Piers Daniell

With the Geneva motor show into full swing it is obvious that the whole car industry has gone mad. While it was funny to watch ‘green’ people go out in their thousands and buy Toyota and Hondas with a hybrid engine, I was much more impressed with the likes of BMW being able to demonstrate better economy, emissions, acceleration and cost without the need to move to hybrid. Now however, even they are looking it at it, along with the likes of Ferrari and Porsche. I would have thought these companies would understand the complex design make them expensive, and with anti 4×4 campaigners saying SUVs are too heavy as they carry around all their four wheel drive bits, a car with two engines is equally ill-conceived.

Unfortunately, the word ‘hybrid’ sells, and while politicians jump on the bandwagon the idea of having city centres emission free starts to become a reality. And these performance brands know if they don’t innovate the will be stuck with cars that people can’t buy because they won’t be allowed to go anywhere. It is all moving towards an electric future and even a hydrogen fuel-cell future, where cars wiz around emitting nothing apart from water vapours. I’ll skip past the point that water vapour is not very kind to the atmosphere, and get straight onto the practicalities. Electric cars can’t go very far, and while improvements are being made, it is still an issue that will last many years, along with the time consuming refuelling process. Hydrogen on the other hand delivers an immediate refuelling process, although it has to be stored below minus 270 degrees and we have no infrastructure with which to support it. This brings me onto a different technology that has been around for generations, one that solves all these problems, but seems to have been forgotten about.

Methanol was demonstrated by Lotus four years ago as the fuel of the future. Being a liquid at room temperature it can be stored like petrol and even has a higher octane level (100). It can be burned in engines or used in fuel cells (to keep the greens happy) but ultimately could be very easily supported by our existing infrastructure. And as Lotus can demonstrate, you can even use it at the same you’re your car is filled with petrol, giving us a better solution than carrying around two engines. It can be produced in vast quantities from natural gas (still much lower carbon than oil), or made by mixing hydrogen and carbon from the atmosphere making it carbon neutral. The problem is that none of the big car makers have got behind it and so it remains a rare and undeveloped opportunity. Let’s hope someone out there makes them see sense.

Considering there are over 20 million motorists in the UK, it is surprising what rubbish we put up with. You would have thought by upsetting so many people with the huge tax burden, it would become more of a political issue. But as we are all green and ill informed when it comes to emissions and the impact on the environment we are happy to take it.

Not for much longer. It is incredible, that in an election year, Gordon Brown feels it is acceptable to continue to take the mickey and charge 2% extra on fuel duty when he shouldn’t be. It all started when the government came up with the brilliant idea of lowering VAT to 15%. But then they realised their biggest VAT source, fuel, would reduce revenues so they added a further 2% duty tax mitigate any benefit. It doesn’t matter, thought the government, people need fuel and they are too stupid to complain. And maybe we didn’t complain (because we were too interested in working out what a 2.5% reduction meant in the high street, ie not very much) but now that VAT is back up to 17.5% we should as we are now paying a further 2% more.

Unfortunately in our democratic society the only protest that seems to work is blockades and violence. However seeing that we are all too busy trying to work this country out of the black hole it has been put in, can you please take a few minutes to fill in this non violent petition? Hopefully someone will get around to reading it.

I attended a very interesting breakfast meeting hosted by The Stone Club in association with Coutts. The topic was around private equity and it’s involvement within our economy, and how opportunities exist for it, as an industry, to help improve the position of British business. One point that was made right at the beginning was that while there is huge public outrage and hatred for all things financial, it is a very large industry employing hundreds of thousands of people and can’t be pigeonholed with the tyrants who brought the global economy crashing down. Yes they were reckless, and took risks with cheap credit, but remember private equity actually invests in business and hence can only reap the rewards from actual success rather than smoke and mirrors.

Private equity has always had a bullish reputation as its unrepentant goal has always been to make lots of money. But does this mean it deserves the hatred and does it in fact have a larger role in helping Britain out of the hole we currently find ourselves? There seems to be a general consensus that while private equity can be bullish it does make the businesses it invests in work harder and has actually saved companies during the economic downturn.

One business owner mentioned that when his business was publically listed he struggled to invest and grow his company, due to the changing ownership and diverse shareholders. However, now under private money, he has been able to invest and grow the business during a recession making the company even more successful in 2010. So while private equity may want more return, they understand a simple calculation, which is that more money comes from more investment.

It is a simple truth Government would be wise to take note of, and while it has no money to invest, there is bags of it outside the UK ready to be directed into British business. However while the tax regime remains so complex (we have the most complicated regime in the entire world), and rates remain high this money will not come into the UK. Our tax ranking compared against all the world economies currently stands at 84^th, down from 4^th place. So there are 83 economies better suited for investment before Britain and that is before you consider the fact that business is now global.

Apparently 80% of all private equity comes from funds outside the UK which will now dry up as Government uses tax as a political football and gives no certainty to the long term tax structure. There is obviously a requirement to lower taxes (which, it has been proved, will increase revenue for the Government), but more importantly the uncertainty is killing private equity within the UK. Most people don’t realise that investments are made for 5 – 7 years on average and hence require a stable structure to persuade investors to commit.

None of the above will actually cost the UK anything, and when the tax take for January doesn’t even cover outgoings for that month, there isn’t a moment to loose in making immediate policy changes. Another point raised was Government spending, and the necessity to reduce spending from 50% of GDP to 40%. Long term we need to bring that down to 30% to compete, once again, as an economic super power.

As we slowly come out of our short-lived ice age I was surprised at the media coverage on the number of potholes that appeared following the snow this winter. Obviously it makes the situation worse by the water getting into the road, freezing, expanding and then melting. But hasn’t anyone been driving in the last ten years on our roads? Surely this is not a new phenomenon, but one that we have always lived with.

Ever since I started driving I have always driven on the crown of the road rather than in the gutter to avoid the broken surfaces. It hasn’t always served me well and once buckled a wheel on a particularly nasty hole a few years back. The reason it is so endemic is because of our policy on road maintenance and not just about funding. For some reason we have it in our head that it is better to patch the road rather than resurface it. The problem is by patching we are weakening the road and giving the ice the opportunity to penetrate it. Ironically it isn’t any cheaper to patch than actually resurface a piece a road, especially when you consider how many times they have to return to fix it again and again.

I am not talking about resurfacing the whole length of the road either but instead the whole width so that there are no joins (weak points) in contact with the tyres. If they forced any contractor who digs under the road to do this then we wouldn’t have the outcry we currently have. As it is they can’t now keep up with the repairs for the compensation rightly being claimed by drivers.

And the solution our public servant masters have come up? Blasting holes with a new technology which again just deals with fixing the problem, rather than preventing it in the first place.

Well congratulations to Amy Williams who managed against all the odds to achieve gold in skeleton (sledging) at the winter Olympics in Canada. For one of the few nations competing without any kind of winter sport it was a fantastic achievement. She learnt most of her trade running a board on wheels down a road. It is such a shame then that Canada thought it right to complain to officials about her helmet not being the correct regulation, when they knew they didn’t have a leg to stand on.

Canada’s Melissa Hollingsworth finished 5^th, nowhere near the medals. Even if they believed they had a case, and Amy had to forfeit her position, their lady would only make it up to forth. Fact is that America complained earlier in the competition and it was thrown out. What it shows is a complete lack of gamesmanship and behaviour I would expect from the Chinese or Russians. Even Germany’s Kerstin Szymkowiak who came second said that she deserved to win. And rightly so when she was a massive 0.5 seconds faster than anyone else – the equivalent to 10 years in the real world.

Canada has been abusing its position of holding the Olympics by only letting its athletes onto the tracks in the build up to the games. And those of the Russians who surprisingly will be holding the next games in four years as they have agreed to return the favour. Sort of leaves GB out in the cold considering we are never really going to be able to hold the winter games.

I am not suggesting that Britian drops to their behaviour when we hold the summer games in a few years time (were too politically correct for that!), but maybe it is an opportunity to help out all the smaller countries, and give the cold shoulder to the larger more successful ones such as Canada?

I recently went to visit my brother in New York over a long weekend. It was a good opportunity to remind myself why London is still the best place to live (apart from the countryside). For my brother it was a journey of discovery and one which has been met with taxi drivers politely asking, “Where do you want to go arrrsseeehoole?” to dirty streets and astronomical rents. You think London is expensive? Try living in a little cardboard box and then imagine it being so hot your shoes melt to the floor. Then imagine flat mates coming in all ours with their girlfriends…. and paper thin walls…. and you are charged $1,600 for the privilege. Give me London squalor any day.

Anyway after I arrived I had a few spare minutes so decided to check my email to find I had a new Facebook friend request. So after looking at all my very important work email I took a look at the friend request to discover I didn’t recognise the chap looking to add me until I saw the message “Hey Piers, I was wondering if you could be my friend – I was the guy who checked your passport at Amsterdam airport”. So apart from a guy from Amsterdam looking to add me as his friend on Facebook *shudder* who I never spoke to or remember meeting he also felt it was ok to take my personal details from my passport and search online for them. Obviously if it was a good looking girl this post might have been a bit different, but the fact remains that in the old days this sort of contact would have been much more difficult to organise.

So while it is good to be social and out on the big world wide web there still needs to be some level of social conduct. And while anyone wanting to contact me can happily add a comment to this website or email my company I don’t expect them to add me to Facebook without first meeting me.

From the amount of emails I have received from companies over the past few weeks pushing hosting space I believe we are seeing a glut of capacity currently in the market space. Interestingly not much of it is located within London which still struggles with power supply.

We are on the bandwagon as well but see it much more as a strategic addition to our connectivity offering rather than a standalone solution. Key points to note with any hosting is the long term commitment especially if your requirements change and you need more space or power. It seems most of the offers focus on rack space rather than power, which is good for the headline price but becomes expensive when you realise the power offered will only support a few servers rather than the rack you have paid for.

Another consideration is how well served the datacentre is for connectivity as a lot of these deals seem to be for sites in the middle of nowhere. Make sure that any hosting you do take is within easy reach of the sites you need to connect to and scalable for future needs.

Google’s latest announcement is to move further into telecommunications and deploy a fibre network in the US offering up to 500,000 consumers access to a 1 Gb/s network. Now I have written before how general internet browsing was not enhanced when we moved our office to fibre, but Google believes new requirements will emerge.

It is hoping that 3D videoconferencing will become a reality and the ability to stream large amounts of data will further enhance our lives. I have no doubt that this will be the case, however I struggle to see why Google is getting involved and what, in the long term, it believes it will get out of this project. Apparently Google did some bidding on wireless frequencies in the US but not to build its own network, instead it was hoped the move would frighten existing carriers into launching their own services. Going the fibre route however is a big leap and one I am confident it is not ready to make.

Google seems to forget what makes it so rich and powerful at the moment – margin. Currently it can sell vast quantities of advertising space in a model which doesn’t cost much to produce or distribute. Sure there are costs involved but nothing like print or television media to which it competes. It also is able to operate as a monopoly in the internet without restriction (apart from Chinese) on what it delivers to consumers.

In the telecoms world it is a bit different. Firstly the costs involved in building fibre are enormous and if there was a pot of gold at the end of it I am sure the industry would have responded. Businesses are already moving to the technology but because of an immediate requirement, not a future hypothetical one. Secondly a provider of a large fibre network could be forced to open it up to other competing companies to ensure users had choice of service. This would mean Google would not have the monopoly it currently enjoys and hence the margin would be lower.

I am all for moving the industry on, and it does need a kick, but I don’t believe it will be a good move for Google. Is this the start of the IT industry finally waking up to the fact that the shift in revenue from content back to infrastructure will now take place as we move our lives into the cloud?

Interesting piece on thinkbroadband.com with regards to router speeds over the O2/Be network we did a few months back. Basically as part of the wholesale offering for ADSL2+ we had to collate data on all the types of routers they may use and test them under lab conditions.

Although the Cisco’s came out near the bottom they did perform well with upload and in my mind have proved the most reliable and still what I would recommend to customers.

I was speaking to a client yesterday on the merits of virtualisation and what needed to be considered before moving his company ‘into the cloud’. A lot has been said in the press and by manufacturers about the benefits of hosting services, however little covers the specific problems that you are inevitably left with. In this client’s case the business was at a junction in terms of IT investment as it evaluated its creaking server infrastructure and to plan the next steps.

With eight separate servers, each carrying out a specific function it was easy to recommend sharing one larger server using something like Vmware to convert each server into a virtual environment. My word of caution came with trying to share resources between servers and better instead to over specify the base machine to ensure each server got exactly what it needed. Modern virtualisation software is clever in sharing resources but in my experience if you have a Microsoft Exchange server gobbling up 4 GB of RAM then it isn’t going to share very well with a Microsoft SQL server requiring the same. Better to ensure there is at least 8 GB on the base machine and allocated 4 to each. The same goes with processors, only hard drives can really be shared, and with RAID, reliably too. So now instead of buying eight cheap servers the client can instead buy one or two (for extra redundancy) high specification servers to carry out the same role.

The next problem is where to host the platform. While the customer knows it should be in the cloud so that it can be accessed from everywhere and highly secure it does mean handing over parts of the business to a third-party. This can be done by fully outsourcing the virtual machines and not even owning the hardware, however without full due diligence what could appear to be a good service today, could fall over when another hundred customers have the same idea. Also no SLA will ever compensate your business should the worse happen so I believe it is better plan as though everything is about to go very wrong. Therefore a good solution would be to collocate some hardware in a datacentre but also maintain a local version and replicate between the two. That way there is maximum resilience should the internet fail, supplier go bust or office burn down.

While the industry will remain very positive on the concept of the cloud it is important not to loose sight of the technical challenges your company will face and how that would impact your ability to do business.