miércoles, 21 de marzo de 2018

5G and net neutrality

Without any doubt, 5G was the star of the recently held Mobile World Congress (MWC). Since several years ago, the MWC has mutated from an event exclusively focused on mobile technology to a conference on the latest advances on digital technologies. However, this year the MWC has shown its true colours and a pure mobile topic (5G) has been the darling both of the people who have attend the congress and the journalists who have reported what have happened there.

5G was on the origin of one of the more tense debates of the congress, the session about net neutrality. One of the more innovative features of 5G is the so-called "network slicing",  a technique for network virtualisation that allows to define several networks on top of a shared infrastructure. Therefore, "Network slicing" allows to provide services with different speed and latency on the same physical network, what can be read as a violation of net neutrality principle.

As "Network Slicing" is one of the hopes of network operators to obtain new revenues in the 5g environment, they are pushing for a lenient interpretation of the rules. The critical importance of these new revenues is easy to be grasped in the framework of the cost estimations for 5G deployment. It is estimated that network-related capital expenditures would have to increase 60 percent from 2020 through 2025, roughly doubling total cost of ownership (TCO) during that period.  Furthermore, In Europe along network operators need to cough up around €56.6 billion to pay for 5G networks covering the entire EU.

So, at it was expected, the economics are at the center of the debate of 5G deployment. Before announcing the use cases for the enhanced broadband, the mission critical applications and the support for IoT which is foreseen in 5G services, the operators would like to know which levers will have at their dispose to monetise the services. And new interpretation of net neutrality looks as the main lever.

miércoles, 14 de marzo de 2018

Forget the hype, AI is not a new market

It looks that 2018 is AI´s year. Artificial Intelligence is on the news each day and it is beginning to be taken into consideration as one of the enablers of digital transformation. The excitement is not surprising, as it is expected a jump in its market size from 1,378 millions of dollars worldwide in 2016 to 59,748 millions un 2025.

Even in the digital age the space in the press is not infinite, so great part of AI buzz has been made at the expense of big data. According with the data available in Google Trends, there have been a convergence between the usage of both terms. Also this is not surprising, as AI is probably the main application build on big data. Data is useless without being analysed. So it is really possible that we are not talking about a new market, but a rebranding of what we have been calling the big data market.

The substitution theory of Big Data by AI is supported by E. Morozov. In one of his last articles he highlighted that "data is not the new oil, but AI probably is". Furthermore, he pointed that the same players that has been hoarding data for years are now grabbing market power in AI market based on its dominance of the Internet. So according this point of view it should be the GAFA the leaders of the AI market.

And the facts are greatly supporting the substitution theory. Two of the GAFAs are leading the ranking of 15 companies which are hiring AI experts and two of them in the list of 5 top investors on AI. Amazon is repeating on both lists, as well as Microsoft, so Morozov maybe right on his last theory.

So it is highly possible that AI is neither a new market nor opening new opportunities for new entrants, but the continuation and consolidation of the current scenario.

miércoles, 7 de marzo de 2018

"El final del hombre" - Antonio Mercero

El final del hombre (Sofía Luna, #1)El final del hombre by Antonio Mercero
My rating: 5 of 5 stars

Antonio Mercero escribe, ante todo, una gran novela negra. El autor inicia con esta historia lo que promete ser una serie de relatos con la inspectora Sofía Luna como protagonista. La obra inicia una saga de casos de similar factura a los protagonizados por Pepe Carvalho, Tony Romano o Bevilaqua. La puesta en escena inicial arranca con un crimen truculento en que se usa un arma inusual, alrededor del cual empiezan a presentársenos personajes ambiguos, a los que es tan difícil amar como odiar: Policías de abnegada dedicación con pequeñas corruptelas, personajes decimonónicos de ideología trasnochada, jóvenes nihilistas de una generación perdida, mujeres y hombres especializados en la manipulación de las emociones, ... El relato se adentra de la mano de todos ellos en un callejón sin salida, en un laberinto de mentiras del que parece imposible escapar hasta que en un final acelerado cae el velo de todos y cada unos de los engaños. No descubrimos sólo la historia de detrás de un crimen, sino la existencia de otras miserias humanas que página a página habíamos ido intuyendo.

La obra de Mercero no carece tampoco del factor social que hace inolvidables las grandes obras de novela negra. Sofía Luna, la inspectora que protagoniza la historia, en una mujer trans* en transición social hacia su identidad de género. En las primeras páginas, una funcionaria le hace entrega del auto que le reconoce administrativamente como mujer y le acompañamos en su salida del armario en su entorno personal y laboral. Se suceden todas las escenas de empatía y discriminación por las que pasan las personas trans*: Apoyos de algunos familiares y rupturas con otros, compañeros de trabajo que se mofan y otros que admiran el valor de Sofia, el rechazo abierto de quien antes te amaba o valoraba, la transfobia violenta que aguarda en un portal, los problemas de identificación ante terceros, las preguntas incómodas, ... Historias reales que acercan al lector desde el respeto a la realidad trans*

Difícil augurar si tan gran comienzo tendrá una digna continuación. Mercero se ha puesto el listón demasiado ato.

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miércoles, 28 de febrero de 2018

The battle for the ad (blocking) market

Some weeks ago, a wave of surprise shook many people when they read that Google was on the brink to distribute an adblocker integrated with its browser. Was Google going to start blocking its main source of revenues? Was the inventor and king of online ads as the source for financing digital services going to kill the market it created? But things are more complex.

According with the data published by PageFair, in 2016 11% of the Internet population are currently using an ad blocker, with a yearly growth of 30%. So the menace was already there when Google decided that the best strategy was to join (apparently) with the enemy. Furthermore, ad blocking was such a growing sector that different kind of business models were beginning to arise. Because you should notice that the majority of adblockers are not non-profit companies. Adblocker Plus, the leader of the ad blocking market,  is itself a two-sided platform that provides free services to users thanks to the revenues it obtains from not blocking some kind of ads.

So once more and as usual, it is good to take a look from a different angle. The reality is that Google (and Facebook) are not fighting the online ad business but protecting its (big) share in it. The ad blockers market battle that have already started is in fact an ad market battle. On one side,  Adblocker Plus and the so-called Acceptable Ads Comitte have defined an Acceptable Ads Definition. On the other side,  the Coalition for Better Ads (CBA), which include Google and Facebook, has defined the initial better ads standard. On the gap between both standards for a consumer-friendly ad lays the online advertisement market of the future (and its stream of revenues)

So things are not as some people has described. Google is not entering in the ad blocking market but continue its battle for the absolute dominance the ad market.

miércoles, 21 de febrero de 2018

Again platform regulation, now as online intermediary services

Some weeks ago, I wrote about the complexity of laying down rules on fake news, but the sudden EU regulatory frenzy about platforms doesn't stop on this issue. The digital giants are also on the focus of Brussels for other reasons, one of them their role on the economy, particularly as intermediaries on the value chain for the distribution of good and services. In the midterm review of the Digital Single Market Strategy, the European Commission committed to present concrete actions on unfair contracts and trading practices in platform-to-business relations before the end of 2017. Although the deadline has passed without any initiative be presented, it looks that it would be done in the following months.

The objective of the forthcoming European Commission proposals are what they called online intermediation services, which take part in the relationship between companies and consumers through some kind of contract. The main kind of platforms that could be included on this group are e-commerce market places (e.g. eBay, Amazon, ...), appstores (e.g. Applestore or Google market) and  online advertising platforms (e.g. Google and Facebook). However, it is difficult to establish a limit of which are the markets and categories of online platforms that could be regulated as intermediaries. Perhaps, a wiser approach to this regulation is laying down the topics that should be monitorized on intermediation services and an open procedure to define which are the categories by the regulator. 

So, let´s focus on what should be regulated on this unequal relationship between the digital giants and national companies. Perhaps, the better studies on the issue was published by the European Comission, one of them last summer and a second one on December. Based on survey on SMEs and complaint cases, the documents identify five issues to be regulated with different termonology:
  • Terms and conditions of the contract, particularly its clarity and changes during the relationship
  • Search and ranking tools on the platform, with a special focus of algorithm transparency and the listing mechanisms
  • Platform operation as another service provider on equal conditions as the other companies
  • Conditions for the usage of data generated within the platform, both by the platform and the service providers
  • Dispute resolution mechanisms for redressing of unfair treatment
Regarding which platforms should be regulated, there is a consensus on the classification detailed above, However, as I stated before, a fix classification would be always short sighted. A lesson we have learned on the years we have already lived on the digital age is the unexpected dynamics of the markets and the unending creativity of innovators. In the same manner that it is done in the telecom market, it would be wiser to lay down the rules for the definition of markets to be regulated and which kind of remedies could be introduced on the above mentioned five issues on the cases that are needed.

miércoles, 14 de febrero de 2018

The sleepwalkers

The Sleepwalkers: How Europe Went to War in 1914The Sleepwalkers: How Europe Went to War in 1914 by Christopher Clark
My rating: 4 of 5 stars

Since I was a child, I have been puzzled about how the First World War started. When you study the Second World War, you have a feeling of the inevitability of the conflict: A megalomaniac fool invading one country after another until the other big powers get fed up and declared the war. On the contrary, in the first reading the chronicles of the begining of the Great War you see the killing of the heir of a decaying empire at the hands of a nacionalist terrorist group as the flame that ignited the clash. Everytime I have spoken with a friend about the comparison of the outbreak of the starting of the two major disputes of the human beings history, I have met with a reflexion of my own perplexity.

With the rationale above, it is easy to understand why the first time I read of the existence of "The sleepwalkers" I knew that I would read that book. The essay looked as the key to the explanation I was looking for since my childhood, the link bewtween the killing in Sarajevo and the explosion of a war that ending with the dead of 30 million of people. Once I have finished it, I am not disappointed in ny manner. At last, I have worked out the debt of knowledge on the matter with myself.

The pages of "The sleepwalker" disentangle the genesis of the war. On one hand, there was a growing rivalry for the dominance of the Balkans between a rising country and a decaying one, respectively, Serbia and Austria-Hungary. On the other hand, both of these countries was the vortex of a complex alliance scheme. The inevitable conflict between Serbia and Austria drawn the rest of the European continent to war. The killing in Sarajevo was an excuse, but it could be another one.

However, it was not so simple as it was described above. Reading the pages of "The Sleepwalkers" you have the feeling that the war could have been avoided. The unthinkable of the war was it the end the reason for its declaration. Every power acted as if the other side was going to act in a wiser manner and would take the cautious decision on spite of its provocation. It was this way of thinking the final rationale for the conflict.

But the book is more than an excellent history book. "The sleepwalkers" it is also a background for thinking in our current crisis in many areas, both in the international and national arena. The pages of the book give us many reasons for demanding a more concious behaviour of our leaders, asking them for being something more than sleepwalkers dragged by the events.

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miércoles, 7 de febrero de 2018

The case for digital skills

According with the Treaties, the European Union has not any real competence on Education. However, the European Commission has made the promotion of digital skills one of the central policies, first, in the Digital Agenda and, afterwards, in the Digital Single Market Strategy. The spreading of digital technologies is leading to the need for every citizen to have at least basic digital skills in order to live, work, learn and participate in the modern society. 

The urgency for promoting the acquisition of digital skills by citizens is usually justified by figures and statistics. For instance, one piece of data that is putting forward frequently are the results of the last DESI publication, which is showing that around 45% of the European population lacks of  basic digital skills. However, few times we think on the real stories that are behind that numbers.

Let´s start our review of the consequences of the lack of digital skills on real life with a hot story: fake news. Since the last USA presidential elections, it looks that there is a real worry among policies makers about the quick spreading of fake news through the Internet. The last evidence of this worry of the elites are the proposals for regulations coming from President Macron and the European Commission. However, the focus of these proposals is regulating plaforms and less on explaining the population, for instance, how algorithmic selection of news works. And we should remember that 54% of the population has a preference for the algorithmic selection of news, which is the real problem when a high percentage of people still believes in conspiracies in Europe.

The lack of digital skills is beginning to have impact on the opportunities to access to public services.  On a time where some people are still suffering the impact of the economic crisis, the dramatic consequences of the digital divide on an ordinary guy who is not able to fulfill an online form to demand welfare services is the starting point of "I, Daniel Blake", the last Ken Loach´s film. Perhaps, it s an extreme case, but without any doubt, it is already easiest to obtain public grants and benefits using the Internet than going to a physical point of service.

It is also worrisome how receiving any kind of information through an app or website gives this information an extra verity value. An evidence of this fact have happened in Sweden recently, where 37 unwanted pregnancies occurred among users of an app which was sold as an "algorithmic contraceptive method". The app was the digitalisation the traditional rhythm method, a contraceptive method known as insecure due to its typical failure rate of 24%, which so long ago was declining on usage in western societies. It is not difficult to imagine among the 37 unexpected mothers a significative percentage of women who looks her smartphone as an unerring device for giving advice on any kind of issue who would have never used in a conscious manner the rhythm method.

Another field where the lack of digital skills may have devastating consequences for people are the usage of fintech services. Particularly dangerous to people finances could be entering in the cryptocurrencies market. Different scams model are emerging, including fake ICOs or exchange scams. In 2017, Japan police detected 33  cryptocurrency scam cases in the first seven months. We can expect a rise of these figures in the current year.

Any kind of relationship where a citizen is involved is based on digital means, the increasing adoption of technology is an evidence of this fact. Therefore, the lack of digital skills have a daily impact on people beyond their professional career. Using a car without any driving knowledge usually ends with an accident, difficult to expect a positive outcome of using computers or smartphones lacking digital skills.

miércoles, 31 de enero de 2018

Fake news: The problem is the measures we are not taken

It´s official now. There is a race for regulate the so-called fake news and other harming content between the Brussels bureaucracy and the big European capitals. After the approval of German law, it is the turn for France for rushing before the European Commission presents its own initiative. One of  shared objectives of the three mentioned initiatives is safeguarding democracy from misinformation. However, although there are a positive side on the part of the initiatives, there could be also unforeseen consequences.

On the bright side we have the push for transparency of some the ideas put forward by the French President. Including transparency regarding sponsored content would make clear to the users who is posting some of the pieces of information that are flowing on the network. However, the almost certain consequence is less sponsored content, so the social networks are beginning to reorganise their business model before the proposal be an actual law.

But we should be cautious with other part of these measures against harmful content. On the heart of them there is also the promotion of a more responsible behaviour of platforms. Although I´m in favour of the idea of demanding a bigger liability of platforms, this demand should not be only for the retirement of harmful content within a certain timeframe, there should be also a counterbalance of fines in case the alleged harmful content retired was not such. Otherwise, the consequence would be an excess of caution that would harm freedom of expression, as we are beginning to see wit the application of the German law.

Unfortunately, what it is missing in all these initiatives are measures for facing the enemy at the the real battlefield: the user. Because the real problem are not the fake news but having an audience that gives credit to the news. And this battle is far to be win according with recent polls. So the problem are not only the measures that are being adopted against fake news, but those that nobody are taken.

miércoles, 24 de enero de 2018

Net cynicism

On the end of 2017, the battle on net neutrality was reawaken. Net neutrality is the principle that Internet service providers must treat all data on the Internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. The FCC decision to repeal the Open Internet decision approved in 2015 that ended the enforcement on net neutrality was welcomed by network operators and  criticised by digital platforms. 

The rationale behind those defending net neutrality is the need to guarantee equal opportunities to compete between those who use the internet resources, wether or not they are network providers. Imposing a ban on establishing preferences for the apps using the network prevent that internet providers could act as gatekeepers for the digital economy.

But this is not just another article on net neutrality, but an article on net cynicism. To begin with, let´s done some changes on the definition on net neutrality and start talking about app neutrality. App neutrality is the principle that digital platforms must treat all apps within their environment the same and not discriminate or charge differently by user, design or purpose. The about app neutrality is the change on the subject who is obliged to respect it, which are the digital platforms who call for net neutrality. 

The problem with the enforcement of app neutrality is the subtle forms of some of its violation. For instance, we all agreed with the idea that data is valuable, therefore taking advantage of the full knowledge of app activity on a platform is an indirect charge on the app developer. So the business model of Facebook would violate the app neutrality principle unless the platform provide with an open API to access all the information about any app activity to all the apps developers at the same cost that Facebook use this API for its services.

Something similar could be applied to app stores run by Apple or Google. Both manufacturers have established rules for including apps in its distribution system. The impact of these rules is appreciated with any slight change of them, however there is not a report published regularly of the apps that are banned and the reasons for it. Furthermore, there is not transparency on the results of the acceptability tests for the apps developed by the owner of the appstores.

None of the questions on app neutrality are put on the table by digital platforms jointly with the debate on net neutrality. That is what I called net cynicism.

miércoles, 17 de enero de 2018

Digital breathing air is diminishing

According with the available data, in 2017 among the top 6 companies by market capitalisation 5 are ICT companies, 4 of them close to the concept of "digital platform". These companies are Amazon, Alphabet (Google), Facebook and Apple, the GAFA. Only Google was among the top 20 companies in 2009, Apple was below the 30th post in the 2009 ranking, neither Amazon nor Facebook were in the top 100 companies.

The phenomenal growth of the GAFA is not completely understood yet today. However, it is sure is that working for more thatn a decade in an innovative and not tightly regulated sector has had a big influence in the current situation. The bigger the space you have to breath free of any other living being in the surroundings the more you can expand yourself. But suddenly, the space has started to decrease.

The breathing air for digital platforms is composed by two main elements: the usage of connectivity infrastructure deployed by other companies and contents created by third parties. The connectivity is used in the same conditions as other users without taking into consideration its role as producers and the content is exploited in an indirect manner without any charge for its intermediary role. Both of these elements are on the road of getting more expensive for platforms, and therefore, diminish the space for the benefit obtain from its usage for business purposes.

Starting with connectivity, US Government repealed Net Nutrality regulation. From now on, telcom operators can negotiate paid deals with websites for so-called fast lanes to consumers  as long as they disclose those practices to the public. This could mean in the future higher prices for those (as digital platforms) which are traffic sumps on the Internet, that could be forcedto pay more to have better access to consumers.

On the content side, there are two pressures towards more expensive contents. Firstly, the governments are looking for a bigger control of contents by the digital platforms in order to suppress extremist messages as soon as possible. More control means more humans analysing each piece of content, and, therefore, the need to pay more salaries. Secondly, some content producers are asking for tools to obtain a bigger piece of cake of money obtained for services by platforms built around their news, videos and so on.

So platforms are facing a new challenge: showing that the business model is healthy in spite of the diminution of benefits and the increase in expenses. A change on the landscape that could change the balance of forces in the digital ecosystem.

miércoles, 10 de enero de 2018

Omnichannel: Brick-and-mortar is not dead but the cog of a more complex mechanism

Christmas is over. There are no more gifts under the tree and even the tree has been dismantled. Online sales may have reached a new peak and its for sure that its growth has surpassed once more the growth of brick-and-mortar sales. Back in September, Deloitte forecasts a growth of holiday sales growth of as much as 4.5 percent while e-commerce sales would increase 18 to 21 percent. Taking into account these numbers you may be tempted to close your physical store and you will make an error if you do so.

Although it may look so, the future of sales is not the Internet. At least is not only the Internet. The combination of offline and online shopping is not a provisional stage but a permanent one. According with a survey, in the last Black Friday/Cybermonday campaign in USA while over 58 million shopped online only and over 51 million shopped in stores only, over 64 million shopped both online or in stores. However the future of shopping is also beyond multichannel, it lays in what someone calls omnichannel.

What's the difference between multichannel and omnichannel? Basically, it is a question of customer experience. While in a multichannel strategy a shop print a range of lightly connected options to the shopper, in an omnichannel strategy there is a seamless continuity of the actions done by the shopper through the different channels. For instance, the shopper is free to start the relationship with the commerce through one channel and end it in a different channel.

The implementation of the more basic cases of omnichannel strategies is growing. The US merchants offering omnichannel services as buy online/pick-up in the store or ship to store doubled from 2015 to 2016. But more complex cases are already being implemented. My favourite one is the "My Disney experience" that allow you to start planning your trip to the magic kingdom from your PC to fully enjoy your days with SnowWihite, Peter Pan and the rest of the troop.

So in the end it looks that it could be true that digitalisation will not be the end of jobs but the start of a new breed of them. Omnichannel is the first step in that direction on the retail world.
palyginti kainas