Month: July 2012

The voice services space may be demonstrating the fate that any “basic” service of connection will face, and also some of the technical opportunities that could still be realized.  Acme Packet, one-time darling of the financial analysts, has taken a hit and the “Why?” says a lot.

Acme has been a provider of session border controllers for VoIP services, a market that at one level you’d think would be going well given the voice transition we’re in.  But the voice transition is being driven by free overlay voice services like Skype and Google Voice, and any time you face free competition, your own price and cost will be under pressure.  In the SBC space, Acme has been forced to push a software-SBC model, and obviously that’s going to sustain a much lower margin.  Just as obviously, in the longer term, the P2P voice model is going to win out and SBCs will be a thing of the past.

OK, doom and gloom in voice is nothing new; most people have realized that voice services will ultimately be incrementally free and thus based on the lowest possible technology cost.  As we move to smartphones and tablets with easy gadget-based access to multiple online message, mail, and voice services there’s little reason to worry even over the issue of interworking among providers.  Let the device bridge the gap.  And video obviously breaks the old PSTN calling model.  But is there anything good that might come of this?

One thing, I think.  As we move toward the notion that services are a feature that’s hosted rather than an element in hardware (SBCs are software, remember?) we move to a model of cloud services that just might embrace the network devices themselves.  After all, where’s the boundary of a cloud?  Let’s suppose we had a service architecture where all features were represented by a URL and where all devices from the phone/tablet in your hand to the deepest data center, INCLUDING the routers and switches, might host stuff on demand.  It’s a cloud model that lets not only users join and applications run, it lets resources join.  When they do, the resource’s location relative to the user and to other resources would be used to decide when to host something on it versus elsewhere.

You could argue that the Mozilla Firefox OS concept could promote a notion of “agile resource fulfillment”.  Incorporate an API into an app and it needs to be satisfied somewhere.  Why not bind apps to APIs more dynamically, so that if the handset has a capability it can be drawn from it, but if not the API could realize to a cloud service?  If you want “location” you call for it, to either draw on handset GPS or carrier triangulation.  The notion is to abstract what elements make up a service and then utilize what’s best suited.  If the cloud can assign applications to resources, why stop with server farms?  I don’t think we can, or should, or will.

One interesting possibility in taking a step in this direction would be to adopt a kind of Firefox-OS-ish model for basic orchestration and control of network behavior.  Microsoft and Joyent have been pushing a server-side Javascript architecture with “node.js”.  Could you compose “service pages” and then execute them?  Could you extend the architecture with some broad API-discovery mechanism like UDDI?  Could equipment vendors host node.js on network management platforms to provide a link to their own exposable assets?  Could we secure a distributed service/cloud architecture?  There are other approaches to node.js, of course, but at least this is an option for a broad architecture at a time when we darn sure need one.

 

With Apple looking like it’s going to launch a 7-inch tablet, it’s hard not to see that form factor gaining a lot more traction.  My surveys tell me that enterprises prefer that layout for many of their mobile-worker applications because it’s easier to carry and because most of these apps involve displaying something for on-site review based on a few keystrokes.  As far as consumers are concerned, the big thing seems to be cost—the 7-inch model is cheaper and it lets players like Apple go down-market without discounting their premier line.  But is that all?

Amazon, since the launch of the Kindle Fire, has been the major player in the 7-inch space, and Google’s Nexus 7 clearly aims as much to hit Amazon as to miss the traditional Apple iPad niche.  Apple’s response, if true, would be effectively a punch at Google to be sure, but also at Amazon.  So what’s up here in the 7-inch space?  You guessed it; I think it’s cloud ambitions.

If you’re going after the mass market you need to have a cheap product, which either means you have thin profits overall or that you find ancillary profit sources as follow-ons to the tablet buy.  Amazon (and B&N) get their primary profit from sales of ebooks to the customers who have their reader.  Google or Apple, entering the 7-inch space, are going to have to draw on some form of cloud service like ebooks or they’ll never be able to both compete in price and generate margins overall.

Tablets push cloud, but not the most general cloud model—at least not so far.  Most tablets are WiFi and are used to do something that needs more screen real estate, so e-reading is a good example.  Content is clearly another, which is why Kindle Fire draws on Amazon’s library of video.  Google has revamped its whole Android store vision to support a stronger channel of content delivery to devices.  Apple, of course, already has a store.  And store changes aren’t over yet, because Google and presumably Apple will bring a new dimension to 7-inch e-reader form factors—multiple ebook clients.  That may push everyone to expand services.

Amazon doesn’t support alternative ebook libraries on Kindle.  Google does, effectively, on Nexus 7, and Apple likely will if it launches a 7-inch tablet.  For Apple and Google, the move is essential because they need to be able to support the growing ebook market, but for Amazon this is bad news because it means that they either have to open their own device or risk users will fly to a more general tablet to get access to all the ebook conduits.  I read both B&N and Amazon on my tablet, and I’m sure many people do the same.  With this shift, the ebook subsidies are at risk, which pushes the Amazons and B&Ns of the world more to a generalized model of a tablet as a content receiver, which then pushes them more to a cloud model.

Amazon may be launching its own smartphone, say the rumors.  That’s very possible, I think, and if they do then I think it’s also going to put pressure on Apple and Google to raise the bar again.  Maybe to become MVNOs?  It will also pressure operators to support the Mozilla Firefox OS and cloud-hosted, HTML5-authored, apps and features.  In short, we’re looking at a major sea change in appliances, and it’s going to bring changes not only to the gadgets in our hands but to the servers and storage and networks that support them.

 

Telefonica has launched a bunch of new digital-service initiatives that are aimed at transforming the company’s revenue model, but interestingly most of them are aimed offshore rather than in-market.  They’re working with Etisalat to add cloud and other mobile enhanced services to emerging markets, they’ve added mobile-billing options for online purchases in countries where credit card penetration is low, and they’ve backed the Mozilla Firefox OS to reduce smartphone costs in emerging markets.

European operators have been going offshore more than most; on a recent trip through Latin America I saw players like Telenor emerging as major market contenders.  I suspect that part of the problem is that the EU operators are afraid that EU telecom regulations, which have been aggressive on roaming costs, data charges, and infrastructure sharing, might inhibit ROI expansion from investments in-market.  The other factor is that in-market service enhancements demand a real service-layer investment, and operators are still looking for the magic formula that links cloud infrastructure to services.  For example, video services are a big target for operators, or at least they have been historically.  The spring survey results I’m just now finalizing suggest that video monetization remains a titular goal but that execution on meeting the goal is lagging.  The cloud, on the other hand, was always the third-priority monetization choice and it’s now leading in execution.

Speaking of video, if you’ve followed my blogs on video/media, you know I’m a believer in the notion that OTT on-demand content has to look more like linear viewing to work.  You need to have a channel guide, channels, time slots, etc. and you have to blend broadcast material with streaming to create a unified experience.  There’s a commercialization of a video model in the UK that at least takes some steps in that direction, from YouView.  But so far I hear it’s not quite hitting the mark.

YouView has a DVR-like thing that is both an engine to search online content and channel guides using metadata, and a mechanism for cataloging a user’s own content assets.  What it lacks so far is a consistent interface.  As you may recall, I’ve suggested that users needed “virtual channels” that were composed of available on-demand material and populated based on viewer interest.  So I might have a “Wildlife” channel because I’m interested in wildlife travel and photography.  If I don’t find something interesting on channelized TV, the hypothetical system could give me some wildlife programming from online sources, stuff consistent with what I’ve viewed before but eliminating things I’d viewed recently and tagging the stuff I viewed some time ago and might be willing to watch again.  Absent this, all these gadgets tend to be conveniences, not drivers to new viewing behavior.

The cost is another factor.  YouView is over four hundred bucks, and while it’s gotten a fair level of acceptance from retailers, only one manufacturer has stepped up to build the box.  The company says that future products will be cheaper, and my UK sources say most people are saying “Fine, then I’ll wait”.

 

The telcos, including some big national carriers, have announced their backing of Mozilla’s Firefox OS, a smartphone platform that’s supposed to bring down the price of smartphones.  That’s obviously what’s behind the deal in the first place; telcos have become weary of subsidizing handsets to promote coolness.  They’ve encouraged Microsoft and now it appears that they’re hedging their bets even there.  Even if the new phone OS isn’t a big hit, it could have a big impact.

Firefox OS is based more on HTML5, with applications taking the form of web pages and scripts.  There’s an older-version open-source Android kernel at the bottom and a shim layer that exposes phone features through APIs so that they can be addressed by HTML5.  Thus, they can access the APIs representing both external (web/cloud) and internal (Firefox OS) features.

It seems to me that the value of this model would be limited if we assumed that the phones had to do exactly the same work to produce a given experience, and an alternative app model would rely more on cloud execution of features to unload the device and lower the cost.  If that’s the case then there may be a double reason for operators to like the approach.  If operators hosting mobile features in the cloud could integrate these with basic handsets (what I’ve called “brightphones” as opposed to truly “smartphones”) they could have a model that re-introduces them to the mobile revenue stream.

The Firefox OS model might also represent another take on the thin client, what Google Chrome OS goes after.  While Mozilla is saying the goal is the phone and tablet space they admit that even a desktop is possible, and that might mean that the OS could take a fork into the business space, offering a richer and standards-based virtual desktop.  The big question will be performance; scripting languages running inside a browser aren’t likely to be as fast as traditional app languages.  Work here would narrow the gap, though.

Another interesting development is the Dell buy of Quest Software.  Quest is a database and IT infrastructure player, a company that would give Dell a firmer foot in the data center when competing against players like HP and Oracle who have both software and servers.  The important thing here, I think, is that Dell is demonstrating that you can’t be a pure server player and sustain profit margins and strategic influence.  That’s also true in network equipment, as my recent surveys are showing.  Vendors who have a greater IT component to their product lines, or more software focus, have uniformly scored higher.  Engaged in the cloud in a credible way?  Good for your margins.  Enterprises who are embarking on IT missions of their own want the missions supported by their vendors, not a vendor who simply pushes devices at them for self-assembly.  Obviously a full spectrum product line helps out, and Dell wants to make the move.

Quest isn’t a known cloud play, though, and I don’t think that infrastructure management is going to drive enough buyers to Dell’s doorstep.  They need to reposition this asset as part of their cloud story.  That will almost certainly mean positioning infrastructure management as cloud management, something that I always wondered why Quest itself didn’t take on.  There’s an enormous opportunity in the area of “cloudifying” applications, after all.  We’ll likely see some steps taken quickly because Dell won’t want to waste the limelight the deal will bring them.

Could storms in Virginia dispel some cloud momentum?  I received the last of the responses to my spring survey of enterprises on Friday, and operators had already sent in their responses so the process of data analysis and interpretation can now begin.  For subscribers to our journal, Netwatcher, the results will be in the July issue.  For now, though, I was struck me by the synchrony between enterprise comments on the cloud and the experiences of Twitter, Amazon, Netflix, and Instagram users during the east-coast power problems.

If you ask senior management at enterprises what the benefits of the cloud are, they cite flexibility in worker empowerment as number one, flexibility in assigning resources to applications based on optimum cost/performance as number two, and availability as number three.  Nine out of ten believe the cloud to be more reliable than their own data centers, and yet only 2% reported any massive data center outage in the last year.  That’s actually a bit lower than the rate of reported cloud outages.  What gives?

It looks to me like there are two clouds out there; the idealized fuzzy cloud of our imagination and the real deployed cloud.  You can read about the first in any publication, but you never hear much about the second.  For example, you don’t get an answer to the question of why, given the supposed geographic diversity of the cloud, a user like Netflix could be taken down by a power outage in one area.  Actually, the cloud isn’t usually that geographically diverse.  Many cloud providers serve customers out of a single data center, and most serve customers out of no more than a couple in any market geography.

Cloud operators will admit in private that a small number of large data centers is more economical than a bunch of distributed ones, which we all ought to realize or the whole server consolidation trend would be based on a lie.  The facilities are cheaper and can be located in areas where costs are lower, power is similarly likely cheaper, and so is communications access.  Thus, even though in many cases cloud data centers are so large that they can’t be powered by backup facilities at all, we are seeing risk concentration along with server concentration.

One reason we may be having these problems is that we lack a systemic vision for how an application is deployed on the cloud.  Absent automatic commissioning of even complex applications, there’s a tendency to build non-resilient app models even on resilient infrastructure.  Another reason is that the notion of the cloud demand an intimate partnership between IT and network to facilitate optimized distribution and access.  That partnership also has to be automated, and the progress toward addressing these issues is very limited at this point.  People talk about cloud networking but progress there is elusive.

Maybe because we don’t know what it means, period.  We do have a notion of networking’s evolution in SDN but we haven’t linked it to the cloud.  This despite the fact that nearly all the enterprises who think they understand cloud networking understand it in SDN terms.  The recent Cisco announcement and some competitive and market byplay following it make it clear that there’s still a major debate even on what SDN is, much less how it’s related to the cloud.  Even Cisco drew a more casual link than an architectural one, citing VPNs as the basis for both SDN and cloud but going no further.

Could an SDN-centric vision of the network combine with a DevOps-centric vision of the cloud to create the Great IT Movement?  Sure, but we need to develop that vision.  I suggest that to secure the goal we have to unite the efforts, not pursue them individually then try to harmonize the result.  There is only one IT budget, so you can’t drive it in two directions.  Unite and prosper.  If you’re a vendor in the network or cloud space, that would be a good motto to consider according to my surveys.