Peter's Technology Trumpet

Dan Costello and Christian Belady of Microsoft Global Foundation Services discuss the Chicago datacenter in a CNET video interview.

Microsoft opened the facility in September, and are now using Container-based deployment simply plugged in to power and water spines.  This reduces the resources required – in terms of plant and packaging – and means Microsoft can meet capacity requirements at >4000 servers per day. Dan claims 50% improvements in PUE compared to conventional co-located racked servers.

Inside one of the world's largest data centers | Beyond Binary - CNET News

Its not often that a technology blog references VARIETY magazine, the Hollywood equivalent of the Scottish Daily Record.

Anyway, shortly after announcing the edgy new “Family Guy” marketing strategy for Windows 7, it seems that the funniest show on the telly (after the Simpsons) is just too risqué to fit with the Windows brand :-)

MacFarlane special loses Microsoft - Entertainment News, TV News, Media - Variety

More on the burst of touch-enabled PCs entering the market alongside Windows 7.

Windows 7 Driving Touchscreen Evolution -- Microsoft Windows 7 -- InformationWeek

After years in the wilderness, is it cool to be a PC again?

In 2006 Apple’s Mac adverts cast the PC as an anachronism contrasting David Mitchell’s bumbling and confused PC user with Robert Webb’s tousle-haired trendy young Mac dude .

Some 3 years later, the middle-aged Windows PC has lost a few pounds and found its clothes have come back in fashion – re-invigorated by Windows 7 and some trick hardware.

Mainstream and IT media have reached consensus that Windows 7 is a good thing -  fast, thrifty and more in keeping with Austerity Britain than the bourgeois Apple MacBook Air with its thoroughbred Snow Leopard.

Speed, responsiveness and efficiency have a lot to do with it. From consumers point of view, Windows 7 is a leap forward, running like a train on cheaper, less powerful NetBook hardware. And the view from Waverley Towers shows many Scottish enterprises that struggled to run Vista on existing PCs now planning their Windows 7 rollouts.

Following the sustained engineering effort to prepare Windows 7 for launch on October 22nd, Microsoft’s marketers have cottoned on to the  austerity vibe with “The New Efficiency” tagline, a theme adopted for Microsoft Scotland’s launch event on November 24th.

But marketing millions and flashy ads alone can’t make a device an object of technological desire. It has to perform reliably, have aesthetic appeal, and work really intuitively. And it helps if it is small and black.

Clearly the “too cool for school” award of the recent past goes to the Apple iPhone and wider family of touch devices. Its success in part must go the highly tactile means of interaction – using a “multitouch” display. The device can be driven by “human” gestures like pinching, swiping, rotating, dragging through support for multiple simultaneous finger touchpoints.

Its on-board accelerometer allowing tilting and shaking gestures also adds to the appeal, and enabled the No.1 mission critical enterprise iPhone iBeer “pretending to drink a pint of lager” application.

Meanwhile in the Personal Computer marketplace, gesture based computing and multitouch is about to enter the mainstream. All major PC manufacturers including HP, Lenovo, DELL and Acer have recently launched multitouch PCs. Shortly after driving an enabled application you will agree with the industry pundits who predict multitouch will dominate in higher end laptops and consumer scenarios within the next few years.

Multitouch could make the PC more acceptable and easier to use in many situations – for example in hospitals, point of sale, and in the home. It can also make computing more accessible people who struggle with it today such as the elderly, younger kids, or communities with language comprehension issues. Numerous applications benefit from this – notably anything involving graphics and media, spatial or geographic data – but in fact anything which involves navigating through lots of data.

Clearly all this is made possible by display innovations,  OS engineering and software developers toolkits which can marry higher screen resolutions and “dots per inch” to the kind of gestures driven by peoples fat fingers.

Research in multitouch dates back to the early 80’s. In 2001 Microsoft envisaged started development of the Surface device – essentially a computer embedded in a table with a large, flat, touch responsive display. This does away with mouse and keyboard, and provides a tabletop that can interact with people and objects.

The crowd-stopping impact of this device was demonstrated last September when the First Minister Alex Salmond opened Waverley Towers – that’s Raymond O’Hare girning on the left. More recently we saw its power to impress at Aberdeen’s Offshore Europe conference this September.

Offshore Europe is a strange event to those not stepped in Oil & Gas. About 50,000 people gather from around the world to ogle at heavy machinery, safety equipment, and helicopters in a tent on a car park at the Aberdeen International Conference Centre.

But the big drills were put in the shade by software development company Codify, who used Surface to navigate the North Sea – an application which they developed with Petroleum operations company AGR. This demonstrated the visualisation of hydrocarbon fields and well data, and had amazed well engineers zooming in to view levels of detail such as depth and completion status of wells, all with a brush of the hand.

Companies and individuals, such as Codify’s MD Mark Griffith,  who can harness this kind of innovation may yet make the PC cool again…

Microsoft continue to drive the cool agenda with some marketing dollars: Seth Rogen, the creator of “Family Guy” is producing a special episode devoted to Windows 7 on November 8th. Though this is unlikely to reach the UK because of our stricter product placement guidelines, undoubtedly it will be viewable via the Internet shortly afterwards.

Veteran technology and business journalist Bill Magee returns from a meeting with Microsoft’s top cyber-crime spooks to highlight the bad guys increasing focus on Small and Medium businesses – SMBs in Scotland must think about protecting their passwords and safeguarding their IT systems.

The Russians are coming: hackers target small firms - Scotsman.com Business

Food, clothing, shelter....and television.

These seem to be the basic necessities for life, at least in those regions of the World with electricity supply. Studies have shown that homes seem to be happier when there is a telly in the corner of the living room.

Here in the UK there are so many ways to watch the telly that we should be a very happy nation indeed. But the average punter has struggled to follow the Digital Switchover, work out the HD classification of flat panel TVs, and is mystified by new transmission methods like Cable and IPTV.

Since the early 1980s when UK transmission was dominated by 3 TV stations, the choice of TV channels has exploded.

Back then choice was perhaps more limited, but entertaining content was assured for your £46 license fee – following the BBC’s principles of good taste and common decency, and a mantra of educating and informing the public.

Setting aside endless reruns of Dad’s Army and ignoring chewing-gum-television categories of Reality/Daytime Chat/HomeMakeover, most worthwhile original content is still on the Beeb. When Roger Waters of Pink Floyd wrote of “13 channels of shit of the TV to choose from” (The Wall,  1979) he could scarcely have imagined the true horror of a 48+ TV channel UK featuring the unmissable lineup of National Lottery Extra and BidUp TV.

Nearly 30 years later, for many choice of TV content is no more varied, we all have to fiddle with strange set top boxes and multiple remote controls, and now have to pay to watch live football. Not all progress then.

Clearly the next step in our audiovisual evolution is to be able to conveniently watch our favourite programs where and when we want, with a minimum of fuss. For most consumers this means “plug and play” compatibility of components and 1 remote control for everything.

News Corporation’s SKY has delivered on these requirements and succeeded in the UK. It has annexed popular content like Premier League football, and simplified the viewing experience for the public with set-top boxes that work well.

This has been achieved at considerable cost to the public. At the start of 2009, only half of British households were willing to put up with plain old Freeview. The rest are paying from £240 per year for this convenience and content – and the vast majority of them have a satellite dish on the wall, discounting a handful of Cable and BT Vision subscribers.

And it doesn’t stop there. News Corporation will gladly take another £120 for another SKY tuner for the kitchen/spare room/antisocial teenagers bedroom. SKY+, their take on the Personal Video recorder, has also proved popular with around 50% of SKY’s subscribers, so they don’t miss last night Big Brother, and can skip past the adverts. All these subscriptions add up to an eye-watering £452 average revenue per unit according to SKYs last quarterly results.

Such Multiroom and Personal Video Recording (PVR) technology is also available to viewers of free “council telly”. But although UK sales of Freeview PVRs reached 1 million earlier this year, they are still dwarfed by the subscribers to SKY+. 

For the techno-literate, willing to spend time fitting together loosely compatible fast home networks, streaming media devices, and HD tellies, anything is possible. Such technophiles are inspired by the dream of being able to view and listen to high quality, digital High-Definition content either broadcast or on-demand, from any source, on any device.

However, reality falls short of this dream, as it relies on infrastructure not present in the home – unless you happen to live in a building flooded with Cat6 ethernet cable, and live in FibreCity Dundee.

The problem of a home network to distribute digital content to all screens and speakers in the house has never been satisfactorily or economically resolved.

Many homes now own a wireless broadband router (often called a ADSL or Cable modem) which can project a private wireless network around the house. Sadly, even in latest Wireless-N guise, this medium struggles to reach the bandwidth and reliability required to reach perfection for the feature-length HD movie – which is no good if you have just shelled out £600 for the new 42” flatscreen telly. Even when it works, many struggle with the practicalities of choosing and securing the correct wireless network in WiFi congested suburbia. And there is always the nagging concern that it may quietly be slow-cooking our children’s brains.

There are encouraging signs that Powerline Ethernet could be the simple solution that is taken up in the home. It’s more reliable than wireless, potentially simpler to setup, and with a bandwidth to support Full HD streaming. BT seem to think this is the answer, having embraced the solution for their self-fit BT Vision/BT Home hub solution.

Maybe the antisocial teenager in front of his bedroom TV has the answer. He has been downloading early release movies in HD quality to his XBOX 360 for several months now, and soon will be able to access content from SKY and BT Vision sources.  The cognoscenti choose a Windows 7 Media Center PC, which is a sinple £250 solution yielding a networked home hub device to manage all video, audio and photo content, as well as acting as a Freeview/Freesat PVR.

All this innovation has passed some UK viewers by. Its estimated that a full 20% of UK TV owners are still watching Analogue TV transmissions. These people get a nasty shock when in 2012 the final areas of the UK face the big Digital Switch.

Despite these challenges, we remain optimistic that we can all watch Scotland on Freeview High Definition glory as they compete in the 2010 World Cup Finals in South Africa.

But don’t hold your breath.

“Every little helps” according to Tesco’s and the nice lady rattling her Sally Army collection box.

Unfortunately, in terms of our Ecology and Environment, that’s just not true. To change the post-industrial trends in fossil fuel dependency and carbon emissions, massive shifts in technology and society are required.

Militant Eco-warriors view that our efforts so far smack of tokenism: consumers assuage their guilt by switching to hessian shopping bags and eco washing up liquid; Government’s energy policy, foiled by the planning process, approve only tiny wind farms which make negligible impact on our energy generation mix; Business’ carbon offsetting measures smack of cynical “greenwashing”.

But Its easy to understand why people are unsure how to act. Generally the public have a poor understanding of the science behind “carbon emissions” and their contribution to global warming. Though scientists finally reached consensus that human actions were contributing to climate change in the IPCC 2007 report, there is still much contradictory and confusing information on our impact on global warming – and whilst we are bombarded with Green Marketing messages it is difficult for us to truly understand the links between our lifestyles and their environmental effect.

The Technology Trumpet would suggest that the key to understanding our environmental impact is for everyone to understand their personal energy use. Since James Watt perfected the steam engine, the energy consumed by all our activity, travel and consumption has steadily increased. Whilst this started in the burning of coal to steam engines, our ever-increasing lifestyle energy demands for energy for travel, heat, manufacture and electricity still come from fossil sources.

Today in the UK our daily energy consumption is around 200 kiloWatt hours – the equivalent of 200 40Watt bulbs switched on all day, every day, for every person in the country.

Unfortunately the hangover from all this energy consumption is a warmer planet – the accumulated “greenhouse gases” from burning hydrocarbons mean that infra-red “heat energy” from the surface of the Earth is absorbed and warms the atmosphere rather than harmlessly passing into space. 

Back with the Eco-warriors, most popular initiatives to restore kilter to the complex systems which threaten to warm the Earth’s atmosphere by a few degrees by 2100 are tiny compared to growing “light bulb” count. Every little helps, but not at a scale to check the rate at which global energy use is increasing. Taking steps which drastically reduce the consumption of individuals, businesses and society in general is required to check the process which by general agreement of the scientific community, now seems to be underway.

Unfortunately for our comfortable Western lifestyles, bigger initiatives, which eliminate a significant fraction of our “personal light bulbs” are required. Here in the UK the lions share of our light bulbs are from Travel, Heat, and consumer “stuff” that takes a lot of energy to make or use. We stand the best chance of switching off our personal light bulbs by addressing these three areas.

Broadly speaking we can address this in several ways – use energy from renewable sources which don’t emit carbon, reduce energy requirements through technological innovation (like better insulating our houses), or mandate changes in our energy intensive lifestyles.

The problem is scale and timing – the changes required in any of the above must be drastic throughout the first half of this century to make a substantive difference before the century ends.

The Scottish Government had a go at this recently when it proposed that 95% of passenger cars should be electrically powered by 2020 in Scotland. This proposal, aimed at achieving an audacious 42% reduction in Scotland’s carbon emissions over the same period, were  rubbished as hopelessly unrealistic by pressure groups from the business and consumer community. But this is the scale of change required to make a real difference.

Whilst democracy remains a popular system of government, our politicians, understanding of human nature, prefer to soften the hard lifestyle change messages to maximise their chances of election.It can be tricky to convince the population to support implementation of changes at the scale required as shown by last years rejection of the large Lewis Wind farm.

Prof David MacKay’s “Sustainable energy without the hot air”  is a seminal work which quantifies the changes needed in the way the UK generates and uses energy. His conclusions are sobering, showing that onshore wind farms the size of Wales and massive offshore tidal barrages in Pentland and Solway would be required for the reality to meet the rhetoric.

So in summary, we may all fry unless we drastically change our ways – and soon.

Meanwhile, despite the bunkum of the industries’ Green marketing, it could yet be we Information Technologists who end up saving the planet!

That’s because the World needs us to help them  effectively measure energy use. Because few individuals and businesses effectively measure, they fail to understand and effectively address energy use and costs.

Though we all mump and moan about the rising cost of our energy bills, few actually have any idea of their breakdown. Like the careful driver who feathers the throttle when driving a car with a trip computer measuring instantaneous fuel consumption, we need instant feedback to modify our behaviour. Whilst the gas and ‘leccy meter stay in the cupboard under the stairs, we miss the feedback.

The Utility industry is addressing this only slowly - In Germany Yello Strom are undergoing widespread deployment of Smart Electricity Meters, and closer to home Scottish Hydro have tentatively rolled out these devices which instantly feed back the cost of our actions, so that we don’t fill the kettle quite so full, hang up the washing versus switching on the tumble dryer and understand the value of better insulating our homes.

Whilst the utilities dawdle, a new class of software which address personal energy management has appeared – Google with PowerMeter are aggressively targeting smart meter infrastructure, whilst Microsoft, with their Hohm tool announced in late June, uses expert systems based on location, utility company, home size, etc. to predict energy use in advance of smart meter rollout.

The holy grail for these applications is to integrate with energy measurement and demand mitigation devices (thermostats, electric vehicle charging systems, etc) around the home and industry, to manage and mitigate overall energy use. It is early days, but this could become one of the great IT industry innovation battlefields like the desktop OS, the Browser, or the Search Engine.

Another area where the IT industry can make a huge impact on personal energy use is in travel avoidance. Air and surface travel account for over 40% of our personal energy use (80 of those 40Watt bulbs). The financial and environmental impact of technologies for teleworking and virtual meetings are well documented at the micro level. At the global scale, an ambitious  study recently published by the WWF t concluded that the impact of Telework aggressively implemented would have a dramatic effect on World carbon emissions. It claims that by 2050 overall global transportation emissions could drop to between a quarter and a third of their current levels.

This is perhaps an optimistic view – again it is difficult to compel people and businesses to adopt the changes required. Ironically it may be the first global flu pandemic for 40 years which tips the balance. If 100,000 new daily cases of H1N1 swine flu are appearing by late August as predicted by the UK government then Teleworking technologies could help stem the spread of the virus, as well as saving the world one watt at a time.

With global recession in the foreground threatening ruin for many in the developed World, it’s easy to forget other clear and present threats to commerce, society and our way of life.

However, the growing threat of vandalism, crime and even espionage perpetrated using computer and network systems should certainly be higher up the agenda of your average UK citizen.

Whilst prioritising the global war on terror, western countries have generally been poorly prepared to defend against the growth of organised Internet crime. Cyber Warfare and online terrorism are even more disturbing prospects as, in our increasingly connected world, computer and network systems we all depend on can be penetrated wreaking widespread havoc equivalent to any violent terrorism.

In 2007 the world saw the first Cyber-attack on a sovereign state in the form of small EU member Estonia. A diplomatic spat with its powerful neighbour Russia quickly evolved into concerted Internet attacks including massive SPAM attacks on government email servers, distributed denial of service (DDoS) attacks on key Internet banking sites, and hacking/defacement of significant websites such as the ruling political parties homepage.

In 2008 as the Russian military annexed the province of South Ossetia, a co-ordinated cyber-attack blocked key Georgian Government websites.

Whilst there was evidence that these attacks were Russian orchestrated, as any Internet security expert will tell you, the use of Botnet's and Zombies around the World makes the ultimate source of attacks almost impossible to identify. The Kremlin, with Litvinenko-esque brass neck, denied all involvement.

Whilst the plight of small nations in Eastern Europe is of some concern here in Scotland, its worth remembering that the World Order is generally shaped by those nations and organisations with access to new weapons technologies and military strategies. Consider the 2^nd World War - Superior German tank technology and mastery of armoured warfare allowed the Nazi powers to quickly “Blitzkreig” across Poland in 1939 despite stronger Allied forces. The deployment of the nuclear fission bomb in 1945 ended this war and defined World order for the next 45 years.

Even now, the world order is largely subservient to the United States, whose economic powerhouse allows it to deploy more aircraft carriers and accurate, high speed projectiles than any other nation. Whilst this could be considered reassuring to the national security of its close ally the United Kingdom, it seems likely that future international power struggles will feature the Cyber battlefield as an important theatre of operations, and those nation-states with mastery of its weapons and techniques will prevail.

The USA’s new administration is aware that economic might and ocean borders cannot defend from cyber security threats. The Pentagon recently revealed it was on the back foot with cyber attack damage limitation costing $100M in last 6 months alone. The Wall Street Journal reported last month that Chinese and Russian spies had penetrated the U.S. electrical grid to leave “sleeper” software which could be used to disrupt key infrastructure.

Again, the embassies of both countries vehemently denied any knowledge of this. It is extremely difficult to trace and prove the identity of an attacker, and therefore nigh on impossible to prove whether an attack is government sponsored. However, the league table of malware producing nations show that China and Russia together are responsible for well over half of the Internet’s spyware and malicious code.

No surprise then that since election Barack Obama earmarked $335M for private and public sector cyber infrastructure, not including any secret funding for the National Security Agency, and is about to appoint a cabinet level “cyber-czar”.

Finding the perpetrators of Internet crimes and aggression is notoriously difficult and requires painstaking detective work. The conviction in May of 8 men on child pornography charges in the High Court at Edinburgh, following a long, multi-agency investigation codenamed Operation Algebra and a 10 week trial, was only possible because of the dedication of Lothian and Borders Police, and the aid of leading edge techniques made available by academia and Microsoft.

As many nations wake up to the need for improved Cyber defences, tiny Estonia has emerged as the worldwide leader in the field.

Estonia is possibly the most switched on of the EU countries in terms of penetration of paperless government, web-based banking and ambitious plans for country-wide WiMAX networks. Whilst 2007’s Russian internet attacks were underway the Estonian government called in the top Internet security spooks from NATO, US Security agencies and elsewhere.

Subsequently the Co-operative Cyber Defence Centre has been established in Tallinn as the NATO centre of excellence for this key area of defence. The U.S. Secretary of defence Robert Gates announced the USA would join the Cyber Defence Centre as a sponsor. And just last week, Shawn Henry the FBI Assistant Cybercrime Director revealed that the he would be basing his top cybercrime agents in the Baltic State.

Meanwhile it seems that the UK is waking up to the threat and will take some steps to consolidate responsibility for the cybercrime remit currently spread across multiple agencies. David Davis, the shadow Home Secretary, announced that the Conservatives would follow Barack Obama’s lead and appoint a Cabinet-level CyberSecurity Minister if elected into Governement.

Likewise, the Commons Defence Comittee trip to Estonia’s Cyber Defence Centre in April suggests that the UK will be next to join the Americans in the Cyber defence trenches at the Baltic Border.

Last week a close friend and business associate finally went over to TWITTER.

For a 40 year old with 3 kids to suddenly come out of the closet and start tweeting was a big shock. Although he claimed it was a valuable Digital Marketing tool for his new business startup, we all hope its just a mid-life thing which will soon pass.

For those of us disqualified by age from "Generation Y" Twitter seems a little scary. We enthusiastically followed the crowd as far as the familiar Curriculum Vitae-like atmosphere of LinkedIn. But when we tried to fit in at Facebook, we always looked like the Geography teacher at the school disco.

So I was heartened by the comments of FBI veteran turned Microsoft Security spokesman Ed (The Fed) Gibson in Waverley Towers this week. Ed, who has spent a lifetime chasing bad guys, captivated his audience with stories of X files Eastern European Cybercrime and implored us to stay off Twitter and Facebook – as any revelations placed there by you or friends will be available to embarrass and compromise you for all time...

Recent guesstimates indicate around 75% of web users are now participating in online social networks of some form. Clearly this new form of entertainment is taking over and older non-interactive media like TV, radio and the printed page must evolve if they are to retain our attention.

However, as the populace enthusiastically embraces the trend to broadcast their movements, relationships and even religious or political views, spare a thought for the longer term impact- making all our trivia a matter of public record makes it much easier for governments, advertisers and even criminals to build an accurate picture of our lives. Indeed, the Home Office have just announced plans to monitor social sites in an effort to track contacts and friends of criminals and terrorists.

But whether or not we choose to project ourselves digitally on a social site, all of us are slaves to Digital Snooping in one way or another.

Whenever we open a browser we are being tracked, categorised and targeted. Anonymous entities build an accurate profile of our innermost desires by a process of deduction. They know where we came from, where we are going next, and what we are looking for. These agencies tune and target advertising to meet our unspoken needs and report our habits to corporations to fine tune services to extract more cash from the unsuspecting consumer. And Ed The Fed can’t stop them because its all legal!

Don't believe it? Just switch of "automatic cookie handling" in your browser. This will reveal the extent to which your Internet Search engines, favourite video site, and Ad exchanges are tracking our every move. Every time we browse to a website including a syndicated ad, our browser is being "bugged" with a cookie which uniquely identifies and subsequently transmits our recent navigation history. Its enough to make you lock the doors, bar the windows and retreat into a digital Howard Hughes hermit-like state.

Most will understand that Google AdWords will deliver tomato sauce ads in the context of a webpage about Hot Dogs, but are not aware of behavioural advertising techniques which can pigeon-hole you as car owner, football fan etc by tracking your progress across the web.

Google, feeling confident of their brand value and dominant position in Internet advertising, recently announced their intent to fully embrace behavioural advertising - but in fact all of the major agencies are already using these techniques. Most will allow users to "opt-out" but the practicalities mean that only a miniscule percentage of users ever will.

Encouraged by these more targeted digital marketing techniques, advertising dollars are shifting to new media, and the recession seems to be delivering the coup de grace to printed media and perhaps ultimately TV advertising. 2008 figures recently published by the World Advertising Research Center showed newspaper ad revenues dropping nearly 20% in the final quarter of last year. This was enough to see 60 local newspapers shut down in 2008, a year when Local Internet Search overtook the mainstream print directories.

The implication for Joe Public is that increasingly sophisticated advertising techniques are invading our privacy and messing with our brains in a way that the ads in Coronation Street or the Daily Record never could.

The Digital Marketing cognoscenti place much faith in the predictions of the Razorfish Digital Outlook Report.  Its 2009 report published this month recognises that the public are becoming immune to traditional paid media and that the overall digital experience is becoming as important as the actual physical product. With 75% of the online population now social, digital agencies are now very focussed on how to tap into Social Influence marketing.

This use of Social objects where people talk “around” things on the web - trivial things like a Facebook drinking game advertising an alcopop, a viral YouTube video selling chocolate with active eyebrows, or more significantly a Wesabe personal finance community impacting a retailers reputation and profitability. So we can expect the ad men to insidiously and aggressively work their way into the new medium of social media and networks in the coming year.

Despite this there are some positives for the public in the growing Digital media economy.

Direct web advertising is an improvement on printed classified ads – not only is it more convenient, it can make markets more efficient. Sure, its a shame about the demise of the Parish Newspaper, but companies and individuals embracing EBAY have grown very successful businesses particularly in niche areas which would not otherwise be viable. For the individual it’s easier to buy difficult to find stuff at a more reasonable price.

Likewise, in these straitened times, most would agree that price comparison sites are very valuable to the consumer. These useful sites allow similar products and services to be found, compared and ranked to find the best deal. Their business models are usually funded by web advertising  - in fact a mixture of sponsorship, agency placed ads, and affiliate funding.

Some web companies have built respectable business models purely on affiliate funding. MoneySavingExpert, the “consumers revenge” and most successful Personal Finance site in the UK eschews direct advertising but generates a tidy income purely on the fees paid when users click-thru to referral-paying companies and affiliate agencies. Skyscanner, the Edinburgh based budget flight search engine and comparison site which aims to answer questions like "Where can I go for under £100 next weekend from Edinburgh?” has built a £5M turnover on affiliate income.

So whilst we see the benefits, know that Big Brother really is watching us. 2009 may well  be the year of Digital Media, when we feel peer pressure from our Freindsters to start Tweeting. However, I think it safer to commit MySpace Suicide and opt out of the ad networks - if you would like to join me in splendid isolation try http://www.privacychoice.org/

A side effect of consumer doom and gloom is very keen prices for all the technological paraphernalia that we can't live without. Despite our weak Sterling we can buy a lot of computing power and techno-gadgets for not a lot of dosh.

Consumer electronics retailer EBuyer forms a good baseline for a makeshift techno-consumer Retail Price Index - it reveals that a laptop PC can be procured for less than a business return fare to London Heathrow. A hard disk big enough for all the movies you will ever watch costs about the same as the return train from Edinburgh to Aberdeen.

Whilst the current global financial stramash may have lowered many vendors predictions of device shipments for 2009, the appetite of the IPhone generation for technology seems undiminished. However, the way consumers are willing to pay for it is changing – low, predictable costs with no long-term commitment are key in the credit crunch era.

Consumer psychology

Consumers are familiar with "Pay as You Go" models which make ongoing costs predictable and transparent. The psychology is that when the one-off investment is covered by beer money, no agonising over costs vs benefits is neccessary. It may seem an obvious point, but when people are generally unsure they will have a job next year, significant capital expenditure is deferred till "better times", whilst lower cost items will still make it under the fiscal threshold.

This is one factor in the rise and rise of the NetBook. According to Gartner, these mini-notebooks built to ship at the lowest possible price point, will account for 8% of all PC sales in 2009. These are credible mobile devices, capable of running most of what a grown-up laptop can do, and cost as little as £150.

Although the innovation the NetBook form factor has unleashed is great news for the consumer, things may get tricky for PC manufacturers selling lower-margin devices during the crunch. The profit may be in the value added services: Most mobile telecom networks, extending the "free phone with a contract" model, now offer free NetBooks with a £25-a-month data deal. This is a predictable cost which the UK consumer,  weaned on a £30/month SKY TV subscription, will barely give a second thought.

Companies going cheap?

This has parallels in the business world. Generally the IT manager has discretion to fund small projects out of his "Keep the Show on the Road" budget. However, as soon as he needs the larger capital funding he needs to speak to the Financial Director, who is far too worried about keeping the company solvent to find the funds.

Over the last decade IT projects with 2/3 year Return on Investment would be considered for funding, but today these will just not fly. PREDICTABILITY of costs have never been more important than now - IT projects which can be funded out of Opex are more likely to get the go-ahead.

For some companies, a move to least-cost subscription-based licensing of software - paying per user/device/processor per month – will be an increasingly attractive option. These allow software costs to be funded out of Opex and, crucially, costs to be reduced in the event of consolidation.

Increasingly there are options for "pay as you go" models around the installation, delivery and ongoing support of software services - with cloud-based delivery or traditional co-located hosting becoming a realistic and feasible option for a greater percentage of users and a broader proportion of the software services employees use.

Smarter, faster, cheaper...

Ever since Mr. Moore noted that the number of transistors on a semiconductor doubled every few years, we have taken for granted exponential growth in computing performance, data storage, and pixel count. PC OEMs of the last decade have become lazy - its easier to make devices ever more powerful and feature-packed and avoid the investment true innovation requires.

However, the PC industry could learn from the current malaise of the US auto industry, where "bulkier is better" has driven designs which are a poor fit to customers requirements in a recession.

It is in this austere environment that Windows 7 emerged in public Beta this January.  Improved performance and power management are high priority design goals for Windows 7, and the Blogosphere consensus is that Steven Sinofsky, the Microsoft General Manager in charge of Win 7 development, has a winner.

Low memory usage, fast boot times, reworked I/O and graphics processing are all qualities which lead to speedy operation on limited NetBook hardware. Likewise, lowered power consumption will squeeze more out of their cheaper, lower capacity batteries. Interestingly, its improved efficiency means most NetBook hardware is capable of running it well, and make Windows 7 beta the NetBook OS of the cognoscenti over Windows XP, Windows Vista and any Linux distribution.

Get Cheap

Throughout the last 15 years companies have taken a heavyweight approach to employee productivity devices: a laptop for home working and mobile days, a work desktop PC, a mobile phone or Blackberry for the jacket pocket, and an expensive desk phone at work.

It all mounts up. All of these devices incur capital and revenue costs. Clearly there is room for consolidation, and new technology opens the door for IT penny pinching in today's Austerity Britain. Here are my suggestions for companies who want the IT department to "get cheap":

• Implement employee self-selection and support for PCs and mobile devices: Companies such as BP give employees an allowance to buy their own devices, saving significant sums in desktop engineering, hardware, maintenance and support. This approach may not suit every industry, but drives an efficient approach minimising hardware procurement costs.

• Don't give employees a desk phone: Its not uncommon for a business IP Phone to cost £200 and require costly extra network infrastructure. By implementing Unified Communications VOIP technologies employees can make calls from their desktop PCs, reducing capital cost and potentially call charges.

• Outsource your email: Consider having basic IT services such as the provision of Email hosted by a 3rd party - Although this may not be the most flexible approach, it will almost certainly be cheaper. Microsoft offer BPOS for standard collaboration requirements whilst hosting companies like Edinburgh's Lumison offer more customised email and collaboration solutions

Clearly the above are bold steps and not for the faint-hearted IT Manager. There are challenges in terms of security, management and meeting service level with these approaches. Companies deferring management of PCs, applications, and IT staff to 3rd parties and end users must plan and build strategies to address these real concerns.

But one things for sure, if and when we finally emerge from the recession, IT is going to look a lot cheaper than it does now

Happy New Year. Its getting harder to stay cheery these days.

We've all tried to stay positive as the sub-prime crisis spawned the credit crunch which smothered the global economy. But its easy to lose heart as pensions and house prices tumble and mighty institutions such as HBOS, RBOS are humbled.

As the gloom of the New Millenium Depression sinks in, we find ourselves working harder, with scarce opportunity, and evaporating job security.

As the good Rev. I. M. Jolly once said, "You know, its been a hell of a year".

With this in mind just before Christmas we invited renowned economist Jeremy Peat to speak at Microsoft Edinburgh HQ.

Jeremy's views on the Scottish economic outlook for the next 18 months were riveting, but there were few rays of sunshine. Luckily the windows are sealed at Waverley Gate, preventing the assembled Scottish IT Industry leaders from throwing themselves on the railway tracks below.

Looking for cheerier news, I checked some of my favourite RSS feeds.

Although Barry Beelzebub politically incorrect rant on the state of the nation and The Daily Mash can't fail to amuse, everywhere else it's doom and gloom as the World faces a doubly whammy of financial and environmental catastrophe.

The Guardian's respected environmental blogger George Monbiot tells us that the International Energy Agency is warning of "Peak Oil" in 2020, some 10 years earlier than previously projected. Earlier posts explain that global warming proceeding faster than anticipated faster than expected with melting of arctic ice and permafrost warming the atmosphere by around 5 degrees to 2050 - rendering human civilisation impossible across much of the planet.

George's views, backed up by solid research it must be said, is that we must change our ways or the planet will burn. I imagine he doesn't get invited to many parties these days.

Meanwhile in the Technology Industries perhaps there are some positives... The Global Financial Crisis may be a perfect storm for technology and IT professionals with Business willing to try out new ideas.

In economies like the UK and US where GDP is likely to shrink by a few points in 2009 and faced with growing commitment to climate change legislation and regulation, it seems clear that business and consumers must find new ways of "doing stuff" which are less wasteful of resources, can reduce operating costs and make less demands on capital investment. Its common sense that a recession changes habits  - Consumers put off the expensive holiday in favour of paying the mortgage. Organisations will take every opportunity to make changes which cut operating costs before taking the step of making redundancies.

Lynda Gratton of the FT predicts that business travel habits will fundamentally change in her article "Recessions give space for new ideas to flourish" with fiscal necessity driving adoption of collaboration and video conferencing technologies.

This really is a no-brainer - stop flying employees to meetings and use conferencing technology. Not only will this take a serious bite out of business air travel carbon emissions (currently 6% of UK total), but it can have a significant impact on opex. Of course this doesn't work for all industries, but it is not unusual for a UK services sector enterprises to budget £10,000 per year for employee T&E. My personal experience has been that judicious use of Unified Communications tools can cut 50% off that figure.

In fact, if such tools are fully adopted in the company culture (and this takes time), Real Estate and Facilities could really start to trim some fat from the bottom line.  Such tools promise to make employees productive wherever they are, reducing the capital cost of office move and consolidation, facilitating Telework and promoting more flexible sharing of expensive office space.

Such ideas are not new - but as the tech gets cheaper and the pressure to reduce operational expenditure increases, ideas thought too risky in the boom times may become standard in the bust.

Cloud-delivered subscription services such as Microsoft's Business Productivity Online, which for some companies can give an employee all the IT services they need for around a tenner a month, may become the norm for smaller customers in a protracted recession. This is more efficient for many businesses than procuring hardware and software and running the services themselves, and for those familiar with the growing electricity consumption of the IT industry worldwide, it promotes maximum efficiency of energy use.

Perhaps all this is good news for IT industry professionals: demand for skills around technologies which reduce consumption and make things more efficient in the coming years may stay solid. Companies IT spend will may shift focus, and new ideas previously thought of as too far removed from the status quo will flourish.

Information Technology based  applications, ideas and initiatives can have a broad impact on energy use and operating costs. Take Shiply - a venture born just as the UK's major banks were passing round the hat in Rights Issues last year. Shiply is on online freight marketplace which benefits both the consumer and supplier of the service. Hauliers reverse-auction for jobs to fill empty lorries returning from other work, and the customer pays around 50% of traditional services. Clearly this service improves efficiency, reducing costs, more effectively utilising resources, ultimately reducing the number of freight journeys and hence carbon emmissions.

Ex-SAP Executive Shai Agassi high profile Better Place initiative aims to go even further. His ambitious business model is to replace our vehicle and oil based public transportation with an electric infrastructure of free cars where we pay by the mile, in much the same way as the free handset/Pay as you go model works in telecomms. Further positive grand vision can be found in the Global E-sustainability initiative "SMART 2020 - Enabling a low carbon economy in the Information Age" which identifies the IT industry as the hero, contributing to the Low Carbon economy by enabling new motor and logistics systems, smart energy grids and buildings.

So despite the doom, gloom and despondancy, there are still some uplifting stories to raise our spirits in 2009 - But remember in these dark and uncertain times the words of the Good Reverend - "Life is like an ashtray - full of little doubts".

Mike Manos of Microsoft's Global Foundation Services has released some detail of ambitious plans for Microsoft's new generation of cloud compute infrastructure on his blog.

This is the result of long painstaking multidisciplinary R&D from Dan Costello and his engineers, and Microsoft's experience of running . Mike's blog post is longer than War and Peace, but very briefly Gen 4 defines a common framework for pre-fabrication of all aspects of datacenter infrastructure, not just the server component, to

• support just-in-time delivery of capacity (building datacentres is a capital intensive activity)
• be flexible enough to meet the range of characteristics for support and cost required across services as diverse as Live Spaces and Business Productivity Online

Much of the architecture is being put out in the public domain in a public-spirited effort to drive the whole industry forward.

See below an animation which illustrates some of the key concepts. I note the video shows mega-datacenters in several locations as yet unnannouced....

Our Vision for Generation 4 Modular Data Centers - One way of Getting it just right . . . « LooseBolts

Cloud computing. Marketing pixie dust or IT Industry paradigm shift?

The topic even had the Economist gushing about cloud computing's impact on business in their regular technology supplement in October. Analysts have wholeheartedly jumped on the bandwagon with Gartner spreading cloud computing all over its Top 10 strategic technologies list for the coming year, and Yankee group predicting a $20B marketplace for software as a service by 2011.

Meanwhile marketeers keen to capitalise on all the attention are sticking a "Cloud Computing" banner over last months "Green Computing" badge in a desperate attempt to sell the same old junk to win a share of an increasingly fickle audiences shrinking IT budget.

Despite the confusion caused by cloud marketing spin, at a Software + Services Roundtable I attended today with a collection of Scottish IT Services and Software Development companies, Edinburgh and Scotland seem well-placed to benefit from these industry developments.

CLOUD CAMPAIGN:

The Cloud concept is providing great headline fodder for bloggers and journalists, with "Ahead in the Clouds" from the Times, "Thinking Out Cloud" from high rated cloud blogger Geva Perry and  "Get onto my Cloud" from Yours Truly.

But there is little evidence that the activity on the newswires has influenced buyers of IT services - many customers I meet nonplussed by the promise of cloud computing's promise of a new way forward, and see it as just a recycling of last years concepts - Software as a Service, Grid, Utility Computing and the like. Others, like Larry Ellison,  are bamboozled by the buzzwords. Larry with some justification condemned the IT industry fickle fascination with fashions such as cloud and confessed "Maybe I’m an idiot, but I have no idea what anyone is talking about".

So what is behind the hype? Cloud is nothing more than shared IT services:  delivered at large or massive scale, made made available to multiple customers,  generally on a subscription basis over t'Internet.

What marks a real shift in the industry is the explosion in diversity of these internet services, the stong investment in software development and cloud infrastructure by key industry players like Microsoft, IBM, Amazon, etc, the creativity of cloud startups, and the willingness of more customers to consider the model for their own applications.

Cloud embraces familiar computing models such as co-location (where multiple customers dedicated equipment is placed together and some or all of its operations outsourced) and Software as a Service (where many customers instance of an application are run centrally far more efficiently and at lower cost than any one customer could achieve). The recent activity and attention has arisen from the variety of applications, services and business processes which are starting to be made available in this manner.

So where will clouds growing share of the software marketplace predicted by Gartner, Yankee et al come from?

Firstly from Software delivered as a "finished service" such as Salesforce, and Microsoft Exchange Online. Till now, most would prefer to trust important business information to their own tin in their own server room. But if a service is available as hosted or on-premise and both can be shown to meet all of a customer's requirements, the hosted option is likely to be cheaper overall through its inherent economies of scale.

Given the pay as you go model, it's likely that cloud adoption will accelerate in the current global recession. Customers will find it more difficult to find capital for the upfront investment in equipment and systems integration which an on-premise solution requires. Likewise, as more companies tighten their belts and try to reduce costs, subscription software may be an increasingly attractive option allowing them to scale up quickly and provision new services, users and infrastructure based on demand. Likewise if the back office staff have to be let go, or the Christmas rush doesn't happen, capacity and costs can be quickly reduced.

Another important cloud play is around the virtual datacenter - this model is really co-location on steroids, where rather than racking up servers, storage and networking in their own server room, an enterprise can readily provision such services in the datacenter of a cloud provider with usage-based chargeback. Customers can provision servers with their specific preconfigured application images as and when peak demands dictate. Server virtualisation and associated technologies are an enabler here, but key to the viability of such services is automated provisioning of IT infrastructure and the abstraction of this physical hardware and setup from the customer - companies such as QLayer and Scotland's Enigmatec are innovating to fill this gap.

But where the cloud has generated most hyperbole and discussion of "platform shift" is where the cloud can offer all the services required for applications as a complete "Cloud OS" . Examples include Amazon's Web Services and Microsoft's Azure. These aim to provide all the services which application developers require to build applications and services in the cloud, incorporating existing applications and devices, and providing tools which allows companies and developers to leverage their existing skills and investments.

SCOTLAND'S CLOUD CAPITAL:

Scotland is seeing its fair share of innovation in the cloud space.  Scottish hosting company XCalibre have established their Flexiscale low-cost on demand computing service, and Enigmatec founder Duncan Johnson-Watt is currently in stealth mode setting up Cloudsoft.  Several more Cloud Computing startups are at the funding stage, and we can expect to hear more in the New Year.

Likewise Scotlands play for the nascent market for the engine rooms of Cloud Computing is gathering pace with support building for 3 ambitious mega-datacenter projects in the 100MW range - Cable & Wireless/Thus and Internet Villages International in the South West, Alchemy Computing in the NorthEast, and from Morgan Stanley near the Pentland Firth.

CLOUD CONCLUSIONS

The Cloud currently gathering on the horizon will drive an evolution of the IT industry rather than the revolution the hype has suggested. But in the words of David Chappell, the Armani-wearing long served Microsoft pundit...

...whether you work for an ISV or an enterprise, some cloud platform services are likely to be useful for applications your organization creates. A new world is unfolding; prepare to be part of it.

...as Private Frazer was prone to shout whenever Captain Mainwaring's home guard faced a crisis.

Likewise I have long bored colleagues with prophecies of doom for those failing to embrace new business models enabled by "cloud computing".

"Doom" might be overstating it, as the Microsoft's partners making a living from installation and service of customers' PC server, collaboration and application infrastructure continue to do rather well - so much was obvious in the Aberdeen Microsoft Partner group last night who heard about Microsoft Virtualisation and Management strategy from Matt McSpirit. Business is good in Aberdeen right now, as the Oil/Gas industry continues to stoke customers IT budgets in the Northern boom town, whilst Financial Services dependant partners in the central belt are increasingly dismayed by the glbal financial outlook.

However, the arrival of Internet Services such as BPOS potentially make a customer less reliant on a friendly IT partner based round the corner. Consider a partner providing Exchange email for a customer- cross-border cattle-rustlers could offer this service through BPOS undercutting or undermining the partners installation and maintenance revenue.

BPOS won't suit all  customers, but the smart partners are learning how they can blend it into their existing services - so that they can continue to offer a "value-added" relationship to their customer base, which includes Software Services offerings like BPOS as and where appropriate.

The BPOS juggernaut is on its way and will reach our shores in Spring 2009. I encourage partners to look at the trial and sign up.

In the meantime, Steve Ballmer was moved to describe online services as "a platform for the next technology revolution" in his Exec Email yesterday following Bob Muglia and Ray Ozzie's announcements of Microsoft Azure Services, formerly known as RedDog, at the Professional Developers Conference yesterday. In his words

"Azure will enable developers to build applications that extend from the cloud to the enterprise datacenter and span the PC, the Web, and the mobile phone".

The new cloud services operating system runs in Microsoft Datacenters and is a platform for applications - as opposed to a "finished" application like Exchange Online or Live Meeting.

This gives enterprises and developers a new option to host apps and services in the cloud - providing on demand computing and storage to enable applications without up-front investment in infrastructure.

A pay as you go hosted platform for any app, taking full advantage of developer's skills in .NET, and the like, will likely be an attractive means for an organisation to move processing off-premise or for an ISV to build and distribute its app without the hassle of deploying servers. By taking advantage of other web services such as SQL, Sharepoint online and  CRM Live, and leveraging consumers's data synchronised across his Mesh of devices, powerful applications can be composed with low initial costs. Whats's more they could scale up readily to meet demand, and potentially allow organisations to reduce capital investment and move costs to ongoing operational expenditure.

At the core of Azure is .NET Services (the artist formerly known as Biztalk, providing the backbone to compose, sequence and orchestrate processes up in the cloud) and SQL Data Services (a hierarchical data store in the cloud built on SQL Server). As ever, David Chappell has reduced a tricky concept to the level of a Ladybird Book in his newly published white paper.

As if that was not enough, the PDC this year also annouced Office Web Applications, lightweight browser delivered versions of the Office apps which will be added to Office Live when Office 14 is released.

Don't Panic Mr Mainwaring!

The rumoured Morgan Stanley initiative to utilise the Pentland Firth's renewable energy capacity has broken cover in the Guardian - Working with Atlantis, a turbine manufacturer, their ambitious plan to power a 150MW datacentre will bypass national grid connection.

This will surely build the case for Scotland to follow the  infrastructure investment of countries such as Iceland required to support the new renewable Energy Datacenter industry. Fibre bypassing London and connect Scotland directly to Northern Europe would make the country a compelling proposition as its renewable energy exploitation gathers pace.

Off-grid data centre powered by tidal energy planned for Scotland | Environment | guardian.co.uk