Four Lessons in Disappointment

Two “tech embarrassments” lead the news today, and there’s at least one lesson to be learned from each of them.  Amazon had a cloud outage that disrupted some websites, and both Apple and Google are accused of tracking users with their smartphone technology.

The Amazon outage was apparently related to its distributed RDBMS, though precise causal information may or may not be available eventually.  This has caused a public flap, understandably, because cloud computing is supposed to be a way of improving reliability.  Amazon, in addition, has segmentation strategies that are supposed to add to the availability of the cloud, and the failure is certainly no endorsement for the service in general or the availability enhancements in particular.  Could it be that clouds are over-hyped?  Gee, why would that be a surprise?

The WSJ has reported that both Apple and Google are “tracking” users, meaning that they either are or could report location back to the companies and to developers and others.  There’s the usual threat of an inquiry from Congress here, but there’s also an interesting question; why?  Truth be told, neither Apple nor Google are trying to follow you, they’re just trying to monetize you.  That effort, pursued with perhaps more gusto and less foresight than we’d hope, is really not focused on “you” at all, but the demographic superclass to which you belong.  They want to serve personalized ads to the “merchandisable you” and so they need to know where the “real you” is because that’s a member of the demographic superclass they need to serve ads to.  They’re not thinking “Tom is entering Staples”, but rather “Gray Panther” is entering, and they serve an ad accordingly.

Verizon reported their numbers and demonstrated why voice and legacy is out and FiOS and mobile is in.  They beat AT&T on subscriber ads, something the media links to the iPhone availability.  I’m not so sure, given that AT&T didn’t report any noticeable loss of customers because of their loss of exclusivity.  But at any rate, the numbers also showed that FiOS is picking up strongly and that DSL (limited in speed by the local loop characteristics) is losing ground in its basic form.  That’s significant because it suggests that copper loop may be getting a lot less valuable.

The latter suggests a fundamental issue for the telcos; leveraging their key asset is on the ragged edge of financial whimsy and yet doing FTTH is over the edge for most areas.  That’s another reason to jump into mobile, but it also casts doubt on whether wireline is even a rational long-term business.  Since wireless can’t easily support HDTV broadband to the home, that begs the question of whether telco TV is feasible in some areas of the world, and whether OTT video can really be expected to overcome multichannel broadcast cable and satellite.

Economically, the big news is that consumers are feeling poorly again.  The dip in confidence is attributable to a combination of higher gas prices and political dialogs that are making the future look like a choice between a bunch of lousy options.  Since the gas price issues are, in my view, a result of commodity speculation that could have been stamped out by an honest regulatory policy a decade ago, this puts the whole problem at the feet of the two parties.  And, of course, the voters.


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