Tag Archives: Facebook

Universal Internet Access

navigator_globe_lgWhile many of us are spending a lot of time trying to find a broadband solution for the unserved and underserved homes in the US, companies like Facebook, Google, and Microsoft are looking at ways of bringing some sort of broadband to everybody in the world.

Mark Zuckerberg of Facebook spoke to the United Nations this past week and talked about the need to bring Internet access to the five billion people on the planet that do not have it. He says that bringing Internet access to people is the most immediate way to help lift people out of abject poverty.

And one has to think he is right. Even very basic Internet access, which is what he and those other companies are trying to supply, will bring those billions into contact with the rest of the world. It’s hard to imagine how much untapped human talent resides in those many billions and access to the Internet can let the brightest of them contribute to the betterment of their communities and of mankind.

But on a more basic level, Internet access brings basic needs to poor communities. It opens up ecommerce and ebanking and other fundamental ways for people to become engaged in ways of making a living beyond a scratch existence. It opens up communities to educational opportunities, often for the first time. There are numerous stories already of rural communities around the world that have been transformed by access to the Internet.

One has to remember that the kind of access Zuckerberg is talking about is not the same as what we have in the developed countries. Here we are racing towards gigabit networks on fiber, while in these new places the connections are likely to be slow connections almost entirely via cheap smartphones. But you have to start somewhere.

Of course, there is also a bit of entrepreneurial competition going on here since each of these large corporations wants to be the face of the Internet for all of these new billions of potential customers. And so we see each of them taking different tactics and using different technologies to bring broadband to remote places.

Ultimately, the early broadband solutions brought to these new places will have to be replaced with some real infrastructure. As any population accepts Internet access they will quickly exhaust any limited broadband connection from a balloon, airplane, or satellite. And so there will come a clamor over time for the governments around the world to start building backbone fiber networks to get real broadband into the country and the region. I’ve talked to consultants who work with African nations and it is the lack of this basic fiber infrastructure that is one of the biggest limitations on getting adequate broadband to remote parts of the world.

And so hopefully this early work to bring some connectivity to remote places will be followed up with a program to bring more permanent broadband infrastructure to the places that need it. It’s possible that the need for broadband is going to soon be ranked right after food, water, and shelter as a necessity for a community. I would expect the people of the world to expect, and to then push their governments into making broadband a priority. I don’t even know how well we’ll do to get fiber to each region of our own country, and so the poorer parts of the world face a monumental task over the coming decades to satisfy the desire for connectivity. But when people want something badly enough they generally find a way to get what they want, and so I think we are only a few years away from a time when most of the people on the planet will be clamoring for good Internet access.

 

The Open Compute Project

The InternetI wrote recently about how a lot of hardware is now proprietary and that the largest buyers of network gear are designing and building their own equipment and bypassing the normal supply chains. My worry about this trend is that all of the small buyers of such equipment are getting left behind and it’s not hard to foresee a day when small carriers won’t be able to find affordable network routers and other similar equipment.

Today I want to look one layer deeper into that premise and look at the Open Compute Project. This was started just four years ago by Facebook and is creating the hardware equivalent of open source software like Linux.

Facebook found themselves wanting to do things in their data centers that were not being satisfied by Cisco, Dell, HP or the other traditional vendors of switches and routers. They were undergoing tremendous growth and their traffic was increasing faster than their networks could accommodate.

So Facebook followed the trend set by other large companies like Google, Amazon, Apple, and Microsoft, and set off to design their own data center and data equipment. Facebook had several goals. They wanted to make their equipment far more energy efficient because data centers are huge generators of heat and they were using a lot of energy to keep servers cool and were looking for a greener solution. They also wanted to create routers and switches that were fast, yet simple and basic, and they wanted to control them by centralized software – which differed from the market who built the brains into each network router. This made Facebook one of the pioneers in software defined networks (SDN).

And they succeeded; they developed new hardware and software that allowed them to handle far more data than they could have done with what was on the market at the time. But then Facebook took an extraordinary step and decided to make what they had created available to everybody else. Jonathan Heiliger at Facebook came up with the idea of making their hardware  open source. Designing better data centers was not a core competency for Facebook and he figured that the company would benefit in the future if other outside companies joined them in searching for better data center solutions.

This was a huge contrast to what Google was doing. Google believes that hardware and software are their key differentiators in the market, and so they have kept everything they have developed proprietary. But Facebook had already been using open source software and they saw the benefits of collaboration. They saw that when numerous programmers worked together the result was software that worked better with less bugs and that could be modified quickly, as needed, by bringing together a big pool of programming resources. And they thought this same thing could happen with data center equipment.

And they were right. Their Open Compute Project has been very successful and has drawn in other large partners. Companies like Apple, HP, and Microsoft now participate in the effort. It has also drawn in large industry users like Wall Street firms who are some of the largest users of data center resources. Facebook says that they have saved over $2 billion in data center costs due to the effort and their data centers are using significantly less electricity per computation than before.

And a new supply chain has grown around the new concept. Any company can get access to the specifications  and design their own version of the equipment. There are manufacturers ready to build anything that comes out of the process, meaning that all of the companies in this collaborative effort have bypassed the traditional telecom vendors in the process and work directly with a factory to produce their gear.

This effort has been very good for these large companies, and good for the nation as a whole because through collaboration these companies have pushed the limits on data center systems to make them less expensive and more efficient. They claim that for now they have leapt forward past Moore’s law and are ahead of the curve.

But as I wrote earlier, this leaves out the rest of the world. Smaller carriers cannot take advantage of this process. Small companies don’t have the kind of staff that can work with the design specs, and no factory is going to make a small batch of routers. While the equipment and controlling hardware is open source, each large member is building different equipment and none of it is available on the open market. And small companies wouldn’t know what to do with the hardware if they got it, because it’s controlled by open source software that doesn’t come with training or manuals.

So smaller carriers are still buying from Cisco and the traditional switch and router makers. The small carriers can still find what they need in the market. But if you look ten years forward this is going to become a problem. Companies like Cisco have always funded their next generation of equipment by working with one or two large customers to develop better solutions. The rest of Cisco’s customers would then get the advantages of this effort as the new technology was rolled out to everybody else. But the largest users of routers and switches are no longer using the traditional manufacturers. That is going to mean less innovation over time in the traditional market. It also means that the normal industry vendors aren’t going to have the huge revenue streams from large customers to make gear affordable for everybody.

The Shift To Proprietary Hardware

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There is a trend in the industry that is not good for smaller carriers. More and more I see the big companies designing proprietary hardware just for themselves. While that is undoubtably good for the big companies, and I am sure that it saves them a lot of money, it is not good for anybody else.

I first started noticing this a few years ago with settop boxes. It used to be that Comcast and the other large cable companies used the same settop boxes as everybody else. And their buying power is so huge that it drove down the cost of the settop boxes for everybody in the industry. It was standard for large companies to put their own name tag on the front of the boxes, but for the most part they were the same boxes that everybody else could buy, from the same handful of manufacturers.

But then I started seeing news releases and stories indicating that the largest cable companies had developed proprietary settop boxes of their own. One driver for this change is that the carriers are choosing different ways to bring broadband to the settop box. Another change is that the big companies are adding different features, and are modifying the hardware to go along with custom software. Cable companies are even experimenting with very non-traditional settop box platforms like Roku or the various game consoles.

I see this same thing going on all over the industry. The cable modems and customer gateways that the large cable companies and the large telcos use are proprietary and designed just for them. I recently learned that the WiFi units that Comcast and other large cable companies are deploying outdoors are proprietary to them. Google has designed its own fiber-the-the-premise equipment. And many companies including Amazon, Facebook, Google, Microsoft, and others are designing their own proprietary routers to use in their cloud data centers.

In all of these cases (and many other that I haven’t listed here), the big companies used to buy off-the-shelf equipment. They might have had a slightly different version of some of the hardware, but not different enough that it made a difference to the manufacturers. Telco has always been an industry where only a handful of companies make any given kind of electronics. Generally, smaller companies bought from whichever vendors the big companies chose, since those vendors had the economy of scale.

But now the big carriers are not only using proprietary hardware, but a lot of them are getting it manufactured for themselves directly, without one of the big vendors in the middle. You can’t blame a large company for this; I am sure they save a lot of money by cutting Alcatel/Lucent, Cisco, and Motorola out of the supply chain. But this tendency is putting a hurt on these traditional vendors and making it harder for vendors to survive.

It’s going to get worse. Currently there is a huge push in many parts of the telecom business to use software-defined networking (SDN) to simplify field hardware and control everything from the cloud. Since the large carriers will shift to SDN networks long before smaller carriers, the big companies will be using very different gear at the edges of the network – and those are the parts of the network that cost the most.

This is a problem for smaller carriers since they often no longer benefit from being able to buy the same devices that the large companies buy to take advantage of their huge economy of scale. Over time this is going to mean the prices for the basic components smaller carriers buy are going to go up. And in the worst case there might not be any vendor that can make a business case for manufacturing a given component for the small carriers. One of the advantages of having healthy large manufacturers in the industry was that they could take a loss on some product lines as long as the whole suite of products they sold made a good profit. That will probably no longer be the case.

I hate to think about where this trend is going to take the industry in five to ten years, and I add it to the list of things that small carriers need to worry about.

Selling Our Personal Data

SpyVsSpyRecently, the CEO of Apple, Tim Cook, has been making speeches in multiple forums that contrasts Apple’s privacy practices to those of other large consumer-based companies like Google, Facebook, and Yahoo. Cook says that his company is selling superior products and that they are not in the business of gathering or selling information about their customers.

Certainly he can’t say that Apple doesn’t use customer information, because they do. I have a Macbook and there are tons of ways that Apple uses my data to make my experience better. If I travel, the Mac will display the right time and local weather, for example. And various Apple software products will get to know me and make customized suggestions for me over time. But Cook’s point is that Apple doesn’t sell that data to others.

Of course, the companies that Cook is comparing himself to do not sell electronics like Apple but rather software. Probably the closest analog to Apple is Samsung and they can’t make the same claim as Apple. Late last year it was discovered that Samsung smart TVs were capable of listening to customer conversations all of the time. It’s not clear that Samsung gathers data directly from its smart phones, but they have chosen Android and one can imagine that part of that arrangement is to let Google gather data from Samsung smartphones.

Companies like Facebook and Google have a hard time not using your data, because that is really the only way they can generate value. It’s wonderful to have millions of loyal users on your platform, but both companies make most of their money from advertising. Certainly Google’s search engine advertising doesn’t require any data from users and that revenue is driven from the companies who want their products to be at the top of the list in a search. But Google and Facebook also sells web advertising, and the name of that game is to know the user in order to direct the most relevant ads to each customer.

I think if using our information stopped with advertising that most people would be fundamentally comfortable with having these companies invade their privacy. I know I find it eerie when I do a Google search and for the next three days I see ads that are related to for something I searched for. But I can personally live with that, because most of the time Google is wasting their time on me and I wasn’t looking to shop. I find it funny that I will look up the latest information about smart cars and then get flooded with car ads (because I exclusively drive Ford trucks and I buy one every twenty years, whether I need a new one or not).

The real rub is that these companies do a lot more than build advertising profiles on us. They know all sorts of other personal data about us and they associate that data with our name. While I am not bothered by getting car ads for vehicles I am never going to buy, I frequently hear about people getting bombarded with ads or even mailings and phone calls about far more personal topics like rehab centers or the latest diabetes treatments. That is going over the line in my opinion.

The invasion of our privacy seems to be going even further. Facebook, for example, is the world leader in facial recognition technology and they are building a huge database of every time you show up in somebody’s picture. They not only know about you, but they are learning where you go and who you associate with. That is a bit unnerving.

But to me the real scary thing is that these companies then sell this data to others. And there is no telling how that data is used. Even should the large companies have some sense of morality and responsibility (and many believe they do not), the companies that buy this data can do anything with it they please. It’s very easy these days to buy a data dump about other people, and that kind of information can be a powerful tool in the hands of an ex-spouse, an employer, or a scammer.

The problem that we all face is that it’s too easy to use the services that watch us. Google has a spectacular set of software products. And for my generation there are a ton of friends and relatives on Facebook. If you don’t want to be spied on you have to make a very conscious effort to wall yourself off from these sorts of data-gathering web activities, and that is hard to do. And no matter what you do online, your ISP or the government might be gathering all of this data anyway.

These large companies sometimes hide behind the fact that they mostly sell ‘metadata’ which is data that has been scrubbed to hide the identify of individuals. But numerous articles point out that with data mining it’s only necessary to know a few facts about you in order to pull out facts about you from metadata files.

We may come to a day when there is massive pushback against these companies that are collecting, using, and selling our personal data. It will probably take a string of tragedies and disasters for this to become a worry for the average person. And if that happens, then either the large companies will stop spying on us or somebody who promises not to will take their place. But it is extremely profitable today for the big companies to spy on people, and until there is more pain than profit from using our data, one has to imagine that this is going to continue.

A Path to the Infosphere

Futurama_Comic_S1Eric Schmidt of Google recently made headlines when he said: “The Internet will disappear.” By that he meant that it will become so seamless that it will surround us everywhere. Obviously a lot of things have to happen before we can all move to the ubiquitous infosphere. For instance, as I just covered in another blog, we will need small nonintrusive wearables. Gone will be the fitness trackers and smartwatches and even the cell phones. We’ll instead have to have some small device that is always with us and that can communicate with us both audibly and visually. This could be an earbud or even implanted chip along with some device that can cast images into our retinas, something far less clunky than Google glass.

But aside from better devices, the biggest change is going to have to be in the way the web functions. Gone would be today’s interface with the web through browsers where we interface with one program or one website at a time. The way we work on computers today is too linear and while we may have many programs running, each of them is separate, and we dip into them one at a time.

The wireless world has already shown us a partial path to the future by virtue of having moved to a world of apps rather than URL websites. But apps still suffer from the same problem of being used one at a time, and there is very little linking between apps today. There are apps today that want to dip into other apps to grab existing data, but I normally get the impression that this is more for the benefit of the app company than it is for the user. I constantly run across apps that ask if they can have access to my contacts list on Facebook or LinkedIn and I always say no. Unless it’s some sort of a communications app, these companies are just fishing for more leads to try to sell their product. We don’t need more advertising linking, but functional linking.

There is an attempt in the app world to establish better links between apps. For instance, Google’s App Indexing and Facebook’s App Links are the start of an effort to create what the industry is calling deep linking, which are ways for apps to usefully share data for the benefit of the user. There are a number of other software companies working in this area.

Today, content providers build custom cross-linking libraries to fulfill this function. The cross-linking process makes it possible to move seamlessly from one app to another. But such links are custom-made and are very specific to a small set of apps. The links share data fields so that a customer using one app can be sent to a second app without logging in again and without having to provide basic data about who they are.

But what’s really needed in the long run, if we are going to get to a seamless infosphere, is a software system that automatically allows a user to shift from one app to another without ever having to log in. The whole idea of logging in has to go away. We need apps that can authenticate who we are and that don’t have to ask us basic questions about who we are. So another thing that is needed for a seamless infosphere is some sort of foolproof authentication. Apps need to be able to trust that we are who we say we are.

But the flip side of that is that as users we need to know that apps won’t spy on us and suck out every bit of information about us. When apps can talk to each other without our permission, we need to have some sort of privacy matrix established that defines what we are willing to share and not share. And the apps must follow the rules that each of us establishes. So another thing needed for us to feel safe in the infosphere is some sort of trustworthy privacy rules that all programs we interface with will follow.

One of the early dangers I see from the linking process is that it could become very proprietary. If Google, Facebook, or Apple develops a suite of linked apps that work well together but that don’t link to outside apps, then we will have taken a step backwards and will have undone the intent of the recent net neutrality ruling. That ruling ensures that large ISPs don’t restrict entry of new competitors into the web market. But that ruling does not protect against the large content providers getting so large and ubiquitous that they kill off competitors by locking them out of linked systems. So eventually we are going to need net neutrality rules for content providers.

So we are almost there for a ubiquitous web. All we need are a total migration to apps, better wearable devices, foolproof authentication, better privacy screens to protect our data, rules that allow any app to safely link with others, and net neutrality rules that don’t let any content provider control the infosphere. Come on Silicon Valley. We’re waiting.

Is the Universal Translator Right Around the Corner?

star trek comm badgeWe all love a race. There is something about seeing somebody strive to win that gets our blood stirring. But there is one big race going on now that it’s likely you never heard of, which is the race to develop deep learning.

Deep learning is a specialized field of Artificial Intelligence research that looks to teach computers to learn by structuring them to mimic the neurons in the neocortex, that portion of our brain that does all of the thinking. The field has been around for decades, with limited success, and has needed faster computers to make any real headway.

The race is between a few firms that are working to be the best in the field. Microsoft and Google have gone back and forth with public announcements of breakthroughs, while other companies like Facebook and China’s Baidu are keeping their results quieter. It’s definitely a race, because breakthroughs are always compared to the other competitors.

The current public race deals with pattern recognition. The various teams are trying to get a computer to identify various objects in a defined data set of millions of pictures. In September Google announced that it had the best results on this test and just this month Microsoft said their computers beat not only Google, but did better than what people can do on the test.

All of the companies involved readily admit that their results are still far below what a human can do naturally in the real world, but they have made huge strides. One of the best known demonstrations was done last summer by Google who had their computer look at over 10 million YouTube videos and asked it to identify cats. Their computer did twice as good as any previous test, which was particularly impressive since the Google team had not pre-defined what a cat was to the computer ahead of time.

There are some deep learning techniques in IBM’s Watson computer that beat the best champs in Jeopardy. Watson is currently being groomed to help doctors make diagnoses, particularly in the third world where there is a huge lack of doctors. IBM has also started selling time on the machine to anybody and there is no telling all of the ways it is now being used.

Probably the most interesting current research is in teaching computers to learn on their own. This is done today by enabling multiple levels of ‘neurons’. The first layer learns the basic concept, like recognizing somebody speaking the letter S. Several first-layer inputs are fed to the second layer of neurons which can then recognize more complex patterns. This process is repeated until the computer is able to recognize complex sounds.

The computers being used for this research are already getting impressive. The Google computer that did well learning to recognize cats had a billion connections. This computer was 70% better at recognizing objects than any prior computer. For now, the breakthroughs in the field are being accomplished by applying brute computing force and the cat-test computer used over 16,000 computer processors, something that only a company like Google or Microsoft has available. .

Computer scientists all agree that we are probably still a few decades away from a time when computers can actually learn and think on their own. We need a few more turns of Moore’s Law for the speed of computers to increase and the size of the processors to decrease. But that does not mean that there are not a lot of current real life applications that can benefit from the current generation of deep learning computers.

There are real-world benefits of the research today. For instance, Google has used this research to improve the speech recognition in Android smartphones. But what is even more exciting is where this research is headed for the future. Sergey Brin says that his ultimate goal is to build a benign version of HAL from 2001: A Space Odyssey. It’s likely to take multiple approaches in addition to deep learning to get to such a computer.

But long before a HAL-like computer we could have some very useful real-world applications from deep learning. For instance, computers could monitor complex machines like electric generators and predict problems before they occur. They could be used to monitor traffic patterns to change traffic lights in real time to eliminate traffic jams. They could be used to enable self-driving cars. They could produce a universal translator that will let people with different languages converse in real-time. In fact, in October 2014, Microsoft researcher Rick Rashid gave a lecture in China. The deep learning computer transcribed his spoken lecture into written text with a 7% error rate. It then translated it into Chinese and spoke to the crowd while simulating his voice. It seems like with deep learning we are not far away from having that universal translator promised to us by science fiction.

The Battle of the Routers

Cisco routerThere are several simultaneous forces tugging at companies like Cisco which make network routers. Cloud providers like Amazon and CloudFlare are successfully luring large businesses to move their IT functions from local routers to large data centers. Meanwhile, other companies like Facebook are pushing small cheap routers using open source software. But Cisco is fighting back with their push for fog computing which will place smaller function-specific routers near to the source of data at the edge.

Cloud Computing.

Companies like Amazon and CloudFlare have been very successful at luring companies to move their IT functions into the cloud. It’s incredibly expensive for small and medium companies to afford an IT staff or outsourced IT consultants, and the cloud is reducing both hardware and people costs for companies. CloudFlare alone last year announced that it was adding 5,000 new business customers per day to its cloud services.

There are several trends that are driving this shift to data centers. First, the cloud companies have been able to emulate with software what formerly took expensive routers at a customer’s location. This means that companies can get the same functions done for a fraction of the cost of doing IT functions in-house. The cloud companies are using simpler, cheaper routers that offer brute computing power which also are becoming more energy efficiency. For example, Amazon has designed all of the routers used in its data centers and doesn’t buy boxes from the traditional router manufacturers.

Businesses are also using this shift as an opportunity to unbundle from the traditional large software packages. Businesses historically have signed up for a suite of software from somebody like Microsoft or Oracle and would live with whatever those companies offered. But today there is a mountain of specialty software that outperforms the big software packages for specific functions like sales or accounting. Both the hardware and the new software are easier to use at the big data centers and companies no longer need to have staff or consultants who are Cisco certified to sit between users and the network.

Cheap Servers with Open Source Software.

Not every company wants to use the cloud and Cisco has new competition for businesses that want to keep local servers. Just during this last week both Facebook and HP announced that they are going to start marketing their cheaper routers to enterprise customers. Like most of the companies today with huge data centers, Facebook has developed its own hardware that is far cheaper than traditional routers. These cheaper routers are brute-force computers stripped of everything extraneous and that have all of their functionality defined by free open source software; customers are able to run any software they want. HP’s new router is an open source Linux-based router from their long-time partner Accton.

Cisco and the other router manufacturers today sell a bundled package of hardware and software and Facebook’s goal is to break the bundle. Traditional routers are not only more expensive than the new generation of equipment, but because of the bundle there is an ongoing ‘maintenance fee’ for keeping the router software current. This fee runs as much as 20% of the cost of the original hardware annually. Companies feel like they are paying for traditional routers over and over again, and to some extent they are.

These are the same kinds of fees that were common in the telecom industry historically with companies like Nortel and AT&T / Lucent. Those companies made far more money off of maintenance after the sale than they did from the original sales. But when hungry new competitors came along with a cheaper pricing model, the profits of those two companies collapsed over a few years and brought down the two largest companies in the telecom space.

Fog Computing.

Cisco is fighting back by pushing an idea called fog computing. This means having limited-function routers on the edge of the network to avoid having to ship all data to some remote cloud. The fog computing concept is that most of the data that will be collected by the Internet of Things will not necessarily need to be sent to a central depository for processing.

As an example, a factory might have dozens of industrial robots, and there will be monitors that constantly monitor them to spot troubles before they happen. The local fog computing routers would process a mountain of data over time, but would only communicate with a central hub when they sense some change in operations. With fog computing the local routers would process data for the one very specific purpose of spotting problems, which would save the factory-owner from paying for terabits of data transmission, while still getting the advantage of being connected to a cloud.

Fog computing also makes sense for applications that need instantaneous feedback, such as with an electric smart grid. When something starts going wrong in an electric grid, taking action immediately can save cascading failures, and microseconds can make a difference. Fog computing also makes sense for applications where the local device isn’t connected to the cloud 100% of the time, such as with a smart car or a monitor on a locomotive.

Leave it Cisco to find a whole new application for boxes in a market that is otherwise attacking the boxes they have historically built. Fog computing routers are mostly going to be smaller and cheaper than the historical Cisco products, but there is going to be a need for a whole lot of them when the IoT becomes pervasive.

Who Owns Internet Ad Space?

advertise-hereGoogle made a very interesting announcement a few weeks ago that led me to find out more about the ad space on web sites. Google announced that for $2 per month they would block all ads on web sites for a customer as long as they browse through the Chrome browser.

I find this fascinating because it means that Google thinks that they have the ability to block an ad, even when they are not the one to have placed the ad in the first place. Google sells a lot of ads, and so it makes sense that they can block ads that they have placed on a web page. But when they say they can block all ads it also means that they think they have the ability to block ads placed by somebody else.

Just to be clear about what I mean by ads, look at this web page. At the top is a banner ad. At the top right of the story is an ad. And across the bottom of the article are four ads. After loading this web site multiple times I noticed that the ads changed.

It turns out that there are two kinds of ads on a web page. There are fixed ads and remnant ads. Fixed ads are placed there by the web site owner or somebody they partner with to advertise for them. Fixed ads embedded into the web page and can only be accessed by the website owner. The other kind of ads are called remnant ads. These are coded in such a way as to be available to outsiders, and anybody that has access to a website before it reaches a customer can change what is in the remnant ad space.

And as you would expect, these remnant ad spaces get changed all of the time. There are a lot of companies that sell advertising into the remnant ad space including Google (DoubleClick), Yahoo, Amazon, Facebook, AOL, AppNexus, Openx, Adroll, RightMedia and dECN. It was very easy for me to spot remnant ads in the recent election season, because I swear that every web page I looked at here in Florida had a political ad for Rick Scott who was running for reelection as Governor. So somebody was being paid in Florida to put those ads onto Florida computers.

The first question this raised for me is: who owns this ad space? The web page example is from the TechCrunch web site. TechCrunch chose to make the ads open to the public and I assume they gets revenues from at least some of the parties that use that space, which is their motivation to use remnant ad space. Google thinks they have a right to go in and block whatever is on the remnant ad space on that page, so they are sure that it is theirs to grab. I know that some of the larger ISPS like cable companies are also in the advertising business, through partners, and I wouldn’t be surprised if it was Comcast that gave me all of the Rick Scott ads.

I was shown a recent legal opinion by one of the companies that advertises in the remnant space who was gracious enough to share it with me as long as I don’t publish it. The opinion says basically that nobody owns the remnant ad space. The legal opinion says that the act of a web site owner in making this available to the public means just that, and it can be used by anybody who somehow has access to the website before it reaches a customer. That generally is going to mean some company who is part of the chain between a web site and the customer. Obviously the web site owner can hire somebody to place ads in the remnant space. If you reach the web site through a browser then the browser owner can place the ad in there. If you get to a web site through a link on another web site like Yahoo News then they can place ads there. And your ISP also would have access to this ad space.

I really like the Google product that blocks ads. I think there are plenty of customers who would love to avoid all of those ads. Further, blocking ads means a faster Internet experience for a customer. I know there are web sites I go to that have multiple videos automatically running that seems like an extravagant use of my bandwidth. I have a 50 Mbps Internet connection and there are still web sites that load very slowly due to all of the extra videos that have been layered into the ad spaces. I also learned that remnant ads are one of the most common sources today of adware and malware and I will talk about that more in tomorrow’s blog.

Can Web Experiments Go Too Far?

Numismatics_and_Notaphily_iconI remember a few months back when there was a big stir in the Facebook community when it was announced that Facebook had been experimenting to see if they were able to influence the moods of Facebook users. They gave some people very upbeat feeds and gave others more negative feeds to see if the different feeds would influence people’s moods positively or negatively. And as one would suspect it did impact people and there was a difference between seeing puppies and kittens versus bus wrecks and war stories. But Facebook got caught and they issued the appropriate apology and promised they would never do it again.

I find the whole story amusing since people are experimented on every day on the web. I’m not sure that everybody gets that the vast majority of our web experience is funded by advertising. Most of the sites that people enjoy are there because of advertising, and web advertisers experiment on us every day trying to find that one technique, that one color scheme, that one catch phrase that will get more people to buy what they are selling.

There are countless examples of how experiments are done on users to find out what works and doesn’t work. The companies that run these experiments are often open about it and not apologetic like Facebook was. For example, just last month Google announced that it was launching a major set of experiments to improve its performance on cellphones. They’ve gotten very good on computers but are not getting the same results from phones. Google’s ultimate goal is to be able to track people’s purchasing across all platforms so that they can know when somebody sees an ad on a cellphone but completes the purchase on a computer.

Most big companies that sell things on the web experiment with their web site to see what best influences the number of sales or clicks they get. The process of experimenting with website design is called Conversion Rate Optimization (CRO). That’s a fancy way of saying that that a company will change subtle things about their site to see if it makes a difference in sales. They can change everything from color, fonts, pictures, message, layout etc. to see what is most effective. The web sales process is basically one large ongoing experiment on customers.

What works often defies logic. For example, Trip Advisor found that having a blue background was more effective when a customer came to their site from Google but that having a yellow background was more effective for customers who came straight to Trip Advisor. They have no idea why.

The subtle differences that come from CRO can make a big difference in results. For example, Google revealed earlier this year that using a different shade of blue on search results caused more people to click links and this one change increased their revenue by $200 million for the year.

This is not to say that all such CRO changes are ethical or as easy as changing colors. For example, some web sellers use techniques like using deliberately confusing language to get people to buy or click something. Or they may trick customers into checking boxes that give away the right to return a product. And web sales have always used techniques like hiding expensive shipping prices until the last step of the process. There has always been an unsavory side to sales and it’s no different on the web that has its own version of high-pressure sales techniques.

You can take some advantage of CRO with your own website. If you are trying to sell broadband products or add-on features on the web you should be taking steps to maximize your sales. You may not have the time or resources to conduct continuous CRO experiments, but you can still take advantage of the process. For example, take heed of the companies that are successful at selling on the web. Some of the most successful sellers of web telecom services are the various companies that sell VoIP services, so you might want to look closely at their web sites or to similar companies and compare them to your own. What colors are they using? What’s their mix of text and pictures? Do they use full sentences or phrases?

I often browse carrier web sites and I see many that are terrible at describing their products and prices. Too many companies build a website once and never really look at the design again for many years. This might be acceptable if your website is used for nothing more than to provide basic information about your company. But if you are hoping to drive any sales from your web site you have to put more effort into the details. Don’t be afraid to experiment a bit with different ideas, different looks, different presentations. And if you do, take notes so that you know what worked and didn’t work.

The Battle of the Network Switches

Cisco_Media_Convergence_ServersYesterday Facebook announced that it has successfully built an open-source network switch. This is really big news in an industry where Cisco and Juniper together have more or less cornered the switch market. The Facebook switch has been named Wedge and is operated by an open-source software platform they called FBOSS. This has been created as part of the Open Compute Project (OCP) started by Facebook but now involving many other companies. The goal of this project was to radically change the way companies buy hardware and software, and it is starting to achieve those goals.

 

This announcement is going to shake up the $23 billion Ethernet switch market in the same way that the introduction of the softswitch killed the duopoly on voice switches once held by Nortel and Lucent. I’ve written earlier about how the Ethernet switch industry is moving towards software-defined networking (SDN). The goal of SDN is to take features that have baked into hardware, such as security and device management and make those functions software controlled.

 

Cisco has already introduced their own version of SDN and they now have software that will control their various devices. But honestly this is only a modest change for them, because at the end of the day all of their hardware and software is proprietary. We are all very familiar with network engineers who need multiple Cisco certifications just to be able to operate the Cisco gear. Cisco’s SDN doesn’t really change that need for network engineers or lower the cost. It just layers a new software over top of the old platform.

 

The industry was ripe for this change because Cisco has grown into the same kind of company that we saw in Lucent and Nortel at their peak. The Cisco pricing model now includes a permanent 15% annual fee on top of any hardware you buy from them. This fee is ostensibly for upgrades and maintenance, but the people who write the checks for this don’t feel like they are getting much value from these annual checks. This sounds exactly like the kinds of pricing practice we saw in the voice industry when it was a duopoly of Nortel and Lucent.

 

Cisco has been reported to have a 60% profit margin, and so they are ripe for a challenge. Cisco is not going to go away easily and they have been very clever in the way they have shaped the network switch market. That market is operated by and decisions made by switch engineers, all of whom Cisco has made certain have a long list of Cisco certifications. And frankly, the OCP initiative is aimed directly at getting rid of those network engineers, in the same way that cloud computing is doing away with server engineers.

 

Certainly Cisco has already lost the largest customers in the market. Facebook will be going with their own new technology. It’s been reported that Amazon, Microsoft and Google all are working on their own versions of SDN servers as well, although none of them are reported to be headed towards open-sourcing like the OCP initiative. But one would think that this is going to put a massive amount of price pressure on Cisco in a few years, as ought to happen with any company that has gigantic profit margins. There are still going to be a number of network operators who are going to go with traditional Cisco for a while simply because it works and is comfortable for them. But as the OCP hardware becomes readily available and proves able to work in the market it’s going to get harder and harder to justify buying expensive and proprietary servers.

 

It took a full decade for the traditional voice switch manufacturers to fail after the introduction of the softswitch. And Cisco is probably better equipped to fight back against this change than were Nortel and Lucent. But in the early days of the softswitch I saw some of my clients cut their hardware and maintenance costs in half by going with a softswitch and it was obvious then that the newer technology would eventually win. This Facebook announcement is the first day of the decade that is going to transform the way we buy and use network switches.