Category Archives: Business

Business Tech

I finally have a ‘real’ office

April 7, 2009 – 12:52 pm

hp6410My office has finally been christened as a legitimate workplace – I now have a photocopier :)

Well, of sorts – it’s actually one of those All-in-one devices, which I finally decided to buy because I was fed up of laboriously scanning multi-page contracts / licenses on a flatbed. I went with a HP Officejet J6410 – it was cheap, got some very good reviews, and I’ve generally been happy with other HPs over the years. Sure, their cartridges are some of the most expensive around, but I’m not a heavy duty user anyway, and the main thing I like about many of their recent devices compared to other manufacturers (at least at this price point) is the built-in wifi, which this one has too. Having the ability to put the printer anywhere and not connect it to any PC or even an ethernet port is something I’m not willing to do without anymore, especially since this new one is pretty large.

So far, so good. It’s not that noisy, setup was quick and fairly painless, and (most importantly for me) it’s super-easy to scan multipage documents direct to PDF, pushing them to PCs with an agent installed or emailing them if you want. The copy facility is fairly slow (obviously) but then I only need it very occasionally – after all, who wants to generate more paper?I probably won’t use the integrated fax since I use scanned documents on email, or an electronic fax bridge when I need to, but it’s nice to have the option.

Yay, no more babysitting the scanner when dealing with tedious paperwork! :)

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Business Games Internet

OnLive – an idea that deserves to work (eventually)

March 24, 2009 – 12:53 pm

In the past, I’ve made no bones here about the fact that I consider proprietary console platforms to be a sub-optimal content delivery platform for games. I understand why they’ve got to this stage (desire to seed the market with advanced, standardised tech at less than cost price, requiring lock-in to recoup later), but that doesn’t make them a desirable end-game. Closed systems are by nature market distorting, and can hamper innovation, because when only a chosen group of ‘authorised’ developers have access to deploy on it, you’re not maximising the amount of content innovation available. XNA and the CommunityGames Channel go some way to addressing that, so kudos to MS for trying, but the fact that it mandates a certain technology means that it’s something of a dichotomy – it’s great that it’s open, but it’s significantly hampered by the fact that what you develop will only work in that environment (or on Windows), when in practice a lot more people want to be able to reuse their technology across many platforms, like mobiles, the Mac etc. Also the tools and libraries for XNA might be good and expanding, but they still represent a tiny subset of the breadth and maturity you get access to when using C/C++ so I’d still consider it less desirable as a target platform. Of course, the reason for this restriction is security, which again goes back to the closed platform argument.

Personally, I most love devices where anyone can create on them, using whatever tools they like. All other media follows this pattern – films, books, music can all be created by anyone with the will to do so and will ‘play’ on a standard device in any home; the limitations associated with games are a throwback to a historical position which gets eroded every generation (look at the exclusive / cross-platform ratio this gen compared to previous iterations), and which will eventually disappear. The PC remains king of the hill in my book – but of course commercially it’s a bit tricky. The two main issues are piracy and hardware compatibility – price is sometimes listed here too, but that’s blown out of proportion; the kind of people that say you need to spend £1500 on a gaming PC are talking out of their arse, you can build a good gaming PC that will outclass the main consoles for a third of that price these days,  it’ll never be as cheap as the console, but you can do a lot more with it.

OnLive tries to address these problems by running your games in a server farm (the ‘cloud’ if you will), and just having a relatively simple device at the customer end – which can be an existing PC or a small set-top box if you don’t have one. I think it’s a little early, since internet speeds are still a bit rubbish in many parts of the world (here, for example) and not up to the 5Mb/s required for HD delivery, but there’s definitely a good kernel of an idea here. Lag is of course an issue, most concerningly on the input side, but in practice the kind of information going back and forth is actually no more than what you have in a standard multiplayer game, and providing the video streaming can keep up, it might just work. I can’t see it working for very lag-sensitive games like music games, but for most other things if the QoS is acceptable it might be ok.

This deals with hardware requirements, because the set-top box is cheap, and piracy because the games are never actually on  your machine anyway. I could imagine games moving more significantly towards a rental / subscription system in this kind of scenario, except where the developers get paid more directly based on play time rather than just the initial box purchase like with current rental schemes – I consider that a good thing for developers, since those who make games which people play for months or even years deserve to be rewarded for that.

The one concern I have is that the service provider still controls the content that you can see. I could imagine that once the technology is mature, other service providers would compete and hopefully content delivery would be more open. However, in practice I can see that initially service providers would want to lock down the service, putting us essentially back in the one-provider situation again. So, even if the technical hurdles can be cleared, this might not lead to open gaming nirvana just yet. A requirement would be an open development package (something like SteamWorks), where anyone could develop content that would work on the platform even if they still had to gain authorisation to be hosted there (and I could imagine the barrier to entry here would be lower anyway).

So, despite the difficulties and unknowns it’s a step in the right direction I think. The closer games get to the state of availability and openness enjoyed by other media, the better we’ll all be for it. I actually think that the next generation of platforms may be a stepping stone in this direction – I would actually not be surprised if Microsoft was looking at this area for the 360′s successor, since they have always been fans of digital delivery. I could imagine that perhaps the next iteration, probably announced in 2010/11 might be a hybrid device, capable of disc play but with a much heavier emphasis on digital delivery, and I don’t think full downloads are necessarily the way that will go for full games, because of the high up-front wait time. I think it’s more likely to be either something like OnLive, or the progressive download technology used by GameTap (where just enough of the game is downloaded to start playing, with the rest downloaded as you play in the background).

Either way, I think the ‘traditional’ console business model is reaching the end of its run, and the next 10 years will see it transform completely from the way it is now. Those who think it won’t – remember that 10 years ago the Internet was still embryonic, Amazon was still small and Google didn’t exist – 10 years is a long time. Technology just doesn’t sell games as much as it used to (see the Wii), and in that environment it makes less sense to have to subsidise cheap cutting-edge (at the time) hardware in the living room and recoup through artificial restrictions – it becomes all about the content and how you sell as much of it as you can to customers; which means re-examining your content delivery approach, going broader and opening up to allow more people to deploy content (because how will  you find the next big thing otherwise?), taking away disincentives to buy (such as having to buy 3+ consoles to play everything), getting content to people quicker, and most importantly in the manner they want it. Forget what worked in the past, you won’t discover what will work best in the future by holding on to a model that was developed in the 80′s.

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Business Open Source Personal

Reflecting on how far open source has come

March 17, 2009 – 12:22 pm

It seems that more and more these days I find articles cropping up in publications like the Economist or WSJ about open source projects, and it occurred to me how ‘normal’ it had now become for such business-oriented publications to recognise what a driver open source has become in the modern world. It’s expected now, but it made me think back to my personal journey with open source, and how much resistance I’ve encountered to it over the years.

I’ve been a fan of open source from before I even knew what it was. Ever since I got my first modem and hooked my computer up to the world in the early 90′s, firstly to access BBS‘s & FidoNet and soon after the ‘Internet’ (telnet, ftp and gopher FTW), the main thing I did with it was consume and publish source code. I remember thinking that if only I’d had access to these sorts of systems earlier in life, I would have been a better programmer much quicker, rather than having to hunt out obscure paper references all the time. These youngsters don’t know how good they’ve got it! :)

Initially, my main ports of call were coding-oriented university FTP sites like oulu.fi and sunet.se, where members of the ever-active European demo scene used to hang out and share code and technical information. As I learned, I began to publish my own code back onto these same sites – at the time under a public domain license. The main reason I did this was that I felt a responsibility to do so – after all, I’d learned from downloading other people’s work, so it made perfect sense that once I produced something, I should contribute it back to the community too, renewing the cycle. These principles are of course at the heart of open source development, even though at the time I didn’t know there was a developing concept and set of formal licenses that neatly wrapped up what I considered to be ‘right’.

I really became aware of open source near the end of the decade, but really only started to understand it when I started my own first open source project (which has lasted much longer than I could have imagined at the time). As I saw it develop, I began to sincerely believe that this model represented the future of modern software development; not necessarily in isolation, since real innovation on the upper end of the ideas curve would still be commercially viable, but as a really major part of the underpinnings of software landscape – the ‘underwater’ part of the iceberg so to speak. It just made so much sense on so many levels:

Developers (good ones anyway!) Software Companies (except incumbents) Software Consumers (savvy ones)
- Like to share knowledge & learn
- Like proven solutions they can reuse
- Like refining / refactoring / improving
- Understand collaboration is key to sw dev		 - Don’t like to burn research money on old problems
- Like anything that helps them compete
- Like to retain dev staff through motivation
- Don’t like being beholden to larger companies		 - Like value
- Like their software to be widely used & supported
- Don’t like being forced to upgrade when they don’t need to
- Like to feel in control of their own destiny

Open source ticks all of these boxes – what’s not to like? And yet, over the years I’ve encountered a lot of resistance to the idea of using open source, and I’m sure lots of other people with a less conservative mindset suffered the same frustrations with those wedded to the traditional. I lost track of the number of times I was told by bosses that Linux would never be viable as a server OS for ‘serious’ business (the NYSE might disagree with that, among many others), and that non-proprietary software would never underpin anything other than hackish, thrown-together systems some university student might play with. No, for ‘real’ systems you had to expect to pay a proprietary vendor for every element of it, otherwise it wasn’t serious. No amount of arguing about how much money was wasted re-inventing technology that was well understood, just because a proprietary vendor wanted to control it (the tech you’ll find in databases, operating systems and email systems is mostly decades old, yet some people still happily pay for it even if they’re simple mid-range users) seemed to make a dent in the conviction of these people that open source was a silly distraction.

Luckily, they were wrong. In the end, what typically happened is that open source sneaked in under the radar – when budgets were constrained, developers and other savvy techs would start using open source to deliver what they needed without having to request more funding. Unbeknownst to customers, software & hardware that they purchased ended up having significant open source components present, introducing some to it surreptitiously – and often they discovered that the standardised nature of it meant they could do more with it than they might have realised. Slowly, inexorably, the grass roots realised (at varying speeds) that open source had something genuine to offer them, that their proprietary vendors were not delivering. Most proprietary vendors went through the standard ‘transition curve’ on open source (and some haven’t come out the other end yet):

  1. Denial – refute that open source can be useful for anything, that it’s too risky
  2. Anger – threaten legal action, wave patents, accuse of anti-commercialism or socialism
  3. Bargaining – a softer version of the above, try to convince people your approach is better
  4. Depression – realise everyone’s ignoring you and doing it anyway, dither over how exactly to deal with that
  5. Acceptance – realise that open source and proprietary models can co-exist, and everyone can benefit. The extent to which you can control and exploit your customers is forever reduced, but you’ll get over it.

I’ll leave you to make your own judgements on where a selection of vendors are on this curve right now ;) Most customers have been, or are going through the same experience – and typically the stage they’re at reflects how tightly they were bound to particular proprietary vendors, and how conservative or innovative they are. But these days, I don’t think there’s any organisation that can say they’re not using any open source, or that they expect to use less of it in the future. Even Gartner, the research company that has traditionally been ridiculously slow to pick up on these things, to the extent that their analyses on the subject were becoming remarkably detached from reality (I think they only talked to Microsoft and Oracle partners), has finally admitted the trend.

So, in summary, I can look back at the last 10 years since I became aware of open source, and I can feel very happy about how things have turned out. A great idea has flourished in spite of the scorn poured on it by those with vested interests, simply because of all of us. We could see that it worked, and carried on regardless of how many so-called industry experts told us it wouldn’t. It’s essentially like democracy – sure you can have a ‘ruling party’ that tries to tell you the way things should be, but if enough people think for themselves and go their own way, change is as inexorable as the tide. And change is a wonderful thing.

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Business Personal Political Tech

Process: no replacement for people and principles

February 27, 2009 – 4:22 pm

Over my years in working in the IT business, one thing that’s a constant is that we’re never short of talk about the latest “Process” that we should be following. There have been a shedload of them over the years I’ve been doing this, and I’ve tried a load of them out and encountered them via third parties, and while some are interesting and useful when taken as a basis for adaption to individual circumstances, one thing I absolutely cannot stand is the kind of people that focus on this as a proof or guarantee that their projects are being run well.

Anyone who has dealt with a large consultancy firm will have encountered the scenario – that they of course tick all the boxes and fulfil all the paper requirements of procedure and ‘best practice’, but when push comes to shove all that really matters is what individual you get doing the job in the end. All the procedures and accreditation in the world will not change the fact that if you get some of the pieces of dead wood in the company, you’re screwed – it’s just that the process of becoming screwed will be handled with the appropriate paper trail and procedural tick-boxes. Conversely from the same company you can get some absolute stars who totally carry the project and make it much better than it would be otherwise. What difference did the process make to this outcome? At best, if it was a good process it might have oiled the wheels – often the opposite is true of course, especially with large bureaucracies. Good people will function well with no process, and may function better with an efficient, lightweight process, whilst bad people will do just as badly with any process and may well enjoy hiding behind the more complicated ones when things don’t work.

This isn’t an argument for not adopting reasonable processes – like I say they can oil the wheels when they’re appropriately deployed. Rather, this is about recognising that they are entirely secondary to the qualities of the people involved. I really wish more people would recognise this truth instead of pretending they can rubber-stamp an organisation with universal seal of quality through processes alone. People matter. What those people believe in and are motivated by matters. Process – it’s really just icing. It makes management types feel better, and allows them to believe they’re doing due diligence when vetting companies, but in the real world, it’s nothing but a helping hand.

What made me think of this today? Banking, oddly – specifically the FSA talking about how much of a pigs-ear they’d made of banking sector regulation. They were ticking all the boxes, making sure bosses didn’t have criminal records, tidying up the minutiae – but not once did they ask whether the principles of what was going on at the banks were at all questionable. They just assumed that bankers would act rationally, and all they had to do was check the processes were in place, whether reporting was in place, the right number of risk managers were on board etc. And here too, it’s proven that process doesn’t matter in the grand scheme of things – what matters is the people you have doing the job, and what their principles and motivations are. No process is going to save you if the people don’t have the right stuff – and the FSA have rather belated realised that as they watch the ashes of the economy smoulder because they let a group of unprincipled, reckless, money-grabbing banking executives continue to run the show, just because they had the right paper trail.

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Business Personal Political

Why do we like chains so much?

February 18, 2009 – 10:17 pm

america_unchainedI’ve been neglecting my blogging duties of late, not because I don’t have anything to say (it takes strong gaffer tape to achieve that particular result), but I just seem to be juggling a lot of stuff at once right now and there’s always something else to be doing. This post is therefore for those who have been missing my particular brand of opinionated rambling. ;)

I recently watched Dave Gorman‘s America Unchained. For those who aren’t familiar with the man, he’s a British alternative comedian / stand-up whose work includes such classics as Are  You Dave Gorman? and Googlewhack Adventure, both of which I highly recommend. In this instance, Dave decided to try to cross North America without paying any money to any ‘chain’ – every business he patronised had to be an independent, ‘Mom and Pop’ set-up.  That meant no staying in Holiday Inns, no buying petrol (gas) from chain-owned gas stations, no Starbucks or McDonalds. Having an affinity to independent business myself it sounded like a pretty interesting premise.

As it turned out, the film wasn’t as entertaining as his previous work, but it raised some fascinating issues about society and modern culture. He originally decided to embark on the journey because on a previous whistlestop tour through America, he’d lamented that by staying in chain hotels and often eating at chain restaurants, he got absolutely no feel for the individual character of a particular region – everything was homogenised, standard. This is increasingly the case wherever you go – high streets that have all the usual suspects lined up along them, all containing all the same products that you’ll find anywhere else. Why is it that, as a culture, we seem to approve of this removal of individuality, and excessive standardisation of our consumptive environment?

Ok, cost is one issue. Big chains can buy in bulk and sell cheaper (although not all operate like this of course – some sell at quite ridiculous prices). But I think it’s about far more than that.

I’ve said I’m something of a fan of independent business. I hate just about every major fast-food chain and have experienced first-hand the soul-sapping experience of staying in a chain hotel in a foreign country. However, if there was one chink in this armour (ignoring Amazon for a minute), then that was Starbucks. Earlier in the life of my coffee appreciation arc, I was a big fan of Starbucks, and would seek it out wherever I saw it, wherever I was in the world. Why? It wasn’t because it was cheap – their prices are ridiculous. I was because I knew I liked it. It was a safe, easy option, guaranteed – and I’m convinced that deep down, this is the primary factor for most people who unfailingly patronise chains. As time has gone on, however, I’ve discovered that by seeking out Starbucks rather than something else, I’ve risked missing out on broadening my experience. Going elsewhere sometimes means a dud, but that’s the risk you take. These days, I’ll drink Starbucks (although it never seems to taste as good as it used to, probably because I’ve broadened my palate), but the fact that I know precisely what it’s like actually means I’m less likely to buy it if there are other options now. Been there, done that – let’s try something else. Happily, the best take-out coffee in my local town is an independent (‘Woodies’, who also source their blends locally), but actually my favourite coffee is now my own; because I have the equipment to make good espresso and I regularly experiment with different beans.

Ok, amateur psychology time. :) So one of the factors I think is in play here is that our modern lives are so fast, so competitive, so turbulent, so mobile, so devoid of the predictability that previous generations encountered (discounting war and famine of course), that we cling more to any kind of perceived rock of stability and certainty that we can find. In an age where consumerism so dominates our existence, surely it’s very natural that some of the things we cling desperately to in the storm are brands. If your life is fast, tough and regularly complex and challenging, maybe it’s nice not to have to think quite so hard about where you get your coffee, where you got to eat, where you buy  your clothes. Maybe in the past, with a slower pace of life, people had the time to build one-to-one relationships with local, independent traders and evaluate things individually – but when you’re moving around and have so much else to think about, fast, easy decisions with a predictable outcome are no doubt attractive. It sort of reminds me of speed dating – no time to consider the subtleties, just get the process done fast.

Personally, I think looking down a high street in any place in the world and seeing 90% country-wide or worldwide chains is pretty depressing. It represents a homogenisation of the world, a removal of individuality, and a ceding of personal, local character to faceless, amorphous giants. I agree with Dave Gorman that we should lament the steady decline of ‘Mom and Pop’ businesses, which may be less predictable, non-standard and quirky, but that’s part of the charm.

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Business Development Local Open Source Political

Making a new home for patent trolls

February 7, 2009 – 1:11 pm

I live on an island that often gets bad press for being a ‘tax haven’. Those in the local financial services industry don’t like that term of course, pointing out how standards-compliant the finance industry is, and how many information exchange agreements we have with other countries (the line ‘the lady doth protest too much’ bubbles to the surface in some people’s minds I’m sure at this stage). So, we’re not technically a tax haven according to the OECD definition, but we’re certainly a place for people to stash their money and avoid paying tax on the income they derive from it in the juristictions in which they live. There’s no getting around the wider political debates about whether that’s a morally respectable position to take, particularly that the reason taxes can be so low is that the state doesn’t have to pay for defense, which is sponged from the UK government, provides precious little in the way of healthcare, and generally takes a right-wing policy route that seems to actively promote social division, but let’s leave that for the moment. Obviously being somewhat of a left-leaner I find it all slightly distasteful and am quite grateful my career path has so far kept me doing other things. I don’t deride people for choosing to be involved in that business – it’s their choice, and certainly it pays better than most of the alternatives in a small locality, but for a little while now (certainly since developing my own political opinions rather than inheriting them from the community around me) I’ve felt much better to be ‘aligned’ with the goals of whatever organisation I’m spending my working time with. Seems to me that we spend so much of our lives working, it probably ought to be for something we actually believe in, and I personally can’t say I have any significant motivation to help people avoid paying tax. While I can, I’ll keep doing other things, although increasingly our local government doesn’t seem very interested in seriously promoting much else.

However, I have been dismayed with one of the latest developments locally which are supposedly ‘branching out’ beyond financial services, because it’s actually worse - our IP law has been revised now so that patents from any juristiction can be re-registered locally to obtain the same protection (previously, it only applied to IP registered in the UK  I believe). Simple enough, except that articles in our local news have been chest-beating about it specifically with reference to the fact that now, patents that wouldn’t be valid in the UK can now be registered, so long as they are valid in another juristiction – and in particular they singled out business method patents as registered in the US, which are currently not allowed in the UK. They’re happy that ‘asset holders’ can now ‘bolster their protection’ by re-registering their ‘IP’ even though the UK would have thrown it out as worthless.

Ugh. One of the things I was proud about in the UK is that bullshit patents on business methods weren’t valid. I was happy that total nonsense like the Amazon 1-Click patent and it’s ilk were deemed not to be valid inventions, for they are widely acknowledged to suppress innovation and play directly into the hands of patent trolls. The world is blighted by people who register widely known techniques as patents with a registrar who is so ignorant and/or compromised by conflicting interests that they’re incapable of acknowledging the prior art, and an entire industry wastes precious resources either fighting patent spam, or building their own equally rancid pile of patents as a self-defense mechanism, all instead of actually inventing significant things, or you know, making great products that stand up in their own right. If even half the time that went into the overheads of establishing, debating, licensing and fighting low-brow, pointless patents was spent on the creative process, who knows how much we’d actually advance the human race. Instead, that effort gets spent on lawyers instead – it’s no wonder that the people lauding these ‘advances’ are from that particular profession.

At a time when everyone else, even big companies like Microsoft in the US, are recognising that software / business method patents are proving corrosive to the industry, locally our law makers are puffing themselves up over having allowed such nonsense to happen here too.

But hey, it’ll make a quick buck, both for the registrar and for our local legal firms, so it’s ok right? Favouring the financially convenient over the holistically respectable seems a common line around here. I despair sometimes.

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Business Political

Trying to find the positive in a negative climate

January 30, 2009 – 12:17 pm

We all know that the economy is badly screwed. And this isn’t just some country-specific problem, it’s economic buggery on a global scale, thanks to the wonders of a joined-up international banking system run by people who thought they were a lot smarter than they actually were. “Gold rushes” always collapse eventually, it’s just that in this case the gold rush knew no national boundaries and when it ended, everyone is left with a hangover, even (or perhaps even especially) the people that didn’t benefit stratospherically from the good times.

It’s already getting ugly, and it’s going to get a lot worse.

Like a lot of people, I’m outraged with those that drove this particular bubble to such a bursting point; I’ve always been sensible financially – I only buy things I know I can afford, I make sure I have appropriate plans in the event of bad times, etc, and now I’m paying for other people’s folly anyway. I refused to participate in the Internet bubble in the late 90′s too, knowing full well that it was built on hype and lies – and despite offers to get involved in the booming sector, it just felt wrong to start jumping into something I knew would fall apart at any minute as soon as people woke up and smelled the coffee. Basically, if I wouldn’t invest money in something, I sure as hell wasn’t going to stand there and encourage others to do so, just because we might have a fun ride for a few months. It’s immoral. But, that’s exactly what the supposedly reputable banking sector has been doing for the past few years.

I was annoyed by the Intenet bubble too, that the sector I worked in was crippled for a while by people who didn’t (or refused to) acknowledge that what most of them were doing was total, unsustainable nonsense. The difference that time was that at least it was mostly confined to one sector, to the people that screwed up (although some of us also got dragged into it too). This time of course, everyone suffers.

But, the scale of the repercussions of the utter financial folly of the last few years may have one positive effect – to force people to consider the sustainability of what they do, and to hold others to account in the same way. Short-term thinking, get rich quick schemes, the dream of that ‘one big break’ – all these things are distractions, glittery diamonds dangled just out of your reach that more often than not simply lead you directly over a cliff. I personally think that if people put more thought into how they might positively contribute to the world around them in the long term (as well as making a living of course), and less about how they might be able to get on the cover of Forbes or Hello, or wangle the purchase of yet another unnecessary status symbol, they’d actually be much happier, and we’d all benefit.

The culture of worshipping celebrity, coveting great wealth, chasing the high life – it’s a mirage and entirely void of substance. The few that do make the transition to that kind of life (especially in the public eye) often turn into emotional train-wrecks along the way anyway, so quite why this is a laudable goal is beyond me. Better to aim for real, practical and substantial goals – such as a decent living,  being happy, and preferably doing something with your life that you can feel content with (or even proud of), in a way that doesn’t require that you put a monetary figure on it before you can justify the time you spent doing it.

Maybe facing the reality of the folly that caused this economic recession/depression will trigger some people to reassess their priorities a little. If not, then it’s all been for nothing, and the only legacy will be a small bunch of people having gotten rich on the back of crippling the rest of the world for years afterwards, and the whole thing will be repeated in a decade or so once everyone’s forgotten. I’d rather not think that’s the end result.

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Business Political

The last roll of the dice

January 19, 2009 – 10:49 am

Another week, another plan to stimulate the economy from the UK government. I actually think what they’re doing this week is pretty sensible, which basically means an insurance / underwriting scheme dependent on mandated lending to individuals and small businesses. But I think today is actually less about this individual step, and more about the fact that most commentators are in agreement that if this doesn’t work, ie doesn’t restart the flow of credit to sound lenders, then it’s going to lead to pretty much a wholesale nationalisation of the banking sector in the UK.

It’s happening piecemeal already of course, in almost every country in the world – Ireland had the latest case in the Anglo Irish Bank – as each bank fails, it gets bought up by the state to prevent the ripples it causes becoming tidal waves. But what we appear to be talking about now, if this latest initiative fails, is a major policy shift away from the concept that institutions as important as banks should be allowed to entirely run their own affairs.

That doesn’t mean Whitehall beuraucrats directly controlling operations of course, but major shareholders and board members do set the tone for how a company operates. I think it would mean a complete shift in the way banking is perceived (even more so than now) – in the last decade or so, certain elements of the banking sector seem to have been suffering from the ‘Hello magazine effect’ – i.e. focussing entirely on chasing the high life rather than on the fundamentals of their profession. Sure, it’s led to the sector becoming sexy and glamourous, made a lot of people a disproportionate amount of money – at the expense of, oh, just the entire world economy. Shame that.

If full nationalisation happens, and it means that banking becomes suddenly less sexy and attractive to graduates looking for the quickest way to their first Ferrari, I won’t shed a tear. The whole industry badly needed a reality check, and if it takes nationalisation to make it happen, so be it. I do think, however, that all those who received huge bonuses in the last 10 years for doing what amounts to selling snake oil, should be bankrolling the recovery schemes, not the general public. But we know that’s never going to happen – the fat cats stay fat, and the general public gets to pick up the tab for their excesses. Again.

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Business Personal Tech

2009 Predictions for the IT business

December 28, 2008 – 9:17 pm

So, 2008 is almost done and 2009 rapidly hoves into view. I thought I’d share a few of my predictions for the next 12 months, on the frankly dubious assumption that anyone on the Internet actually cares what I think. Specifically, I thought I’d talk about some IT business topics, since that’s what my mind is largely focused on when it comes to trying to figure out what’s going to happen next. We all know that the economy is well and truly wedged in the toilet, and is likely to slide further round the U-bend as the Christmas period recedes behind us and cold, harsh reality clamps its jaws around our unmentionables. Predicting that isn’t anything exciting – it’s obvious to everyone.

But what about the details? Here’s a few predictions I’ve been pondering about over the last few days.

  1. The ‘Web 2.0′ hype bubble will finally burst. Investors will cease to blindly invest in everything with ‘social networking’ in the title and start asking where the returns are. The multitude of sites that have assumed that so long as they’re trendy & popular, they can figure out a business model later, will find that just about everyone will lose patience with them in 2009, and the easy answer of ‘advertising’ won’t be enough as ad revenues continue to free-fall. I predict that an awful lot of these sites will fail to find an independent business model, and sometime in 2009 (or 2010 if they’re lucky) will be begging to be acquired by a larger company that can use them as a means to an end, or as crowd pleasing ‘fluff’ around something with a real business model. It will be a buyer’s market, and the stratospheric valuations in 2006/7 will be reduced to a fraction of that in the cold light of day. A few might discover a viable model independently, but probably not without offending some of their users, who have come to expect everything for free.  But then, since investors won’t be clamouring to fund new sites for these people to hop over to anymore, they probably won’t have anywhere obvious to go. The dream world of completely free everything on the Internet funded by advertising that doesn’t get in your face very much will slowly die, leading to more premium subscription models, micro-payment models and much more obvious ads.
  2. Open source use will receive a boost. Obviously when money’s tight, you look for the cheapest option and as such open source will continue to get more attention. Not just because of the lack of an initial license fee, but because it hands more control back to the customer, rather than the traditional model of the supplier keeping it all to themselves, and calling all the shots when it comes to upgrades etc. In addition, companies that use open source foundations to make their own premium products or services will find that open source continues to offer them more freedom to explore business opportunities, without being dependent on a supplier that may pull the rug out from under them, or even become a competitor in the future.
    Despite this, I still don’t foresee that much growth in the desktop Linux market. Ubuntu continues to make progress there, but I still don’t think it’s that attractive to the general public. Despite making lots of improvements, it’s still more tricky to look after than either Windows or OS X, and I personally am still nowhere near recommending it to non-technical family members. It’s probably no more difficult to switch to for general home use, when it works, but things like device compatibility and what you can do when things go wrong still requires far too much involvement from traditional geek circles. Still one for the enthusiasts rather than the uninterested general public IMO.
    Server-side though, I see lots of possibilities. Cloud-based hosting services are still in their infancy, and I believe there’s a lot of untapped potential there, from both businesses of all sizes and from general consumers. The Internet as a storage space and processing centre has a massive amount of growth still in it, and open source is perfectly placed to be at the centre of that – both because open source already runs most of the Internet anyway, and because the nature of it encourages collaboration, data exchange, and perhaps most importantly, trust. I think virtualised capacity in the cloud will continue to expand & mature in 2009 and well beyond.
  3. Microsoft will continue to do well. Despite open source’s growth, Microsoft isn’t going anywhere soon and will continue to prosper, particularly with existing customers. Not only  will they continue to recognise that customers see benefits in open source, and try to respond to that (like including jQuery in Visual Studio), but they are very good at delivering value and driving down prices, and they will benefit from budget-constrained conservatism in existing customer sites. As a cash-rich company, they have significant room to provide price incentives, and they have proven themselves capable of providing value in a number of core business areas. While I think open source will continue to gain traction in companies that make software, and at companies with a more technical bent or who are starting up and looking to break moulds, companies that mostly use software as a means to a different end, and particularly those that already use Microsoft software are unlikely to risk change in this climate. When budgets are being heavily cut, provided Microsoft can come in with some good deals for products / tech that the business already uses, that will probably be more attractive to that business than risking a migration away from Microsoft, even if doing so has some potential for long-term benefit. For a couple of years, budget horizons are going to be shorter and therefore any projects that deliver long-term rather than short-term benefits are likely to be put on ice, which will undoubtedly work in Microsoft’s favour, particularly with their existing installed base. Also, with headcounts reducing, software which requires more up-front cost but is easier to manage (requiring less expensive technicians) will continue to be attractive. Again, this still applies mostly within their established product lines – Windows, Office, Sharepoint – the more a company needs to stray outside this core, the less likely MS is to be such an obvious choice.
    Whether Windows 7 will make it out in 2009, and whether people will care is very hard to tell at this stage. Vista showed Microsoft that people are willing to step off their upgrade treadmill if they feel the product isn’t giving them something compelling. In theory there’s still some pent-up demand from people who skipped Vista, but that’s not guaranteed to be released unless Windows 7 delivers something tangibly desirable. So far, I’m not seeing much that says ‘buy me’, unless it’s somehow combined with a touch-sensitive device or something. Frankly, I just don’t think people care about operating system upgrades very much anymore, it’s what they can do with an entire device that matters most.
  4. Apple will continue to do well. Even though they make products that are generally expensive, what differentiates Apple from say Microsoft is that they make products that tend to work well as a complete package, and that people aspire to own. People don’t buy Apple because they feel they have to, to be compatible with X, or because that’s company policy, or because the upgrade cycle told them to. They tend to buy Apple because they want the product. As we all know, when you desire something you tend to find a way to obtain it, and are much less likely to be discouraged by extraneous circumstances compared to something that you have little emotional investment in purchasing. While the economy will undoubtedly hurt Apple’s sales like everyone else’s, I think the desirability of Apple products will make them more resilient than most. In addition, offices, long a bastion of Microsoft, seem to be becoming more open to Macs these days, no doubt assisted by the iPhone. Apple is in no danger of overtaking Microsoft yet, but the days of business people ruling out Apple products as just for graphic designers and hippies seem to be firmly in the past.
  5. Contractors will find it particularly difficult. Obviously as headcounts get reduced, contractors tend to get cut first since there are no redundancy complications to worry about. While I have a number of jobs at various stages of the pipeline right now, I’m expecting things to slow down in the next few months and to become less predictable. In a way I don’t mind so much, since I plan to invest any additional free time in R&D / product development for when the market picks up again. When the immediately paying work is there, you tend to take it since you don’t know when the next job will come along, but in fact investing in your own IP can be more important for the longer term. Provided you have the financial flexibility to keep going while the external sources dry up a little (and having been ruthlessly prudent, I’m lucky enough to have that option, for a while), it’s possible to come out the other end in a stronger position than if you’d just contracted on other people’s projects the whole time. That’s my glass-is-half-full perspective anyway :)
  6. Some SaaS vendors will have problems. “Software as a Service” is a nice idea that sometimes works, particularly in high-margin businesses or where you can exploit leverage the development investment of others (e.g. resellers / deployers of open source software who don’t contribute to the core project). When you need an on-demand service that can be throttled depending on your needs, it is efficient and serves customers well, as well as allowing some vendors to get a foothold in markets otherwise dominated by incumbents. However, the thing about services is that they can also be cut quicker than product investments when you’re trimming costs. Product models load the sales revenue at the start of the customer relationship, when they’re expanding, and that’s non-refundable. Service models amortise that revenue across many months or years, and assume that the costs of signing that customer up will be recouped over the period of time they are with you – eventually of course equalling or exceeding the amount of revenue generated from a product sale. This means that losing a customer, or having them scale back, can lose you more revenue quickly – essentially it’s a model that reacts much faster to a changing situation, so you can’t build a buffer up from the good times so easily to last you through the bad times. The counter argument is that since services are more scalable, customers may still at least continue to spend at some level, rather than cutting completely. I think when you add it all up, the surpluses in product models will exceed those from service models in a volatile environment. Thus, I think some areas of the SaaS market are at greater exposure in a downturn, exacerbated by the fact that they’ve never had to deal with one yet. I think we’ll know a lot more about the practicalities of SaaS models by the end of 2009, particularly which ones are the most resilient.
  7. The traditional PC hardware business will continue to stagnate. Personally, I wouldn’t put any bets on lots of people clamouring for faster CPUs or GPUs in the next 18 months. Enthusiasts will still love them, but I think that for the general public, machines have become ‘fast enough’ for what they need, and they’re much more interested in hardware with a different focus – such as sub-notebooks and smart phones. Dx11 will largely follow the Dx10 trend and be very interesting, but will be mostly of marginal practical importance – optional extensions to mass-market applications, and a prerequisite only for specialist applications where hardware & software requirements are predetermined. Dx10 adoption was even slower than my relatively pessimistic predictions; despite having some nice features, the (artificial) Vista prerequisite and upgrade requirements made it a hard sell (and as expected, a plethora of underpowered cards that supported it on paper but were basically unusable in any practical sense muddied the waters still further). Dx11 will benefit from the fact that more time has passed, and that it works on 2 operating systems (Vista and Windows 7, assuming people start adopting one or the other in greater numbers), but that advantage may well be wiped out by the weaker economy.
    In general, I think the time has passed when the general public were onboard with demanding new & faster machines because their operating systems are getting more complicated & demanding. The only areas where I see some headroom still remaining (excluding hardcore gaming here, since it’s a minority) are in interfaces – touch, speech, image recognition, automation, trend analysis and prediction. And even then, I think people are more interested in seeing those applied to their portable devices than their desktops.
    I do however see potential for much consolidation, where tech that was previously only present in hardcore machines is now far more widespread. You can still create some great looking content with a Dx9-class machine, and the benefit is that now, lots more people have them – in fact cheaper consumer cards sold as Dx10 class are often much better applied to Dx9 class applications, where they can actually perform acceptably. I forsee a lot of potential in bringing high-quality, if not cutting-edge, content to a much broader audience.

That’s the way I see things going anyhow. It’s looking fairly bleak in a great many respects, but there are always opportunities to be found even in the worst of circumstances. At the least, there’s nothing like a good shake-up to really separate the wheat from the chaff.

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Business Political Travel

Travel to the USA becomes even more complicated

December 10, 2008 – 9:57 am

It’s been clear for some time that the US is becoming more and more paranoid about border security. My first trip to the US was in late 1993, when we hopped over to New York on a special deal (less than 2 weeks notice), and I remember it being much like any other international destination, or if anything easier. In particular if you held a British passport, you were pretty much waved through at the border with very little fuss.

Since 2001 things have gotten more difficult, obviously, but in the last 5 years it’s been getting increasingly silly. The need to fingerprint every traveller seems rather unnecessary and certainly slows down the process. On arriving in LA a couple of months ago I was struck by just how unfriendly the officials were, one in particular being pretty damn rude to a family in front of me in the queue who were unsure about which of the multitude of forms they were supposed to fill out when. Sure, it’s really big and clever to swank around with a gun at your hip, shouting at people when they don’t fill in your forms correctly. It’s not universal – recent trips to San Francisco and Boston have been a little more relaxed, but I can’t help but notice that the tension towards ‘outsiders’ appears to still be increasing.

Every time I’ve gone to the US I’ve travelled under the Visa Waiver Programme, which is very convenient – basically you don’t have to apply for a visa if you’re just visiting on business or pleasure, just turn up with your passport, a local address and a return ticket and you’ll be fine. From January 12th next year though, they’ve decided that’s far too easy, and travellers from countries that are eligible for the VWP will have to apply for clearance before travelling, via the Electronic System for Travel Authorization (ESTA). The system appears to be largely automated, so it’s much quicker than getting a ‘real’ visa, but it’s still an extra step to remember to do, and another bureaucratic process that can get screwed up.

I’m not sure why they’ve chosen to do this, I can only assume it’s related to their wish to do pre-checks on travellers, and that they’re not getting ‘enough’ information from airlines – who already have to pre-warn the US authorities of the personal information of incoming travellers (unlike every other country) and give them information which is probably contrary to many local Data Protection laws.

I know 9/11 was a big deal, but honestly I don’t think there’s a need for border control to be quite so unfriendly as it seems to be getting in the US. It’s akin to DRM – hugely overcomplicated processes that mainly put barriers in the way of the kind of people you want to welcome, while almost certainly not impeding the real criminals / terrorists in any proportionate, practical way. Maybe once the current swaggering, fear-mongering chimp of a president is finally gone, the culture of xenophobia and paranoia may start to abate a little.

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