Try Explaining "Cloud Computing" Without Words

Apple does a fairly decent job of showing, in a consumer context, the advantage of iCloud. For users, "what" it is, or "how it works," doesn't really matter. The only thing that matters is the value. Remember the old concept of "write once, read many?" 


That's really the advantage of the cloud, and cloud storage of content. Store it once, use it anywhere, on any device. 

An Important Lesson about "Over the Top" Danger

Contestants in competitive communications markets tend to recognize the value of having the leading incumbents set a high price umbrella, the simple reason being that a common attacker strategy is to offer "same service, less price." 


The higher the price umbrella, the better the value proposition an attacker can offer, and still generate more revenue than under a low price umbrella. 


That seems to be the case for over the top applications in the messaging space, in European markets that feature high tariffs. 


European operators rely on high tariffs for international calls and texts. Whatever else one might say about that situation, the high tariffs allow lots of room for attackers to offer the same features at much lower cost.


Over the top application providers provide salient examples.


By way of contrast, U.S. service providers, operating with a continental-sized domestic market,  offer unlimited or huge buckets of calls and texts for a flat rate that offer much less room for attackers to exploit.


The exception is international calling, where apps such as Skype get serious amounts of use. But for domestic calling, tariffs are so reasonable that there is little incentive to modify domestic calling or texting behavior because the marginal cost of a domestic text or call is zero. The "Panic" About OTT Apps


The point is that the pricing umbrella has significant implications for competitive dynamics. Over the top will be a bigger danger where the pricing umbrella is high, and much less a compelling alternative for users where the pricing umbrella is low. 

What Role for End User Choice in Mobile Data Plans?

Many consumers probably would jump at the chance to buy virtually any TV show, series or channel, including current episodes, a la carte, much as they buy single songs, rather than the bundled collections we call "albums" or "compact discs."

One reason is the somewhat logical expectation that such buyers will get precisely what they want, while saving money.

The issue is whether many consumers will have something of the same reaction to mobile Internet plans that, for example, offer lower data plans in exchange for a curated experience big on Facebook, YouTube or Twitter.

Orange apparently wants to find out. For less than $14 a month, customers get unlimited use of Facebook and Twitter. Web browsing on other sites costs about 70 cents for every 20 minutes of use, the Wall Street Journal reports. All Mobile Traffic Isn't Equal

The issue isn't whether this is the best way to match end user preferences on mobile devices with retail packaging. The issue is that it is an interesting way to customize and personalize use of the web apps people really value, while offering savings at the same time.

To the extent that users already have indicated preference for buying songs, not albums, or might prefer buying shows rather than channels, they might also prefer a focused approach to web apps on their mobiles.

Some won't like the idea, but they can buy the standard plans, and pay more money. Some policy advocates will worry about the implications for app competition or any number of other issues.

But if choice provides end user value in music, video, or stories, it isn't so clear why such choice does not provide equivalent value when mobile users buy and use their favorite mobile apps.

Users Help AT&T Figure Out "Throttling"

AT&T’s new plan to throttle access speeds of customers on grandfathered “unlimited” service plans seems to have been withdrawn. AT&T had planned to throttle users in the top-five percentile of usage at any specific location.

But AT&T now says it will now throttle 3G network  users after 3 GBytes of usage and LTE users after 5 GBytes of usage. The former plan meant users could not tell whether they would face throttling. Under the new plan, they in principle will know when the throttling kicks in.

The rules do not affect customers on AT&T’s current tiered service plans.

The change came after significant pushback from customers who properly objected that the rules did not allow people to protect themselves. Even lighter users might find themselves in a coverage area where their usage put them, temporarily, into the “top five percent of users.”

Essentially, users complained that there was no way to modify and regulate their own behavior and consumption to comply with the guidelines. AT&T now seems to agree.


Just an observation: sometimes users can help their service providers figure out fair ways to manage networks. Most users are not unreasonable about usage limits. But they do understand rule clarity and fairness. In this case, users helped AT&T craft a "better" policy, in the sense that users agree it is fair.

Will Telcos Be Pipes or Service Providers?

Almost no question is strategically more important for any cable TV company or telco than the issue of what future is possible, or desirable. Telcos and cable TV companies always have been "service" providers, where applications and access were tightly bundled. 


Broadband access was the first consumer service to break from that mold, and private line services were the first big change in the business customer segment.


So the big issue now is what "should" be the strategy in a business environment where virtually every application can, in principle, be delivered to users "over the top."

Deutsche Telekom CEO Rene Obermann said the cloud was an opportunity for telcos to “make the most of our assets” and transform themselves into "smart pipes."


Still "pipes," mind you, but pipes that have features. 

“Most people expect us to become dumb pipes, but that’s wrong," says Obermann. "The question of whether we will be dumb pipes or smart pipes will be a thing of the past.” 


In areas such as traffic management and quality of service, network access and transport providers will essentially make substantial money providing various traffic management functions sold to third parties that have a business interest in the end user quality of experience. 


That assumes regulators will let access providers provide quality of service measures that end users can buy, or that application and service providers can buy. It also assumes customers are willing to pay. 

Though both over the top and owned apps, services and features are likely to be staples of any long-term future to some degree, the pipe function is going to be more important over time. Nor is it clear that the revenue contributed by the smart features ever will be quite so substantial as the "dumb" access feature. 


One is hard pressed to think of any "value-added" feature in the mobile or fixed network businesses that provides as much gross revenue as the "basic" service. In other words, do the security features offered to consumers as part of their broadband access subscription drive as much revenue as the access? 


Wll QoS mechanisms drive as much revenue as access and transport, for business customers? 


To be sure, one might argue that a content delivery network so blends a transport function with a value add that it is difficult to compare the incremental revenue provided by the "content acceleration," compared to "simple transport." 


The point is that the value adds probably never will be driving as much revenue as the "base" access products. The issue is to find the exceptions to the rule. 


If a mobile service provider sells a stand-alone personal Wi-Fi Hotspot feature for a smart phone subscription, is the incremental cost likely to approach the retail price of the smart phone's data plan? Probably not. 


But could the personal Wi-Fi Hotspot plan drive incremental revenue that is up to 50 percent of the cost of the basic smart phone access? That is possible, and highly significant. 

Keep in mind that a personal Wi-Fi Hotspot service is still a "dumb pipe" product. But one might conceive of it as a value-added feature of the basic smart phone broadband access service. 

The point is that dumb pipe, though derided, should continue to be the foundation for all the smart pipe features, and that these "smart" features will represent incremental revenue that is some percentage of the value of the "dumb pipe" access. 


Nor is the underlying wholesale cost of bandwidth necessarily related in linear fashion to retail value and pricing. The value of personal Wi-Fi Hotspot bits arguably is higher than that of smart phone bits, or no rational consumer would pay extra for the feature. 


The issue is how many of these enhancements to "dumb pipe" are conceivable and possible, even when the pipe remains the foundation for the rest of the business. . 

Cornelius Vanderbilt cut the price of rail freight 90 percent, Andrew Carnegie slashed steel prices 75 percent and John D. Rockefeller cut oil prices 80 percent between 1870 and 1900.

Malcom McLean, Sam Walton and Michael Dell did roughly the same for container shipping, discount retailing and home computing a century later. Such radical changes often are unwelcome by the producing community, though the consuming public benefits.


In some ways, what service providers are trying to do is sell automobiles and ships rather than steel, even as steel remains the underpinning of the business. 


Service providers always built services on top of pipes. They always have sold "voice" as a retail product to end users; the pipe was only a means to create the service.


What is is different now is that the pipe is becoming the foundation product for the future. Users will buy access to the Internet and apps, whether they buy apps and services from the "pipe services" provider, or not. 


That's the new strategic challenge: to build the whole new business around pipe services. 

Why Pay Attention to Mobile Payments?

It isn't always completely clear why people who care about the mobile business should necessarily pay attention to  "mobile payments," not a subject that represents the most-popular subject on this site.


The reason is that "mobile payments" is an answer to several key questions.  "What business are you in?" is one such important question. "Where will you find future sources of revenue?" is another key question. "How will you do that?" is a third important question mobile and fixed network executives have to ask themselves, and answer. 


One of the by-now clear implications of the Internet is that it enables competition on a different scale than in the past. In other words, "people who aren't in our business" can get into your business. 


The other salient observation is that new industries tend to get created when attackers use the Internet to disrupt an existing business. It isn't simply that the legacy industry is changed; sometimes an entirely new industry emerges. 


Mobile payments is akin to a massive collision of galaxies. Banking, telecom, retailing and marketing are huge industries in their own right, but find themselves colliding in new ways around the use of mobile to shop and pay. 


So the humble thesis is that when industries that big collide, something equally big is going to emerge. Hence, the coverage of mobile payments.


nevertheless keeps getting talked about. It's a strategic

What Comes Next Will Reshape Mobile Marketing, the Issue is "How?"

While delivering a speech at the San Diego Social Media Symposium, hosted by Nuffer, Smith, Tucker, the question of “what comes next,” or “who comes next,” in terms of computing industry leadership, came up.  

The reason for the question is that technology enables new forms of marketing at the same time technology changes the potential effectiveness of existing channels. Among the best examples is use of social networks for marketing.

Facebook finally has figured out how to use display marketing in a PC context. It is just now exploring how to do advertising and marketing in a mobile device context. Twitter has developed the promoted tweet, a new form of marketing messaging.

At least 40 percent of all Facebook activity, for example, now occurs on mobile devices. And though all channels used in a PC context can, in principle, also be used on tablets and smart phones, there are key contextual challenges.

The substitution of a touch and swipe user interface rather than keyboard and mouse are examples. The amount of screen real estate are other key issues.

Beyond that, the use case for each device tends to be distinct. Smart phones are the “best” device for “on the go” apps and messaging. Smart phones are best suited to location apps and communications.

Tablets are less “mobile,” and suited to content consumption activities, though the setting is more “couch” than “on the go.” It is nevertheless true that smart phones get used at home or at the office more than “in transit.”

PCs increasingly are being “relegated” to work or desktop settings.

The truthful answer is that nobody knows yet how computing, and marketing possibillity will change in the next era. Part of the indeterminacy is that it is hard to figure out what era, epoch or age is coming. We all sense that mobile and Internet will be foundational, as will the pervasiveness of computing.

But that doesn’t help refine one’s search for the “next big thing” or the characteristics of firms or enabling technologies that might lead the next era, epoch or age. It seems clear, in retrospect, that virtually nobody, or almost nobody, could have foreseen the power of “search” or “social networking.”

Few seem to have recognized the importance of the “browser” or visual computing. Many would be surprised that Apple could be called the most important technology firm on the planet, or that a technology firm as large as Google could be funded by advertising.

Asked to speak about mobile marketing, one has to acknowledge the immediate difficulty. Mobile is many things, including discrete devices ranging from notebook PCs to tablets to smart phones to game players to music players. In principle, any current form of digital or online marketing can be applied to any Internet-connected device with a screen.

So email, text messaging, display advertising, promoted tweets, promoted stories, content marketing, social networks, blogs and websites all are channels that can be used across all screens, whether mobile or stationary. So too are tactics including earned media, paid media and owned media.

What isn’t yet so clear is which approaches will ultimately emerge as ideally suited to each category of screen, type of user interface or application setting. Mobile is a bunch of things, marketing is a bunch of things and so is “digital” or “online.”

A 2008 Microsoft paper described eras largely in terms of the relationship between computers and people. In the mainframe era, one computer served many people. In the PC era (for analytical purposes, Microsoft apparently did not see the mini-computer era as qualitatively significant) there was one PC per person. In the 2000s, which Microsoft describes as the mobility era, there are several devices per user. In the coming ubiquity era there will be thousands of computing devices for every user.
You might therefore represent the change quantitatively. But it is the notion of pervasiveness that probably gets to the heart of the matter. In any era where computing is literally embedded widely into the fabric of life, “computing” itself fails to stand out. It becomes something like electricity, an underpinning more than a discrete pursuit.
Nobody would call the present era the “era of electricity,” as one might have spoken of the “age of the automobile.
In fact, geologic time is the polar opposite of computing or Internet time, where the taxonomy of eonothem (eons) , erathem (eras), system (period), series (epoch), and stage (age) are used to refer to the layers of rock that correspond to these periods of geologic time. On a scale where the most-granular measure of time is “millions” of years, the entire history of computing occurs on a time scale too short to measure. 

To the extent that one can apply the geologic taxonomy, the Internet eon and pre-Internet eon might make sense, as use of the Internet spans multiple computing eras.

Perhaps we are have mistaken eras for ages or epochs, though. Mainframe, PC and mobile “eras” might be better seen, from a longer time frame as ages, epochs or periods within the broader framework of tool use.

The point is that people might instinctively sense that Internet, broadband, web and apps have some significance in the history of computing that we’ve not had time to digest and put into perspective. Clearly something important has happened with the Internet, and clearly something important is coming in terms of mobility and mobile devices. Precisely how that fits with the taxonomy of computing is not so clear.