Tag Archives: business

3g + tethering = $10 more a month? I don’t think so.

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I hate to rain on Gary’s parade, but the idea of dishing out another ten bucks a month to tether my laptop to my iPhone just sounds silly to me.  Maybe that’s because I read WAY between the lines.  Or, maybe it’s because I’m cheap.

Anyway, the iPhone tax is high enough as it is.  You’re in it for $100/month just to own an iPhone. This is why the non-nerdy don’t buy data plans.  But imagine the economy of scale if unlimited 3G was 50% less expensive per subscriber.  Even if AT&T can’t do that, the fact that you can’t tether your iPhone is disappointing to begin with.  Tethering should be an out of the box feature.

After all, you’re saying, when you buy an iPhone, “Hey, AT&T, I know you’re a giant customer-shafting carrier [a totally legit business model in this day and age], but I’m going to go along with your smelly customer-reviling existence because it’s the only way I can get my grubby hands on an iPhone without doing questionable things. Please, please, how about letting me tether?  It’s not like I’m going to use more simultaneous bandwidth on my laptop than I do on the iPhone by itself.”

To which AT&T replies, “No, no, no.  See, we can get $120 more bucks a year from you.”

How appropriate a thing for a big telco to say.  Reminds me of the carriers saying you can’t use a broaband router and multiple PCs on a DSL line a few years back.

I.T. outsourcing as a means of dealing with economic difficulties

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From the Best Technology e-mail newsletter, dated today:

With another difficult year behind our region, northeast Ohio is facing a crossroads of challenging business conditions.  Our industrial identity is up in the air, our regional infrastructure is behind much of the country, and our I.T. costs are higher than they ought to be. Yet, there’s never been a better time to trim technology budgets.

The incentive to outsource role-based personnel and I.T. management positions is very high right now.  Here are four reasons why:

1. I.T. employees, some of whom may be “coasting along” during a downturn, often get less work done than consultants, whose ability to earn is based on their work deliverables instead of upon their employment relationship, which is difficult and expensive to sever.  Retaining consulting staff can gain you more value.

2. I.T. employees, especially network administrators and systems support personnel, rarely offer the rich knowledge and expertise of a consulting organization.  When you work with a consultant, you are drawing on the expertise of many.  Moreover, before you ask your I.T. employee to complete a project for your company, consider that a consultant has probably already completed that same project many times before, while this may be your I.T. employee’s first attempt at it.   A consultant can work with your I.T. employees to manage the project through to satisfaction–completing the project, reducing waste, and improving your I.T. employees.

3. Consulting with a third-party reduces your tax liability. As an expense item, I.T. consulting does not incur the same tax burden as an I.T. employee (payroll tax). There’s no sales or use tax associated with I.T. consulting, either.

4. The number of I.T. staff required to support your technology users has shrunk drastically in the last several years, do to improvements in software stability and a more knowledgeable user base.  If you have a single I.T. employee or a small group, which is doing both end-user helpdesk support AND networking support, it is very likely that a consulting organization can reduce your expense and increase the level of service experienced by your users.

Newspaper doomsayers not looking at the full picture

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After reading some posts at the Atlantic and Slate about the impending doom of the newspaper industry, and specifically the ostensibly ill-fated New York Times, I feel I’ve got to come to the defense of the newspaper.

As these two pieces have approached it, you’d think the newspaper, and print media in general, have no merit at all when compared to the web.  But this is arguably not true, and a gross simplification of a more complex problem. Sadly, the people who’ve argued the web allows cheaper, faster, more demographically-appealing news coverage are right. But, because they look at consumer trends alone, they’re wrong about the roots of the problem facing papers today.

That is, the web isn’t killing papers with its competitive advantages. The web is killing papers by beating them over the head with their own cockiness. First, newspapers they’re always the purest, best source for news–and this is sometimes true, but more because of the deep pockets of paper financiers than because newspapers employ English majors and journalism grads. To say you need more than a sense of fairness, a knack for clarity, and a smidge of brevity to succeed in the reporting business is only a partial truth: but the flip-side of this expression, the one that says only nimrods work for online outlets, is false. Newspapers employ good purveyors of the written word, and so do web sites.

But the thing that’s killing newspapers right now isn’t a disparity in newsmaking power: In fact, they can get the news to their web sites as fast, or faster, than the most well-informed blog or Slate.  Actually the real problem in the paper business lies in the dimishing value of print advertising to potential advertisers.  The web has a near-zero production cost when compared to the composing costs of a newspaper. This means advertisers aren’t required to spend as much money on the web to get the same mind share in return, at least in theory.

Furthermore, content management techniques on the web outstrip any current CM thinking in the print periodical industry.  The web is a cheaper, faster output mechanism that doesn’t require QuarkXpress or InDesign labor, doesn’t require expensive inks and press upkeep, and doesn’t impose a diesel bill for distribution. Yet these issues alone don’t undermine the success of the newspaper. Remember, newspapers still think they are all-in better than web sites.  Cockiness is at the heart of the matter.

The web also empowers the news preferences of the consumer, something newspapers have struggled with. Lifestyle nonsense doesn’t matter to the guy who wants the business section and real estate doesn’t matter to the single twenty-one year-old.  The web solves this by putting the end-user in command of his news consumption preferences. Of course, it does so at the expense of the tactile pleasure of handling and reading the news from the printed page. While sentimental, this can’t be over-valued.

That said, it’s easy to pick on papers because of what the’re bad at. But there are still free rags that turn a profit.  And there are still monthlies that turn a profit. I write for several of them. There are also small-market dailies that break even or make a small profit by concentrating on the news that is hyperlocal in nature: high school sports, local arts, and the like.

But if the Times and the small-market news shop alike are going to be in business in 10 years, it’s going to have to be online.  The boomers will start dying and the diminishing value of print advertising will so burden the print industry that the web will be, for some shops, their only option.

Hopefully, my friends in the print industry recognize this long enough before it happens that survival is still an option.  The newspaper industry must first recognize that classified advertising is not the model of the future but of the past.  Paying $40 for something you can do on EBay or Craig’s List isn’t going to work any more.  Moreover, display advertising can continue to work but only if newspapers learn how to subsidize print production costs using the web. This is a difficult proposition at best, since the web itself has no physical production costs to speak of.

Newspapers: here are your keys to survival.  1. Keep it local. 2. Play the web game and learn how commerce works online. Classified advertising is a dying ilk.  3. If print production and daily delivery remain close to profitable, find out who your customers are. If they’re over 50, by and large, it’s time to move online for good.

I hate to say it. I really do.

Amiga should do iPhone apps

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At long last, Jay Miner‘s once-mindblowing Amiga platform has devolved over the decades into a company that creates simple games for mobile phones and handhelds.  With Google capitalizing on the current Amiga ownership’s vision of making an OS that runs on everything (ie. Android), Amiga should recognize that it’s too late to play the platform game and whole-heartedly embrace a market with fewer risks, and fewer rewards: iPhone apps.  I would definitely play an Amiga-style game like Shadow of the Beast on my iPhone, and without unlocking, to boot.  Does anybody at Cloanto have a UAE build ready for the iPhone?  I know you can do it with a jailbroken iPhone, but there’s a decent business opportunity to sell Amiga games to the iPhone masses. The toughest part–pick the right game to convert.

Those with VoIP’s blood on their hands…

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The blogosphere, at least around my blogroll, has had an amazing bout of introspection over the last several days.  First, we had well-informed pal Alec Saunders declaring VoIP dead, in a manner of speaking.  Perhaps in reality, the death of VoIP is symbolic of a passage from the top-of-mind, as Ken Camp, a VoIP knowledge pioneer, pointed out by calling VoIP “plumbing”.  It’s not the exciting thing it used to be.

I mean, do you know anybody who gets hot and bothered about plumbing?

Jeff Pulver, whose own motions to transform his flagship VON expo and publishing operation into a “more than voice” effort seemed to indicate, two years ago, that VoIP has lost its sex appeal.

Is that death? Maybe not, but in this neck of the woods, something is dead when people quit talking about it.  Here in Cleveland, nobody was ever really talking about VoIP, except the partial players like Cisco VARs, and even they had to be careful not to call it “VoIP”.

Interestingly, there’s an obvious correlation between this death and Om Malik’s rant about the pigsty of mediocrity in which the U.S. business world now sits.  This is the best piece Om has EVER written, no question.  And it has almost nothing to do with VoIP technology. Instead, it deals with today’s craptacularly perfect storm of of crummy debt, bad business decisions, over-reaching government and under-achieving American companies.

The mediocrity and “it’s good enough” attitude has been at the heart of VoIP disappearing from the excitement radar.  Early pure-plays didn’t innovate useful services when the window of opportunity was open. Vonage didn’t offer an open soft phone, just as Skype never made a SIP proxy available to their users. Two huge mistakes.  But there’s more.

The cable companies insisted on bundling data, TV, and phone service, and then didn’t differentiate their phone service from that of the existing LECs.  So, not only couldn’t you get dedicated data service and choose your own voice provider, but you also got stuck with substandard phone service to boot.

Equipment makers insisted on asinine licensing structures (are you reading this, Cisco and Avaya?) for the privilege of using their “good enough” solutions, while scrappy, VoIP-only startups were sidelined by the general lack of decent broadband access.

It’s like all the elements of the telecom industry revolution were there–just at the wrong times. Broadband became pervasive, and just as it was getting unbundled (thanks Congress), the competing network operators went belly up, so ASPs and hosted voice providers, having sunk millions and millions into excellent new offerings, had no way to get their services to the masses.

Those that did survive did so because some insider bank gave them a loan to keep the engine running just a little longer, and then a little longer, and then a little longer. And when banker keeps pumping non-revenue dollars into out a cash-losing business, the banker eventually comes for his money. When the banker can’t collect, the treasury secretary buys his debt.  When the treasury secretary loses all his money, he prints more.

Then, suddenly, a gallon of milk costs $20.

That’s mediocrity from start to finish.

My Favorite VoIP & Telecom Blogs for 2008

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(Or, ten folks whose blogs I should’ve post more comments on in 2008.)

10. Darla Mack.  If you’re a Nokia nut, there’s no better destination.  The self-proclaimed “mobile diva”, Darla tries just about everything with her Nokia phones.

9. Rich Tehrani. The brawn and brains of TMC, Rich has been in the industry as long as any of us, and his blog is a great mix of gadget news and insider industry info.

8. Alec Saunders.  Alec’s in the trenches daily as a VoIP visionary (he declared VoIP dead this morning) and application developer, so he’s usually weeks or months ahead of trends.

7. Om Malik and his band of creative cohorts. It’s pretty hard to ignore the guy that breaks just about every telecom industry rumor 24 hours before it turns into news.  Some of his underling’s stories are habitually wacky (obsessed with all this overstated carbon economy BS, for example), but generally,
Om’s is one of the best blogs around.

6. Ken Camp and Sheryl Breuker.  I’ve been in the Ken Camp camp for years now. Now that Sheryl’s on board with Mr. Camp, they’ve begun leading the way in a movement I expect will become the norm in 2009: VoIP people concentrating on social applications instead of VoIP.  That’s my plan anyway, so I’ll be keeping tabs on Ken and Sheryl.

5. Esme Vos.  No longer the lone female in my list (thanks to Darla and Sheryl), Esme is primarily known as a event/expo organizer who concentrates on municipal WiFi, having founded the MuniWireless expos. But she’s got something to say about software, Apple, Nokia, publishing, and a bunch of other stuff I care about.

4. Andy Abramson. A keen observer and predicter, and a new media relations specialist by day, Andy has more contacts than any two other people.

3. Phone Boy.  Dameon “Phone Boy” Welch-Abernathy: the only guy I know with a name longer than my own.  His blogging habit is better than mine, too.   He mainly blogs about gadgets, Nokia stuff, and social networking.

2. Jeff Pulver. Like Camp, Breuker, and others, Pulver is leading the retreat from VoIP charge to social media through video and social web applications.  I love reading Jeff’s blog. He posts a ton of photos and track logs.

1. Martin Geddes.  He doesn’t post often, but it’s always worth the read.  Also, this guy pulls no punches. Just as I aspire never to do, Martin Geddes never sets off the the bullshit detector.

Freeing Middle America from Tech Hostage Status, One Little Town at a Time

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When I started my company, I used to jab that I was “bringing Silicon Valley thinking to my own backyard”, which, at the moment, is Lorain County, OH.   My firm, Best Technology, has its office in the county seat and the crown jewel of Lorain County (ask anybody) is a community college called LCCC.

The county seat, and home of the college, is the City of Elyria, and tonight I attended a council meeting during which the 11 council members were deciding whether or not to establish an official I.T. Dept. and increase the number of I.T. staffers from 2 to 7.  Of course, the city is also considering Police and Fire layoffs, so this issue is a natural hot potato.

The vote came up to tonight on Council’s agenda.  So I donned my best charcoal grey suit and purple tie, jotted down five pages of notes assembled from the talks I’ve had with various councilmembers and the city’s two I.T. managers over the last six months, and addressed council in a speech that went 6 minutes over my allotted time.

In my pleading, I wanted to know: where did they come up with 7 staffers as the ideal?

The Mayor responded by telling me, and all present, that the software consultant ACS, a Minneapolis-based firm that specializes in municipal line of business ware, was instrumental in coming up with the 7 number, and so, apparently, was the college. OK.  Free consulting MUST be superior.

The city wants to hire a full-time web developer to work on its 5 web sites–again, while considering laying off public safety officials. The Police Chief was on hand, glock-in-holster, to let Council know that he could cut nothing except people at this point, if asked to shrink his budget.

Haven’t these guys ever heard of WordPress?  It’s pretty hard to justify a $80k guy when you can get a consultant to do a Parks and Rec template on Joomla for a grand or less.  Not that I would take that sort of work.  But here’s where it got fun:  when I dropped the term, “content management”, I could just FEEL the wind getting sucked out of the room. Nobody had the faintest clue what I was talking about.

And then it dawned on me. Municipalities like Elyria have been left behind.  Little midwestern towns have been convinced that I.T. is what it was 30 years ago: expensive, inflexible, and inaccessible to people with more than 5 grey hairs on their heads.

Another local municipality, North Ridgeville, also in Lorain County, which runs its servers on a certain formerly-dominent networking product that now runs only on Linux, just can’t justify putting out the money to go with Windows and Active Directory, despite 95% of the world having moved to Windows Server some years ago.

How in the bloody heck will I ever be able broach the subject of VoIP with these guys?

These organizations are Tech Hostages, made inept and held to zero progress because their decision makers are committees that spend 39 minutes reading identical ordinance description over and over and over with a chairman saying “first reading” after each iteration.  It’s like listening to paint dry.  No, it’s worse.  I’m very much a democracy supporter, but if we can’t get these folks to innovate in the democratic process, how can we expect them to use technology more fervently, more effectively?

That, dear friends, is the job of Ted Wallingford.  Convince the Midwest that, at least when it comes to the silicon part, it’s OK to emulate Silicon Valley.

Heartburn Chuckle: The telecom industry can blame itself

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As pal Om Malik writes this weekend about the layoff woes at Alcatel-Lucent and the delisting danger at Nortel, many of us in the industry are experience what I call the “Heartburn Chuckle”.  Or, as I try to put an ironic spin on Jeff Pulver’s famous Purple Minutes expression by calling negative achievements in the telecom industry as “Brown Minutes”, I can’t help but laugh at how empty the promise of unified communications has turned out to be.

This is Brown Minutes and the Heartburn Chuckle all wrapped together. But I can tell you why this telecom crash is occuring. Remember, once an industry is scaled to its max, like the telecom industry, the only way to succeed is to generate profit through new innovations. Merely recycling established ideas with different pricing and bundles may be good for short-term cash grabs but has little to do with the sustainability of long-term profit.  Just ask Yahoo. They’re dying because of that axiom right now.

The Manufacturers

Companies like Cisco and Nortel have done too little to move the VoIP revolution beyond the customer’s demarc, while tradeshow talks about SIP trunking and a spirit of cooperation in using the Internet to replace the PSTN have all been hollow talk designed to please the audience of the day.  True, end-to-end VoIP still isn’t reality unless you’re willing to sit in front of your PC and run Skype.   To say Skype carried out the VoIP vision more successfully than Cisco and Nortel ought to be greatly humbing to those companies, but it’s really true.  Skype got it.  Cisco, Nortel, and Avaya didn’t.

The big manufacturers continue to be the only powers with enough leverage to move the carrier giants away from circuit-switched technology, yet the manufacturer’s own uncertainties about recooping licensing fees and retaining customer-base (through lock-in rather than innovation) have scared them away from issuing the carriers a real challenge: build an all-IP global voice network or we will.

The Carriers

The carriers are firms like AT&T, Windstream, Verizon, BT, and so on.  Their obsession with the billing unit (the almighty minute) has made them helpless to see the possibilities of a software-rich, application-based global ecosystem.  Consequently, the most successful apps to arrive on the carriers’ networks, the ones most embraced by the public, overwhelmingly have one purpose: to steal billable minutes from the carriers. The innovation disappeared and the scrappy new players in the market, the ones with the power to transform the public’s thinking about telecom, instead got stuck doing the same old thing the big telecoms do to put bread on the table: bill minutes.

The Government

In the United States, deregulation under President Clinton in the Telecom Act of 1996 went in all the wrong directions and didn’t do enough to create entrepreneurial freedom in telecom. It failed to recognize that the Internet was going to eclipse the PSTN in terms of consumer participation, and as a result, it positioned the carriers to remain in their highly subsidized comfort zone.

Further mistakes were made when the FCC became distracted by lobbying for Network Neutrality legislation. As with many things, the passage of time revealed that Netnoot was a solution in search of a problem, more often than not.  Apparently nobody at the FCC realized that the free market would provide for the needs of consumers who didn’t want to participate in a 93-octane Internet.  So the FCC spent a lot of time looking at issues that were overstated and geared to bolster the chances of a few admittedly excellent Silicon Valley content startups who didn’t want to get choked out by the carriers.

Shame on us for not recognizing that the carriers are too inept to succeed in the content business anyway. And shame on the FCC for wasting all that energy when they should’ve been looking at ways to encourage greater adoption of end-to-end IP technology.

The Conclusion

So, when you have three willing participants in a massacre, you get a massacre.  The three power players in our industry–boxmakers, regulators, and networkers–are playing the same tune.  Protect revenue by doing nothing. The fruits of that labor are now obvious.  Like the automotive industry, which has a frighteningly similar situation on its hands, the answer now is the same as ten years ago: innovation.  Put on those thinking caps, MIT grads and garage tinkerers. We’ve got an even bigger hole to think our way out of now.