The Great Debate UK

Why we are not witnessing a tech boom

By Kathleen Brooks. The opinions expressed are her own.

The words ‘tech bubble’ have been bandied about since the Apple share price really started to climb at the end of 2011. Earlier this month, its market capitalisation hit $600 billion dollars, only the second company to see its market cap get that high. So it appears like everyone wants a bite out of the proverbial apple.

There is a dangerous precedent for markets’ believing that tech stocks can only go in one direction. The dotcom bubble back in 2000 caused havoc in the equity markets and also contributed to the Federal Reserve keeping interest rates incredibly low, one of the contributing factors to the housing crisis in 2007.

Added to this, the only other company to have registered a $600 billion market cap was Microsoft at the height of the tech boom. Today Microsoft is worth about a third of that value. So does Apple need to watch out?

We have seen the Apple share price fall quite sharply in recent days, it is down 7 percent since last week. However, it has followed the overall market lower and thus the decline may not be people getting nervous about holding Apple stock, but rather some profit-taking and a normal correction. While we certainly don’t expect Apple to continue to appreciate at the pace it has of late, good profit growth, surging sales and plenty of opportunity to expand its retail operation across the developed and developing world could help prop up the share price even at these levels.

It’s not just Apple’s incredible marketing and product quality that makes us doubt the doomsayers. In my view, the overall market does not look like it is in bubble territory. Although Apple is bigger than some small European countries (it is more than double the size of Portugal’s annual GDP), it is not the only tech stock on the block. Research In Motion (RIM), who makes the Blackberry, has seen its share price fall 77 percent over the past year. Nokia has seen its share price dwindle from $9 per share in April 2011 to below $4 today. So not every company has seen its share price surge nearly 90 percent, like Apple has. Hence the Nasdaq remains more than 30 percent below the peak reached in 2000 before the dotcom house of cards collapsed.

The key difference between then and now is that the market has a better nose for quality, revenue source and longevity. Hence why Apple – with its 50 percent control of the tablet market and dominance in the phone sector – has managed to outperform RIM and Nokia. The tech bubble was characterised by the huge valuations of companies people had barely heard of and who, ultimately, did not have viable business models. LinkedIn, whose IPO last year saw its share price double on its first day trading, has seen its share price trajectory get more volatile since then rather than surge to frothy levels. Also, LinkedIn has a viable business model. Subscribers can pay to get a premium service, which is invaluable for head-hunters, human resource managers and others. LinkedIn is a good example of the free/ subscriber hybrid model that some newspaper companies should have followed years ago.

from Paul Smalera:

What real Internet censorship looks like

Lately Internet users in the U.S. have been worried about censorship, copyright legalities and data privacy. Between Twitter’s new censorship policy, the global protests over SOPA/PIPA and ACTA and the outrage over Apple’s iOS allowing apps like Path to access the address book without prior approval, these fears have certainly seemed warranted. But we should also remember that Internet users around the world face far more insidious limitations and intrusions on their Internet usage -- practices, in fact, that would horrify the average American.

Sadly, most of the rest of the world has come to accept censorship as a necessary evil. Although I recently argued that Twitter’s censorship policy at least had the benefit of transparency, it’s still an unfortunate cost of doing global business for a company born and bred with the freedoms of the United States, and founded by tech pioneers whose opportunities and creativity stem directly from our Constitution. Yet by the standards of dictatorial regimes, Internet users in countries like China, Syria and Iran should consider themselves lucky if Twitter’s relatively modest censorship program actually keeps those countries’ governments from shutting down the service. As we are seeing around the world, chances are, unfortunately, it won’t.

Consider the freedoms -- or lack thereof -- Internet users have in Iran. Since this past week, some 30 million Iranian users have been without Internet service thanks to that country’s blocking of the SSL protocol, right at the time of its parliamentary elections. SSL is what turns “http” -- the basic way we access the Web -- into “https”, which Gmail, your bank, your credit card company and thousands of other services use to secure data. SSL provides data encryption so that only each end point -- your browser and the Web server you’re logging into -- can decrypt and access the data contained therein.

By blocking SSL, Iran has crippled Tor, a program that enables Internet users to anonymize not just their content but their physical location as well. Tor is a very common workaround for users in totalitarian regimes to access Twitter, Gmail, Facebook and other services. It’s hard to come up with an apt analogy for Iran’s unprecedented blockage -- it’s not just that the letters you send are read by the Post Office and photocopied for their records, it’s that the Post Roads themselves have been closed off, so you can’t even send a letter in the first place. That’s the net effect of blocking SSL in Iran.

The hacking group Anonymous has brought down all kinds of websites in protest, mostly over copyright, in the U.S. and Europe. I don’t advocate their targeting any country’s servers for retribution, but where is the outrage or public demonstration or media attention over the denials of Iranians’ basic freedoms to communicate, via the Internet?

Unfortunately, it’s still too easy for Internet companies and even the Internet’s founding fathers to dismiss the importance of the tools they created in fostering free and open public dialogue, especially in places like Iran. Recently, legendary engineer and Google Vice-President Vint Cerf published a New York Times op-ed entitled “Internet Access is Not a Human Right,” where he wrote: “Internet access is always just a tool for obtaining something else more important.” How wrong he is. Cerf’s line of thinking eviscerates the Internet -- the wonder of the modern world he helped build. Cerf argues that humans have the right to “lead healthy, meaningful lives,” including having “freedom from torture or freedom of conscience.” Yet, we live in the 21st century: It’s hard to see how, among people whose economies are developed enough to afford them communication devices, Cerf would excuse governments that curtail their citizens’ freedom and right to use the ultimate communications tool -- the global network of the Internet. In fact, in underdeveloped parts of the world, the cost to have a cell phone that connects to the Web can be quite affordable.

I’m not arguing semantics here -- if our society excludes the Internet from the fundamental rights of human communication, we also excuse totalitarian regimes like Iran’s from any repercussions when it comes to blocking that avenue of human contact. It’s a dangerous compromise to make in a world that only gets more digital with each passing day. And it also conveniently excuses the free world from having to do much of anything about it. We wouldn’t forgive Iran if it threw 30 million citizens into solitary confinement -- so why would we ignore it when the Iranian government effectively cuts the entire population off from the outside world, to stifle their voices during a critical electoral cycle?

Startup accelerators and Internet bubbles

–Joe White is COO of Moonfruit.com. The opinions expressed are his own.–

All this week Seedcamp, a UK-based internet startup accelerator, has been running its headline annual event Seedcamp Week in London.

As an accelerator, Seedcamp has mimicked a successful process established in the U.S. by Y Combinator, Techstars and others of taking early stage internet entrepreneurs and running them through an intense programme of mentoring and business development. Mentors are laid on from different disciplines and work with the entrepreneurs each day. They cover founders, product experts, venture capitalists, marketing specialists and more. The best ideas at the end of the programme get funding to get started. Seedcamp Week brings the best of the best from the Seedcamps throughout the year and around the world for a final London mentor and pitch feast.

Seedcamp has grown its fund to €5m this year and made some other announcements to bolster its success. There’s no doubt that a tie-up with Dave McClures’s 500 Startups will boost Seedcamp’s profile (disclosure: Dave McClure is also a Moonfruit investor).

But there are two questions that have plagued internet tech financing in recent months: Can Europe produce internet companies that rival their U.S. cousins in terms of success and influence? And are we in a tech bubble?

Let’s deal with Europe first. Seedcamp Week ends today – start-ups this time ranged from grabcad.com and farmeron.com, bringing the internet to engineers and farmers, to compilr.com and transferwise.com hoping to disrupt the software compiling and foreign exchange transfer markets respectively.

In my mind, for the UK to really produce world beaters with $1bn plus valuations, we need to have start-ups that play to our strengths. The UK and London in particular have strong industries in finance, design, music, and the marketing and creative industries. Some of these talent pools should help a great deal in the 2.0 world of slick UI and simplified design. NYC has done well to distinguish itself from the Valley based on a similar city profile to London, with companies like tumblr, foursquare and etsy.

Heavy traffic on the information superhighway

– Jeff Smith is Senior Director Infrastructure Services, Global Crossing EMEA. The opinions expressed are his own.–

For many years now, number crunchers have obsessed over the growth of data, marvelling at the way that the computer age has generated enormous amounts of content and IT types have speculated as to how disks, tapes and other storage devices would need to evolve to accommodate this. Now, however, the problem has spread and the new fear is greater: could the digitisation of the world’s information lead to catastrophic communications breakdown?

Consider this head-spinning set of numbers. According to EMC, the data created in 2010 would be 1.2 zettabytes, the equivalent of 75 billion 16GB iPads, filling Wembley Stadium 41 times. And in the age of the Internet a lot of that data doesn’t just reside on physical media but instead gets repeatedly shunted around the globe. On mobile networks alone, 8,000 petabytes will be sent in 2011, says a May 2011 report by ABI Research, and that figure is set to grow by about 50 per cent annually for the next five years. Overall, IP traffic will grow to 767 exabytes in 2014, according to Cisco. A petabyte is over one million gigabytes and an exabyte is 1,000 petabytes.

This data growth is part of a broader picture of non-stop innovation that characterises the technology sector. The situation is exacerbated by the ease with which files can be exchanged using social networks, email, instant messaging and other systems.

However, there’s no need for panic and despair and it’s worth remembering that concerns over the Internets ability to withstand wave after wave of demand are nothing new. The Lawrence Berkeley National Laboratory newsletter reported that in October 1986 the net suffered a “congestion collapse” and “slowed to the pace of the telegraph” with emails taking a day to deliver. This was in spite of the fact that at the time it hosted only about 10,000 users sending data at up to 56 kilobits per second.

Even legends of the industry are not immune to spurious predictions of an apocalyptic meltdown. One of the founders of computer networking, Bob Metcalfe, once predicted in a magazine column that the Internet would “go spectacularly supernova and in 1996 catastrophically collapse”. Metcalfe had the self-deprecating grace to later blend that article and eat it in front of an audience. The scares have continued with think tank the Internet Innovation Alliance predicting Internet brownouts by 2012.

Certainly it’s true that additional network capacity is taken instantly, as soon as it is available, but there are many causes for optimism. Content delivery networks have proven effective ways to organise the Internets traffic by storing data where it is needed so that it does not have to take the long way around. ‘Fatter pipes’ (faster networks capable of carrying more data, faster) and sub-sea links have given us all more breathing space while compression techniques crunch data more effectively than ever and private networks offer back roads that take the weight off the main information thoroughfares.

from MediaFile:

Apple and Twitter: A New Power Duo?

One big winner coming out of Apple’s developers’ conference on Monday is Twitter.

Apple announced that the Internet microblogging service will be integrated directly into future versions of the iPhone and iPad software.

That means iPhone users can quickly publish information on Twitter by tapping on a photo taken with the iPhone’s camera, or by tapping on a news article in the phone’s Web browser.

It’s the kind of front-and-center placement that any of Apple’s thousands of app-makers would kill for, and it will likely provide a nice boost to Twitter’s traffic of 140-character Tweets.

It may also represent the latest alliance in the ongoing battle of the technology titans.

The collaboration between Apple and Twitter could signal a new power duo, playing in smartphones and social networking – the two powerful forces that are re-shaping today’s computing, advertising and media markets.

How deep the Apple/Twitter partnership may be is still unclear. Twitter referred questions to Apple about whether the integration involved any financial terms, and Apple did not return a request for comment.

The consumerisation of IT

By Mike Oliver. The opinions expressed are his own.

Whether the corporate IT world is ready or not, a growing number of employees now use a variety of mobile devices to access and carry corporate data. Powerful smartphones are becoming omnipresent – led by the universally enticing iPhone, while tablets such as the Apple iPad, Samsung Galaxy Tab and Research in Motion (RIM) Playbook are set to make major inroads this year.

Mobile devices can transform almost any business for the better as increased productivity across the organisation leads to higher revenues and happier employees. And, of course, companies that have high morale find it easier to recruit and retain high-value employees. But it also raises very important questions around security and what IT departments need to do to keep information safe. Securing the entire mobile estate — both corporate and personal devices — will be imperative for businesses in 2011 and beyond.

Mobile devices are an easy target for theft, putting corporate information at risk and organisations therefore need to ramp up security. Departments need to keep a close account of these devices, particularly who is using them and for what purposes. A mobile governance policy can be used to codify rules and regulations, such as how often users must change their passwords and the software that needs to be installed on each device. This provides the framework to secure both network traffic and sensitive internal data.

But governance does nothing to reduce the growing burden on resource-challenged IT departments to administer mobile devices. Fortunately, a proven mobility management platform excels at solving these problems without overtaxing IT resources – even for companies experiencing fast smartphone growth. A comprehensive device management and security solution should be at the heart of any business’ mobility strategy and will have an immediate impact on the operations of a company.

For the past decade, a number of mobile device management solutions have effectively solved the issue of securely managing data and devices so that all data stored and transmitted by mobile devices is secure. Data and content is backed up and can be deleted if a device is lost or stolen. Sensitive data on devices is also encrypted so IT can be confident that sensitive company information is secure outside the office. It also provides the tools to solve complex mobile management tasks simply and effectively.

However, slow take up has always been due to the cost and complexity of these systems. The leading solutions such as (the now defunct Nokia Intellisync, and the nine year market leader Afaria, from Sybase) are solutions built entirely for the mobile enterprise. As such, only organisations with a mobility minded IT resource, and a significant commitment to their deployment, would invest.  Today, the same technology is available as a hosted service, a SaaS monthly subscription, without the often significant cost or complexity.

from Business Traveller:

Travelling through the cloud on a tablet

John McHugh, VP and Chief Marketing Officer, Brocade

As technology and business travel become ever more inextricably connected, I talk to a man whose life is a symbiosis of both worlds

John McHugh, VP and Chief Marketing Officer of networking infrastructure firm Brocade, proudly sits on both sides of the buyer-seller fence. On one hand, a WiFi-less or WiFi-jammed hotel will not be seeing his custom again in a hurry; on the other, his company offers hotels WiFi deployment.

He knows how tricky it is to design a network where, from “6am to 8.01am and 8pm to midnight” every business traveller downloads their email, watches streamed media or lets their kids use the Xbox.

“Hotels don’t want to spent a lot of money and invest in a lot of infrastructure if they don’t have to; they’re trying to get by on the absolute bare minimum so the system is normally massively oversubscribed at the very time when the user wants to use it.”

It’s a problem that McHugh deals with every day in a world where information and applications, once stored in traditional data centres, are now being distributed in a more ‘virtualised’ manner.

A new generation of feminist scholars

Jess deCourcy Hinds, a library director and writer, has written for Newsweek, the New York Times, Ms., and School Library Journal. The opinions expressed are her own. Thomson Reuters is hosting an International Women’s Day live blog on March 8, 2011.

I am the librarian at Bard High School Early College in Queens, New York, where my students speak 34 languages, from Albanian to Urdu to Tibetan. And I’m proud to say that these bright, culturally diverse students are learning about feminist history—some as early as 9th grade.  I had to wait until graduate school to become a feminist scholar with the kind of research opportunities my youngest students have now.

My students read primary source documents about slaves and suffragettes on the Library of Congress website. They stream videos of labor activists through the Women’s History Archives of Smith College. They find Eleanor Roosevelt’s letters, and listen to Virginia Woolf’s voice in a BBC recording—on YouTube!  Multimedia archiving and the digitization of documents present exciting new opportunities for learning about women—famous and ordinary.

Sometimes, when I’m talking with students about the limitlessness of women’s history resources, the opportunities for under-represented women to have their stories finally told, I’ll find myself overcome with emotion. “Calm down, Miss,” a student once said with a smile. “Don’t hyperventilate.”

But how can you not hyperventilate? My students, many of them first-generation Americans and the first in their families to attend college, are doing real research. They are doing the research that was previously restricted to scholars who possessed letters of introduction, invitations, and appointments. My students and I have none of these things. We are in a public school during a recession. And yet, we are true researchers.

In the morning, students knock on the library door, begging to be let in. “We open in five minutes!” I call. I savor the first five minutes of the day alone with my coffee cup and my own research. Currently, I am researching Berenice Abbott, the WPA photographer known for her “Changing New York” photographs of the city. Her work is among 700,000 archived materials in New York Public Library’s Digital Gallery.

from Davos Notebook:

Cybersecurity goes prime time at Davos

- Michael Fertik is the founder and CEO of Reputation.com, an online privacy and reputation management company. He is a member of the World Economic Forum Agenda Council on Internet Security and recipient of the WEF Technology Pioneer 2011 Award. The opinions expressed are his own. -

The World Economic Forum (WEF) has named cybersecurity one of the top five risks in the world. In its Global Risks 2011 report, the WEF's Risk Response Network nominated cybersecurity alongside planetary risks posed by demography, resource scarcity, trepidation about globalization, and, of course, WMDs. This is heady stuff. Cybersecurity has officially gone prime time. This week in Davos, I'll be moderating and contributing to panel sessions on this topic.

The timing could not be more ripe. Right now we are witnessing the convergence of multiple seismic risks to data integrity. Social networks capture and mine ever larger amounts of data about humans and companies, opting users into increasingly invasive data collection with little or no notice. Apps operating on social networks and smartphones continually pull data streams about friends, families, personal connections, contacts, geo-location, behavior, preferences, tastes, and health habits -- even when these data streams are unrelated to the stated purpose of the applications.

We've seen search sites mine public data, semi-public data, purchased information that was supposedly private, and even scraped or stolen data, and aggregate them together for sale and resale on the open web, claiming cover of current law. To date, the Internet economy has been nearly perfectly stacked against individuals' control over their data. The proliferation of deep digital information about every individual on earth, along with the correlated explosion of its easy and unwitting accessibility by third parties, poses a "personal WikiLeaks" threat to each of us.

That brings us to Julian Assange's WikiLeaks, which is itself the subject of at least one session at Davos this year. Reviled by some and relished by others, WikiLeaks represents either "radical transparency" or "radical invasion," depending on your point of view. A large and growing raft of self-described "whistleblower safe harbors" pervade the Web, enabling and encouraging publication of confidential information that is difficult to authenticate as true or false. I suppose I was nonplussed by the bulk of the content published on WikiLeaks about American foreign policy -- I think it's fairly awesome that the United States is secretly saying pretty much the same exact things it says publicly.

But many people can agree that, when it comes to difficult questions of diplomacy, the ultimate resolution may be greatly benefited by the comfort of each party to talk freely within itself or with others when behind closed doors. The brilliant sunlight of transparency may be just the medicine needed to remedy a public lie, as in the case of the Pentagon Papers, but it may also turn from "transparency" to murkier "invasion" when it comes to secrets of hard-won technical innovation such as an automaker's hybrid engine code base or a nation-state's schematic for a particularly nasty weapon.

Indeed, states and non-state actors alike are taking note of the evident power of cyber tools to advance their often alarming aims. Cyber-warfare and cyber-terrorism are now the single most efficient ways to damage sworn enemies. Just as the most enterprising criminal networks have decided to abandon old-fashioned thuggery in favor of more profitable cyber crimes such as VAT fraud and identity theft, states and terrorists have taken to the Internet to realize the maximum possible benefits of asymmetrical warfare. A few smart people can infiltrate financial systems, transportation networks, energy grids, and key commercial installations to steal information, seize control of operating systems, or shut down critical infrastructure. Software engineers are now, pound for pound, the most valuable weapons in a military arsenal.

from The Great Debate:

Google’s greatest skill – and challenge

By Jeff Jarvis Jarvis is the author of "What Would Google Do?" and teaches at the CUNY Graduate School of Journalism. His next book, "Public Parts", will be published later this year.

The miracle of Google was that it could accomplish anything—let alone become the fastest growing company in the history of the world and the greatest disruptive force in business and society today—while being run by a committee, a junta, a council of the gods.

In management, as in every other arena of business, technology, and media, Google broke every rule and made new ones.

It should not be a shock that Eric Schmidt has stepped aside as CEO and made room for Larry Page. Schmidt was the prince regent who ruled until the boy king could take the throne while training him to do so. We knew that this would happen. We just forgot that it would.

When I interviewed Schmidt a few weeks ago and asked about pressure over privacy, China, and lobbying, he said, “This is not the No. 1 crisis at Google.” What is? “Growth,” he said, “just growth.”

Scale is Google’s greatest skill and greatest challenge. It scaled search (vs. quaint Yahoo, which thought it could catalogue this web thing). It scaled advertising (vs. the media companies that today don’t know how to grow, only shrink). It is scaling mobile (by giving away Android). It has tried to scale innovation (with its 20 percent rule)—but that’s the toughest.