If Data Center is Operating System, WAN is the Data Bus

Sam Johnston, who just left his job as Equinix director of cloud and information technology services, describes a modern data center as an operating system for an enterprise.

In that analogy, as enterprises might run apps on desktop or mainframe operating systems, so they can connect to services like Office 365 and AWS.

Others at Telx might have used the shopping mall analogy (Johnston says has used that analogy at times, as well), where the data center becomes the place where software as a service is obtained.

“For the enterprise CIO, they should look at the data centre as an operating system, only rather than installing best-of-breed applications like Office and Photoshop, they simply connect to services by installing best-of-breed applications.

If the data center is the operating system, then others might therefore liken the global backbone network to the bus, which connects all the internal components of a computer, such as CPU and memory, to the motherboard.

The cloud analogy of course then becomes an external, wide area bus, replacing the

internal data bus (local bus).

At some level, that illustrates the fusion or blurring of the lines between information technology (computing) and communications. At a physical level, the global wide area network has become the data bus, in part.

The cloud data centers assume the function of operating systems, to an extent.

Parenthetically, Johnston is off to a new venture involving the “consumption and application of information technology to solving business problems.”  

Google Fiber to Offer No Cost, No Install Fee to HUD-Assisted Housing Residents

In case you though marginal cost pricing (near zero) is a growing trend in the Internet access business, consider what Google Fiber is going to do.

All  Google Fiber markets are launching programs to connect residents in select public and affordable housing properties no cost and with no installation fee.

This initiative is part of ConnectHome, a program to bring Internet connectivity to more school-aged children and families living in Housing and Urban Development-assisted housing in 28 communities across the country.

Google initially is focusing on Atlanta, Durham, Nashville and Kansas City, but will extend the program to every other current and future Google Fiber market.

The fundamental challenge of the Internet age is that is is very hard to compete against suppliers that give away the products a given industry sells. That is near zero pricing or marginal cost pricing and the trend is extending into the physical realm, not being relegated to digital products and services.

Netflix Keeps Growing Share of OTT Video Subscription Business

Someday, some firm might challenge Netflix in the subscription over the top video business. Perhaps not soon, though. Netflix continues to grow its share. 

In the second quarter of 2015, Netflix passed the 65 million member mark, with over 42 million in the United States and 23 million internationally, adding a record 3.3 million new streaming members in the second quarter of 2015, compared to 1.7 million net new subscribers in the same quarter a year ago.

Most of that growth came in international markets. Netflix gained 0.9 million members in the United States and added 2.4 million members internationally in the quarter.

Netflix predicts it will add 2.4 million net new international customers in the third quarter of 2015.


source: Business Insider

Will Common Carrier Regulation Reduce Investment?

To be sure, one cannot be absolutely certain, as a matter of “scientific fact,” that any specific policy “works” or “fails to work.” There simply are too many variables, and no way to create control groups.

Still, the argument is that common carrier regulation (applying Title II to Internet access) does not dictate specific rates of return, and it does not stimulate entry, but it does likely increase costs and regulatory hurdles for providers, authors Kevin A. Hassett, American Enterprise Institute director of economic policy studies and Robert J. Shapiro, Georgetown Center for Business and Public Policy senior policy fellow.

Such a framework increases uncertainty, and uncertainty almost always leads to delays in long-lived investments.

Common carrier regulation could lead to substantial price increases and consumer costs on top of any universal service fees, they also argue.

In the case of telephone service, numerous studies have found that common carrier regulation inhibited competition, discouraging and dramatically slowing innovations in telephone service, the study argues.

Innovation always entails substantial risk of failure and often involves substantial sunk costs. Therefore, we should expect that the incentives to assume those risks and bear those costs are greatest when the additional costs of regulation are absent, they argue.

The authors note that as the Federal Communications Commission  phased out some of its regulation of telephony carriers, new service offerings increased by 60 percent to 99 percent.

Some studies also suggest that if the regulatory system had never been applied to telecom, consumers would have 62 percent more services.

The authors argue it is reasonable to expect large negative effects on investment from Title II regulation, if Title II regulations move the United States closer to the European regulatory model that prevailed in continental Europe in the first decade of the 21st century.

Again, the problem is that researchers, policymakers and economists do not all agree on the likely impact of Title II regulation on investment levels, and there is no way to create a control group.

But some would argue it is likely that when profit margins are limited, investment will be limited. When profit margins are unlimited, more investment will likely be made, all other things being equal.

Intel Earns 4% of Revenue from IoT

“Second-quarter results demonstrate the transformation of our business as growth in data center, memory and IoT accounted for more than 70 percent of our operating profit and helped offset a challenging PC market," said Intel CEO Brian Krzanich, commenting on second quarter 2015 financial results.

Of course, whenever big segments get lumped together, one has to parse them.

Client Computing Group revenue was $7.5 billion, up two percent sequentially and down 14 percent year-over-year.

Data Center Group revenue was $3.9 billion, up five percent sequentially and up 10 percent year-over-year.

The Internet of Things Group revenue was $559 million, up five percent sequentially and up four percent year-over-year

Software and services operating segments revenue of $534 million was flat sequentially and down three percent year-over-year.

In other words, Internet of Things revenue did grow five percent sequentially. But IoT represents only about four percent of total revenue.

Asia Mobile App Use Grows 77% Over One Year

Mobile now drives revenue growth in the telecom industry, and Asia drives mobile revenue  growth. Since mobile also drives Internet access, it can be said that mobile drives Internet access growth, and Asia drives global Internet access growth.

Between 2014 and 2015, Asia experienced double digit growth in its mobile app economy.

When we compared at total session growth in the trailing 12 months from April 2014 to the trailing 12 months from April 2015, we found that sessions in Asia grew 77 percent, Flurry says.

The double-digit growth in the region is driven by consumer categories that provide a clue about the growing purchasing power and sophistication in the region.

Three categories of apps stand out as driving this growth: hopping and lifestyle, news and reading, plus utilities and productivity.  

The fastest growing category of mobile apps now is “shopping and lifestyle,” followed by “news and reading.”

Growth in use of messaging and social apps is a reflection of already-high usage in that category. Simply, most people already rely on messaging and social apps to a high degree.

In Asia as elsewhere, “everybody” uses messaging. Messaging apps’ daily use is 4.7 times higher than the average app, Flurry notes.

The average daily use of an app across all categories is 1.9 times. Messaging apps are used, on average, almost 9 times every day.

Although messaging is a large driver of sessions in Asia and around the world, it only represents 13 percent of users time spent in their mobile apps.  That means smartphones are used for a wide variety of purposes on a typical day.

Asia also is a region where the phablet is the fastest growing device type to date, with 148 percent year over year growth worldwide.

Globally, session distribution between medium phone and phablet is 60 percent and 31 percent, respectively.

In Asia, sessions are split evenly between the devices, with medium phones contributing 45 percent and phablets 42 percent.

In Asia phablet users also conduct 78 percent more sessions than the average smartphone user.

Compared to the rest of the world, Asia is a unique app market, where it comes to photography, lifestyle and shopping, and personalization categories.

Although 81 percent of Asia’s photography app users are female, men in Asia are 1.9 times more likely to use photography apps than men in the rest of the world.

Women in Asia dominate the lifestyle and shopping category in terms of use, but are also 1.4 times more likely to shop in mobile apps as compared to women around the rest of the world.

Globally, 81 percent of personalization app users are men, though in Asia, usage is split evenly between men and women, 51 percent and 49 percent respectively.

This makes women in Asia 2.7 times more likely than the global female population to use personalization apps. That might be a result of Android adoption, Flurry suggests.

Mobile Addicts Grew 59% in the Last Year

Consumers who launch applications 60 times or more per day are called “mobile addicts” by Flurry.

The number of global mobile users who do so grew from 176 million in the second quarter of  2014 to 280 million in the second quarter of 2015, a 59 percent  increase.

From the second quarter of  2014 to the second quarter of  2015, the total population of smart devices measured by Flurry grew from 1.3 billion to 1.8 billion, a 38 percent year over year growth.

“Regular Users,” consumers who use apps between once and 16 times daily, grew from 784 million to 985 million in the same period, a 25 percent increase.

“Super Users,” consumers who use apps between 16 and 60 times daily, grew from 440 million to 590 million, a 34 percent increase.

Those findings are consistent with a similar report sponsored by Bank of America, which indicated U.S. consumers are constantly connected to their smartphones.

Mobile Addicts interact with virtually every category of smartphone apps, but also  use some categories of apps at rates over 100 percent higher than “average” users.

Messaging and social apps are clearly the leading apps used by Mobile Addicts. In fact, Mobile Addicts use Messaging apps 6.56 times (an over-index of 556 percent) more than an average mobile consumer.

Flurry says “messaging has become mobile’s killer application.” But Mobile Addicts are using their smart device as the sole computing device and conducting every aspect of their lives on that device.