If you pay much attention to the business and investment media, the big buzzword is “cloud” when discussing the future of tech companies. In the realm of a free and open Internet, “cloud” means are broad range of applications and services from many sources that are as device independent as possible. For the corporate monoliths and Wall Street the word “cloud” means the return of the walled garden – with a vengeance.
Walled gardens have been with us for a very long time. They have always benefited cabals and cartels and have often been created to support them. Old school telecom is a perfect example. Less than 30 years ago, you had one choice for telephone service and that same source restricted your choices in services and hardware. What about old school Cable TV? again, one choice, one provider. In these walled gardens, technology stagnates, prices rise and variety of offerings are limited. The internet provided the ultimate work around for consumers of both services and offered them more variety at a price more in line with the actual value of the service. This is why old oligarchies from Telecom to Hollywood hate the Internet.
Back to big tech and the cloud. Companies like Intel, Microsoft and Apple built new walled gardens around software and hardware. The Internet has matured to the point where all of the propriety products have become less relevant. These companies are reacting by building new walled gardens in the “cloud” to once again confine consumers to a single platform. Apple should be credited for starting the trend with iTunes. By simultaniously dumbing down the users interface and restricting choices the company has cultivated a loyal cult that is mesmerized by elegant product packaging. That cult willingly pays large to be constrained to a narrow field of choices, all in the control of the fruit cult overlord. That process has been replicated with smartphones, and even “do no evil” Google is now running an “app store” for it’s increasingly less open Android platform. Even if Google doesn’t restrain alternative app sources for Android, wireless providers can and will. OS’s are largely irrelevant now with the browser being the users main interface. With the browser as the interface devices and OS would have largely become commodities without new walled gardens. (more…)
I’m no analyst, but I can see when a properly schooled one is either spreading FUD or is simply clueless. FUD is only dangerous when fed to the clueless, who it so happens are often the majority of fund managers. I’m assuming Mike is just not up to speed on WiMAX, and that his FUD is unintentional.
“While we believe Clearwire has amassed an attractive spectrum position that enables the delivery of competitive wireless speeds, we are concerned about the competitive landscape for both residential and mobile services, the impact of the weak economy and the appetite for business partners to sell Clearwire services,” he writes.
McCormack notes that the company plans to offer wireless broadband service at 2-4 Mbps, which is above the 0.6-1.7 Mbps offered by the national carriers currently. In some markets, he notes, Clearwire expects to offers speeds of 6-15 Mbps, “easily” outpacing 3G speeds. But McCormack says he questions whether end users are demanding that kind of speed. (Barrons)
If you only understand the concept of broadband in the context of a landline or a cell phone, you will have missed the following:
1) The average fixed broadband user in America has access to a top speed in the 2-4 GBPS range, making Clearwire’s initial speed offering competitive in with fixed line service in most markets. Wimax has the potential to deliver far faster speeds than ADSL or DOCSIS 2, so there’s plenty of headroom to stay competitive.
2) As for mobile, there is not even a complete standard for a 4G implementation on the telco side yet, and when there is they are still not capable of delivering the same speeds. The spectrum held by Clearwire does not penetrate buildings as well as the incumbent telcos 700mHZ real estate, but Clearwire’s allocated bandwidth is much larger – meaning far faster wireless connections are possible.
3) VoIP enabled devices, both portable and fixed can easily displace old school fixed line and mobile voice service without any additional investment from Clearwire. Since Clearwire is offering an open network, new capabilities will surface and grow viruly, always placing new technologies and services on their network first.
4) Yes, you have to be competitive. Study after study has shown that most broadband users want more speed for less. Give them that and they are yours. Offer it for either fixed or mobile use with a single infrastructure, and you have a huge cost advantage over the incumbents, as well as a unique offering.
5) There is no shortage of willing business partners to sell the service. Startups always follow layoffs even if the traditional cell phone shops are not interested or get bullied by the incumbents. Also, there’s is no bullying the likes of Best Buy, Office Depot, Staples, Target and Walmart even if you are AT&T or Verizon.
Please don’t take me as a mindless Clearwire fanboy. I have concerns about its viability, but from a perspective of the firm’s ability to build enough national coverage to be a viable mobile player for the traveling user (who is also typically the biggest spender) as well as its ability to market the service. Only time will tell if there is enough money and savvy in the Clearwire camp to make it happen.
Clearly the technology and spectrum gives Clearwire a leg up on the competition if they can execute the business plan well.
Not to slam our current crop of tech and business reporters, but it’s refreshing to see an interview with a tech CEO done to the point with relevance. Done at the D6 conference, Om Malik Questioned Mr Bezos on how Amazon web services got stated and where it’s going. Om also brought Wall Street’s complete ignorance of the significance of the cloud computing wave into focus.
- How and when Amazon began its cloud computing effort.
- Why Amazon has become an innovator with Amazon Web Services and how it relates to their core business of being an online retailer.
- Whether or not Wall Street recognizes Amazon’s cloud efforts.
- What’s next for Amazon Web Services.
- Whether or not Amazon has plans for a VC fund or for cloud computing startups. (GigaOm)
It’s hard to trust analyst’s motives, but it’s also hard to ignore their predictions even though they are often dead wrong. In this case we have a respected firm declaring that Sprint’s long awaited Wimax service is on target for a summer launch.
The analyst firm, which has been one of the key cheerleaders for Clearwire LLC (Nasdaq: CLWR – message board) and Xohm in recent months, says that that initial “WiMax network launch” for the Xohm service will happen in Chicago, Baltimore, Washington, and Portland, Ore., “mid-year” with “others following closely behind.”
Chicago and Baltimore-Washington were the initial markets slated for an April launch by Sprint, which has subsequently been delayed. Portland, meanwhile, is a Clearwire market, and the analyst firm continues to suggest that a link-up between the two WiMax rivals will happen sooner rather than later. (Unstrung)
With the lions share of the wireless spectrum now in the hands of the same two companies that control the lions share of fixed line access, this launch is of monumental importance. I could also be the saving grace for Sprint. With so much at stake, I hope the analysts are up to more than just trying to talk up Sprint’s stock.
Wall Street analysts are an odd bunch. They try to fit companies into neat little cookie cutter profiles and insist you make yourself fit into one – even if you don’t fit. It makes your company easier to analyze and market to investors. Chances are you’ll fail if you try to fit their profile no matter how hard you try, so it may be better to resist and let them trash you now rather than have them blame you for inevitable failure later.
Qwest had their meeting with said analysts today. Analysts want to know what Qwest will do to look more like the AT&T Death Star or Darth Verizon with triple play and now saturated wireless. Sticking to plan, Qwest Chairman Ed Mueller told them that the future is a big dumb pipe and that they would do wireless and pay TV through partnerships:
“The line that comes into the home is a connection, and not a telephone number,” says Mueller, “and that’s important” in order to not be simply pushed aside by cellular offerings and fiber-optics.
The company expects it will pass 1.5 million homes with its fiber-to-the-node lines by the end of this year. The company says this could add 1 percentage point to revenue growth in the second year of the initiative, and Mueller thinks Qwest can increase its share of consumer broadband in its markets from 32% currently to 45%, without specifying a time frame. (more…)
Comcast’s stock has taken a beating of late for a variety of reasons. All the talk of FiOS has many of them worried, as did the looming (and so far unfounded) rumor that the company was interested in making a major wireless broadband play. But the company’s fussy investors got a gift this morning with Comcast’s fourth quarter earnings results, which bested most analysts’ estimates. The company reported higher than expected profit for Q4, and announced a new annual dividend payout for shareholders.
Comcast Corp. announced plans for its first dividend in nearly a decade and committed to a timeline for buying back nearly $7 billion in stock, a salve to investor complaints the cable giant isn’t friendly to shareholders. The moves Thursday come as Comcast’s stock price has withered and just a month after one of the company’s biggest investors accused Comcast of a litany of missteps and called on the company to commit to shareholder givebacks, including a dividend. (from Broadband Reports)
Just to let cutomers know that the company is fully committed to creating a robust network capable of delivering a 21st century level of broadband access, they are rumored to be investing $175 million in social networking loser Plaxo. I for one wonder how fiber nodes could be upgraded, how many more DOCSIS 3 loops could be deployed or how much better a dividend could be paid out with the same said $175 million.