Piers Daniell

I visited Microsoft’s London offices today in Victoria to learn about their hosting strategy and new products they are launching. Being involved a little bit in this internet industry I thought it was important to keep up to date with the application layer. Obviously being Microsoft they are a little behind on the curve but nothing prepared me for how boring they made it all sound.

Never before have I ever felt like sleeping in a conference but within ten minutes of the presentation starting I felt myself drift away. How can anyone make such an exciting industry so dreary? They have a fantastic office, with top of the range everything, even a fully catered subsidised canteen but still talk as though the world is coming to an end. There was really nothing new apart from little bit better Exchange, little bit better Outlook and little bit better Windows. It is like the software equivalent of Porsche where every new model is pretty much identical to the previous one but goes that tiny bit faster. Their biggest growth product is SharePoint which apparently got to $1bn in sales quicker than any other product in its history. Well great, but it is still boring and is definitely no IPod moment for Microsoft.

The business has to be very careful over the coming years because, from what I can see, it is becoming very much like IBM. It is becoming the goliath with companies such as Apple and Google retaining the right to David. Cloud computing is a very exciting time for our industry and something we have fully adopted in house (Fluidata) as an example for our clients. I just wish Microsoft used its might to help lead rather than follow and come up with something new that would set my pants on fire.

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 announcement by Google that they plan to pull out of China if the government can’t curb the hacking of email accounts on it’s free service offering, Gmail. It appears that there is a lot of activity with human right activist’s email accounts specifically, being compromised.

Being in the communist state has always gone against the grain for Google but with the promise of increased advertising revenues (for a business with a motto of ‘don’t do evil’) they were very happy to restrict content for Chinese users. However as time has gone on revenues haven’t increased and many believe China is still a loss leader for Google.

So the best way to gain more market share? To publically humiliate the Chinese government and get more column inches in every paper globally than any marketing campaign could achieve. I am sure Google couldn’t give to hoots about the compromised email accounts, but by voicing it’s concern publically not only wins public support but also dramatically increases advertising revenue as people flock to the website.

Don’t get me wrong, I am not advocating China’s way of doing business, but to suggest Google is taking a stand for human rights and not commercial gain is short sighted. I wouldn’t be surprised if more western businesses join the bandwagon as China beating becomes more popular. It is a communist state with appalling human rights abuses – what do they expect?

This afternoon saw a large number of users across the internet fail to access Google. We had a high volume of customers this afternoon report that Google.com and Google.co.uk were unavailable. And looking across our wide range of transit peers it was affecting a lot of other carriers as well. Google have yet to issue a full statement but reports from all over the world point to a problem on their network.

A couple of years ago if the same had happened we wouldn’t have had one call but now with the proliferation  of Google and its services it has become a cornerstone to most businesses. One thing is for sure that no matter how small the glitch it shows the key problem of cloud computing. As users rely so heavily on the delivered service, if it fails it immediately affects you where as the standard server/client relationship is less susceptible. I always go on about connectivity needing to be resilient for businesses in the last mile, but obviously no point if the cloud provider isn’t there!