Have Cloud Apps Started Disrupting the Computing Upgrade Cycle?

Technology analyst Brian Proffitt suggests cloud apps now are disrupting the computing hardware upgrade cycle, which might explain the weakness of Windows 8 adoption. Simply put, and as has been the case for the last several Windows upgrade cycles, users are finding their apps work well enough that there is no need to upgrade hardware to run new software. 

That wouldn't be unusual, and represents a consumer trend that mirrors what should happen i the business networking space, others would suggest. 

Baird Equity Research Technology has argued that "cloud services will drive a shrinking IT spending pie," since companies will replace server and networking infrastructure with cloud services.


That means spending will shift from owned hardware and software to services. 

"We estimate that for every dollar spent on [Amazon Web Services], there is at least $3 to $4 not spent on traditional IT, and this ratio will likely expand further," Baird analysts predict.

In part, that might explain any number of things, from shrinking PC sales to slower operating system upgrades. 

Cloud-based apps, in other words, have begun to affect the hardware upgrade cycle because cloud-based apps do not require hardware upgrades as much as locally-resident apps often do, are upgraded automatically in the cloud and rely as much as the Internet connection as processor speed and memory. 

Over the next three to five years, technology spending in both consumer and business markets will transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, from fixed voice and data connections to mobile. 

EU Network Neutrality Rules Would be Less Restrictive than U.S. Rules

It appears that any European Union version of network neutrality would have some distinctive features, compared to the rules fixed network providers (cable and telco) must follow in the United States, if the framework now proposed by European Commission Digital Agenda Vice President Neelie Kroes is adopted.

Among the most-noticeable differences is that although fixed network ISPs can provide only “best effort” access, EU network neutrality rules would allow quality of service tiers. At the moment, mobile service providers can offer such features, while fixed network ISPs cannot.

“I you've just bought a videoconferencing system, you'll probably also want an internet service that guarantees the right quality, end-to-end,” said Kroes. “If someone wants to pay extra for that, no EU rules should stand in their way; it's not my job to ban people from buying those services, nor to prevent people providing them.”

In other ways, the EU rules would be similar, requiring plan transparency, for example. “Before you sign up to an internet contract, you want to know key details,” said Kroes.

But EU rules probably will regulate terms and conditions of service in a way U.S. rules do not. With an eye to allowing consumers more ability to switch ISPs, the EU will be looking at excessive charges, modem rentals or control of email addresses that tend to create barriers to switching behavior. In the U.S. market those might not be in the domain of network neutrality but more consumer protection.

As do U.S. rules, EU rules would prohibit the blocking or other degradation of lawful services such as voice over Internet Protocol (VoIP) or over the top messaging services.

Traffic management to avoid congestion will be allowed, as network management is permitted on U.S. networks, under network neutrality rules.

But there are key nuances. Under EU rules, it appears Kroes supports rules that would allow ISPs to separate time-critical traffic from the less urgent traffic. Under U.S. “best effort only” rules, that is not allowed.

The EU rules might also allow creation of access services customized for different types of lead applications, ranging from light email or Web surfing plans to video entertainment intensive plans. “Operators need to respect these different needs, and to do that they must also be allowed to innovate to meet those needs,” said Kroes.

On balance, the EU rules would be less restrictive of ISPs, allowing more use of quality of service and assured levels of service features, while also making clear that all lawful applications must be free of interference, compared to U.S. rules.

Justice Department tries to force Google to Hand Over User Data

U.S. citizens no longer trust their government, polls suggest. A recent national survey by the Pew Research Center for the People & the Press found that 53 percent of respondents think the federal government threatens their own personal rights and freedoms. 

Just 28 percent of respondents surveyed by the Pew Research Center rate the federal government in Washington favorably. That is down five points from a year ago and the lowest level of trust percentage ever in a Pew Research Center survey.

A new lawsuit illustrates why the lack of trust exists. The U.S. Justice Department lawsuit, filed April 22, 2013, attempts to force Google to comply with Federal Bureau of Investigation demands for confidential user data. 

The FBI uses so-called National Security Letters, a secret electronic data-gathering technique that does not need a judge's approval and recently was declared unconstitutional in an unrelated court case.

NSLs  supposed are used only in national security investigations, not routine criminal probes, and there's no upper limit on the amount of data a single NSL can demand. Also, any recipient of an NSL, which do not require warrants, also make criminal the act of revealing that an NSL was issued. 

50 Mbps Services Dropping to About $1 to $1.60 Per Mbps Per Month?

Cable ONE says it has eliminated fixed usage caps for its high speed Internet access plans, and instead suggests that its plans assume a 300 GB maximum on monthly usage on its 50 Mbps plans. The 50 Mbps plan sells for $50 a month (before the taxes and fees) when bundled with voice service. 

Cable ONE also is launching new 60 Mbps and 70 Mbps plans, though pricing was not immediately made public. 

One might conclude that the dropping of the usage cap and the expansion of speeds is, at least indirectly, a response to Google Fiber. In 2010, for example, 50 Mbps service in the U.S. market cost about $145 a month, or nearly $3 per Mbps of access speed. 

The latest Cable ONE offer pegs bandwidth at $1 for each Mbps of access speed, when access service is bundled with a voice plan. 

Verizon FiOS likewise now is available, on a promotional basis, for about $1.20 per Mbps of speed for about a year, on contract, with second-year prices of about $1.60 per Mbps of speed. 

Line's "Chat" Revenue Model: Stickers and Messaging to Followers

"Monetization" is a very big deal for most Internet app firms, and a reasonably big deal for any would-be Internet access provider, simply because any entity requires a sustainable revenue model of some sort to stay in business and create new features. 

Line, the Taiwan-based messaging provider, now appears to be generating revenue by selling businesses access to Line users. 

A company buying a Line corporate account can send buy plans allowing sending of 15 messages or 30 messages a month to its followers. For those who select a limit of 15 messages, the cost would range from NTD 150,000 ($5014) – for up to a maximum of 100,000 fans – to NTD 450,000 ($15,047) – for more than 600,000 fans. 

The developing adage that if a user is not paying for a service, then the user is the product, applies to Line and many other application providers. 

But Line might make more money selling sponsor "stickers." For example, a firm might pay NTD 1 million ($33,438) for the right to develop eight stickers available for download for one month and which users can use up to six months.

Line's "Chat" Revenue Model: Stickers and Messaging to Followers

"Monetization" is a very big deal for most Internet app firms, and a reasonably big deal for any would-be Internet access provider, simply because any entity requires a sustainable revenue model of some sort to stay in business and create new features. 

Line, the Taiwan-based messaging provider, now appears to be generating revenue by selling businesses access to Line users. 

A company buying a Line corporate account can send buy plans allowing sending of 15 messages or 30 messages a month to its followers. For those who select a limit of 15 messages, the cost would range from NTD 150,000 ($5014) – for up to a maximum of 100,000 fans – to NTD 450,000 ($15,047) – for more than 600,000 fans. 

The developing adage that if a user is not paying for a service, then the user is the product, applies to Line and many other application providers. 

But Line might make more money selling sponsor "stickers." For example, a firm might pay NTD 1 million ($33,438) for the right to develop eight stickers available for download for one month and which users can use up to six months.

How Tim Cook Sees Apple's Values

It is a given that Apple is different, post Steve Jobs. Equity prices aren't everything, but Apple's stock price suggests investors are uncertain about the company's prospects, with Tim Cook as CEO. The comparison is unfair, in many ways. 

Some of us would argue that although it largely is true "nobody is indispensable," it is not always true. Steve Jobs was an extremely unusual CEO. So would there be a regression to the mean, in terms of CEO "potential impact?" Almost certainly. 

The issue is how well Apple can manage its future without Steve Jobs. In that regard, Cook argues that Apple will in the future have to rely on many contributions, with teams--and teamwork--more important than in the past. 

That likely would be the only logical answer no matter who was running Apple.