Piers Daniell

We laughed in the office on the news that Easynet is finally being sold off by Sky as I have been saying it would happen for over a year. Some believed me, some didn’t but my reasoning was sound. Ever since Sky bought Easynet it has been an uneasy marriage of a vast consumer brand and a very business focused one. Easynet was one of the first to get involved with LLU (local loop unbundling) in the UK and were able to launch products way ahead of BT. Something Sky obviously liked when they paid well over £200m for the business even though, by then, they were actually buying an old network and much of it needed to be upgraded.

Unlike O2, who at the same time, paid a fraction of that (£50m) for BE. They had a much newer infrastructure, and after all the upgrades to make it fully national was less than Sky originally paid for Easynet. But when you look at how Sky treated Easynet it was still segregated within the organisation and divisions were created to ensure a nice clean break when the time came to offload it. I think they did very well to get £100m for it, especially as the actual valuable part, the network, has remained in Sky’s hands meaning Easynet are now just a third party with a good supplier agreement. But again, like when Sky bought Easynet originally, it was done by a company who didn’t understand data communications and this time they found some bankers who obviously were taken in. I don’t think the amount demonstrates value for money and it will be a difficult business to float/sell in a few years when the venture capitalists decide they want their money back.

Obviously for us it probably means a bit more competition in the coming months as the business gets some much needed direction, but with no innovation over the past four years they are going to struggle to catch up. While they have an enviable client list, I am sure the customers coming to the end of their dire 5-year terms will be ready to for a change. So good luck Easynet – you are going to need it!

There seems to have been a some power issues over at Telehouse North this afternoon. A few ISPs and hosting providers are reporting outages and most notably LINX have suffered a significant drop in traffic. This, however, was due to a port upgrade for a customer - and not caused by the power failure.

LINX provide an open peering relationship with most companies within the industry to allow traffic sharing and hence reduce costs. This is done by having fixed cost for the connections so what you find is LINX ends up shifting huge amounts of internet traffic. At its peak today they supported nearly 600 Gb/s.

We don’t currently use LINX and purely rely on transit however with a good mixture I don’t see why there should have been such a big impact but obviously a lot of ISPs rely THN!

For those of you who visited Goodwood Festival of Speed on Sunday a few weeks back you would have been greeted by an awesome sight. No, not the new McLaren MP4-12C or the Rolls Royce Ghost, but actually a relic from the golden years when ‘can’t’ wasn’t in the vocabulary of the British engineer. It was the Avro Vulcan, or Vulcan Bomber as it is commonly known. A machine so advance that it was our nuclear deterrent during the Cold War and saw service during the war in the Falklands.

What makes this machine so outstanding was that it pretty much was a first for so many technologies. The fact that the delta wing design and the engines went onto form, what became, the most advance passenger aircraft ever, Concorde. It was a very humbling experience to stand beneath this plane as it roared through the sky above Goodwood.

It got me thinking on the abilities of our country and the skills we once had. However I was buoyed by a new program on Sunday evenings straight after Top Gear which looks at key pieces of technology we have developed in Britain. By far the most interesting was the one on Rolls-Royce which detailed the building and design of their Trent jet engines. For us British, Rolls-Royce appears to be a sizable global company, but in reality I hadn’t realised how fragile and small it is compared to its competitors such as General Electric.

We have the abilities in this country to engineer some incredible technology, lets hope there is more to come and Britian isn’t only known for wacky vacuum cleaners.

With the announcement last week that BT will be offering Sky Sports through its BT Vision product, I am convinced, more than ever that BT will focus on becoming a media company rather than a telecom provider. By using the premise of providing fast internet access (BT has earmarked over £2.5 bn into the investment into fibre based products, FTTC and FTTH), it has been able to create a platform to compete directly against Sky and Virgin Media.

While the rollout of these products is currently low, the footprint will bring the fight directly to Virgin’s door. And while Virgin may offer internet access it gets nowhere near the support from government as it is perceived as being a media company and not as a technology enabler, like BT. So while BT gets good press on bringing faster internet to the masses, and not its actual intentions on competing against Sky & Virgin, the others are treated, rightly, as a media companies.

This action further ruins BT’s reputation within the telecom industry as customers needs are being put to the bottom of the pile, while saying publically they are at the top. The BT Vision product, for example, is given priority across the BT backbone to ensure the TV quality is comparable to the competition. This means that other traffic is left to fight it out over the remaining space reducing quality. A niche ISP who has worked with BT for many years even put a public notice out on their blog about the issues their customers are experiencing because of the reduction in capacity. And this situation can only get worse as BT’s plans to become a media player grow.

My message, therefore, is don’t believe the headlines. Unless you are going to become a direct BT Vision customer then I can only see you being disappointed with BT’s connectivity plans.

Unlike the rest of the population I am not a fan of the government’s recent tax on banks. I feel it is too needy and will, like most taxes, reduce the tax take rather than increase it. I am especially against the EU’s attempts to put a cap on bankers bonuses and feel that any business should be concerned about such legislation.

As a business owner it is my prerogative to decide how to reward staff and should have nothing to do with government policy. Appreciate it is just the finance sector at the moment but it could very well be any other industry in the future. The fact is if I decide to pay staff using a generous commission structure, even if the industry as a whole doesn’t, then that shouldn’t be anyone else’s business. My thought process is a well incentivised sales person offers our clients better service and help to ensure the success of the company. If the banks feel the same then it shouldn’t be down to government to decide best practice.

Instead government, and more importantly the busy bodies in Europe, should be concentrating on putting restrictions in place on the industry as a whole. I believe that by requiring banks to hold a certain amount of their trades as deposits (or by increasing that threshold) they will be less likely to fail as there would be something to fall back on during a recession. Also by reducing the amount of readily available cash in the business, less will be likely to go to staff in the form of bonuses.

This kind of regulation is very much a low touch policy which still instils entrepreneurship and the desire to grow but should fix big problems in our society. It is, for example, a travesty that parts of the country are already suffering from a hosepipe ban when the water companies should have been investing for the last two years in more capacity. Again regulation stipulating the amount of water to have in reservoirs for each citizen would ensure supply during times of drought.

So my message to government is no need to tax or mess with individual businesses, just provide clearly defined regulations which protect the wider economy.

Interesting results from ThinkBroadband’s latest comparison between the main internet providers. Unsurprisingly for some, BE and O2 come out on top of everything including speed, which might seem odd considering the most they can offer is 24 Mb/s but Virgin offer 50 Mb/s products. Virgin has even started talking about launching 400 Mb/s services in the near future – so what gives?

Well for those of you who watched one of the many sporting events over BBC’s Iplayer you will have realised that the reduction in cost of broadband over the last few years has reduced capacity levels within core networks. This means that when the need for bandwidth is there, the capacity isn’t and everyone suffers from packet loss, high response rates and low throughput. While Virgin may have its own network it obviously hasn’t made the necessary investment into it, unlike the Telefonica O2 group. BE doesn’t support a legacy BT network, which O2 does offer, which probably explains the difference in performance. Key point is the wholesale platform offered to ISPs must be good if the consumer businesses can achieve so much with it.

Never before has the internet played such a key role in bringing public events to the masses. First it was the election, then football, Wimbledon, cricket and even the budget brought to the desktop of thousands of office workers previously unable to partake in such events during office hours. With the advent of BBC’s excellent IPlayer the events are only a click away from anyone’s desktop.

As a business specialising in bringing connectivity to corporate customers, rather than consumers, we get to see the difference between a standard day in the office and one with a major event. Most of you will be familiar with 9/11 when the internet literally ground to a halt in the UK as we watched America come under attack. Back then there was very little video streaming and websites would crash under the demand for information.

Today it is a different story, and while England playing football by no means compares to the interest generated back in 2001, it does put the internet under enormous strain. And today we have video streaming which soaks up bandwidth putting demand on connections. For us, ie Fluidata, the game was an interesting test of the network which normally runs well below capacity as we focus on selling low contention, high bandwidth services.

As you can see from the graph from the monitoring on one of our networks we do literally nothing on the weekend (as most businesses are closed) and little traffic during the evening. However as the game started at 3 pm today (end of the graph) you can see traffic nearly doubled as people closed down outlook and logged onto the BBC…

Another holiday, another BA strike. For those who are familiar with my holiday plans they always involve some kind of issue. Whether it be a strike, queue on M25, volcano, war or anything equally bothersome I am sure to have my plans affected by something. But to date I have always managed to go and find a way around the problem. BA for one always seem to find a plane and fly, even if it is some god awful Portuguese ageing 767 with seats so small you wondered if there was a comedian designed the plane.

It got me wondering as to how much the flight really matters, as long as you get there. I was just grateful the flight was going and was able to make the most of BA’s excellent T5 executive lounge. Also no insurance argument would ensue in trying to get back missed days at the hotel. The problem was that I had saved up my air miles for Club and this plane certainly had never ever catered for such a service, even economy customers were laughing at the ‘service’. The little ‘Club’ napkins on the headrests didn’t improve matters and certainly didn’t counter the distain of my fellow passengers. But we were going and I would have my holiday.

Ironically I think BA would have had less of headache on its hands of disgruntled passengers if it had actually just cancelled the flight and blamed it on the crew striking. The problem by flying was that it put hope into customers minds and they very quickly forgot about all the strike issues when faced with a 1920’s 767 (I know by the way that Boeing hadn’t made a 767 in the 1920s, just making my point…). I, for one, have decided against complaining as I had my holiday and certainly made the most of the glorious service on my return. A reminder, if you needed one, that while BA may have its issues it is still the best carrier out there. And Portugal should be ashamed of itself!

I have written before about the virtues of a good work/life balance, well last week saw the introduction of a new toy to our London office. The question was what to do with space put aside for future expansion. Should we invest in another sofa that never gets sat on or go for something a bit more team focused. Something that could settle arguments, bring teams together and make important business decisions over.

The foosball table was a favourite but with a Fluidata five a side team already established it was felt something more inclusive should be considered. Table tennis would have been nice and so would have been a pool table, both of which however required a lot of space. Difficult to justify when paying London rates in the centre of the city, however we finally came up with a solution, Air Hockey!

I had an enjoyable morning with BT Openreach last week as they outlined their plans over the coming years. While the business isn’t the most loved within the industry I thought the presentation was well thought out and impressed by the staff. What was interesting was their candid nature on growth aspirations and while they don’t see dramatic increase on their £5 bn or so of sales each year they do foresee dramatic changes in how this is made up within their product portfolio.

One key thing for Openreach is to continue to push new technology which may reduce margins or return on more profitable legacy technology. They seem to understand that with any change there is always loss of existing business but in most cases made up for with the replacement and the new requirements it spawns. When local loop unbundling came in the impression was BT revenue would fall but instead it actually grew as more businesses entered the broadband space.

One key legacy technology that is the bread and butter of Openreach is ISDN technology and they were very clear on their expectations for this to be replaced with SIP technology. When it will happen exactly they don’t know, as customers seem slow to adopt, but it will happen and they are ready for it. You even get the impression they want the switch to happen faster. Obviously for companies such as ours this is good news especially as we recently launched a range of products under the ADVANCE brand which deliver seamless failover to multiple networks, perfect for delivering the kind of SLA customers expect from ISDN. All we need now is more SIP carriers who can persuade businesses to make the switch.