November II 2008

Fredric Morris
Editor-In-Chief
Connect-World

Heads in the clouds, doves, pigeons and cybermeters
Cloud computing, sky-hy-hype, data centres, cellphones and digital inclusion

Cloud computing, refers to the use of Internet (the ‘cloud’) not as a communications system, but as a way to access computing services one – most often – does not own, control or even understand. The information and the applications reside somewhere in the Internet cloud. Users access the applications they need and, using a simplified interface – Web browsers for example, request the services and data they need. Cloud computing really refers to a series of separate, but related concepts including Software as a Service (SaaS) and utility computing where one pays for usage as for electricity; a sort of ‘cybermeter’ measures the computing resources used. Most often, the computing resources that provide the cloud’s virtualised services and data storage are housed in vast data centres. This has made cloud computing a viable alternative for many users.

Google, Amazon, Yahoo!, Salesforce, IBM, Sun and Microsoft are among the best-known providers of cloud computing resources for individual users and large companies alike.

Cloud computing pops up with increasing regularity at industry events, emails, newsletters, newspapers, on the Net, discussions with cyber-geek friends. OK, I don’t deny it has great potential, but the awe and reverence with which some treat it – let’s face it we are not being showered with blessings from above – really puts me off.

There are pigeons and doves in this cloud. Doves are the good guys, the aristocrats of the family. Doves get the good jobs, they carry olive branches for the United Nations, they are the harbingers of peace and good tidings and they get to coo for lovers. Pigeon, on the other hand, are the bums of the family. Pigeons, sometimes called feathered rats, just get to sit on – and mess- statues, windowsills and unlucky passersby.

First, as it befits their rank, let’s talk about some of the ‘doves’ of cloud computing.

For some, cloud computing (let’s call it CC for now) is a great way to handle heavy peak traffic without investing too heavily in computing infrastructure that is idle most of the time. CC is also an effective way to obtain emergency backup. By maintaining a ‘mirror image’ of its systems and data at a data centre in the cloud, a company can often resume full operation within minutes of a major system outage.

By using CC resources, by paying for service only if and when needed, the costs for building and maintaining extra capacity are shared with many other users. CC applications can also greatly reduce the investment tied up in software and applications development. The large centrally managed CC data centres generally have staff dedicated to security and have effective, massive, backup for everything – hardware, software, applications, communications and data.

Major data centres also tend to be ‘greener’ than individual computing facilities, if for no other reason than they must work constantly to reduce their operational costs, especially energy consumption. Google, for example has one of the biggest solar panel installations in the United States. Data centres are looking seriously into alternate sources of energy including wind power to reduce both their cost and their carbon footprint. Then too, companies that use the cloud for peak demand or for backup tend to have smaller installations, use less energy and have smaller carbon footprints than they otherwise would.

All these uses are very important and they will grow. In the years to come, I believe there is another use which will eventually surpass these applications, but I will leave that for the end.

Let’s move on to the pigeons.

Despite the generally high level of security and backup, even the best and biggest operations can go down. Even Google’s enormous operation went down for 90 minutes earlier this year. Security, although the big centres have a good record, will still be a problem. Big centres are a tempting target for both terrorists and hackers – and they are sure to win a battle or two.

I like cloud computing but, in a sense, it reverses the personal computing revolution. The idea of putting complete control in the hands of users is more satisfying. Cloud computing takes away control and makes the user dependant on others. I can rationalise this in many ways – still, it doesn’t feel right. The more one uses the cloud, the more one depends upon data in someone else’s hands, upon applications picked and spoon-fed by a third party, the less freedom one has to pack up and move on to another supplier. I don’t like having to depend upon third party decision.

What happens if your personal cloud moves with the wind to another applications supplier, to another version – with another cost structure? What if your cloud supplier keels over and dies – what happens to your data? The economy goes bust; you have no job and can’t pay the rainmaker in the cloud – where do you stand then? How do you work? What happens to your data? What if your connection goes? Earlier this year several undersea cables were cut almost simultaneously; it has been convincingly denied, but some still suspect terrorists. What if terrorists or hackers strike, take out the system you use, and it is off the air for days or weeks?

I stopped writing this for a moment to take a call on Skype. I am a Skype fan. Every day, I speak with – and see -family and friends thousands of miles away and use it to keep in touch with my office, but the quality varies from great to downright rotten. This call was close to the rotten end of the range. It reminded me just how much cloud computing depends upon connections and servers – and how undependable and easily overloaded these both are. Performance and risk – in many respects, not all – are a lot easier to manage on a PC or at your own computing centre.

All considered, the best arguments for the cloud might be cost related, but without flat-rate subscriptions one can get ‘nickeled and dimed to death’. Micropayments for every little service or access, unless controlled, capped and predictable, can get out of hand. If you could have affordable access to everything you want in your own little box, why would you use the cloud?

Enough pigeons! The mobile phone is rapidly becoming – by default – the device most of the world’s people will use to access the Internet. The mobile phone is affordable and easy to use, limited in many ways, but not as limited as many of the people who use it. Sadly, a great percentage of the world’s population can barely read and write – if they can read at all. Windows, Explorer, Firefox, in fact almost every application many of us use regularly, are as beyond the grasp of non-readers as rocket science. Cloud applications tailored for the mobile phone, with visual and voice interfaces that can meet the needs of these people might well be a worldwide ‘killer app’ for cloud computing, but that’s a story for the next eLetter.

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The next issue of Connect-World Global will be published later this month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows such as: Mobile World Congress (16-19 February 2009, Barcelona)and CTIA Wireless (April 1-3, 2009 Las Vegas)

The theme for this issue will be The information society 2015 – corporate responsibility and digital access for sustainable development..

The World Summit on the Information Society, WSIS, established a number of goals for the year 2015. Providing the world’s peoples with access – to connect the world’s people in even the remotest regions, its schools, governments, research centres, libraries hospitals and health centres, cultural centres, museums, post offices and archives – was the primary goal. One of the most important goals set by the WSIS calls for a world where, “more than half the world’s inhabitants have access to ICTs within their reach,” by 2015. The WSIS also called for, “ensuring that all of the world’s population have access to television and radio services”.

Providing digital access, as a way to achieve sustainable development, to half the world’s population within a decade is a grand ambition. It will take a mighty effort. Governments, international organizations and non-governmental organisations – NGOs, can do part of the job, but far from all of it. Much of this mighty effort will depend upon the world’s business enterprises. To complete this mission, new technologies, new hardware and software, new applications and content, manufacturing genius, financial resources and logistics that only private enterprise can efficiently provide, develop, deploy and manage will be needed.

What is corporate responsibility in this context? What can, and should, corporations do, then, to help achieve the ambitious WSIS goals? What are they already doing? How can businesses participate? Why should they participate? What will be the rewards and the costs? Is corporate responsibility – corporate participation in the building of the Information Society – good business? These are the questions Connect-World will ask global leaders.

Global 2008 Media Pack; Click here

November I 2008

Fredric Morris
Editor-In-Chief
Connect-World

The once and Future Com

The FutureCom show is like none other I have seen. Sure, it has stands for all the top-name exhibitors and a very good conference but, unless you look closely, it easily passes for any one of the many regional telecom shows around the world. In truth, once every year FutureCom is the true power centre of Brazil’s telecom sector.

The FutureCom show (October 27-30, 2008, Transamérica Expocenter, São Paulo) is the telecom event of the year, of every year, in Brazil. This year – having run out of space in the smaller cities, such as Florianópolis – a charming beach city in the south of Brazil where it has been held in recent years – it moved to the São Paulo megalopolis. The move doubled the attendance, but generated enough subdued grumbling to guarantee its move back to Florianópolis next year. I approve, FutureCom has no business being a show for technicians, students and interested passersby. It has always been something of an elite show, a show for the sector’s leaders, and it should stay that way; that is part of its unique value.

Unlike most shows, having more people roaming the corridors does not necessarily bring joy to the exhibitors. One of the reasons FutureCom has hidden in smaller cities, until now, is to keep swarms of telecom technicians away. FutureCom has always been a show for the decision makers, the leaders of the industry and, of course, everyone that wants to do business with them, so exhibitors don’t want to be distracted, don’t want to keep the buyers waiting while they answer questions from low-level, non-buyer, techies.

FutureCom started as government-run show back in the days when the government’s monopoly, Telebrás, was the only game in town. In those days, the show was called Semint, and everyone who was anyone in the Telebrás system and the Ministry of Communications went there – so did everyone that wanted to do business with the system.

Things changed when Telebrás was privatised, but not much. The government’s Semint show was privatised and re-named – this year was its tenth anniversary as FutureCom, a bigger, happier and better-organised event – but in many respects, the more things changed the more they remained the same. The show is now a family affair. Laudálio Veiga, who has run the show since the beginning, has enlisted the help of his wife and sons. They all pitch in to make sure everything runs smoothly for exhibitors and attendees alike; this is one of the secrets of the show’s success. It is hard to find anyone who does not like them and is not pleased with their efforts to smooth the inevitable glitches.

The rainmakers, the top decision makers of all the privatised companies are still there and so are all the companies that want to sell to them. Even the government, as always, is there.

This year, once again, the Minister of Communications, the President of Anatel, Brazil’s telecom regulatory agency, senators, deputados, the chief telecom advisors from the President of Brazil’s staff are always at the event. This year, the vice-governor of the State of São Paulo, the Mayor of São Paulo, the European Commission’s General Director for the Information Society, the Ambassador from Canada, the presidents of all the telecom-related trade associations among others were also there.

Yes, this is an important event, but what makes it important are not only the officials – it is the presence of every president of every operating company and the country or regional president of just about every major supplier. Users are there as well – not just any users, but the heads of the big users, the buyers that carry corporate check books in their pockets.

Most of these people are not just there for a quick pro forma appearance; they spend time there speaking at the conference, meeting and greeting customers and suppliers, delivering veiled and not so veiled messages to one another, supplier to buyer, everyone to the government and the government to all.

Following long-established tradition, Brazil’s Minister of Communications, Hélio Costa, spoke at the opening ceremony. At the cocktail before the opening ceremony there was quite a bit of good natured speculation and mock betting among the assembled VIPs – How late would the ceremony start? Would the Minister make any significant announcement? Would he speak about the taxes Brazil applies to telecommunications – among the world’s highest? The answers? – It started only half an hour late (often, it is quite a bit later); there were no significant announcements from the Minister, but he did mention taxes and the need to reduce prices. Once again there was a good deal of disappointed laughter at the government’s refusal to seriously consider or even mention reducing taxes; the Minister spoke only about competition as a way to reduce prices. One of the telco presidents – no names to protect the guilty – derided the government’s apparent wish to reduce margins to razor thin levels. The government, by far, profits most from the telco business in Brazil; the people and the economy suffer most from the tax inflated prices

The stands are where business is done, but everyone pays attention to the auditoriums where the sector’s leaders send their messages to the market and to the government. The largest auditorium, called Brasil, is always full; at times even standing room is difficult to find. It is there the President of Anatel, the regulatory agency, and the Presidents of all the fixed and mobile operators speak.

Smaller auditoriums – often packed as well – hosted the talks of other important first rank, but less exalted, industry figures. These rooms also served as the setting for an impressive series of roundtables featuring some of the industry’s most respected experts and chaired by some of Brazil’s best-known journalists.

Most of the executives staffing the stands, the directors of marketing and the like, at least for public consumption kept insisting that Brazil’s telecom sector, if not crisis-proof, was strong enough not to be severely affected. The keynotes in the Brasil auditorium, starting with the President of Anatel, ex-Ambassador Ronaldo Sardenberg, spoke more realistically of the economic situation. Although calm in their evaluations, each spoke in his own manner of the need to be alert and proactive to move smoothly through the upcoming turbulence in the world’s markets.

Anatel plans to, “stop reacting and become proactive”. They plan, “a full-scale review and update of Brazil’s telecom regulations… to make investors more secure facing the international crisis we are awaiting”. This will not be a quick fix; according to the Ambassador, the new regulations should guide the agency and the sector for the next ten years. It has been a bit more than ten years since Brazil’s General Telecommunications Law was passed and the sector was privatised. Almost US$200 millions have been invested in the sector since; the government expects this investment to double during the next ten years.

The heads of the major telcos – Antonio Carlos Valente of Telefonica, José Formoso Martinez of Embratel; e Luiz Eduardo Falco of Oi (fixed and mobile) – and the other major mobile operators – João Cox Neto of Claro, Roberto Lima of Vivo, and Mário Cesar de Araújo, of TIM all spoke of the economic turmoil – some as economists, others as engineers and still others somewhat philosophically. They all made good sense and spoke well, but there was little that we haven’t heard many times over during the last weeks and months on our TVs, newspapers, radios, magazines and on the ‘net’ – either about the crisis or new services. All, one way or another, emphasised that the market would eventually stabilise either towards the end of next year or during 2010. They might even believe it. The analyses and the presentation.

Perhaps the best analysis of all, the one that covered the most territory, was that of João Cox, President of the mobile operator Claro – part of Mexico’s América Móvel. Greatly simplified, he predicts that the decline in usage resulting from the drop in family income and falling company profits would make things more difficult for the operators.

The repatriation of capital will grow, perhaps as much as one third of the capital in the local stock exchanges, to cover cash flow problems of foreign owners. Brasil will increasingly depend upon international demand for its mining and agricultural commodities. The short-term value of the Real, converted into dollars on the balance sheets of foreign owner, will fall. The weaker Real will also affect the importation of electronic equipment.

Despite this, since the fixed-service operators have little competition and prices are among the world’s highest (taxes are mostly responsible), telecommunications will still push Brazil’s economy, although at a somewhat slower pace. Mobile service margins are quite low despite high prices – those taxes again. Capital costs are also high given the need to keep up with the rapid changes in technology – 3G mobile broadband introduced one year ago has grown incredibly.

FutureCom is a direct descendant of Brazil’s previously government dominated telecom sector. It is, at the same time, the most complete representation possible of the sector today and of the days soon to come. Although there were participants from 40 countries, it is hard to imagine a more intensely regional, more wholly Brazilian event. Despite the lack of surprises and the move to São Paulo, it is still quite a show.

____________________________________________________

The next issue of Connect-World Global will be published later this month. This edition of Connect-World will be widely distributed to our reader base and, as well, at shows such as: Mobile World Congress (16-19 February 2009, Barcelona)and CTIA Wireless (April 1-3, 2009 Las Vegas)

The theme for this issue will be The information society 2015 – corporate responsibility and digital access for sustainable development..

The World Summit on the Information Society, WSIS, established a number of goals for the year 2015. Providing the world’s peoples with access – to connect the world’s people in even the remotest regions, its schools, governments, research centres, libraries hospitals and health centres, cultural centres, museums, post offices and archives – was the primary goal. One of the most important goals set by the WSIS calls for a world where, “more than half the world’s inhabitants have access to ICTs within their reach,” by 2015. The WSIS also called for, “ensuring that all of the world’s population have access to television and radio services”.

Providing digital access, as a way to achieve sustainable development, to half the world’s population within a decade is a grand ambition. It will take a mighty effort. Governments, international organizations and non-governmental organisations – NGOs, can do part of the job, but far from all of it. Much of this mighty effort will depend upon the world’s business enterprises. To complete this mission, new technologies, new hardware and software, new applications and content, manufacturing genius, financial resources and logistics that only private enterprise can efficiently provide, develop, deploy and manage will be needed.

What is corporate responsibility in this context? What can, and should, corporations do, then, to help achieve the ambitious WSIS goals? What are they already doing? How can businesses participate? Why should they participate? What will be the rewards and the costs? Is corporate responsibility – corporate participation in the building of the Information Society – good business? These are the questions Connect-World will ask global leaders.

Global 2008 Media Pack; Click here