DoCoMo to Feature Google Apps

Japanese wireless provider DoCoMo, which is said to be in the running to sell the Apple iPhone in the Japanese market, also is moving to feature Google applications including search, Gmail, calendar and photo apps, according to "The Nikkei."

DoCoMo is also said to be weighing development of a next-generation handset using Google's Android OS for mobile devices.

It isn't unusual for mobile providers to feature applications on their phones, of course. What is new: making it easy for end users to access mobile-optimized and formatted third-party Web-based apps.

Cbeyond Eyes Pittsburgh: Thank FCC

Pittsburgh is on a short list of new markets Cbeyond now is is reviewing. And the recent Federal Communications Commission decision that several Verizon markets were not yet sufficiently competitive to relax wholesale special access rates (broadband access services such as T1s and DS3s)can be credited, in part, for the interest.

The FCC ruling means Cbeyond can buy T1s at discounted rates, and that's quite helpful for Cbeyond's business model, which typically involves provision of voice and data services to small businesses over one or two T1 lines.

Cbeyond apparently has been considering Pittsburgh for some time but the FCC ruling was pivotal, Cbeyond Vice President and Corporate Counsel Bill Weber says.

"Had that FCC decision gone the other direction, in all likelihood we would have never come to Pittsburgh because it would no longer be possible for us to make money," Weber said.

Cbeyond might not begin operations in Pittsburgh, should it decide to expand there, for as much as two years. Typically a fierce competitor in the small business market everywhere it operates, Cbeyond will run into Comcast in Philadelphia as well as Verizon and other providers.

SME Smart Phone App Gap

As you might expect, 65 percent of heavy smart phone-using small and medium-sized organization associates say access to corporate applications and data anywhere and anytime would most benefit them in their work roles, according to a survey undertaken by the Yankee Group. Smart phone-centric employees generally have jobs that require more remote working and therefore find some value in smart phone technology.

Excluding corporate email, the most-used applications by employees who have smart phones are Web browsing, business
productivity suites such as Microsoft Office, customer relationship management, project management and corporate instant messaging.

However, no more than a quarter of SME employees are using these applications on their smart phone in the office. Also, in most cases, no more than a handful of SME employees are using these smart phone-enabled applications outside the office in work-related venues such as airports and hotels.

Considering only those SME associates whose primary mobile device is a smart phone, material requirements planning and supply chain management applications are top applications.

However, none of the SME employees in the Yankee Group survey in this segment use MRP and SCM applications on their smart phones regardless of workplace venue.

Both MRP and SCM applications are valuable tools for operations-based employees to track flows of raw materials, pre-finished goods and finished goods at various stages in the supply chain and manufacturing process. Non-office use of these applications is stymied today by a lack of mobile-enabled solutions, Yankee Group researchers argue.

Things might be improving. The Apple iPhone helps with Web browsing. User experience for productivity apps is hampered by small screens, formatting issues and device processing power. Salesforce.com helps with CRM, but the need to support multiple IM clients is cumbersome.

The point, Yankee Group analysts say, is that there is lots of room for further refinement of user experience that could boost use of mobile apps by small and mid-sized business associates.

Fairpoint Buy Rejected by Vermont Regulators

Fairpoint Communications, a provider of rural telephone service, has had its bid to buy some rural Verizon landlines rejected by the Vermont state government. Verizon and Fairpoint announced the deal, which consists of 1.6 million landlines in Vermont, Maine and New Hampshire, nearly a year ago.

The deal has also faced opposition from regulators in Maine. The Vermont Public Service Board's decision doesn't terminate the deal, but it forces the companies to reach a new agreement, which could mean lowering the sale price.

It's just another reminder of how much regulators shape and condition the telecom market.

The Trouble with WiMAX

The "trouble" with WiMAX, I've maintained, has nothing to do with performance, or necessarily with network cost. The technology will work. The issue is how and where WiMAX fits in the business environment. In developed markets where lots of competition already exists, the issue is figuring out where WiMAX plays in the applications environment. As a fixed alternative to cable modem, fiber-to-customer or Digital Subscriber Line services, the issue is how big a market exists. As a mobile broadband platform, the issue is how it competes with 3G networks and Long Term Evolution, the GSM-based fourth generation network alternative.

There's less contention in rural areas or less-developed broadband environments. Where it is too expensive to deploy a terrestrial broadband network, WiMAX has a clear logic. Even there, though, there might be questions about how more-established mobile voice and 3G networks factor into the competitive equation. One certainly can argue that WiMAX will provide much more bandwidth than 3G, today. The issue is how long it will take to create robust revenue models for 3G services, let alone providing those services more effectively over a faster 4G network.

It is, in short, a business issue, not a technology issue. To be sure, one can argue that a new market for broadband-enabled devices other than mobile phones is coming to fruition. But the issue there remains whether WiMAX necessarily or primarily provides access to those devices in ways that 3G cannot, let alone 4G. One might argue that WiMAX has a shot at providing access to all kinds of consumer devices other than "phones." But one might also argue that such connectivity has to be much cheaper than anything we've seen so far.

WiMAX networks might be half as costly as a 3G network to build. But that's not enough. They also have to be less than half as costly to operate, or prices won't be low enough to entice users to pay for connections to cameras, music players, game or entertainment platforms, for example. Those functions also are enabled on 3G networks, in many cases, combining the text and voice functions with the very services WiMAX might enable.

WiMAX might not prove to have the market traction its supporters hope for, in other words, at least in developed broadband markets where there is robust competition from cable modem, DSL, fiber to home, 3G mobile, fixed wireless, Wi-Fi hotspot and satellite broadband alternatives. The difference could come if WiMAX becomes the mobile provider 4G platform or if mobile WiMAX access is priced well below current mobile rates, allowing customers to access enable more devices than they now do.

It is not unthinkable for users to consider simultaneous broadband subscriptions. But it does require a more-compelling value/price relationship. We can assume standard-issue mobile phones, increasingly of the "smart" variety and optimized for Web experiences. We also can assume greater penetration of wireless data cards to support notebook PC use in nomadic fashion. What is not yet clear is the potential demand for broadband-connected music players, cameras, game players, dedicated navigation devices or video players. How many different subscriptions are users willing to pay for?

There is some thinking that WiMAX will be used especially heavily by mobile PC customers, as WiMAX is seen as powering a good chunk of the access card business.

“In 2010, the forecasted WiMAX subscriptions in North America will represent two percent of that for mobile 2.5G/3G and 66 percent of the subscriptions for mobile data cards,” say Philip Marshall, Yankee Group vice president, and Tara Howard, Yankee Group analyst.

Yankee Group estimates the number of WiMAX subscribers will increase from 1.3 million to 7.8 million between 2006 and 2011 and that in 2011, 7 million subscribers will be using 802.16e technology. Some percentage of that use will be for fixed broadband access, of course.

Assume such forecasts are correct. The percentage of WiMAX subscribers relative to residential broadband subscribers in the North American market then will increase from 2.2 percent to 7.4 percent between 2006 and 2010. Whatever else one might say about this level of adoption, it certainly doesn’t represent some sort of full-blown challenge to cable modem, DSL or fiber-to-customer access technologies. In fact, WiMAX, if it is adopted as Yankee Group researchers now forecast, will be yet another ancillary or niche form of broadband access.

So in mature markets, the major upside opportunity for WiMAX is expected with mobile personal broadband services, with fixed and portable services gaining moderate early market traction. In some Asian markets, such as Korea, it is conceivable that WiMAX-based mobile broadband could succeed, despite the existence of robust 3G and mobile video alternatives.

Still, the ultimate role of WiMAX in the wireless market is debatable, says a recent Organization for Economic Cooperation and Development report. “Large supporters such as Intel have a vision that WiMAX will change the way we all access the Internet in a matter of years,” says the report.

“Detractors claim that the economics of large-scale WiMAX networks are simply not justified,” the OECD report suggests.

Mobile WiMAX technologies may have the most profound impact in some urban areas because they could fill a connectivity void between 3G data networks and Wi-Fi, though.

Ultimately, this will not be a matter of technology, but of commercial issues and creation of new niches. It's hard to see GSM mobile operators going with WiMAX as a full-blown replacement for 3G, when LTE is coming. And it isn't simply a matter of technical performance. Smooth migration paths are important for large carriers. WiMAX might be too abrupt a transition for many. That might not be the case in undeveloped broadband markets, where a fixed broadband capability is reason enough to deploy it. Mobile broadband is a tougher matter, though.

Right and Wrong, But for the Wrong Reasons

In its story on "Technology in 2008," The Economist makes three predictions, one that will not happen in 2008, one of which could--but won't--happen and one which already happened. The three:
1. surfing will slow
2. surfing will go mobile
3. networks will go open

Oddly, the article predicts the Internet will clog because of spam. The article also says access pipes operate "symmetrically." If only it were so! The article is more apt when it says user-generated content, especially of the video sort, will stress the networks. "Gridlock" is the prediction. But it won't happen. Pipes are being upgraded and "reasonable use" policies are going to change. Traffic shaping is coming and access pipes are getting bigger. "Surfing" isn't going to slow.

The article is correct in noting that wireless access is coming. But the article implies that it is the 700-MHz auctions that will drive the change. Keep in mind, these are predictions for 2008. There is no way any new network using 700-MHz spectrum is going to be operating in 2008. And the tier one mobile providers are doing everything they can to convince more users to buy data access plans, with modest success so far. It's coming, no doubt about it. But it's been coming for years.

Use of data cards, browsing plans and email access plans will grow incrementally, and at a faster rate, to be sure. But there's no "big bang" coming in 2008. The trend began years ago.

In predicting that we'll see more "openness" in mobile networks, the article is on track. Perhaps the article focuses a bit too much on open operating systems and not enough on unlocked phones and access, but of the three predictions, this one is most nearly correct. But a new operating open network in the U.S. market at 700 MHz, in 2008. Absolutely no way.

Web services are going mobile and open, no doubt. But neither trend is specific to 2008.

Motorola Details WiMAX Progress

Motorola says it increased to 15 the number of contracts for commercial WiMAX networks and demonstrated the historic first live mobile WiMAX 802.16e handoffs between continuous WiMAX cells supporting voice, data and multimedia applications during WiMAX World USA in Chicago.

The company also increased to more than 57 the number of WiMAX engagements in 38 countries worldwide, including 44 active trials.

Motorola says it is on track to support the Sprint Xohm soft launch in Chicago by year end 2007 and is on schedule with deployment for the planned commercial launch in the second quarter 2008.

The company also says it has completed the deployment of the first 802.16e commercial WiMAX network in Pakistan for Wateen Telecom and has completed the first phase deployment of two additional commercial WiMAX systems in France and Germany.

Senza Fili Consulting says WiMAX is due for some growth.

Is VoIP Significant?

Some years ago, many observers were convinced VoIP would be "disruptive" to the global telecommunications industry. There's much less certainty now. In fact, one might ask: is VoIP mostly a better way to do voice, or just a new way? Mobile clearly is a new way, and might be disruptive in many ways. So is VoIP. But "different" isn't the same thing as "disruptive."

The global industry made a transition from analog to digital switching, as it earlier made a transition from mechanical to electronic switches. New services and efficiencies were gained in each of these transitions. But one can question whether the differences were transformational.

Likewise, most of the U.S. competitive local exchange carrier industry thought it was doing something revolutionary in buying its own Class 5 switches to compete with incumbents. As it turns out, that wasn't hugely disruptive.

These days, most tier one carriers earn only about 20 percent of total revenues from consumer voice, and not significantly higher percentages even if enterprise voice is included in the total.

The point is that "voice," though still hugely important as an end-user value, is less and less the revenue driver for the global industry. So VoIP is in many ways a much-better way to use voice, but such a smaller part of total revenues that it cannot strategically change industry dynamics, one way or the other, so long as a transition away from reliance on voice revenues is predictable.

There are precedents for that as well. Long distance revenues have been declining, in terms of revenue per minute, if not volume, for decades. But the industry had time to transition away from long distance as a driver of profits.

At this point, it certainly looks as though VoIP is more nearly the latest enhancement to basic voice, rather than a disruption. If anything, it is mobile that represents the big "disruption."

at&t Says It Will Provide CDN Services

Earlier this year Level 3 caused a stir when it said it would enter the content delivery network (CDN) market with a radical pricing model: essentially offering the quality of service features at no incremental cost to what customers expect to pay for simple IP transit. And if you think about it, that's precisely what a CDN does: provide QoS features on top of dumb pipe. All of which should have, and did, raise fears about the health of the CDN market.

After all, if a contestant says it will give customers for free, what they today pay for, that's disruptive. Most recently, at&t itself said it was getting into the CDN business as well. Which should have caused another shudder: remember Northpoint, Rhythms Netconnections and Covad? They were the three independent providers in the nascent Digital Subscriber Line broadband access market. Of course, when the incumbent telcos decided broadband access was a business they had to "own," they simply moved to do that.

So are Level 3 and at&t a threat to market-leader Akamai? Right now it's hard to say much, beyond the obvious fact that competition is increasing in the space. One issue could ultimately be the size of the market opportunity, the reason for that being that a smallish market will favor specialists, while a large market will favor the larger telcos.

And it is not necessarily simply because scale economies might kick in. It is more a matter that large telcos tend not to do well in market segments that are small. Small markets never get the attention they might deserve in a large organization. So unless the market gets fairly sizable, a large telco simply will not invest enough to keep pace with smaller specialists.

So how big is the market today? As it turns out, that's a guesstimate of sorts.

Some things are hard to count. Unified communications software is an example. People who track these things like concrete measures: ports, servers, licenses sold. So how do you track "presence" features that simply are embedded in the basic functionality of an IP PBX?

Other markets aren't quite that hard to track, but still are fuzzy because mutltiple revenue categories get lumped together in the reporting. Streaming media services, as distinct from application acceleration, provides an example of that sort.

Dan Rayburn,StreamingMedia.com EVP, provides a reasonable way of current approaching the U.S. market size, though. Working backwards from benchmarks, Rayburn suggests the market for CDN services (but not P2P apps) currently is less than $800 million.

Internap's 2007 revenue is about $24 million. Limelight Networks generated about $105 million for 2007 and about $95 million of that was earned in the U.S. market.

Akamai probably generates $400 million to $450 million of its $625 million total revenue comes from their CDN services. Rayburn further guesses that U.S. CDN revenues amount to $300 million.

Level 3 wasn't in the market for much of the year, but might have earned $2 million or so.

VeriSign might have earned about $8 million for the year in the U.S. market.

Mirror Image, CacheLogic, Panther Express, CacheFly and Advection.NET taken together will do about $20 million in the U.S. market.

EdgeCast, CDNetworks and BitGravity combined did about $5 million for the year. Again, these are new services that didn't have a full year of operation to measure.

PEER 1, NaviSite and Ignite Technologies together collectively generated about $8 million.

All other smaller regional service providers providing small and medium sized businesses outsourced video delivery services sold under $20 million in 2007.

Can iPhone Overtake BlackBerry??

Now that I've had a chance to look at Research in Motion's most recent quarterly results, which were robust, one can make a comparison between what RIM did, and what 9to5mac.com expects Apple to announce it has done. Namely, 9to5mac.com expects Apple to announce sales of five million iPhones in February.

RIM sold 3.9 million Blackberries in its most recent quarter across more than 100 carriers and 13 product lines. It isn't an apples-to-apples comparison. The two companies have different quarterly "endings," RIM finishing Dec. 1 and Apple Dec. 31.

Plus, it isn't clear what time period the five million iPhones were sold over. 9to5mac.com does not indicate a belief that all five million were sold in one quarter, and one suspects that isn't the case. Make it 3.5 million or so devices in the quarter.

What is interesting is how well Apple would have done, should it report anything like five million devices over even two quarters, given its early status in the market.

Apple has been selling one model of a GSM iPhone in four countries with just four carrier partners; while RIM, with a huge head start, is sold by more than 100 carriers, and features 13 different product lines.

Firefox Goes Cloud Computing

Firefox has taken a step towards cloud computing by releasing the first version of Weave, a way to blend of the desktop and the Web through deeper integration of the browser with online services.

Basically, Weave pushes browser metadata (bookmarks, history, customizations into the cloud so it can be retrieved and used on any machine. The metadata is transparently reflected everywhere an individual gets online. Weave also will provide a basic framework for easily sharing and delegating access to this metadata to friends, family and third-parties. And it's a Mozilla product so there will application program interfaces for developers.

Mozilla intends to provide the infrastructure and an consistent model for how a user can open up their browser metadata to friends and third-party applications.

Bye Bye TDMA

at&t Wireless and Alltel finally are shutting down their old analog and first-generation cellular (TDMA) networks in February 2008. Verizon Wireless says on its Web site that it will retire its analog network on Feb. 18, 2008, and will not provide analog service after that date.

Almost nobody will notice. The carriers say a million phones out of 250 million in use might be affected. No phone capable of text messaging uses analog technology. No Sprint or T-Mobile phones use analog, either.

Carriers have been telling analog customers about the shutdown and offering them new digital service plans and phones, so it isn't clear that any active users will experience issues. There might be some "phones sitting in drawers" that users keep around for emergency 911 calling, without plans, that could be affected.

But at&t, which had the largest number of analog customers at one time, has been phasing analog out since 2001, and with the high rates of phone replacement, can't still be supporting many users on the older system.

Separately from the analog shutdown, Alltel and AT&T will finish phasing out networks that use a first-generation digital technology known as D-AMPS or TDMA (for Time Division Multiple Access).

Google Growth Uneven

Some observers caution that Google is over-estimated where it comes to innovation. "Not everything Google does succeeds," that line of thinking goes. And of course that is quite correct. Lots of things Google has done have not been runaway successes. Some initiatives have failed, plain and simple. GTalk hasn't caught on, and Google bought YouTube because Google's home-grown video site wasn't getting traction.

Perhaps the implication is that potential competitors shouldn't fear Google as much as they seem to, as Google fails often enough. Perhaps the other way to look at matters is the frequency with which Google does, in fact, succeed, compared to the number of attempts. And given the number of attempts, the more Google fails, the more it will discover things that work.

Sure, Google seems to go off on tangents now and then. Google defends these explorations as attempts to find other really big businesses. Maybe. And maybe Google just goes off on tangents now and then. Either way, the attempt to start new things is going to lead to lots of failures, if Google tries enough new things. Some of us might argue that is precisely what makes Google so fearsome: it innovates so fast for a firm its size.

Still, the observation that Google does not succeed with much of anything outside of search might be premature. Even "search" took a while to catch on. So, no, Google does not immediately dominate "every" market or segment it enters. It experiments. It fails. If it succeeds 10 percent of the time, and fails often enough, it just might discover some significant-sized new businesses.

Christmas Humor

MEMO: December 1st
TO: ALL EMPLOYEES

I'm happy to inform you that the company Christmas Party will take place
on December 23rd at Luigi's Open Pit Barbecue.
There will be lots of spiked eggnog and a small band playing traditional
carols... feel free to sing along.
And don't be surprised if our CEO shows up dressed as Santa Claus to
light the Christmas tree!
Exchange of gifts among employees can be done at that time; however, no
gift should be over $10.
Merry Christmas to you, and your family.
Patty Lewis, Human Resources Director


MEMO: December 2nd
TO: ALL EMPLOYEES

In no way was yesterday's memo intended to exclude our Jewish employees.
We recognize that Hanukkah is an important holiday that often coincides
with Christmas (though unfortunately not this year). However, from now
on, we're calling it our "Holiday Party."
The same policy applies to employees who are celebrating Kwanzaa at this
time.
There will be no Christmas tree and no Christmas carols sung.
Happy Holidays to you, and your family.
Patty Lewis, Human Resources Director
MEMO: December 3rd
TO: ALL EMPLOYEES

Regarding the anonymous note I received from a member of Alcoholics
Anonymous requesting a non-drinking table, I'm happy to accommodate this
request, but, don't forget, if I put a sign on the table that reads, "AA
Only," you won't be anonymous anymore.
In addition, forget about the gifts exchange -- no gifts will be allowed
since the union members feel that $10 is too much money.
Happy Holidays to you, and your family.
Patty Lewis, Human Researchers Director


MEMO: December 7th
TO: ALL EMPLOYEES

I've arranged for members of Overeaters Anonymous to sit farthest from
the dessert buffet and pregnant women closest to the restrooms.
Gays are allowed to sit with each other.
Lesbians do not have to sit with the gay men; each will have their own table.
Yes, there will be a flower arrangement for the gay men's table.
Happy now!?
Patty Lewis, Human Racehorses Director

MEMO: December 9th
TO: ALL EMPLOYEES

People, people! -- Nothing sinister was intended by wanting our CEO to
play Santa Claus!
Even if the anagram of "Santa" does happen to be "Satan," there is no
evil connotation to our own "little man in a red suit."
Patty Lewis, Human Rat Race Director

MEMO: December 10th
TO: ALL EMPLOYEES

Vegetarians -- I've had it with you people! We're going to hold this
party at Luigi's Open Pit whether you like it or not, you can just sit
at the table farthest from the "grill of death," as you put it, and
you'll get salad bar only, including hydroponic tomatoes. But, you know
tomatoes have feelings, too. They scream when you slice them. I've heard
them scream.
I'm hearing them right now... Ha!
I hope you all have a rotten holiday! Drive drunk and die, you hear me?!
The ***** from Hell

MEMO: December 14th
TO: ALL EMPLOYEES

I'm sure I speak for all of us in wishing Patty Lewis a speedy recovery
from her stress-related illness. I'll continue to forward your cards to
her at the sanitarium. In the meantime, management has decided to cancel
our Holiday Party and give everyone the afternoon of the 23rd off with
full pay.
Happy Holidays.
Terri Bishop, Acting Human Resources Director

IBM Blue Cloud: Internet Style Data Centers

IBM’s Blue Cloud is a platform for cloud-based computing, expected to be available to customers in the spring of 2008, supporting systems with Power and x86 processors.

“Blue Cloud" will allow corporate data centers to operate more like the Internet, enabling computing across a distributed, globally accessible fabric of resources, rather than on local machines or remote server farms.

It is, along with Amazon's Elastic Compute Cloud, a seminal step towards network-based computing architectures. Sun Microsystems was ahead of its time in declaring that the "network is the computer." But cloud computing is going to fulfill the prediction.

Call it "software as a service" if you like. The point is that we are nearing an era where resources will be invoked from the computing cloud using a Web browser. Policies still will be needed to authorize use of specific resources, to be sure. But the larger point is that computing, storage and application resources will reside "in the cloud," and be invoked as required by users at the edge of the cloud.

There are all sorts of practical advantages. Distributed or mobile workers can simply invoke their services and information from where they are, using a standard Web browser. Everyone always will have the latest version, the latest patch, the latest version or update.

Computationally intense activities can be handled by clusters of machines designed for such intensity. Storage can be invoked, not carried; used rather than built.

If a developer needs expensive resources, they can be gotten on a sort of "time shared" basis, rather than on a "build your own computing center" basis.

Blue Cloud will be based on open standards and open source software supported by IBM software, systems technology and services.

The interesting speculation is about how cloud computing might change the way enterprises think about their application and storage architectures. Given the massive increase in the scale of IT environments, one wonders how they'll assess the trade-offs between "building data centers" and "renting reources."

Up to this point, the enterprise data center has been the penultimate computing resource. Might the "cloud" surpass even local and networked data centers?