Tuesday, June 23, 2009

Returning from the new Digital City State

I'm on a train returning to London from Manchester, where I was very kindly invited by the Manchester Digital Development Agency to give the opening presentation at the NextGen event. For those who didn't catch the live stream yesterday, I think there is going to be a replay, or perhaps an edited highlights version, or both, available after the conference closes today (I hope so, because all the presentations were of a very high caliber). I will post my presentation slides, once I'm on something better than a temperamental HSPA connection. (UPDATE: The slides are now up.)

Without getting too self-indulgent (now apparently my hallmark) or boring anyone, here were the main points I sought to address:
  • The current crisis is a very deep hole, from which we will need a lot of time to extract ourselves.
  • Ironically, this gives us greater license to consider strategies which might have been dismissed previously, in the interest of gaining some control over the direction of our future.
  • However, history has proven that the future is hard to predict, particularly when pundits have attempted to dismiss new ideas or to predict that certain innovations have no application. Some of my examples are found here. In almost every example I cited, the pundit in question was a genuinely respected and successful leader in his field - but dead wrong about where things were headed.
  • More frustratingly, some innovations end up being used in a dramatically different way than was originally intended (Warfarin, nitroglycerine, SMS, email), with profound consequences.
  • Other innovations arise prematurely, only to die (or be killed in this instance) and be revived later.
  • Expedient, commonsense decisions can often be completely wrong, and sometimes historical revenue models which should be obvious for new businesses (in this case sender-pays data, which commercial broadcasting had used for 60+ years) are initially missed.
  • So we must be very careful when today we hear that there are no visible applications which could really put 100Mbps symmetrical connections through their paces. Beyond being short-sighted, the Ford vs. Ferrari comparison in the UK is a canard for the ordinary consumer. Your choices are a blue Ford (various shades available, fifth gear often disabled), a red Ford, or staying home.
  • The process of electrification in the US poses some interesting questions. Here I reproduced a chart from a 1980s study (Tim - this has proven to be the gift which keeps on giving, thanks!) which shows average electricity consumption doubling between 1950 and 1960, and again between 1960 and 1970, though what's really interesting to me in the chart is that sub-categories of consumption increase dramatically over that period. What this really reflects is that entirely new categories of appliance were being created, each with its own parts supply chain, assembly infrastructure, sales, distribution, maintenance, insurance and finance functions - in short, a proliferation of ancillary functions and jobs which made these appliances affordable and mainstream. There is no doubt in my mind that the original architects of universal electrification didn't envisage this happening, nor could they imagine what came after 1970 (set-top boxes, VCRs, DVD players, PCs, portable media players, cellular phones, broadband modems, WiFi routers, game consoles, ad nauseum). We're lucky that they didn't try to plan for the impossible, and I don't seem to be alone in thinking so. Certainly, it would be hard to find many in the industrialized world who would argue that we should have planned our grids not to scale beyond the consumption patterns of 1950.
  • Thus, the option value of fiber will only be demonstrated definitively after it is in place. Prior to its arrival, it's easy to dismiss its contribution and utility, because it doesn't exist. As any dealer of exclusively red and blue Fords will tell you, no one ever comes in the dealership asking for a Ferrari.
  • However, I would stop well short of characterizing fiber as a "faith-based initiative" - connectivity policy alone is not enough, as has been demonstrated in more advanced markets (see the postscript [in red] to this post).
This final point is what intrigues me about what is happening in Manchester and a number of other northern English cities/regions, representatives of many of which were in attendance at the conference. It is clear that superior connectivity is a key issue in attracting and retaining new economic activity and creating sustainable employment, but it is far from the only one. Public transport, amenities, law & order, educational strategy, tax policy, culture, regulation and the built environment are also important factors which would be among any business' decision criteria. It also helps if there are positive externalities to add to the momentum, in this case the relocation of BBC functions to nearby Salford.

I think the people involved in these cities genuinely "get it," but once again the range of factors at work here is infinitely more complex than the range of issues a telco is interested/experienced in, and the potential benefits to be captured are also well beyond its scope. Which calls for a different framework and approach, and probably leads to misunderstanding and conflict in the short term. Afterall, what we've really got developing here is the new Devolved Digital City States, competing aggressively for new skilled residents, businesses, and an enhanced tax base. Broadband can't be the sole ingredient of the answer, but it will be a significant one. In the Q&A I cited a case study I saw several years ago dealing with St. Louis and Chicago, and the fact that the former was hostile to railway development in order to protect the vested interests in river transport, while the latter became the focus of investment and subsequently reaped the rewards. I like both cities, but there is no comparison between them today. We underestimate and underinvest in the option value of infrastructure at our peril.

Trash to the curb

I'm honored, really. Stefan, over at IntoMobile, deigns to give us insight into what criteria he uses to reduce his RSS bloat in an attempt to become a better blogger, reader, etc. Apparently he has concluded that he should unsubscribe:

"This is a classic case of 'blog that covers a certain niche turns into a blog being more about the author’s life that what it was originally about.' EuroTelco used to ask hard hitting questions about the telecoms industry, now it’s turned into a personal diary."

I think those of us with a respect for English grammar would say "than what it was originally about," but apart from this petty criticism, I'm genuinely sorry that Stefan feels let down. Of course I'm very concerned about the opinion of any blogger who would take the time to selflessly write a series of articles about how they're trimming their RSS feeds, and why. I also enjoy licking sandpaper, eavesdropping on the conversations of self-obsessed gadget bores, and counting in-bound links from IntoMobile (I'm currently up to three).

Not that I owe an explanation, but I'm in the process of starting up an investment company, which is understandably taking the majority of my time. In our potential investment pipeline are a number of situations which would form the basis for many interesting posts on critical issues facing the industry, but in my position, it is inappropriate to telegraph these sorts of things in public, and in some cases the situations are not even public, so saying anything would violate NDAs.

This blog is not, and never has been, a source of income for me (contrast this page with the ad-encrusted IntoMobile), so given the choice of how to allocate my time and energy, I am naturally focusing more on activities which are for the time-being. I've been pretty lucky over the past five years to have a large number of readers who were not only interested in the "hard-hitting questions," but also the person asking them. To think that the two could, or should, be separate in a personal blog is absurd, so I'm happy to see anyone who doesn't grasp that unsubscribe.

Sunday, June 21, 2009

Live Monday from Madchester

Turns out the Manchester event is going to be webcast live from 1:30 PM UK time (that's 2:30 PM CET, 8:30 AM EDT, 8:30 PM Hong Kong), with me leading off, followed by Dirk van der Woude from Amsterdam, and a recuperating Benoit Felten from Paris via video link. Should be good fun.

Link to event stream

Wednesday, June 17, 2009

This treadmill goes to 11

Once again I find myself starting a small post with an apology for the lack of output, but suffice it to say I am struggling with bandwidth issues. Last week I attended two conferences in two days, and they might as well have been on different planets. Both were well-run and very interesting, but the audiences could not have been more different.

Open Mobile Summit: audience - older, very technical; laptops - many; WiFi - yes, free; iPhones - near-ubiquitous.

DB High Yield conference: audience - younger, not very technical; laptops - I counted two; WiFi - none; Blackberries - 99% penetration.

At the DB event, the organizers had very kindly set up a mobile charging station, with sixteen chargers arranged in four rows of cubicle enclosures. Throughout the day, being a keen observer of tedious things, I passed by the charging station several times, just to see who was using it. One quarter of the charger connections were for Blackberries, and always hotly contested. Three or four were "universal", which I used to charge my HTC, but which a number of Blackberry users also eventually figured out would work for them. There were three spots for Sony-Ericsson, which I never saw being used, and four for Nokia, which also had no takers throughout the day, as far as I could see. There was one iPhone charger, which I saw being used only once.

I guess none of this should surprise me, but perhaps because of my visit to the Open Mobile Summit the previous day, it started me thinking about mobile segmentation, brand profiling, and user behaviors, and how non-obvious some of this stuff can be. Ostensibly, the DB conference should have had more iPhone users because of the demographic, and maybe they are iPhone users on the side, but their weapon of choice is clearly the almighty Blackberry. I also continue to be amazed at the lack of participants from the finance world in industry-facing conferences such as Open Mobile.

One other takeaway was the stunning graphic from Kenneth Karlberg of TeliaSonera, on slide seven in his presentation at Open Mobile, which tracked data users and volumes consumed on Telia Sweden's mobile network in December 2008. We knew anecdotally that iPhone users are different, but it must be a profound source of embarrassment to others in the space to see the difference illustrated so clearly, and it underlines a comment from a mobile app developer at the conference that, as far as he can see, the only investment going into the mobile app space is into iPhone apps. The rest have a mighty hill to climb.

Anyway, now on to the original thing which brought me to this post - shameless self-promotion, once again. I am looking forward to presenting at the Next Gen Manchester Euro Conference on Monday. Looks like an interesting program, and I'm looking forward to catching up with a couple of old friends and making some new ones. I have peppered my presentation with some fascinating quotes from history on why certain innovations were impossible, and why no one would want this or that. I think you may know where I am heading with this tactic...

Friday, June 12, 2009

State of the art telephony, 1951

This piece may buffer a bit, and the dramatization at the beginning is very 1951, but the other footage is amazing.

Wednesday, June 03, 2009

Stranger than (pulp) fiction

Yesterday, I made an offhand but macabre joke to a colleague about the possibility that all the soon-to-be-dormant GM plants could be converted to data centers. Today the same colleague discovered something I had missed - a paper mill to data center conversion in Finland (press release is here, and additional commentary on the last page of this Stora Enso Q1 report), by none other than the Big G. Maybe I'm on to a nascent regeneration trend...