Technology – Page 6 – Stephen Shu, PhD

March 24, 2005

The Vonage 911 Incident Sheds Light on Differing Definitions of Quality of Service (QoS)

Om Malik’s recent post got me a little heated. While I support voice-over-IP (VoIP) efforts, I worry at times that we as consumers will unknowingly contribute to a tragedy of the commons. The "commons" that we risk of losing is that of the reliability and security of a public utility. Below I’ve reproduced (and cleaned up formatting for) some comments I made in Om’s post as to why VoIP is not the same as the public switched telephone service (PSTN).

Everyone gives a lot of heat to the incumbent PSTN providers, and there’s good reason for that because people are looking at Skype, pre-paid international calling cards, and the like and coming to their own conclusions that the PSTN is not a good deal. Heck, I’m a user and have switched over in some cases based on cost.

What people fail to understand is the PSTN was designed to handle a lot of things we take for granted:

911 calls being nailed up to the operator position so you can’t hang up. Can all VoIP providers do that? (I don’t know)
What about cases of power outages? The PSTN was designed to keep your phone powered during outages.
What about cases of major disasters, e.g., bombs blowing up key parts of the national infrastructure? The PSTN was designed to handle these requirements …
What about traffic congestion and call gapping?
What about FBI or authorities being able to wiretap under authorized situations, etc.?

The list goes on and on, but all people care about is price until things go badly …

Now regardless of whether Vonage has made, will make, needs to make, etc. any information regarding differing QoS, a lot of this will likely go over a typical person’s head in the early rounds and years to come. Telecom technology is pretty complex. I hope someone is keeping their eye on the ball so that we don’t unknowingly wipe out a valued, public commons without a proper alternative. I am all for Vonage, and may the best service win so to speak, but the PSTN gets too much of a bad rap at times. As consumers, we (via our unsatiated appetite for VoIP) and companies like WorldCom have created a ton of pressure on the incumbent carriers that we sometimes forget.

Steve Shu

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March 22, 2005

Pre-Paid International Calling Card Rates Sustainable?

Skype is the rage these days for many technology-savvy folks. Get free international calls when dialing from Skype user to Skype user from your computer. If you need to dial from Skype to a person in Europe who is on a regular landline, you can get rates in the range of 1.7 cents (Euro) per minute.

But have you explored international calling cards lately? I had to explore this because of some telecom issues reaching my wife in France and some of my international clients.

I had to do a triple take on some of the rates. Calling Europe can cost from 1.6 cents to 0.8 cents per minute for some calls using landline to landline calling. On top of that, some of these cards have toll-free 800/8XX numbers that people can call to initiate a call. Now 800 numbers in many cases cost the subscribing company around 25 cents per call to do the number translation from 800 to real telephone number. Now with an $10 international calling card that can do like 1250+ minutes of call time, you do the math to see whether these companies should be able to do this profitably. I mean off-the-cuff, 20 calls costs about $5 of the $10 card just to pay for the setup of the 800 call. Perhaps the prepaid card providers are profitable, but I wonder if there are either back doors or house of cards related to this (presuming that the technology to trunk the call from the United States to points of presence [POPs] internationally is IP-based). I mean someone has to pay for the underlying infrastructure IP is riding over.

Granted when you call the customer support line for some of these cards, it sounds like it is an answering machine from the 70s in someone’s basement, but heck, the call sounds perfect and of digital quality.

Anyway, compare the pre-paid international calling card rates to the $10ish/month fee that some local carriers have for making international calls plus the 8.0 cents/minute fees they are charging. Are any of these fees really outrageous fees? They are almost borderline outrageous on the low side. I feel bad for the traditional telcom customer service reps – people tell me that the reps are simply shocked when they hear about the international calling card rates being brought by pre-paid providers. The only thing the reps can do is try to cross-sell you into other service (e.g., mobile, satellite dish) when people drop their international call service.

March 21, 2005

22 Million iPod Users Can Get Lifestyle in General Motors Auto

Not to mention that they can get the podcasts too.

Bob Lutz points us to the direct interface from iPods to 2006 Pontiac Solstice radios with additional discussions at Autoblog. Regardless of the mechanics of the interface, that’s selling lifestyle.

If you didn’t know how widespread the iPod has gotten, Andrew Sullivan provides perspective on the "iWorld":

What was once an occasional musical diversion
became a compulsive obsession. Now I have my iTunes in my iMac for my
iPod in my iWorld. It’s Narcissus heaven: we’ve finally put the “i”
into Me.

And, like all addictive cults, it’s spreading. There are now
22m iPod owners in the United States and Apple is becoming a
mass-market company for the first time.

(Note: US Census Bureau indicates that the population of the state of New York and United States is estimated to be 19 million and 290 million respectively.)

Now not everyone has an iPod, but I can already see the iPods being given away by local dealers in car promotions.

March 21, 2005

Yahoo Acquires Flickr … Plus Ask Jeeves Acquired

A lot of people reporting today on Yahoo’s acquisition of Flickr (I can hear the Yahoooooo jingle in my head as I type). Om Malik has got the latest on what rumored deal terms are. Other big technology news today is the acquisition of Ask Jeeves. See venture capitalist Fred Wilson for his quick take comparing the two deals.

Consolidation in the software space is continuing up and down the
chain. I expect much more to happen in 2005. It’s not just going to happen in the more mature
segments of the software market (like with Oracle and PeopleSoft). It’s also happening with technology
that hasn’t gotten beyond the early adopter phases (in part because
Internet business models are shifting all around due to blogging, news and PR, and advertising changes). It’s very timely that venture guys like Ed Sim are talking about what happens when competitors are acquired.

March 2, 2005

PRTM Founder Takes Helm At Dallas-Based i2

The troubled supply chain software company i2 has a new CEO from my alma mater at Pittiglio Rabin Todd & McGrath. The new CEO and President is Michael McGrath, also known to people at the Firm as the "M" in PRTM and one of the founders of the company.

One of my former colleagues still with PRTM said that this is one *heck* of a way to spend retirement. It will be a tough slog. At least it is couched as an interim CEO/management deal. Interim management is something that PRTM has also been known for (where consultants have, in cases, played roles as both temporary managers or traditional consultants within client firms).

Steve Shu
Managing Director, S4 Management Group

March 1, 2005

In Search of Better Ways to Measure the ROI of Blogging

I was motivated to write this post based on some discussion at the CEO Bloggers’ Club.

I contend that the investment by most companies in blogging has been minuscule to date. Plus the number of companies making investments is minuscule. When corporate blogging does become more prevalent, I think more sophisticated frameworks for measuring ROI will evolve. These frameworks could be based on models from online marketing, accounting, or finance theory.

So what can one do today to get a grasp on ROI?

Rather than getting caught up in the minutia and complexity of trying to measure returns directly, here might be another way to think about this. It applies the concept of opportunity cost from economics.

Given certain conditions (e.g., no blogging fatigue, no blogging addiction), bloggers may tend to ante up more when the returns are sufficiently positive. When the returns are negative (not sufficiently positive), they tend to take money (i.e., blogging time) off the table and perform other things (this relates to the concept of opportunity cost).

Thus, if you can measure the returns on the activity that you’ve switched to (presuming you’ve switched away from blogging), then you can presume that your blogging return is not more than the activity you’ve switched to.

A little abstract, but here’s another way of coming at it. One could hypothetically say, how much $$ (or $$/hr) would it take you to switch away from blogging entirely (or for an hour, a year, or all of the above, say)? As you go through the complex process of thinking through this, you get an idea of time invested (which is the primary investment for most) versus the minimum return you require to stay with blogging.

If that number turns out to be less than or equal to $0, well then you are either a blogging addict or being coerced by your employer.

So rather than looking at blogging ROI, what’s your blogging opportunity cost?

Steve Shu
Managing Director, S4 Management Group

February 26, 2005

Big Brother’s Watching Your Email and Blogs

Some of the same filtering technologies that block SPAM from getting to you will now be applied to keeping your ~~trap~~ mouth shut. (Hey, we’ve trained the SPAM technologies so well they will be getting used against us!) Blog readers of Jeff Nolan saw first hand reporting of these types of company products at the annual Demo conference in Scottsdale, Arizona. With respect to this particular subject, you can look here, here, and here on Jeff’s blog.

Ephraim Schwartz has an article just yesterday portraying his impressions of the growing trend underlying these products. Schwartz writes,

"This year’s show heightened my awareness to one trend in particular: high anxiety over what employees can publish in both
e-mail and blogs. There was a slew of products that monitor employee communications in one way or another, mapping them to
corporate policy on everything from offensive language and sexual harassment to outright prohibition of personal e-mail."

So if companies can’t get comfortable with their corporate policies on blogging, soon there will be no need to express the rules. Just encode the rules explicitly in monitoring software or train the devices using language processing and Bayesian rules like some SPAM filters. Based on Schwartz’s article, imagine:

pop-up windows appearing on employees’ screens telling them to reconsider what they are typing at any given moment,
managers getting scorecards of how many email and blog infractions an employee has, or
the legal department being automatically tied in the loop to approve what people write.

Blogging is big, but Big Brother is not too far off.

Steve Shu
Managing Director, S4 Management Group

February 23, 2005

Scoble’s Right About RSS … But There’s More In Other Worlds

Referred to by some as the Obi-Wan Kenobi of blogs, Scoble (Microsoft evangelist) has some interesting discussions on the use of RSS for blogging. On the one hand, RSS is pretty cheap. It costs nothing to add. It allows people that are connectors and relaters in the network to build stronger relationships within the blogosphere. That said, the blogosphere is grassroots to an extent. Thus, while RSS helps bloggers and those that use aggregators to gather information, to reach the rest of the world one probably also needs to consider other things (e.g., like [choke] using email). To comment on Winer’s comments that not having RSS is like not having business cards – I have to also agree from a cost perspective. That said, I think that there are some businesses and people that have marketed and done deals without business cards. Really depends on the business model.

Anyway, I wanted to memorialize Scoble’s posts here and here because they have very useful learnings in there, even for those that are neither bloggers nor regular readers of blogs.

Steve Shu
Managing Director, S4 Management Group