Appreciating the Value of ICT Infrastructure in the Developing World

September 28, 2009 Leave a comment

Sitting at a local coffee house wondering why the free wireless internet access is slow, it is easy to be indignant. Indignant that the coffee house owner could possibly be so arrogant as to provide poor quality Internet access while I camp out with an hour old latte, updating important Facebook communities with my plans for watching television this evening.

How are we supposed to live like this? Are we supposed to live like we are in a third world country while slurping our specialty coffee?

A third world country like Ghana, Vietnam, or Palestine? If I was living in say, Somalia, I would be one of 1.14% of people within the country that have Internet access. In fact, according to the United Nations Conference on Trade and Development (UNCTAD), in all of Africa there was only 4.7% of the entire population with access to Internet-enabled infrastructure or technology.

Why do we care?

Consider this – when an economy fails, and people get hungry, what is the first thing they do? Well, in most cases they fall into either a war, or become refugees. In most cases a combination of both. When you have large numbers of potentially uneducated, poorly trained refugees entering your country or society, you have a burden on your own economy and infrastructure.

Education is the KeyOn the other hand, if developing countries have access to technology, such as that made possible through Internet and other information and communication technologies (ICT), there is a much better chance those countries will be better positioned to not only improve the knowledge and abilities of people in developing countries, but the potential of creating an environment to stimulate employment and trade.

The faster we advance and innovate in developed countries such as the United States, the wider the ICT knowledge and capacity gap becomes between us and the developing world. ICT drives the potential for a developing country to develop many of the basic skills needed for a country or society to compete, or at least become functionally competitive in their region.

The key to becoming a knowledge economy is education. Basic ICT infrastructure is required to bring the tools to a country allowing students and workers to gain the knowledge, skills, and training needed to function in the modern world.

Who Drives ICT In the Developing World?

Many Americans understand the value of supporting ICT infrastructure projects. Bill Woodcock from the Berkeley-based Packet Clearing House (PCH) leads a committed group of engineers who not only spend a lot of time evangelizing ICT development, but also roll up their sleeves and provide assistance in locations around the world needing direct human training and support. The PCH is a “proponent of neutral independent network interconnection and provider of (Internet) route-servers … worldwide.   The PCH provides “equipment, training, data, and operational support to organizations and individual researchers seeking to improve the quality, robustness, and accessibility of the Internet.”

The PCH team travels the globe, offering their services to any country with a need.

John Gerlich, a former “lifer” telecom engineer from Las Vegas, does similar work, spending most of his pre-retirement time giving back to the telecom community in need. Splitting his time between locations such as Ghana and Palestine, his motivation is giving people the tools to communicate. Makes no difference if the WorldBank is funding his projects, USTDA or USAID – the end justifies the means. His success is delivering a new ICT infrastructure to a location where none existed, or there was a limited ICT capability, before he arrived.

International organizations from around the world have tried promoting development of ICT, some with great success, others stuck in international bureaucracies and politics that slow down projects, and some (mostly independent non-governmental organizations) which are able to operate and contribute with little or no politics. Some very aggressive organizations supporting ICT infrastructure in developing countries include:

  • UNDP (United Nations Development Programme)
  • US AID
  • JICA (Japan)
  • ZDT (Germany)
  • US TDA
  • And others

Some Additional Thoughts on ICT and a Knowledge Based-Economy

When was the last time you went to a fast food restaurant? Did you notice the counter staff had microphones, and entered the fast food order into a computer for processing within the “cloud” of the restaurant? Is it possible you cannot even work in a fast food restaurant without a good diffusion of ICT knowledge in your life?

Now consider a world where nearly half the people cannot even function at the level that would allow them to take an order for a hamburger. As we in countries such as the US continue to focus our research and development energy on advancement of cloud computing, 4G, and determining if there is water on Mars, there is a very large percentage of the global population that would not be able to turn on a laptop computer.

The UNCTAD says that even basic access to and knowledge of basic ICT “can make a substantial and positive difference to the economic performance of developing countries’ companies and businesses.” Access to technology and ICT knowledge has a proven positive impact on productivity and business success. For developing countries, this productivity may result in improvements in environmental impacts of doing business, better quality of life, better use and exploitation of national natural resources, and better communication and appreciation of everybody’s place in a global economy and community.

Some Final Selfish Thoughts on ICT in Developing Countries

As I take my feet off the railing facing the pier jutting into the Pacific Ocean, and begin turning off my laptop computer, I see a group of recent economic immigrants scrounging for the basic necessities of life. They are happy to be in the United States, but still hungry. Coming to the United States has not solved their life problems. They are confronted with limited job opportunities based on the economic situation, lack of training, lack of language skills, and lack of education. They are preyed on by human coyotes representing gangs and the vile “underworld” of refugee life.

I know the same scene is repeated in Europe, Canada, Japan, Malaysia, and other countries supporting large refugee and immigrant communities.

If those persons had access in their home countries to adequate education, ICT infrastructure, and the resulting potential business opportunities. Access to the cross-border knowledge and communication needed to support trans-national business. Access to knowledge-based jobs, and support from governments well-educated in the power of societies with strong diffusion of ICT knowledge to contribute and function in a global community.

There are many people and institutions committed to making this happen. While we continue to knock off lattes and scones at the coffee shop, they are on the edge, working with governments to develop policies, as well as breaking finger nails installing ICT infrastructure shoulder-to-shoulder in the underprivileged world.

I applaud the efforts of that community, and urge all of us to take a moment or two in between funny cat videos on YouTube to learn more about how we can make the world a better, safe, and productive place through knowledge. Rock on Bill and John, and all the others out in the global field tonight helping others.

John Savageau, Long Beach

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Twitter Shows Its Real Value

September 27, 2009 4 Comments

Google’s CEO Eric Schmidt refers to Twitter as a “poor man’s email.” For millions of individuals, small business owners, and even emergency services organizations, Twitter is rapidly becoming an integral part of their business strategies and personal lives.

That fact is not lost on the private equity and investment communities. Twitter confirmed a large investment on Friday, estimated at $100 million dollars, with a posting on their website:

“Yesterday we closed a significant round of funding with a group of investment firms that we’re excited to publicly thank: Insight Venture Partners, T. Rowe Price, Institutional Venture Partners, Spark Capital, Benchmark Capital, and Morgan Stanley”

Social media is touching all of our lives. Even in the early stages of social media development, it is hard to talk with any network or tech-savvy person without having a conversation that is fairly intelligent on the topic. Some think social media communities and applications are a complete waste of time, some are finding creative ways to make tremendous amounts of money, and others are simply indulging in bringing together long lost relations and newly found relations in an instant contact “matrixed” tool.

All About Bits Twitter, mentioned frequently in a media storm following the latest investment round, is thought to have a valuation of around $1 billion.

While it is difficult to place a hard monetary value on social networking, many investors are starting to jump on the social media venture bandwagon. Microsoft invested $240 million in Facebook, Digital Sky (a Russian company) another $200 million, all in a company that has only recently starting showing signs of generating income. Valuations change depending on who you talk with, largely based on their opinion of social networking. However one fact remains, social media sites are starting to attract serious interest and money from the investment community.

Why? Because even though social media sites and technologies are in the early “stone age” of development, we do understand how this method of bringing people, industries, and events together in a tech-driven community that allows instant global notifications of everything ranging from who is feeding their cat to instant emergency notifications of wild fire evacuations in California.

Twitter has “Become a Verb”

In 1999 we worked hard to startup a new data center business and communications operation for Level 3 Communications in London. It was fairly early in the days of SMS, but gateways allowed transmission of email messages into the SMS system, allowing us to send instant notifications from network management and monitoring systems to both email and mobile telephones.

In addition, as part of our business continuity planning, there was a very clear requirement for notifying individuals, including management, of events that may require a response, notification, or could potentially result in public interest in some level of our business.

The Level 3 software developers in London wrote a very clever, sophisticated web-based notification system that allowed us to meet all our notification and event-logging objectives. Basically a one-to-many broadcast network transcending mobile phone networks, email, pagers, and automated or human information sources. The only real limitation was the length of message, which could either be truncated or rejected based on the individual mobile network’s capacity.

Twitter takes that to a whole new level.

Twitter encompasses all the basic “food groups” of human communications. It supports one-to-one, one-to-many, and many-to-many models of communications. Twitter also supports both interactive and non-interactive (or real time) communications. Your “tweets” are transparent to the media used for either sending or receiving communications. A tweet doesn’t care if you are currently preferring a web browser, a mobile phone, or an email account – it will find you wherever you want it.

Twitter is Understood, Sort Of, and Has Our Attention

Let’s face it, aside from the fact Twitter works, and meets technical specifications and promises, possibly the most compelling reason we’ve adopted Twitter is the cost. It is free. I can send a thousand tweets, and the cost to me is the same flat rate – free.

What does it cost me to use Gmail, Yahoo Mail, or MSN Mail? Nothing, it is free. The only cost to me is the amount charged for accessing the Internet or mobile telephone network. How do they make money? Advertising. Same as the soon-to-be-former print media industry, such as newspapers.

Twitter is taking the cost and flexibility to another step. They have published some of their application programming interface (API) details, allowing private or independent application developers to “plug in” to Twitter’s platform.

An important point – Twitter is, at its lowest common denominator, a communications engine. That engine can be expanded on with much more powerful application support, taking advantage of the powerful interactive and non-interactive design.

Can Twitter Make Money?

Twitter, unlike other social media upstarts like LinkedIN and Facebook, has yet to make any money. Investors, no doubt, are also struggling with that question, and will also, no doubt, force the issue. Is it through introduction of premium services licensed via their APIs? Will our 140 character “tweets” now be truncated further to allow introduction of a MiniURL from an advertiser into each tweet?

Biz Stone, Twitter co-founder, told Reuters recently that “Twitter would not take advertising this year.”

Maybe Twitter is a special case, and will get a free pass on the need for revenue and avenue to “exit” for investors. Not likely. More likely, the development of “plug in” applications that will not corrupt the basic communications engine, such as the addition of geolocation features for both business and emergency services hold a key.

Licensing the communications engine to those who will “plug in” to the platform could be the higher value we are looking for in Twitter. Much like the basic infrastructure of fiber optics, wireless, utilities, and our freeway system, Twitter’s value could be in licensing fees for the additional value layered on top of the basic engine.

Or, other smart people may have already found an answer. Such as those willing to add another $100 million into the investment pouch.

Our User Role

As users we will eventually tire of sending meaningless, worthless noise tweets. The more users become aware of Twitter’s powerful communications engine, even higher value applications will emerge, taking advantage of Twitter’s communications innovation.

Whether it is ultimately Twitter, or some next-generation of Twitter, the concept is valid, and will become a part of the “matrixed” future. This is a good time to take Twitter out for a test drive, gain some tacit knowledge and experience in both social networking and Twitter’s communication engine, and plan for what role this will play in your personal and professional future.

John Savageau, Long Beach

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Sweat Equity in San Diego – Starting Up at the SDSIC Entrepreneur’s Forum

September 25, 2009 1 Comment

“More than 90% of startup companies around San Diego compensate the founders and senior staff with stock options, grants, or restricted stock” advises Mike Kinkelaar, Partner at Procopio, a San Diego Law Firm.

Mike joined three other panelists discussing “Sweat Equity” and senior management compensation at the San Diego Software Industry Council’s Entrepreneur’s Forum Thursday evening in San Diego (SDSIC).

Sweat Equity in the StartupSweat equity refers to “the efforts of executives or other shareholders into a company. This does not include money that is put into a business, which is financial equity. It is the time and knowledge that an individual or a group of individuals put into a business to make a result.” (BusinessFinance.Com)

The panelists represented a very diverse group including lawyers, a couple of serial entrepreneurs, and a CPA who was very familiar with assisting start up companies and their executive compensation plans. Those members were:

  • Joe Perohit, serial entrepreneur and CEO of EcoLayers
  • Mike Kinkelaar, partner at Procopio
  • Daniel Cunningham, serial entrepreneur and CEO at DPC Corporation
  • Timothy Willis, CPA at Mayer, Hoffman, and McCann P.C.

Who deserves Sweat Equity Compensation?

The panel discussed this is great detail during their panel discussion, as well as during the Q&A session following their panel remarks. After a bit of debate, the panel and attendees finally settled on the following model for sweat equity compensation (SEC):

  • Those who contribute to the company in early stages who are willing to accept ownership and shares in the company rather than pure cash compensation
  • Avoid SEC grants or compensation for mercenaries, or those who may leave the company as soon as their shares are vested (Joe)
  • Those senior people who are already financially stable, and will be able to stick out the early phases of the company without a desperate need for cash (Mike)
  • Younger people, newlyweds, new home owners, YUPPIES with expensive tastes in cars, etc., are not generally good candidates for high levels of sweat equity, as they will have a need for higher levels of cash, and will probably not be able to stay in a startup for a long period of time while waiting out the valuation of their potential stock shares
  • Those who offer a very unique contribution to the startup company. This could include engineers with the intellectual property needed for the company’s product, or those who are needed for the founders to go to investment bankers and the market for additional development funding

Understanding the Types of Startup Sweat Equity Compensation

The panel introduced and discussed four major types of SEC, and went into a bit of detail on the descriptions of each. While there are obviously clear legal and financial descriptions available for each category of SEC, it was refreshing to hear the panel paraphrase those categories.

  • Stock/ownership grants. This is really straight ownership of the company. Each stock grant has value, and presents a voting right for the company. This should only be considered for the founders, and possibly one or two C-Level executives. Grants are considered as income to the IRS and state.
  • Stock options. Given more freely to employees. Most often these are incentive grants, either allocated as a signing bonus, or as additional compensation for better performance. Vesting period is normally around 2 years, at which point the employee is eligible to purchase ownership in the company.
  • Warrants. Normally only issued to financiers and banks – not recommended for employees or senior management. This is legally considered a form of stock option.
  • Non-Incentive Stock Options. This is more on the line of friends and family options, and given to those who would not normally receive an option based on performance or other incentives.

Of course there are other forms of stock, ownership, and management of those forms of equity distribution, however the above are those most commonly used as tools by startup companies to provide additional ownership incentives to owners, employees, investors, and financiers.

Setting up Your Sweat Equity Compensation Plan

All panelists were in violent agreement on a few major points. The main point is to ensure you consult with a lawyer when legally setting up your SEC plan. Mike emphasized this is not a lengthy or expensive process, as all reputable law firms have this plan on the shelf. With the number of startup companies emerging each year, law firms deal with the SEC plan as a routine part of the startup process. It is well-understood, simple if done up front in the startup process, and not difficult to understand.

Additional points made by the panel included:

  • Consult with a local small business bureau. Most cities or counties have a very good group of volunteers and professionals happy to assist startup companies with their structure and compensation planning.
  • Keep your legal documents as simple as possible.
  • Make sure your SEC documents are complete – do not defer items to a later, this will nearly always result in unforeseen tax and legal issues.
  • Set up the volume and percentages of shares allocated to grants, options, and warrants at the beginning, again even if you do not plan to allocate right away.
  • Ensure the founders and early stage recipients of SEC fully understand the compensation plan, as most problems and legal disputes with ownership and options occur with founders or senior SEC recipients who leave the company, are disgruntled, or have other issues with the founders.
  • Establish a qualified stock option plan as quickly as possible – even if you do not plan to use sweat equity compensation in the early stages. It is best to have this legal framework in place from the beginning.
  • Do not allow accelerated vesting of shares for other than founders or C-Level executives. This may result in a potential buyer finding the cost of acquisition much more expensive due to the ownership of shares becoming a higher cost to the buyer.

Some Additional Considerations Concerning Employees

Most employees do not understand the concept of stock options, grants, and taxation. Many employees do not understand items as simple as grants being considered income, and options being considered something for which you eventually will have to pay tax.

There are many people who get hung up in the percentage of a company they will own due to grants and options. They do not understand that the only value to stock ownership percentages is when the share gives you the power of vote – and that vote is only useful when it has value within the articles of incorporation, or when it is not overruled by the board of directors.

Many people still believe that percentage ownership is the highest priority, when they should understand the only value of shares is actually when you are receiving distributions (unlikely with a startup company), when you sell your vested and common stock shares, or when an equity event (sale of the company) results in a new ownership “buy back” of your shares. The only value of shares is when you sell the shares and receive cash for those shares.

Dilution of share percentage ownership in a company is normal, and expected. This will only become more apparent as the company continues to grow, receives additional investments, is acquired, or becomes a public company. In short, control by a small group of individuals will be diluted if the company is successful.

Employees must also fully understand the tax implications of all categories of SEC. many states, including California, allow the employee to either pay for the value of an option or grant up front, or defer to a later date. Many, many young employees who do not understand the concept of stock options find themselves with huge tax liabilities when their options vest. This should be explained and clear to employees up front so they do not both have a shock, as well as become disgruntled and ineefective if they are hit with a bad tax situation.

There were many more topics discussed, impossible to codify into a single blog. However a great panel, great audience, and a good use of a Thursday evening in Southern California.

The SDSIC is a great, Aggressive Organization Helping Entrepreneurs and the Tech Industry in San Diego

Silicon Valley – keep your eyes open to the south. San Diego is a very robust technology community, and organizations such as the SDSIC are focused on making it grow. There are many retirees from US and international companies settling in the great communities surrounding San Diego, and many of those successful people are starting to give back to the community through organizations such as the SDSIC.

There is a great energy in the community, with very bright people being pumped out of schools such as San Diego State University and the University of California at San Diego. Both schools have robust tech programs, and both are well-respected on a national and global scale.

Another “Well Done” to the SDSIC, thanks to the panel, and we’ll see you next time (check out the SDSIC schedule at http://www.sdsic.org/events.aspx

John Savageau, Long Beach

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Net Neutrality Returns with the FCC’s Genachowski and OpenInternet.Gov

September 22, 2009 1 Comment

“We cannot know what tomorrow holds on the Internet, except that it will be unexpected.”

The new FCC Chairman, Juliius Genachowski, addressed a group of journalists and industry experts at the Brookings Institution on Sep 21st, focusing his discussion on reigniting the topic of network neutrality and “Preserving a Free and Open Internet.”

Quoting early innovators and leaders of the Internet, including Tim Berners-Lee, Genachowski reinforced the idea the Internet is intended as a “Blank Canvas, allowing anyone to contribute and innovate without permission.” An exciting idea, and an exciting confirmation the US Government sees the Internet as infrastructure. While carriers such as Verizon and AT&T should be able to add value to their customers, the basic premise of Internet access is one of an onramp to the rest of the Internet-enabled world.

“The Internet’s creators didn’t want the network architecture — or any single entity — to pick winners and losers.”

Genachowski believes intelligence and innovation within the Internet lives on the edge. FCC LogoThe network should not determine who will or will not be successful on the network, the value of applications and desire for users to support those applications determines success or failure. The value of a Twitter, eBay, or Yahoo to a community determines growth and success of those services – not the underlying pipes provided by networks and carriers.

“…the genius of American innovators is unlimited; and that the fewer obstacles these innovators face in bringing their work to the world, the greater our opportunity as citizens and as a nation.”

We haven’t even scratched the surface of what the Internet-enabled world may offer us as a nation, or members of the global connected community. Our innovators and creative thinkers need to have access to a platform which offers a “blank canvas,” which offers unlimited freedom for users to develop ideas and new applications. The reality is young Internet users have the network, applications, and concept of a network-enabled world much more deeply diffused into their entire life and thought process than those of us who are making decisions today.

Those young people will come up with ideas which our generation cannot even comprehend today. Who would have thought a utility such as FaceBook, started in 2004, would now support more than 300,000,000 users? What is the next generation of Twitter, FaceBook, or smart grid technology? Where do we go with education and interpersonal communications?

Genachoski noted that “nearly four million college students took at least one online course in 2007, and the Internet can potentially connect kids anywhere to the best information and teachers everywhere.” Driving this further down the educational stack allows us to believe that within a short period of time, children in one-room schools in a remote part of Montana will have the same access to education as children at Peninsula High School in Rolling Hills Estates, California.

This requires our carriers and network providers to continue building the big, fat, dumb pipes needed to deliver broadband access to every community in our country. This is infrastructure, no different from a roads, water, or electricity. Do we need, as a nation, to pay a universal services fee or tax to support development of national (and global) infrastructure?

Absolutely

Do we need to give control of the content and services running over the infrastructure to individual commercial telecom carriers and service providers?

Absolutely not

The Six FCC Internet Principles

Chairman Genachowski intends to ensure that doesn’t happen. He acknowledges that “we’ve already seen some clear examples of deviations from the Internet’s historic openness.” And continues “the rise of serious challenges to the free and open Internet puts us at a crossroads. We could see the Internet’s doors shut to entrepreneurs, the spirit of innovation stifled, a full and free flow of information compromised. Or we could take steps to preserve Internet openness, helping ensure a future of opportunity, innovation, and a vibrant marketplace of ideas.”

To ensure the Internet in the United States continues to support the free, open nature of the network, Genachowski proposed two additional principles be added to the existing four principles of network neutrality, originally established by the FCC in 2005.

  • The fifth principle is one of non-discrimination — stating that broadband providers cannot discriminate against particular Internet content or applications
  • The sixth principle is a transparency principle — stating that providers of broadband Internet access must be transparent about their network management practices

Both principles are good, intending to ensure telecommunication carriers and Internet Service Providers/ISPs do not make decisions on what content is available on their networks, nor will the carriers and ISPs prioritize applications or services based on network management decisions or controls. The individual networks should never determine who will be the winner or loser, the only determination should be on whether or not users actually want to support that service or content.

The six principles of network neutrality will now include:

  • Consumers are entitled to access whatever lawful internet content they want
  • Consumers are entitled to run whatever applications and services they want, subject to the needs of law enforcement
  • Consumers can connect to networks whatever legal devices they want, so long as they do not harm them
  • Consumers are entitled to competition between networks, applications, services and content providers
  • Service providers are not allowed to discriminate between applications, services and content outside of reasonable network management
  • Service providers must be transparent about the network management practices they use

What do Other Countries Think about Network Neutrality?

Canadians are also confronting the idea of network neutrality, with the CRTC (Canadian Radio-Television and Telecommunications Commission) planning to review their own existing policies. The CRTC is looking at whether additional network neutrality policies are required and what they should be. The CRTC is holding a series of hearing on the topic and is planning to present their decisions and finding later this year.

Many Canadian ISPs and carriers ISPs do not believe net neutrality policies are needed. Those providers believe the Canadian Telecommunications Act already is strong enough to prevent abuses as feared possible in the US by the FCC. Others note that this may not be the case, citing issues such as the CRTC deciding in favor of the networks on topics such as traffic shaping and management of peer-to-peer traffic (such as Bit Torrent). (CBC Canada)

Large Content Providers Change their Stripes

Google, Microsoft, Yahoo – all were very vocal in their support of network neutrality during the initial debates in 2005. Who can forget Vint Cerf’s passionate speech discussing the free and open nature of the Internet?

That is starting to change. According to the Wall Street Journal, all of the largest American content providers have started backing down from their aggressive support of network neutrality, and have begun making agreements with some of the largest networks to put their content directly into the network.

The only big news here is that in the past large American networks, known as Tier-1 network providers, have refused to “peer” with other content providers and smaller networks, preferring to charge an access fee for the bandwidth needed to either deliver the content within the carrier’s network, or to use the carrier as a “transit” network to reach parts of the country and world not easily accessible from their primary data centers.

In the past, public and private Internet exchange points provided by companies such as Equinix (IBX) and Switch and Data (PAIX) have allowed content providers to pass their traffic to international and smaller regional or local networks without having to pay the Tier 1 network “toll.” Having a data center presence near or at carrier hotels such as the Westin Building in Seattle or 60 Hudson in New York allowed content providers to have direct connections to their peers.

The only difference here is that content providers have now started making agreements with the Tier 1 networks, bringing their content directly to the network without the need for private interconnections that may not offer enough bandwidth or capacity to provide sufficient service or end user experience. This is not a bad thing, as long as extra or unreasonable fees are not passed on to the end user – but again the end users will ultimately determine the value of that content, and subsequently the success or failure of that service.

The Future or “Our” Internet

Chairman Genachowski understands the US Government’s responsibility in providing a vision for the future of Internet in our country, and in the world.

“We have an obligation to ensure that the Internet is an enduring engine for U.S. economic growth, and a foundation for democracy in the 21st century. We have an obligation to ensure that the Internet remains a vast landscape of innovation and opportunity.”

If words reflect reality, we have a good opportunity to continue leading the world in Internet innovation and development. Chairman Genachowski gets it. He comes from the commercial world, has grown up with the Internet, and appears to truly have the best interests of the American people and global Internet-connected community in his plan. He is opening up discussion, to all Americans on both sides of the debate, at the new website OpenInternet.Gov.

You can read, and listen to the entire Brookings Institution conference, including a great panel discussion and Q&A session at the OpenInternet.Gov website.

This is your future, and the future of many generations to come. Weigh in, understand the issue, and let your voice be heard, regardless of where you stand on the debate.

John Savageau, Long Beach

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Verizon Gets it Right – “Bye Bye” Land Line Telephone

September 19, 2009 5 Comments

The FCC says US telephone companies have incurred a 26% increase in the cost of annual maintenance on traditional copper telephone lines over the past 5 years. Verizon makes 25% better margin on wireless phone than “land line” phones. FiOS is making it possible for Verizon to get into the high value video and cable television industry with a next-generation fiber optic infrastructure.

So why would anybody find Verizon CEO Ivan Seidenberg’s announcement at a Goldman Sachs investor conference that “his company is simply no longer concerned with telephones that are connected with wires” a surprise?

Bye Bye TelephoneWell, there are still many people on the street who believe copper “land Lines” offer better quality, security, and value. There are those who believe it is necessary to continue pumping money into technologies which are expensive to maintain, and offer little additional value to subscribers.

There are those who believe expansion of high performance wireless infrastructure such as LTE (long term evolution) and 4G (4th Generation Wireless) will not meet the needs of individual subscribers in both rural and urban areas.

Of course, they are wrong. Copper lines still fail, and are definitely location sensitive. A person with a heart condition will have a much better chance sending the alarm with a wireless device than a fixed line copper phone, so the more we dig into the copper argument the more it appears folks still are simply reluctant to embrace or endorse change. And change is needed in the United States.

We lag the industrialized world in broadband Internet deployments and availability. LTE/4G/FiOS all support and deliver broadband. Verizon is aggressively moving ahead on all broadband deployments. This includes broadband wireless to rural areas normally not available through either copper or in many cases cable television. In the United States (and most of the world) telephone users are either using low cost mobile phones, or using Internet phones (VoIP) on their home cable TV, or even in many cases wireless Internet connections.

So why is it surprising or concerning to anybody that Verizon is turning its back on their copper infrastructure, and focusing their capital and operational investments on a next-generation of technology? Is it better to spend more money maintaining old copper outside plant infrastructure, or is it better to spend that money reinforcing deployments of high performance wireless infrastructure and fiber optic FiOS technology?

Seidenberg added that “Video is going to be the core product in the fixed-line business.” Yes, thinking of a cable coming into your home as a “telephone line” is no longer an acceptable categorization. The telephone line is gone. Never to return. It is obsolete. We need to delete that from our mental SD chip, and reload with “Wired Humans Version 2.” Cables coming into the home and business are not for telephones, they are for the whole three dimensional concept of communications.

The answer for both the American consumer and for Verizon is clearly to reduce the operational expenses of supporting copper telephone lines, and start forcing the adoption of technologies that are better, cheaper, and offer much more service opportunity (such as high speed Internet access, video/cable TV, additional interactive communications services <such as video conferencing and video telephony>).

Americans need to applaud the courage of Mr. Seidenberg and Verizon to take this aggressive stand on new service and technology delivery.

John Savageau, Long Beach

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Nebula Launches – the US Government Gets Cloud Computing Right

September 16, 2009 Leave a comment

If an individual can create a free email account in a matter of minutes, and a small business can create its entire financial system online in a couple minutes, then why must the government spend billions of dollars building (similar) systems that may not be sensitive in nature?

Vivek Kundra, the US Government’s Federal Chief Information Officer, wants to know why the commercial world can take advantage of applications and services available online through software as a service (SaaS) companies and cloud computing companies, while the US Government manages:

  • > 10,679 individual data centers
    • Including 8x GSA data centers
    • 23 Dept of Homeland Security data centers
  • 300 million customers
  • $76 billion annual IT budget
  • $19 billion in IT infrastructure

Vivek Kundra presented these questions, following with a high level briefing on how the US government will leverage cloud computing and modern Platform (PaaS), Infrastructure (IaaS), and Software as a Service (SaaS) technology to bring the US Government’s IT infrastructure up to world standards, and then exceed those standards to gain leadership in the world’s efficient use of technologies.

And he gets it. The briefing, at NASA Ames Research center, presented a project being managed by NASA Ames to build a model for bringing the US government into the next millennium of information and communications technology. The project, codename “Nebula,” will focus on a number of areas, including:

  • Consolidation of data center infrastructure
  • Development of new technologies such as containerized data centers
  • Massive sharing of compute and data center resource capacity for unclassified government agency use
  • Reduction of carbon footprint through better resource consolidation and reducing number of individual data centers
  • Faster provisioning of SaaS applications throughout government agencies

Kundra gave the example that in normal conditions it takes around 6 months from a user requesting a new application till the time it is delivered, at an annual cost of nearly $2.5 million. With SaaS and cloud computing the same application should take one day to provision, and reduce the annual fees for operating the application to around $800k.

2010 Marks the Beginning

The government, with the Nebula project will use the remainder of 2010 developing and executing pilot cloud-based projects, including deployment of containerized data centers. The prime user interface to these projects will be at apps.gov, which will support government agency users in quickly requesting, approving, and deploying SaaS applications for government agencies.

NIST Definition of Cloud Computing:

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models. (National Institue of Standards and Technology/NIST)

Commercial companies will work with the government and Nebula project to certify their applications to meet strict government privacy and data security standards. The general services Administration (GSA) will also work with commercial companies to develop a common standard for government certification. Today, many individual agencies have different set of certification requirements for software and hardware, requiring commercial companies to go through extended and costly certifications to meet the needs of different agencies.

The GSA will work with Nebula to create a single government standard certification which will be a one-stop-shop for commercial companies. Once passing the GSA standard certification, commercial companies will then be able to bid against all other agencies without concern of going through a second, third, or more additional certifications.

Everything mentioned in the briefing leads us to believe the US government, under the leadership of Vivek Kundra, is starting to “get it.” The briefing is available via YouTube (another application listed as being government and cloud friendly), is very well produced, informative, and gives us hope our government, at least within our ICT leadership, is going to aggressively exploit cloud technologies.

By 2011 each government agency will be required to consider virtualization and data center consolidation is all of their IT budget planning. Might be tough, might take a bit of time, but will definitely result in both a stronger government, and a more efficient ICT infrastructure supporting the government.

John Savageau, Long Beach

Filed under Internet and Telecom Tagged with , , , ,

One Telecom and Business Idea for Ramallah and Palestine

September 13, 2009 2 Comments

Innovation is a catalyst for change in personal lives, education, how we work, and community life. All are components that may fill a fundamental requirement for continued economic development. In Ramallah there are many challenges to overcome in the journey from the current situation, to being in a competitive pool with other developing and modern countries.

ICT (Information and Communications Technology) development will contribute not only to the education and continued automation of banking, government, and eCommerce, but also to the overall quality of life in cities such as Ramallah, Nablus, Bethlehem, and Jericho.

International organizations and the Palestine government are developing specific plans to bring more network-enabled education resources to the schools. There are efforts to extend both fixed line (fiber optic backbone infrastructure) and wireless communications throughout the city (Ramallah), and as regulatory issues and commercial issues mature, that infrastructure will eventually diffuse down to the individual subscriber level.

The Daily Routine

As Palestine does not have a credible public transportation system, all movement is either done on foot, or by private automobile and commercial Walking in Traffic - Ramallahtaxi. During “rush hour” periods travel is virtually impossible, and the quality of air due to exhaust and lax emission standards makes movement through the city extremely noxious. In addition, as there is considerable debris on the streets due to construction, as well as the reality of narrow streets and limited sidewalk space, travelling to both school and work can be a dangerous process.

Through my own pedestrian movement through the city, it struck me as obvious that Palestine is a prime candidate for future knowledge workers (pending further diffusion of “eLearning” and “eReady” graduates into the work force) to contribute to the workforce through telepresence and telecommuting.

Software developers and non-construction, storefront/restaurant, or factory workers would greatly benefit from not needing to navigate the dangerous and unhealthy streets of cities like Ramallah. ICT is the key to both promoting the development of a knowledge worker industry, as well as greatly improving individual quality of life.

Accepting home work is not always easy due to large families and home distractions, thus satellite work areas may be an additional consideration. Those satellite work areas should include high performance ICT resources, allowing knowledge workers to contribute higher quality and effective time to their companies and professional activities.

Overall Impact of ICT Resource Development in Ramallah

During my time in Ramallah I used Internet access points provided by both the hotel and local consultant’s representative office. The hotel connected through PALTEL, the incumbent monopoly communications provider. The hotel did use wireless, with access points extended throughout the hotel to improve local signal strength. Testing upload and download speeds to a California-based server resulted in good performance of 761Kbps down and 558Kbps up. This was adequate to support all my Internet access needs, as well as IP telephony for calls home.

The consultant used a dedicated link to Israel, with performance that can be considered equal to most access locations within American cities.

While neither of these access points would be considered normal for all of Ramallah or other locations within Palestine, it does indicate the potential for delivery of Internet services within the territory. Companies with an existing ICT presence, planning to open neutral data centers, could with additional investment and support of the government (regulatory issues and licensing) increase the potential for Internet protocol-enabled service delivery which would support far greater opportunities for elearning and telepresence.

The Education System

ICT diffusion into the public education system in Palestine is still low, with only around 30% of university students having good access to computers and Internet. The Ministry of Education and other government agencies Despair in the Daily Commute Routineshould aggressively take advantage of international non-governmental organizations (NGOs) and government donors to build a robust network-enabled education capacity.

Visiting refugee camps such as Jenin and Kalandia gives small bits of hope that displaced people do have the attention of organizations such as the United Nations. UN-administered schools will eventually bring additional hope to students who need eLearning and network education to have the basic intellectual tools to enter a modern work force and compete. Having those skills will also increase their potential of eventually leaving the camps, and recovering some quality of life.

Education programs supported and administered by religious groups appear to have a bit better eLearning programs (from discussion with representative from the Ramallah Quaker School). Graudates from those schools will also have better opportunities for international university sponsorships, and likely bring their experience and knowledge back to Palestine at some point.

Jerusalem

There are many commuters who live in Jerusalem and travel to Ramallah each day. The trip is not far geographically, but can take a very long time Border Crossing between Ralamallah and Jerusalemdepending on rush hours, curfews, border closures, or if the Israeli security forces have any extended searches or issues at the checkpoint between Ramallah and Jerusalem.

Having a telecommuting-ready industry would greatly improve the quality of life for people who need to commute between the cities, as well as provide another layer of physical safety for commuters (the Ramallah checkpoint has been a frequent area of civil unrest).

Students commuting between Ramallah and East Jerusalem encounter the same difficulty as workers. The following transcript from France24 tells the story of a young lady who travels the route daily.

There they met Zaina Abu Hamdan, an 18-year-old woman from Ramallah who described her daily two-hour commute to her high school in east Jerusalem, which Israel occupied during the 1967 Six Day war and later annexed.

“As I wake up every morning and come here I am nervous, and I am thinking about the humiliations I am going to face,” she said.

Passing through the checkpoint often involves waiting for long periods in packed metal corridors, extended searches and loud orders issued in Hebrew by Israeli conscripts.

“If you are lucky, how long does it take,” Carter asked her.

“Thirty minutes,” she replied.

“And if you are unlucky?”

“Two or three hours.” (France 24)

Clearly eLearning, telecommuting, and telepresence could, and should have a very positive impact on the quality of life for all Palestinians. Israel needs to expedite approval and delivery of computer/wireless/telecom hardware, as well as release of additional wirel4ess frequency that would further support enhanced ICT.

A very difficult and troubled part of the world. However we cannot lose hope, and like a good Internet protocol packet, we need to find ways around obstacles.

John Savageau, from Ramallah, West Bank of Palestine

Filed under International ICT, Internet and Telecom, Open Topics Tagged with , , , , ,

When the Tanks Rolled We Continued to Drink our Coffee – Ramallah Raid 2007

September 9, 2009 Leave a comment

(01-05) 04:00 PDT Ramallah, West Bank — Israeli troops staged a rare incursion into this city Thursday, bulldozing cars and vegetable stands near the central square as they engaged gunmen and stone-throwing residents in a chaotic two-hour battle that left four Palestinians dead. (LA Times, 5 Jan 2007)

“While the Israeli tanks rolled through our neighborhood, we sat at a sidewalk café and continued to drink our coffee” commented a diner at Thursday night’s Ramadan feast. For the past four nights, most of the Ramallah MosquePalestinians I’ve met on the West Bank have shown a great enthusiasm in engaging me in conversations about Palestine, Ramallah, Israel, and the impression Americans have of the conflict and country.

The gentleman discussing his thoughts and memories of the last incursion Israel made into Palestine, nearly two years ago, was one of fatigue. “We are just tired of the misery this conflict has brought into our lives. We are no longer afraid of Israel, we just want the problems to go away.”

These words attracted several nods from my table and nearby tables, bringing several others into the conversation. One lady described how the house across the street from her home was destroyed by a shell, and it blew the front of her house apart due to the concussion of the explosion. Israeli soldiers would not let her approach the house, as the area was a “security problem.” She was able to return to her home a day later to being rebuilding her life.

“What gives one person the right to destroy the home of another?” asked the lady. Of course I have no answer.

An evening of stories and thoughts of prior conflicts, incursions, the leadership of Arafat, and the current climate of tolerance and desire to get everybody’s lives back on track.

“What is your impression of Palestine, do you think we have hope?”

I took a risk and answered the question by saying “Americans in general hate victims. We don’t like anybody who sits back and waits for others to solve their problems. When I see construction workers on the job at 5 a.m. during my morning jogs; when I see Palestinian software companies popping up doing outsourcing for American companies such as Cisco – and companies in the semi-conductor business, yes I have hope.”

“You are right. I’ve lived and studied in America and that is right. Never really thought of it before. Our leadership is making a mistake. They believe we should tug at the heart strings – which of course won’t work in your country. This story needs to be told.”

During the past four days I have walked the streets of Ramallah, met dozens of people, and had a wonderful time. During the past two days I have encountered two American State Department representatives, both of whom were protected by teams of what appeared to be Blackwater security, or a Blackwater suitable substitute thugs. “The package is 30 seconds out, all is secure…”

And one of my local colleagues asks “why is that guy carrying guns around in my country?”

“I don’t know. Guess they think they are in Long Beach.”

We Really Haven’t a Clue

When I watch Fox news, I get the impression everybody in Ramallah or the West Bank wants to demonstrate against the US, Israel, motherhood and apple pie. Americans think Ramallah is a cauldron of hate, looking for every opportunity to disrupt life as we know it. And we run around the country with armed security forces that are, well, NUTS!

There are four consulate offices near my hotel, and there are Palestinian police protecting the residences – just like in any other country. The local consular officer travels freely throughout Ramallah without concern, as this is a pretty peaceful place. Jogging along the streets you see representative offices from just about any NGO (non-governmental organization) in the world, as well as the United Nations and the World Bank. No Blackwater Security.

How can Americans possibly expect to learn about this ancient and wonderful part of the world when our own leadership acts with such arrogance and elitist actions? The journalists following state department officers in the middle-east must get a small sliver of reality when traveling with the “package.” It appears even the state department officers have convinced themselves this is appropriate behavior.

The Ramadan evening buffet meal over and another walk through the city back to my hotel. It is such a beautiful at night, with a half moon and clear sky, that it would be a sin to ride in a cab or car. Dodged a couple cars as I walked into the street to avoid some construction debris, otherwise the trip was uneventful. No kidnapping attempts, no assaults, and no problems other than I forgot how to say “good evening” in Arabic.

John Savageau, from Ramallah, West Bank of Palestine

Filed under Open Topics Tagged with , , ,

Information and Communications Technology in Ramallah

September 8, 2009 1 Comment

“It’s not about the addressable market today, it is about building a future for my 8 year old daughter,” says Mohammed A, a Ramallah-based consultant in information and communications technology. “The World Bank can provide a lot of great statistics about the state of telecommunications in Ramallah, but if my girl does not have the same access to eLearning and education as an Israeli girl, she won’t have a chance.”

Of course there are a lot of politics and cultural issues involved. Ramallah and the entire territory of Palestine are under Israeli administration, which poses many challenges in receiving approvals for telecom services such as wireless, including frequencies not only for internet providers, but also the mobile phone industry. WiMAX is not allowed (in Israel as well) due to military restrictions, and much of the telecom and computer equipment destined for Ramallah is held up on warehouses on the Israel side awaiting customs clearance and release.

In the education system less than 1/3 of university students have adequate access to basic Internet access or computers, and very few primary and high school students have Internet access or eLearning as part of the curriculum. Government officials admit they had some mistakes in prioritizing educational resources, further reinforcing the obvious issues resulting in education system shortfalls.

And Mohammed’s daughter still has no access to the Internet in school.

In Palestine, everything is controlled by Israel. Many international organizations and groups try to influence Israel’s government to relax restrictions on issues such as mobile frequencies, however Israel has been reticent in responding to international pressure. Why? Oh my, that is a topic that is way beyond the scope of a short blog entry.

But the result is emerging mobile operators such as Wataniya Telecom cannot get final approval from the Israel government to release frequencies in both the 900Mhz and 1800Mhz ranges needed to operate their business. The delays are becoming so costly, Wataniya (a Kuwaiti telecom investment) may need to back out of the project.

At this point all public Internet access is connected through Israel. Independent or private VSAT (satellite) connections are not allowed, nor are direct public fiber connections from Palestine through Jordon or other adjacent countries. The problems are compounded by geographic separation of Palestinian territories such as the Gaza Strip from the West Bank.

And Mohammed’s daughter still has no access to the Internet in school.

Some American and other international companies are developing a soft spot for conditions in Palestine, including Google, Microsoft, Cisco, and the Negroponte Foundation. Those groups are providing both equipment, and training to Palestinians, as well as offering consulting for education programs.

Donor organizations are beginning to dump money and projects into the country (which BTW is ironically a synchronization and control nightmare for the Ministry of Education), and expatriate Palestinians are starting to bring business and opportunity back to the homeland.

Tareq Maaya, CEO of Exalt Technologies (and founder of Ghost Software – the remote access operating system), explained Palestinian software developers are among the best in the world, and there is a good opportunity for Ramallah to become a leader in software outsourcing. In fact, Exalt Technologies is now doing outsourced software development for Cisco, with much of their workload being shifted to Ramallah from development centers in India.

This is good if you are a relatively wealthy Palestinian returnee from Silicon valley, but what about Mohammed’s daughter? How will she bring herself up to the level needed to work at Exalt, if she has no access to the Internet or eLearning resources?

Dr. Sabri Saidam, Advisor to the President on IT and Technical Education, has ideas. He is a politician, well educated, and very savvy on technology. He has a plan on the board to connect all universities via high performance fiber optic cable, and fully integrate both Internet and network education, as well as eLearning into the curriculum.

A passionate man, he is focused on bringing the message of Palestine to the world, evangelizing the need for all nations to support a Palestine that gives hope to the people. He reminds us that “people with hope are productive, happy, and become content with prosperity in life.

Those without hope become frustrated, angry, and need to find a way to express that frustration.”  That is not good for Palestinians, nor anybody else.

The regional troubles of the past 50 years are well known, poorly understood, but always good for a zealous conversation. The rights, wrongs, and realities are all parts of history. History being paid for by 8 year old girls, grasping at hope for a future that brings both peace and prosperity.

Our world is connected through social networks, chats, email, video, and any other activity that can be reduced to binary digits. There is no excuse to deny this connected world to any 8 year old girl, regardless of her nationality, race, or ideology.

Ramallah is getting better every day, but we still need to nurture this city, and every other city around the world in a similar situation.

John Savageau, Ramallah, Palestine

Filed under Internet and Telecom, Open Topics Tagged with , , ,

A Nice Evening Walk in Ramallah

September 6, 2009 Leave a comment

Walking along the streets in Ramallah at night is quite an experience. A cross between dodging cars along tight mountain roads in Hong Kong, and avoiding open manhole covers on the sidewalks of Ulaanbaatar, Mongolia. If you fall into the rhythm, and keep yourself out of harm’s way, the sights, sounds, and climate of Ramallah in September make for a pleasant evening.

In Long Beach you can walk along the streets at night, but passing cars and passing police will reward you with stares or requests for identification. You avoid looking directly into another person’s eyes, particularly if they are of a different race or culture, for fear of confrontation.

In Ramallah you are greeted by everybody you pass on the street, regardless of the fact you are obviously a foreigner, and there is a good probability you do not share their culture or ideology. A smile, a nod of the head, and you pass by without fear.

The city is one of hills and moguls. And like a Beijing of the 90′s, the skyline is dominated by construction and progress. This evening holds a Ramallah Hillsidegentle breeze, and the view of hills and valleys dotted with lights, and life, is very nice. It is good to stand off the side of the road, and look across the valleys towards Jerusalem, with its skyline lighting the distant horizon.

You feel and sense hope. Hope of people who have been through tremendous trouble and pain for the past 40 years. People who are tired of troubles, and want to think of a future that holds the rewards of working hard.

You feel that hope while walking the streets, seeing and hearing the sounds of progress.

Life in the 50s and early 60′s

Imagine getting up early on a Saturday morning in Ramallah, then driving to Beirut for brunch, going to the beach in the early afternoon, having a bite to eat in Tel Aviv, and being home in Ramallah for dinner. No, it is not crazy, it is life in the 50′s. An old man speaks fondly of those days, when life was good, and people of all cultures and ideologies treated each other with tolerance and respect.

The old man tells his grandchildren of a time when fences did not partition the land, checkpoints did not separate villages from each other, and free travel was an entitlement of being alive. The grandchildren listen with awe and envy, as the tales do not seem to have any reality today, in a land of occupation dominated by mistrust among neighbors who have shared the land for a thousand years.

And hope.

On the way back to the hotel you finally pass your first police checkpoint set up within Ramallah. The first thought is “oh my, is there going to be some kind of trouble?” Then a memory comes back of traffic stops in Long Beach you saw the prior weekend, with police stopping every car, checking for alcohol, checking registrations, checking individual backgrounds. Not much different.

A friendly nod by the Ramallah police while walking by, and back to the hotel. A really pleasant walk.

John Savageau, from Ramallah, Palestine

Filed under Open Topics Tagged with , ,

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