case for high speed wireless networks. And perhaps, the best escape pod from the dumb-bit-pipe scenario that telecom companies want to avoid.

Still, users' tepid response to satellite radio should worry cellular mobile video hopefuls.

Mobile application stores and Telcos

Today's WSJ carries an article about online software application stores being the latest "me-too" business being promoted by mobile device manufacturers, telecom companies, and even independent companies. The first notable app-store came from Apple last year, for its iPhone and iPod Touch platform. Apparently IBM has already created a generic platform to create such app-stores, making it easy for any company to start its own app-store.

Third party mobile applications have been around for for a long time - ever since there were APIs and development platforms for mobile devices. I remember developing applications for a Palm III device using the Code Warrior IDE back in 2001. Microsoft also promoted Windows CE/PocketPC/Mobile development via Visual Studio and .NET from early on. In response the developer community created tons of mobile device applications that have been sold or given away for free on the Internet. So what has changed with the advent of the app-store? And why all this sudden interest? These are some of the obvious reasons for app-stores to exist:

1. The host company gets a cut of the revenue. For example Nokia will get a 30% cut on each sale in its Ovi software store. The developer gets to keep the balance. In addition, by providing this portal facility to developers host companies can attract developers who create cool applications, spurring the popularity of their devices.
   
2. The developer gets a suitable hosting platform for her applications. This includes a payment system, and users may be more willing to trust big names (Apple, Nokia) instead of a small unknown development company when they give out their credit card information.
3. The user gets a one-stop application shopping solution where she can compare applications and buy with confidence since hosting companies are most likely to certify applications for compatibility, quality, security, and legal compliance before selling them.

One of the challenges for telecom companies is going to be the consequent loss of control over the application mix on mobile devices and over mobile device hardware. Why? Because by creating an alternative revenue stream for device manufacturers, app-stores will force them to consider application developers' wishes while designing devices. Until now device manufacturers have largely depended on telecom-operated retail outlets to generate the bulk of device sales, making device manufacturers very pliable for telcos. Now device manufacturers can also lean on software developers, who create cool applications for their devices, to drive device sales and to generate revenue. The days when telcos could dictate device capability and decide which software got installed on mobiles are numbered.

Its not all red for telecom companies though. Smart phones and new applications are driving up data plan usage in a big way. There are some unknowns here, for example, users may start using flat-rate data plans for voice (through VOIP) and SMS (through IM and email) substitution. But will the cannibalization hurt telcos or will data plans compensate for the loss of voice and messaging revenue?

The Storage-Processing-Bandwidth triangle in mobiles

The three fundamental "juices" of mobile devices - storage, CPU, and bandwidth - have been improving over the past decade. Storage has grown thanks to better and cheaper flash memory, CPUs have become spiffy thanks to Moore's law and advances in low-power CPU design, and bandwidth has improved thanks to 3G network roll outs. These 3 define the operating point of mobile device applications i.e., what are the trade-offs application designers make based on these underlying capabilities of a device. For example, if bandwidth was free and infinite then there would be less motivation to cache data on devices and instead most data (e.g. an address book) would be stored online. This would have the advantage of letting users access the same address book from different devices and computers.

But the truth is that while storage (bits per dollar) has doubled almost every year in the last decade, CPU and bandwidth have not kept the same pace. CPU power can still be jacked up if one is willing to trade battery life for faster CPUs. But bandwidth remains expensive (bits per dollar) and unreliable (spotty coverage) as compared to storage. Where is the operating point of upcoming mobile devices like smartphones heading? Will the distortion due to seemingly limitless storage lead to a redefinition of the mobile phone into a device that is less phone and more storage/CPU? Will voice and data lose their killer application status on the mobile device? What will users be doing with all that storage and CPU becoming available on their mobile phones?

It is safe to state that whenever data can be cached it will be cached. It just costs much more to transmit a bit than to store it, and transmission latency is also a problem. So expect applications to reduce bandwidth usage through local caching. High cellular bandwidth cost will also promote disruptive services like Wifi-enabled smartphones that can easily bypass operators' expensive data networks. With applications like Fring, users can already make phone calls using Skype on Wifi enabled phones. Mobile phone cameras routinely take images at multiple megapixel resolutions. But these high resolution pictures are seldom transmitted over the mobile wireless interface and are instead stored for later downloading to a PC. Many mobile device mapping solutions do not use cellular data networks and instead rely on storing all the maps locally. Multiplayer mobile games have not taken off either, partly because of the technical and pricing limitations of cellular bandwidth. I download my email over my home Wifi connection into my Nokia E71, reply to these emails on the train while commuting to work, and then connect via Wifi to send the replies once I am in office. Similarly, applications like Avantgo give users the option of avoiding the usage of expensive cellular data plans.

The argument I have tried to make is that the mobile device is not shackled to voice and cellular data only. Market forces will spur creativity to utilize these little wonders of modern technology in engaging and inexpensive ways. Voice and data may not remain the killer-apps on these devices.

Clearwire, Wimax, and cheap broadband

There is a interesting article in the current Fortune about the troubles Clearwire is facing in rolling out Wimax on a large scale across the US. Apparently, it is working out to be much more expensive than was hoped.

In the city of Portland, Or, about 300 Wimax towers were needed to cover the whole area. Although in principle each Wimax tower covers several miles, uneven terrain can quickly spoil this. Clearwire offers Wimax for 30 dollars a month, a price that is significantly lower than wired broadband. But with the necessity of new hardware on the user side, will it work? Especially with Telcos supporting LTE as the Wimax alternative?

The answer lies on the business model for Wimax. Wimax has the edge in terms of early deployment and heavy weight supporters like Google and Intel. The key is the ubiquity of rollout as compared to telcos' LTE. Another question is whether Wimax equipment will be bundled as standard Laptop/phone equipment . Wired Broadband also bundles services like voice and increasingly, TV. How suitable is Wimax for these value-added services?

Test blog posting via email

And this works!

The computing world meets the home electronics world

One would think that computers and data networks can be easily integrated with home electronics like Hifi systems and TVs. Not so. Try hooking up a Hifi to your iTunes collection. Even if you are able to pipe the audio from the computer's sound card into the Hifi's line-in, its hardly convenient to browse and select songs on the computer and have them play on the Hifi. Computers are still lean-forward devices that require active user participation with keyboards and mice. I want to listen to music on my Hifi and browse my music collection sitting on my couch with a remote control. I want to control the music without having to unlocking the computer's screen saver and then using the mouse to control the software music player. And yes, I want to listen to my music with the fidelity that my Hifi offers.

Its interesting that content like movies, music, etc., produced primarily for home electronics, has moved from home electronics to computers and networks but the opposite movement of computing and networks features into home electronics has been slower. One could argue that computers can be easily programmed to mimic home electronics (e.g. software media and DVD players) whereas home electronics have to implement things in hardware - a more complex preposition. But modern electronics is easily capable of integrating computing and networking into products given how modular ASIC technology has become. Most home electronics has digital control circuitry since the 90s. These things are being controlled by computers for the past 2 decades! Then why aren't these computers interfacing to other computers and the big I(nternet)?

In my opinion, the reasons for this relative one-way street between computers and home electronics are more business and consumer related than technology related.

1. Silo thinking and protecting markets: For the home electronics industry, one living room = 1 Hifi + 1 TV + 1 DVD player + 1 Home theatre... Home electronics makers are reluctant to provide interfaces to connect up devices, especially digital interfaces like data networking capabilities, because there is scope to squeeze out redundancy. Today most living rooms have 3 audio amplifiers (TV, Hifi, home theatre) instead of one. But how long can this redundancy last if all music could be noiselessly (digitally) piped into one amplifier?
2. End users' lean back leanings: Home electronics buyers were people in their 30s-70s who were not too comfortable dealing with computers and Internet technologies. On the other hand users who used computers for entertainment were mostly younger. But an increasing number of people are totally at ease with the concepts of computing and data networks.
3. The computer vs. home electronics experience: There is certainly a difference between watching a DVD on a laptop and watching one on a DVD-TV setup. Up until recently this was enough to sway many toward home electronics. But the gap has narrowed significantly now. My wife's Dell XPS laptop comes with a remote control! Acquiring content is more convenient over the Internet (iTunes, Netflix, etc.) instead of acquiring it for home electronics (e.g.video store).
4. The other side: Unlike home electronics, the computer and telecommunications industry have been pushing any software application that consumes CPU, disk-space and network bandwidth - i.e. - music, video, and TV.

But things are changing. Our shiny new Denon M37 Hifi came with a USB port proudly placed on the front panel! The new war of the electronics world and the computer world. Or their confluence.

Smartphones and value for money

Ok so I took the plunge. My shiny new Nokia E71 arrived last week. This is the first time I have bought a mobile phone at its retail price. Before this, I was usually happy to choose among the free phones supplied by the carriers. But this time things are different. There are fantastic smart-phones on the market (like the E71) and I have figured out the math behind why "free" is not free when it comes to mobile phone plans and 2 year lock-in periods.

Still, spending 300-odd Euros on a phone triggered introspection. Do I really need a smart phone that is, well, so smart. Smart is a relative term. I used to sync my old Sony-Ericsson to my PC Outlook and have my contacts and calendar up-to-date. That was smart too. So the question is, is my E 71's extra smartness worth the Euros? After 3 days, here are the things I am doing with my new phone that I could'nt earlier. Offcourse Nokia advertises the things you can do with this new phone, but I seriously doubt I will ever do all that Nokia suggests.

1. Do emails on the train.
2. Use the basic English-German dictionary in the phone
3. Type SMSes faster
4. Set up appointments, to-dos easily on the phone, thanks to its keyborad
5. Get an automatic weather report in the morning
6. Solitaire
7. GPS.. well, perhaps in the summer if I get lost or something (unlikely though)
8. I can chat and Skype-out using Fring.

Well lets suppose the phone lasts 2 years. that would get its price to under 50 Euro cents per day (discounting the cost of capital). That probably makes it worth the money given the list above.

...or am I rationalizing the splurge?

Wireless broadband options in India

I am looking around for broadband services for my folks in Bangalore. They already have DSL via the state-owned BSNL. But this service is quite unreliable, being disconnected for days at a stretch. Before you draw conclusions about the India and her spotty infrastructure, be aware that this DSL broadband comes for about 5 Euros per month. That is 5 times lesser than comparable DSL in Germany. My way of looking at this is that part of the service offering (the reliability) is traded for the lower costs in India. Off course PPP (purchase power parity) will put 5 Euros in India right around 20 Euros in Berlin, but still, 5 Euros a month is a good deal - after all, people who buy broadband in India are very well off.

So we decided to shop around for cellular broadband services. The reasoning is that if you have a couple of services then at least one should be active at any time. The options are

1. Airtel (USB stick, 3G). Officially works at 115 kbps d/l, actually works at 15-20 kbps according to the salesperson, and costs 10 Euros a month for unlimited service.

2. Reliance (Antenna and coax cable, 3G). Apparently delivers upto 300 kbps, and costs 12 Euros a month for unlimited service. Requires installing an antenna on the rooftop.

I would go with option 2 for home use and option 1 for mobility. My folks have a better idea - just revert to dial-up when the DSL breaks because thats good enough for their need for checking email once a day. Cant argue with that!

Social networks - grade sheet

I found a superb data analysis of the most popular social networking websites that may be interesting for some. The data was pulled from Google Insights and Google Ad Planner.

Look how Twitter is soaring!

Eric Maskin's talk at the Berlin/Brandenberg Academy of Sciences

I had a unique opportunity to attend Eric Maskin's Nobel lecture (re-delivered) at the Berlin/Brandenberg Academy of Sciences. Eric Maskin shared the 2007 Nobel prize in Economic Science with Leonid Hurwicz and Roger Myerson for work in "Mechanism Design". This being my first brush with the topic, I expected a lecture of dense technicalities. I was mistaken.

Eric gave a great introduction to the theory and for once I started thinking of how great it would have been to take one of his classes! The idea of Mechanism Design is creating a set of rules that make selfish players behave in a way to achieve a certain outcome. In classical Game Theory the set of rules (constraints) are already given and then players try to maximize their utility (benefit) by playing by the rules via their self-chosen strategies. In the end, game theorists try to determine the steady state or Nash Equilibrium where no player can benefit by unilaterally changing his strategy.

Mechanism Design is about designing the constraints or set of rules. Eric spoke about things like writing the rules for green house emissions among the countries (the players). He also spoke about the energy sector and gave a simple example of how a mechanism can be designed to satisfy different players while making choices about which energy sources to develop.

Eric started with the brother-sister cake division example - how by letting the brother cut the cake in half and then letting the sister choose the first half the division would be fair. Mechanism Design - my brother and I(re)invented this one when we were 6 ;-) !

The rise of the Netbook

While walking in Media Markt's laptop aisle yesterday I was surprised to see the number of mini laptops (Asus EEPC, Acer Aspire 1, Toshiba netbook etc.) in the €299-500 price range. Interestingly, some of them are being sold like cellphones - with a price tag of just 1 Euro with a 2 year "3G data plan". The data plan costs 37 Euros, and probably gives customers a few GB of bandwidth a month.

So adopters get to carry their *free* netbook and Internet connection anywhere, without paying outrageous Wifi hotspot/hotel Internet charges. Perhaps in a few months this Netbook offer will spur many to switch to 3G Internet and give up on tethered Internet (cable, DSL) entirely. Are we looking at this cannibalization in the next couple of years? Low cost cellphones cannibalized fixed line telephone users. Can netbooks with 3G data plans cannibalize tethered DSL?

It all depends on the service quality of 3G data vs. DSL. Now 3G data can seldom serve more than 100s of kbps versus the multiple mbps of DSL connections. But I hazard that there is a sizeable market segment to whom the mobility (and free netbook) will appeal more than blitzy Internet connections.

Another issue will be the scalability of 3G data - 3G infrastructure has some fundamental bandwidth limits - which make a mass deployment in dense areas problematic. There is LTE, the next generation of cellular wireless networks that promises much more bandwidth, but its deployment is only planned over the next decade. Perhaps mass data demand over wireless will speed things up for LTE (or WiMAX).

The multi-person home tethered service is probably safe from wireless 3G data for now. Splitting 3G bandwidth is certainly possible via Internet sharing or a router that accepts a 3G data card and then wifis the bandwidth to multiple home PCs, but the slow speed will be an issue for demanding applications like online video, gaming, etc. 3G data is still a 'midband' service. Moreover, netbooks are difficult to use with their small screens and cramped keyboards. Presently deployed laptops and desktops are certainly more comfortable (minus their limited mobility).

The Netbooks' rise is absolutely remarkable. A couple of years ago MIT's OLPC project was the seed of the idea to create cheap affordable laptops for school children in developing countries. Then Intel threw in its own school laptop competitor. Asus stole the commercial show with its EEPC 701. Intel's spectacular strategy of creating the low-power Atom processor created a captive netbook market for Intel and allowed for smaller and lighter batteries. Microsoft resurrected Windows XP as the Netbook operating system while Linux provided a free alternative to Windows XP. And then there is the 3G data availability through USB sticks.

It all seems to have come together at the right time.

Pure gold statistics about the Internet

Figure: Internet users by age (Click to enlarge). Reproduced from here

I found an absolutely remarkable report issued by the OECD in the summer of 2008. It has got lots of goodies on OECD Internet usage. Here is the URL

The future of the Internet Economy, a Statistical profile

One graph in the report that was very interesting and it is pasted above. The graph shows OECD countries' Internet usage conditioned on the age-group. It is clear that younger people use the Internet much more than older people.

Now as time progresses the young people will age, and I do not think the young people of today will give up on the Internet as they age. Meanwhile the next generations will be even more Internet savvy than today's youngsters. So the low down is that the next 15-20 years will see a high growth period for OECD Internet broadband demand. There is about 20-30 more years of growth in this space before Internet broadband growth saturates, say, the way Electricity did.

My splintered digital world

I get the feeling that my digital life is divided, unequally, among my email accounts, my phone, my USB stick, my laptop, my desktop, my cameras, my linux workstation, my disks, my backups, my Facebook, my Linked in, my blog, my webpage, my o my o my.

When I first started using the PCs 2 decades ago I had a nice floppy disk to carry my digital data. It fit in, or it was thrown out - great garbage removers those 360kB DSDD disks. Well I am not going to go down the Luddite path here, I am perfectly happy with todays infinite storage. But I am concerned about data splintering. My data is in all these various formats, versions, and names somewhere in various parts of my digital ecospace.

Now not to conclude that I don't have a system to file different things in different directories and the like. But too much information may result in suboptimal storage. For example, I have nicely named and dated folders for my pictures. But when 94 photos of my niece arrive via email it takes precious minutes to download and store each picture. How do I aggregate information quickly and without manual labor?

Algorithmic search presents the next best alternative - just keep everything anywhere and then have your computers crawl abd index the information. But search does not span devices (At least right now). How do I pull up the phone number stored in my home phone's caller ID while sitting at work?

Problems problems problems. Thats great because this means there is a whole lot of work to do in this area. Start-up anyone?