» Archive for the 'Telecommunications' Category

Whither Nortel?

Friday, November 14th, 2008 by Jonathan Spira

Nortel’s quarterly loss of $3.41 billion came as no surprise and the same can be said for its plans to lay off ca. 1,300 workers.  What is surprising is the inclusion of four top executives on the list of those to be laid off and that these four were recently recruited from other tech companies to aid in what one now might consider Nortel’s futile turnaround efforts.

Nortel has not caught a break since 2005, when CEO Frank Dunn was “terminated for cause” in conjunction with the discovery of his manipulation of Nortel’s financials to generate higher bonuses for himself and several colleagues.  The company has a colorful history dating back to its founding in 1895 as Northern Electric and Manufacturing, a supplier of phones and other devices spun off from Bell Telephone of Canada.  It started looking into ways of using fiber optic cable in the 1960s at which time it also began designing digital telecommunications equipment.

In 1976, the company changed its name to Northern Telecom and announced Digital World, a family of digital telecommunications products that were industry leading.  The DMS-100 became a mainstay of telephone company central offices (it could handle 100,000 subscriber lines without breaking a sweat) and the DMS line contributed greatly to the company’s profits for 15 years.

In 1998, with the acquisition of Bay Networks, the company changed its name once again, this time to Nortel Networks.  It gained prominence in the late 1990s as a manufacturer of fiber optic gear used to transport massive amounts of data over the Internet but was also one of the first casualties when the telecom bubble of the time burst, sending the company’s market capitalization from $398 billion (Canadian) in September 2000 to $5 billion in August 2002.

Now the company, which dropped “Network” from its brand but not from its legal name, will restructure into three business units: Enterprise, Carrier Networks, and Metro Ethernet Networks.  This time it looks like Nortel is preparing to sell off parts of the company as opposed to cutting costs.

Now, about those executives who were laid off: John Roese, Nortel’s CTO, spent the last 28 months trying to make sense of mishmash (yes, that’s the technical term) of technologies he found when he came on board.  He was also the public face of the company’s turnaround.  Chief marketing officer Lauren Flaherty joined Nortel from IBM just two years ago.  She too is leaving, as is Dietmar Wendt, another IBMer, who propelled Nortel into telepresence, and Bill Nelson, a recent hire from EMC and Nortel’s EVP of global sales.

It’s probably far too late for Nortel to recapture its position as an industry leader but it would be sad to see the Nortel name disappear completely from the marketplace.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Security Alert: Your Smartphone is Vulnerable

Friday, November 7th, 2008 by Jonathan Spira

Smart doesn’t always equal Secure.

Is your smartphone secured or was a password too much of a bother?  Think about what’s stored in your phone, including contact lists, e-mail messages, documents, proposals, spreadsheets, and presentations – many of which could be confidential.

Smartphones are much easier to lose track of than a laptop; they are also much more likely to be damaged or stolen.  Many don’t have remote wipe capabilities, a security feature popularized by Research in Motion’s BlackBerry devices, allowing the IT department to remotely delete all data from a lost or stolen device.

Before going out the door, make sure that you password protect your device (and please don’t select 123123 as your password).  It may be a bit inconvenient at times but it’s far better than the alternative.  If you are using a memory card, make sure it’s encrypted too.

If you are a CIO, you might want to standardize on a device type or platform (i.e. Palm OS, Windows Mobile, Symbian) and limit what information can be moved onto a mobile device from the corporate network.  If employees provide their own smartphones, require that security software be installed on the device or consider a move to employer-provided devices that are under your direct control.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Open for Business – Google and T-Mobile Unveil the G1 Android Mobile

Friday, September 26th, 2008 by Jonathan Spira

This past Tuesday in New York, Google and T-Mobile unveiled the G1, the first Android smartphone.  For the uninitiated, Android is Google’s brand new open mobile platform, first announced last November.  After about 20 minutes of introductory remarks and a few teasers, we finally got to see the G1.  The wait (in actuality almost a year) was, without question, worth it.

From looks, the G1 is clearly in the mold of the LG Prada, HTC Touch (HTC also makes the G1), and, of course, the Apple iPhone.  [The iPhone was not the first touchscreen smartphone of its kind; LG and HTC beat Apple to the punch.  Of course, the iPod wasn't the first music player either; it just turned out to be the coolest, easiest to use, and had the best infrastructure (iTunes) behind it.]

Features one would expect include a large touch screen, Wi-Fi, Bluetooth, an over-the-air downloadable App store, slide-to-unlock, Google Maps including a brand new feature, Street View, which syncs with the built-in compass on the G1, allowing the user to view locations and navigate by moving the phone; a full-screen Web browser; and automatic screen reorientation when you turn the phone 90°.  It also has key features that the iPhone lacks: a real keyboard (under the display), a memory expansion slot, voice dialing, and (very important) a real removable battery that you can swap (especially useful on long trips).

Most importantly, the G1 – as promised – is open.  Open as in the anti-iPhone.  The G1 runs on the open source Android operating system and since it’s open source, anyone can make changes to it without getting Google’s permission.  The Android Market app store, unlike Apple’s, is open as well and the companies promise that they won’t keep some programs from the public, even if the program’s functionality competes with T-Mobile or Google.  Best of all, after 90 days, you can unlock the G1 (it comes with SIM-locked to T-Mobile) and use a SIM from any mobile operator with it.

The G1 is not enterprise ready at launch; there is no current support for Lotus Notes or Microsoft Exchange but, since it’s open, anyone who wishes and who has the talent can write a program to provide such support.  I have no doubt we’ll see lots of interesting enterprise-class applications any day now.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Wi-Fi Alert for Travelers

Friday, June 27th, 2008 by Jonathan Spira

The free Wi-Fi hotspot you just logged into in the hotel lobby to read your e-mail, conduct your banking, or read the news wasn’t necessarily a nice amenity provided by the hotel.  In fact, it might have been operated by the well-dressed gentleman sitting beside the potted palm.  While you sent your confidential proposal, he was collecting people’s credit cards numbers, user names, and passwords, all while enjoying the ambiance and a drink from the lobby bar.

Referred to as “evil twins,” hot spots that seem legitimate but are operated by a hacker are increasingly popping up in public and semi-public spaces (that free Wi-Fi hotspot named FREE WIFI you found in your hotel room doesn’t sound so good anymore, does it?).  These evil twins can even have legitimate-sounding names, such as “Hilton Hotspot” and can also be found in cafés, airports, parks, and even office buildings.

Many laptops are set to connect to any open network and that can lead to trouble.  Travelers can protect themselves by knowing the network they are connecting to.

What you can do to protect yourself:

  • Use a Virtual Private Network (VPN), either through your corporate IT department or services such as JiWire’s HotspotHelper.  VPNs encrypt your online session, making it impenetrable to nearby snoops.
  • If in doubt, don’t log into systems requiring a user name and password that could be exposed.
  • Don’t rely on the lock icon on your browser; illegitimate Web sites can obtain digital signatures as easily as legitimate sites.
  • Watch the Web address.  A hacker could intercept your legitimate request for www.citibank.com and change it to something that might look similar, such as www.cittibank.com, where he collects your user name and password.
  • Turn off peer-to-peer networking.
  • Turn off “automatically connect to non-preferred networks.”
  • Think of public hotspots as shared resources.  If you aren’t using a VPN, restrict your surfing to Web sites and pages that you don’t mind sharing with the gentleman sitting nearby.
  • Disable file sharing (in Windows XP, check the Properties tab of your main folders and look for the Sharing tab).
  • Make sure you are using a firewall, a feature that is included in recent Windows and Mac operating systems.

Even known systems run by hotels and conference venues can be insecure.  More on that in coming weeks.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

T-Mobile’s Sprint to First Place

Friday, May 9th, 2008 by Jonathan Spira

Could T-Mobile USA go from No. 4 to No. 1 in the U.S. mobile phone market?  The same week that T-Mobile announced the launch of 3G service (see MOBILITY), the Wall Street Journal reported that Deutsche Telekom, T-Mobile’s parent, is considering a bid for Sprint Nextel, the No. 3 player.

Telekom is increasingly looking outside Germany to make up for lost ground in its domestic fixed-line business.  The company has seen its greatest revenue growth in the U.S. market; T-Mobile USA added 3.6 million customers last year, boosting revenue to $19.3 billion from $17.1 billion in 2006.  Telekom first entered the U.S. market with its €33 billion acquisition of VoiceStream in 2000.  The acquisition saddled Telekom with €67 billion in debt and caused the company’s stock to lose 90% of its value.  Then-CEO Ron Sumner and his successor Kai-Uwe Ricke were both forced out of the company, in part due to pressure to divest itself of the U.S. unit to reduce debt.

It wasn’t so long ago, less than a year in fact, that rumors were continuing to circulate over the possible sale of T-Mobile USA.  Last June, Deutsche Telekom slowed its overseas expansion and Rene Obermann, the company’s CEO, told the business daily Handelsblatt that Deutsche Telekom had other priorities at the moment.

But T-Mobile USA continued its expansion and, having spent over $4 billion on new spectrum as the top spender in a 2006 Federal Communications Commission auction of new licenses to use the public airwaves for wireless services, commenced significant network upgrades.  Although T-Mobile is arriving late to the 3G party in the U.S., that may be less of a disadvantage than one might presume.  Its competitors have already raised consumer awareness for new and faster data services available with 3G.  T-Mobile, with plans to roll out 3G services across major U.S. markets by year’s end, should be able to benefit from their collective efforts.

T-Mobile also acquired mobile operator SunCom, with 1.1 million subscribers, in September 2007.

Meanwhile, the Sprint-Nextel merger has been a disaster.  Given problems integrating the two companies’ networks and cultures, Sprint has seen its churn rate soar and its stock tank.  Sprint also saw the loss of 800,000 customers as Qwest Communications, a local exchange carrier, switched its customers to Verizon Wireless.

A Telekom takeover of Sprint would be simplified if the company were to shed its Nextel unit (talks to this effect have already been reported in the press) and move ahead with its $12 billion joint venture with Clearwire to provide ultra fast wireless Internet access for mobile phones and laptops.

Unlike T-Mobile USA and T-Mobile in the rest of the world, Sprint’s network, like that of Verizon Wireless, is based on the CDMA standard while T-Mobile and AT&T both use the European-developed GSM standard.  This could be resolved both by gradually migrating Sprint customers over to T-Mobile’s GSM and 3G network in the short term and in the longer term by migrating both to the next generation LTE (3GPP, or 3rd Generation Partnership Program Long Term Evolution) standard.

It’s unlikely that Deutsche Telekom will be satisfied with a No. 4 position (and a distant No. 4 for that matter, as T-Mobile had 28.7 million customers at the end of 2007 compared to Sprint Nextel’s 40 million) in the U.S. for long.  A sprint to first place is not out of the question.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Extreme Road Warrior Part II – Something in the Air

Friday, November 2nd, 2007 by Jonathan Spira

16 days later, I’m back.  (See Part I as well.)   I found a few things rather useful for those traveling on business and wanted to share these with you.

Skype Pro
Skype Pro is a relatively new offering that costs only $3 per month but offers many features particularly useful to the road warrior.  Most notable is the international traveler calling plan.  Users pay no per minute charges for calls to landlines within the same country or region (a connection fee per call, $0.045, may apply).  Coverage includes 28 countries, all of the ones I visited (Austria, Belgium, Germany, and the Netherlands) with the exception of Denmark.  In some countries, including Argentina and France, only certain major metropolitan areas are included.

With Skype Pro you also get a $30/year discount on a SkypeIn number, a free Skype To Go number (you can make international calls from your mobile phone at SkypeOut rates), and free Skype voicemail.

Research in Motion and Verizon Wireless: BlackBerry 8830 World Edition
I also tested Research in Motion’s BlackBerry 8830 World Edition CDMA/GSM.  Part of RIM’s 8800 series of phones, all of which share a full QWERTY keyboard, the pearl-like trackball for navigation, Bluetooth wireless connectivity, and a built-in speakerphone.  The 8830 supports dual-band 800/1900 MHz CDM-2000 1x EV-DO as well as dual-band 900/1800 MHz GSM/GPRS.

For Verizon Wireless customers who travel internationally, this makes it very easy to have a single number that works almost anywhere, something ordinarily not possible with most Verizon Wireless phones, which work only with CDMA networks.  The phone itself, however, was not that easy to use.  I found the keyboard, both for typing and for dialing, not nearly as user-friendly (in terms of not hitting the wrong key) as the smaller format Pearl, which given its quasi-QWERTY keyboard uses RIM’s SureType technology to allow users to compose messages quickly.  The centered dialpad was much easier to use on the Pearl than the 8830′s keyboard, which is not centered.  The 8830 also frequently refused access to the + key, necessary for dialing country codes.  Normally one presses down zero for a few moments and + comes up.  With the 8830, the + only worked occasionally and I had to resort to saving the + and using the paste function in order to dial calls.

These issues not withstanding, Web browsing, BlackBerry e-mail, and placing and receiving phone calls all worked perfectly.

Hotels
I visited multiple hotels and wanted to pass along a few observations important to the business traveler.

1.)    Hilton am Tucherpark, Munich, Germany
Internet worked well.  Rooms were comfortable to work in.  Location was a bit out of the way but on the other hand it was alongside the English Garten.

2.)    Mandarin Oriental, Munich, Germany
Couldn’t ask for a better location, within the heart of the Altstadt and close by to practically everything.  The rooms were recently refurbished and provided a comfortable work environment, although a more appropriate desk chair would have been icing on the cake.  Good Internet service.  Very personalized services, for example check-in formalities are done in the room.  Guests are always addressed by name.  Restaurant Mark’s is one of the top restaurants in the city and deservedly so.  It was too cold to really enjoy the roof-top pool but the views from the pool deck were magnificent.

3.)    Hilton am Stadtpark, Vienna, Austria
Excellent location across the street from the Stadtpark, Executive floor lounge had two free computers but they were always in use.  Internet was slow.  Reading lights for in-bed reading were weak.

4.)    Holiday Inn, Munich – Schwabing, Germany
Recently renovated rooms and lobby, plus a wonderful breakfast buffet.  Not overly luxurious but very comfortable.  New business center is a nice touch with a sufficient number of computers to accommodate most comers.  Internet service through Swisscom offered business-level service with quality-of-service guarantee (no questions asked).  I found the service slow and told them.  I was immediately offered a credit.

5.)    Fairmont Vier Jahreszeiten, Hamburg, Germany
Located on the western side of the Binnenalster lake, an impressive location to say the least, the Vier Jahreszeiten is also in the heart of the business district and its cafés, bars, and restaurants attract a local crowd in addition to visitors.  Hamburg, a city of merchants, is a bustling port on the edge of Scandinavia, with never-ending river traffic along the Elbe.  I noticed many Hamburgers came to afternoon tea, which featured live piano music.  Rooms are equipped with antique furniture, Wi-Fi that was usually OK but sometimes slow, comfortable work environment, and incredible views of the Binnenalster (the Alster is divided into the Binnenalster and the Außenalster, inner and outer Alster, respectively).

6.)    Die Swaene, Brugge, Belgium
The first thing I noticed about Brugge were the town’s narrow streets (on which local residents drove very quickly), centuries-old buildings that time had left untouched, and the city’s canal systems.  Brugge was, in the 14th and 15th centuries, a cultural bridge between northern and southern Europe.  It was rediscovered by English tourists in the mid-1800s who had come to see the nearby battlefield of Waterloo.  Today, it is a hideaway for business meetings and romantic journeys.  Die Swaene, a beautiful small luxury hotel run more like an inn, is a wonderful setting to meet but perhaps not to work in if you require Internet access.  Since my stay was largely during a weekend and in addition to my meeting my plans were mostly to see the city, I didn’t live or die by Internet access but it was limited to the lobby and first floor salon and never worked in the salon and worked only part of the time in the lobby.  When asked, one of the managers smiled and said that it must be “something in the air.”

7.)    Park-Hotel Bremen, Germany
Located in the middle of the Bürgerpark, my stay there was brief (arrived Monday at 21.00) in order to be in nearby Bremerhaven for an early morning meeting.  The hotel’s services were exemplary, Internet was lightning fast (although their system required that I connect both the USB cable and the RJ-45 cable to my laptop), and I was sorry to leave only 12 hours after arriving.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

The Industry is Always Looking for the Next «G»

Friday, September 28th, 2007 by Jonathan Spira

Verizon Wireless and part-owner Vodafone’s recent decision to move in lockstep towards 4G networks may surprise some and move others to believe that this foreshadows a global standard for the telecoms industry, but it’s really just business as usual in an industry that loves having multiple “standards” at the same time.  Many questions remain, namely what, if any, current operability will remain with other “standards,” what will happen to the mobile operators’ core networks, and what technology will consumers feel comfortable with and adopt.

Things in the telecoms industry move far more slowly than most people realize.  Just because new mobile phones are introduced every three months doesn’t mean that there are any new technologies hiding within them.

The industry has been down this road before, moving from analog (1G) to digital (2G), a point upgrade with 2.5G (not a defined standard but a legitimate stepping stone on the path to 3G), and finally to 3G.

We’ve heard the promise of the next generation of mobile services before, although not necessarily from these two players (Verizon Wireless and Vodafone).  2G, no, 2.5G, no, wait, it’s 3G, no, now it’s 4G that will be the great unifier.

What happened to 3G?  We had not one, but two standards, namely W-CDMA and CDMA EV-DO.  Japan’s NTT DoCoMo was the first to launch a 3G network in 2001 (WCDMA), followed later in the year by South Korea (CDMA EV-DO).  3G services in Europe started in 2003 but progress was slowed greatly thanks to the high cost of additional spectrum license fees (3G services in the U.S. use the same spectrum as 2G, so spectrum was not an issue in the U.S.).

One reason 3G caught on in Japan and Korea (both countries built out sufficient network infrastructure at the very beginning) was because there was no need to include roaming capabilities to older networks.  The devices were small and lightweight.  In Europe and the U.S., given limited network infrastructure, multi-mode devices were required, supporting 2G and 3G networks, making the devices themselves larger and heavier, hence less attractive to the consumer.

According to the GSM Association, there are ca. 200 million people using 3G worldwide, mostly in Europe and Asia.  Out of 3 billion subscribers, this is less than 7% of the total.

It makes sense, of course, for companies with as close a corporate relationship as Verizon Wireless and Vodafone to use the same high-speed 4G data network.  They now use the mutually incompatible CDMA (Verizon) and GSM (Vodafone) protocols although there was much speculation that their 4G platforms would also be different.

But 4G will not necessarily bring the industry closer together.  Sprint has already announced plans for its 4G-speed XOHM service, based on WiMAX, and trials are planned for later this year.  Sprint has hinted that this network will be open to any device that supports WiMAX, a wise decision in order to build network revenue.  One thing is certain: 4G will attract many players from outside the traditional mobile telephony industry, such as Google, a company that sees having its own network as a better way of getting new wireless applications to the masses.

As for me, I’m already looking forward to 5G as the platform that will (surely) unify the world.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

The Best Phone in the World?

Wednesday, September 19th, 2007 by Jonathan Spira

The good

  • Stunning display
  • Full technical compatibility with BMW’s in-car Bluetooth telephone interface
  • Uses iTunes to manage music content
  • Thinner than the Motorola Razr
  • Replaces several devices (great for travel)

The jury is out

  • “Innovative” multitouch user interface (slow for typing)
  • Only uses iTunes to manage music content

The bad

  • Wi-Fi from iPhone causes in-car interference
  • No 3G
  • No stereo Bluetooth
  • Limited storage for a music player
  • $399 price with two-year AT&T contract (was originally $599)
  • “Locked” to a single mobile operator (AT&T)
  • No flat rate international data plan
  • No insurance available

What’s missing

  • Cure for in-car interference from Wi-Fi (besides turning off Wi-Fi)
  • Multimedia messaging
  • 3G

Even before the iPhone was introduced at Macworld 2007, the world (not limited to Mac aficionados) couldn’t contain the excitement. What would the iPhone look like? What features would it have? How much storage? What would the interface be like?

One thing was not a secret: the iPhone combines a mobile phone, widescreen iPod with touch control, and a PDA in one lightweight handheld device – and it would be different from anything previously available.

In launching the iPhone this past June, Steve Jobs, Apple’s CEO, told the world: “iPhone is a revolutionary and magical product that is literally five years ahead of any other mobile phone. We are all born with the ultimate pointing device — our fingers — and iPhone uses them to create the most revolutionary user interface since the mouse.”

BMW: MEET THE IPHONE

BMW quickly got on the iPhone bandwagon, sending out a news release announcing full iPhone compatibility with Bluetooth-equipped BMWs a few days after the iPhone’s launch. BMW promises compatibility on “most” BMW Assist-equipped models with Bluetooth handsfree calling manufactured starting in October 2004 (for the 7er as of March 2005 production). In addition, BMW promised compatibility for the “6FL” factory iPod/USB interface (http://www.bmwcca.org/node/7241) but was silent on the dealer-installed MOST bus interface for the iPod.

BMW was the first auto maker to offer an iPod connection in its cars as well as the first to offer Bluetooth for in-car handsfree calling.

In the car, the phone itself is easy to use, both as a phone and a music player. The driver can make and receive phone calls from the MFL (Multifunktion Lenkrad or steering wheel) as well as from iDrive or the MID (Multi-Information Display), depending on how the car is equipped. If the car has Voice Command functionality, this can be used to place calls as well. The iPhone clearly differentiates between home, work, and mobile numbers by displaying “home,” “work,” and “mobile” on the car’s display. Drivers in BMWs with iDrive and a CCC (Car Communication Computer) can utilize the car’s speech-to-text conversion and specify the location by saying either “Dial Franz Klammer home” or “Dial Franz Klammer mobile.”

To use as a music player, simply use the iPod adapter cable, which provides full integration. The cable has an iPod docking connector on one end and separate cables on the other end for connection to the vehicle’s AUX IN jack and USB connector. This permits full control via the iDrive display or MID. BMW owners will find the iPod experience far more satisfying with iDrive because the Bordmonitor provides full information and makes navigation through the iPod’s music content that much easier. We haven’t tested the iPhone with the MOST bus adapter but we will do so shortly and report.

REVOLUTIONARY?

The iPhone, as revolutionary as it appears, is not the first touchscreen of its kind. LG and HTC beat Apple to the punch with the Prada and Touch respectively (curiously enough, Apple introduced the iPod touch a few weeks ago, no word yet from the trademark attorneys on this). But the iPod wasn’t the first music player either; it just turned out to be the coolest, easiest to use device with better infrastructure (iTunes) behind it. The iPhone ups the ante in the mobile phone multi-function space, with optical-quality glass and a 3.5″ display, and software that allows users to control the iPhone with a tap, flick, or pinch of the fingers. However clever this may be, the lack of a real (thumb-operated) keyboard may be a glaring weakness, as more and more users see such devices as e-mail and SMS appliances. Although some claim lightning speeds, I have found that I can type out a message much faster on a BlackBerry or Palm with full keyboard and that I only make errors when using the iPhone.

Apple isn’t the first to provide visual voicemail, either. A quick search using Google revealed that dozens of companies already offer what Apple calls an “industry first”; in fact, I have been using SimulSays, a free, downloadable visual voicemail application for newer BlackBerry devices, that provides functionality virtually identical to what Apple delivers with the iPhone.

The iPhone, introduced with a choice of four or eight gigabytes of storage (the four gigabyte model was discontinued recently), won’t replace most people’s iPods, since many users have filled their 30- or 80-gigabyte drives with favorite music.

And the corporate world isn’t quite rolling out the welcome mat either. Many companies and government agencies don’t like iPods to begin with, since they see them as just another external storage device that could allow a person to walk out the door with gigabytes of confidential information.

CAVEATS
Many drivers, myself included, experienced significant interference and poor voice quality when using the iPhone in the car. This was largely resolved by turning off the iPhone’s Wi-Fi radio, which apparently causes the interference. However, because Wi-Fi is an essential piece of the puzzle, having to turn it on and off is inconvenient and Apple should come up with a better solution to eliminate such interference.

Many purchasers of the iPhone may not realize the ins and outs of how the phone works, especially when it comes to the data side. The media (for one example, see the New York Times) is full of recent reports that Apple iPhone customers found thousands of dollars of data roaming charges on their bills when they traveled internationally, even though they didn’t use the phone to check mail (it checks mail automatically). BlackBerry users can sign up for a flat monthly rate for international roaming; this is not available to iPhone users. Disable your e-mail feature if you don’t want to see a bill that would eat up half of your European Delivery savings on a new BMW.

The iPhone is only available with a two-year AT&T contract and comes locked to that mobile operator. [There are ways of unlocking it, both via hardware and software , which would allow its use with other mobile operators, but these are not sanctioned by Apple or AT&T and could void the iPhone’s warranty.] If you are not an AT&T customer, you may incur penalties if you terminate the contract with your current mobile operator before it is over.

THE VERDICT

Apple is likely to introduce cheaper, faster, iPhones with more storage in the coming six months. If you love the interface and can’t wait, it will mate with your BMW quite nicely. Just remember to turn the Wi-Fi off.

Jonathan B. Spira is the CEO and Chief Analyst at Basex.

Collaboration and Five-Nines – Just What is «Good Enough»?

Friday, August 31st, 2007 by David Goldes

Until recently, if you wanted to talk to someone, you picked up a phone.  It could be a mobile phone or a landline, but it looked like a phone and used fairly standard telephony technologies to place the call.

Now we have more ways than ever to communicate.  In addition, we have become very accustomed to a world in which we are always reachable by a variety of modalities, constantly connected to something.  This has made it so that I am surprised if I actually hear a busy signal.  I also receive fewer voicemail messages because people who need to reach me usually do reach me on the first try.

If you tried to make a phone call on August 16 and couldn’t, you weren’t alone.   Skype, which today (I’m writing this on Wednesday, 29 August) celebrates its fourth birthday, went dark for several days.  Granted, Skype is not an enterprise tool.  But many of the 220 million Skype users around the world work in large organizations.  Moreover, 30% of Skype users have told Skype that they use Skype at least in part for work-related calls.

Some users have even ditched their landlines and use Skype as their office (or personal) phone system.  Those users probably never thought that Skype would be unavailable to them.  Moreover, Skype is not intended as a replacement for a landline (something the folks at Skype have reiterated over and over) yet some knowledge workers see Skype as being good enough for what they need.

It turns out that “good enough” may not always be good enough.

In the post Second World War era, dial tone was something that more and more people took for granted as penetration actually became over 100% as more than a few households added multiple phone lines.  People in the telecoms and IT industries began using the term “five-nines” to describe dial tone availability.  People think of this as being equivalent to “uptime”.  But I would go so far as to hazard a guess that 99.999% really don’t know what it means and even fewer understand where it’s applicable.  The term originated with AT&T’s #1ESS switch.  The switch’s development team’s goal was to have less than one day of outage in 40 years.  Needless to say, it met this goal admirably.

When we speak of five-nines, however, we generally talking more about availability than reliability.  Availability is a function of Mean Time Between Failures (MTBF) and Mean Time To Repair (MTTR).  Today we might think of MTTR as Mean Time To Restore, given our predilection for swapping out faulty components instead of making a repair on the spot.  These factors are usually expressed in hours.  They can be an excellent measure of reliability but they don’t tell you everything you need to know.  As the maker of the Concorde found out, a machine can enjoy a lifetime of reliability and still suffer a disaster, in this case causing the aircraft after one crash to go from having the best safety record to having the worst.  Its zero per million flights fatal accident rate suddenly became 12.5 per million flights, more than three times the rate of the airplane in second place (source: www.airsafe.com).

As we rely more and more on technologies that aren’t quite ready for prime time in our quest to remain connected, the question becomes “how do we strike the appropriate balance?”  Where does “always on” leave off and “good enough” start?  As more and more knowledge workers decide to rely upon online tools, some with limited offline support, this question will come up more often. This of course entails a certain amount of risk.  On July 24, a power outage in San Francisco brought down a variety of Web sites frequented by knowledge workers, including Craigslist and TypePad, for several hours.

On Thursday, August 16, the Skype peer-to-peer network in Skype’s words “became unstable and suffered a critical disruption.”  The disruption was caused by a “massive restart of our users’ computers across the globe within a short time frame.”  The rebooting, Skype explains, was due to a set of patches through Windows Update.

Skype was unavailable for almost all users for almost two days.  The high number of restarts impacted Skype’s network resources and resulted in the lack of network availability.  Skype later cited a “perfect storm” and took pains to avoid placing blame on Microsoft.

So what is the appropriate level of risk?  That is something for each individual or company to determine.  We are so used to ubiquitous connectivity and communications that the miracle of how much we do have goes unnoticed.  Years ago, when mobile phone coverage was spotty, it became common place to become disconnected in a tunnel.  Now we can’t even use that as excuse to end a call early.  But whenever one steps away from a landline, still the gold standard of availability, one assumes that risk.

David M. Goldes is the president of Basex.

Whither iPhone? iPod or Newton?

Friday, June 29th, 2007 by Jonathan Spira

Enterprise market fails to roll out the welcome mat.

Will the iPhone turn out to be the mobile device that rocks the industry?  Apple and AT&T certainly hope so, as do hard-core Apple fans.  The path ahead, however, is far from clear.  Apple, aside from spawning a host of changes in how other makers of mobile devices design their wares, is hoping for a repeat of the iPod’s success and praying that the iPhone will not follow the footsteps of the Lisa and Newton Message Pad, both innovative devices that were somewhat ahead of their time and expensive.

And will Apple become a player in the enterprise space, a lucrative market with the potential for millions of sales in the next few years?

In less than one day, the iPhone will go on sale in the United States with a two-year mobile phone contract from AT&T.  The device is due to appear in Europe later this year and in Asia in 2008.  The market in the U.S. for $500 and higher mobile devices is quite small, perhaps 1% of the total market.  Clearly, with its sales projections of 200,000 sales in the first two days and as many as three million in the second half of 2007, Apple is counting on pent-up demand and hoping that purchasers will overlook the high price and mandatory two-year contract (as well as contract termination fees some customers may pay if they switch to another mobile operator before the end of their contract).

The iPhone, as revolutionary as it appears, is not the first touchscreen of its kind.  LG and HTC beat Apple to the punch with the Prada and Touch respectively.  But the iPod wasn’t the first music player either; it just turned out to be the coolest, easiest to use device with better infrastructure (iTunes) behind it.  The iPhone ups the ante in the mobile phone multi-function space, with optical-quality glass and a 3.5″ display, and software that allows users to control the iPhone with a tap, flick, or pinch of the fingers.  However clever this may be, the lack of a real (thumb-operated) keyboard may be its most glaring weakness, as more and more users see such devices as e-mail and SMS appliances.

Apple isn’t the first to provide visual voicemail, either.  A quick search using Google revealed that dozens of companies already offer what Apple calls an “industry first”; in fact, just today I installed SimulSays, a free, downloadable visual voicemail application for newer BlackBerry devices, that provides functionality virtually identical to what Apple promises.

The iPhone, with a choice of four or eight gigabytes of storage, won’t replace most people’s iPods, since many users have filled their 30- or 80-gigabyte drives with favorite music.

And the corporate world isn’t rolling out the welcome mat either.  Many companies and government agencies don’t like iPods to begin with, since they see them as just another external storage device that could allow a person to walk out the door with gigabytes of confidential information.

The iPhone cannot send or receive e-mail through corporate mobile e-mail systems, a market dominated by three companies, Research in Motion, maker of the BlackBerry, Microsoft, and Good Technology, owned by Motorola.  Still, Apple will most likely want to compete with RIM, Palm, and Nokia on the enterprise device front since that represents the higher-priced segment and companies tend to buy hundreds of devices at once.

Of course, the creative user could forward e-mail messages via a third-party Web mail service (such as from Google or Microsoft) but that would also compromise security and violate myriad rules.  Corporate security departments consider the iPhone too risky at this junction given its lack of the bullet-proof security features that are considered de rigueur today, such as remote wipe.  Thousands of mobile devices are lost each day and most are unlocked, potentially releasing proprietary and valuable information to third parties.

Most CIOs we’ve spoken with in the past few months have indicated that they have no plans to add support for the iPhone but expressed some interest if Apple were to make it simple for them to license software from Microsoft or RIM that would allow the iPhone to act like a virtual BlackBerry or Windows Mobile device.  Just today, Visto announced a version of its Visto Mobile secure mobile e-mail platform for the iPhone that will support Microsoft Exchange and Lotus Domino and Notes.  I’m sure others will follow suit but few if any companies will switch mobile-mail platforms midstream.

The silver bullet might eventually come from Cisco, owner of the iPhone trademark.  In resolving its trademark dispute with Apple, which came a month after the iPhone was launched, the two companies announced they will “explore opportunities for interoperability in the areas of security, and consumer and enterprise communications.”

In the meantime, the crowds will start lining up outside Apple and AT&T stores by the time you read this.

Jonathan B. Spira is CEO and Chief Analyst at Basex.


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