Internet video, iPhones, explosive growth of mobile phones in Asia, flat-rate broadband pricing… these and more have sent capacity demands on the Anywhere Network through the roof in the past year. Many of the packets these activities generate end up queuing for intercontinental transport via one or more of the Earth’s submarine cabling systems.

In London last week I had a chance to catch up on the implications of demand and approaches to submarine cabling finance from an Anywhere industry insider, Vinod Kumar. Vinod is President and COO of Tata Communications and a long-time communications sector leader. Among many other submarine cable activities, Tata Communications operates SEACOM, the big cable that recently reached the shores of East Africa from Mumbai, opening up network capacity in Africa in a big way.

Bandwidth demand is booming around the world right now. Do we need more undersea cabling?

“If you wanted to write a check for more right now, I’d say the Atlantic Ocean needs another cable. Not necessarily because of bandwidth demand in total, but rather because of the rise in demand at various landing spots. I’d run one from south Florida at one end, to southern Europe at the other. South America needs another, so I’d run a branch cable down there off of the new one.”

Public markets aren’t enthusiastic about financing big speculative projects right now – and the debt that supported private equity backers is harder to get now, too. How are these projects getting funded these days?

“They can take $250M to $1B at a go. In the old days, the way it used to be funded was through the formation of massive industry consortia. Tata [via the 2006 acquisition at its core, Indian state-run long-distance network firm VSNL] was involved in quite a few. You’d get 60 to 80 firms to commit up front to the commercial demand for the capacity when the cable got laid, in order to get the project financed. But these cable consortia are tremendously complicated to manage; for one thing, you need to control how a consortium’s members push for capacity upgrades before the bulk of the project cost has been recovered.”

“Then you had the speculator model, which boomed in the late ‘90s… for instance, the private equity firm Blackstone funding SEACOM. Rather than go through all the hassle of securing demand in advance, proponents of this model had a ‘build it and they will come’ approach. That boom, though, led to several busts, when the investors didn’t sew up enough commercial commitments before proceeding.”

“Tata then pioneered a model which seems to bring some attributes of each of those models towards the middle. Maybe you’d call it the ‘private club’ model. We own the main intercontinental cable we lay, and various landing parties own the various cables that branch off regionally to local waters, like to Vietnam or the Philippines. It’s less complicated than the consortium approach because there are fewer members. The main asset is 100% owned by Tata, but about 60% of the demand for its capacity is covered by the club members who run branches off it. It’s better for Tata, since we ourselves only have to risk 40% of the investment cost and it’s easier to manage a much smaller group. It’s better than the completely speculative model for the club members, since they get to buy the capacity at our cost plus a limited markup, less than 10%, and since Tata is an experienced undersea cable operator, they can hold us to extremely strict SLAs [service level agreements] to get comfort about reliability. Since we’ve started doing that, others have mimicked the model and it’s become pretty popular.”

But with exploding demand, and Tata’s balance sheet, aren’t you tempted to go the speculative route yourselves?

“Traffic is growing at 60% a year — but no one foresaw the irrational pricing that’s driving some of that. We’ll never take a speculative undersea cable project to Tata’s board — because we don’t need to. We tell the board what our own organic load will be, and we can find the rest of the funds to keep it prudent. It’s a small industry. We have investments in almost 80 cable consortia, so people know us, and we’re good at the work itself, like figuring out how to put cables where other cables aren’t. Those sound like small details, but the earthquake off Taiwan earlier this week disrupted several cables – not ours.”

My conversation with Vinod was on a day when he and other members of the firm’s management team were showing how far the formerly India-only operator has come in the provision of global connectivity. Vinod’s ambition: for Tata Communications to become ‘the Singapore Airlines of network services’. In an episode that reminded me of those times when you suddenly start hearing about the same movie or restaurant multiple times within a few days, a lot of the rest of our talk was about the new models for wholesale network services. I’ll do another post on that shortly.

Over a fun breakfast last week, I chatted with John Bruggeman, CMO of Cadence, the electronic design automation firm. Just back from Mobile World Congress in Barcelona, I was talking about the battles in the mobile revolution.

John says there are three significant battles still underway in that sector that have do-or-die stakes for the businesses in the actual battle: the mobile operating system (Nokia, Google, and Microsoft — the latter making another run at it with a rethought Windows Mobile), the mobile device platform (the usual handset suspects, Apple, and possibly some daring consumer electronics players), and the prevailing semiconductor architecture — which he sees as boiled down to a question of whether high-performance Intel processors make inroads against the widely used low-power ARM architecture.

Who’ll win that third battle, I asked. The ARM platform has a massive lead in the mobile space, its core IP going into the processor for virtually every handset sold in the world. “Intel is smart, has loads of cash, and knows this is a long-term game,” said John. “Over the next 5 years, they will co-exist. Beyond that, these two worlds — low-power handsets and high-performance portable computing — bleed together. The devices following that time period won’t be about fast web page refreshes; they’ll be about transactions, making fast hits on cloud-based data. When that happens, our mobile devices will want both low power and performance.” Given the time parameters involved, he doesn’t count out Intel’s push to take its desktop/laptop dominance into the smaller more diffused computing domain.

From that topic we wandered over to one that’s a new favorite of mine: that 2010 is the year that mobility as a business issue rises to the boardroom. My logic goes like this:

1. The commercialization of the Internet first hit businesses as an external, largely superficial change, in which they essentially stapled websites to their existing operations.
2. But the subsequent maturation of Internet computing compelled those same businesses to pull the net throughout their activities, affecting supply chains, marketing and sales, manufacturing, and virtually every other function in the company.
3. The mobile revolution has begun similarly. Most major enterprises at this stage have now begun to create mobile experiences for their customers (although, as Carl Howe’s reports on mobile web experiences establish, at widely varying levels of quality)
4. The diffusion of the impact of mobility will be no different than that of the Internet. Thus, corporate board members should begin considering how strategically their enterprises’ leadership is thinking about mobility. How else will governance insure that the business is pushing the leverage of connectivity into every nook and cranny of its operations?

Today's version of a mobility officer

John bought it — and he took the thinking a couple of steps further: ”The first automation of business in the 20th century happened with the advent of mainframe computing. The central information systems function arose then. The re-automation of business, driven by desktop computing, pushed IT further out into the business and, organizationally, led to the rise of the CIO. What you’re talking about — the rise of mobility as a strategic issue for businesses — will mean that we’ll see the rise of a Chief Mobility Officer.”

Fascinating idea, and one Yankee Group will pursue in a research report over the next few months with Josh Holbrook taking the lead. But beware: John followed his prediction of the emergence a new type of corporate CMO with this one: “Sadly, many businesses who take this step will put a networking guy in the job. What they’ll need will be an imaginative business person, someone who’s able to look at all the activities of the business and re-think them completely.”

While researching my new book ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, I had the good fortune to speak with over 50 connectivity thought leaders. I’m using my blog to periodically share some of the insight that didn’t fit into the book.

In this excerpt from my interview with Paul Sagan, president and CEO of Akamai Technologies, which provides managed services to power the performance and delivery of rich media online, dynamic transactions and enterprise applications over the Internet, we discuss the path to ubiquitous connectivity, obstacles to its growth, and how connectivity is accelerating human evolution.

Paul Sagan, President & CEO of Akamai Technologies (c) W. Marc Bernsau

How is connectivity changing over the next five to 10 years? What’s happening to the network from where you sit?

This is a consumer answer to your question, but I do believe this change will help power business things, too. We’re starting to see the Internet becoming television, replacing the giant gorilla in the home. Call it the HD Web, if you will. You will be able to get competitive quality, variety and control over your ‘IP television’ (that’s an incomplete term, but I don’t yet know what to call it) better than you get with conventional TV today. At Akamai, we are starting to deliver live TV streams of HD-type quality, using the term “HD” loosely. A majority of viewers are now selecting the higher-quality video streams over the lower-quality ones.

We handled the NCAA March Madness [U.S. college basketball playoffs] on the Web for CBS this year, as we have for some years now. This wasn’t the first year that they had cable-network-size audiences. We served hundreds of thousands of live simultaneous viewers, but for the first time, a majority of those viewers selected video streams of 1 Mbps bandwidth or greater. That’s a stunning milestone. And that’s in the U.S., where the potential audience has very low penetration of FiOS-quality broadband to the home.

You could argue that’s not ‘true’ HD, not Blu-Ray quality, but it’s more than watchable—after two beers, you can’t tell the difference, and maybe that’s always how college basketball is watched. ‘Two-beer HD,’ maybe we should call it.

What that means to me is that the Internet is now a challenge to TV. If you extend broadband growth out three, five or even 10 years, it’s still a pretty short horizon. TV gets fundamentally changed, and from there, so does gaming and all home entertainment. That is a sea change in the economy. All of home entertainment was completely analog until not that long ago! That affects all sorts of businesses.

Read the rest of this entry »

Much has been made of Apple’s pervasive industry influence, accomplished without actually participating at the in-person events that make up the annual tech sector calendar. But here at Mobile World Congress in Barcelona this week, Google has been the largest presence without a presence.

“What will Google do next (to us)?” has been the prevailing question in virtually every executive conversation I’ve had. It’s safe to say the industry fears Google’s brand, cash, capabilities, and perhaps most of all, sheer audacity. I suspect if Google announced plans to put a new data center on the moon, the network community would nod sagely and say, “Sure; it was only a matter of time.”

Google CEO Eric Schmidt keynoting the 2010 Mobile World Congress (c) Monty Metzger

Tuesday night, Google CEO Eric Schmidt entered a packed auditorium, nominally to give a conference keynote. What he really did was subject himself to the Spanish Inquisition. He did offer some formal remarks, but following that, with poise a politician would envy, he fielded questions from attendees for close to 45 minutes.

Diplomacy was the order of the hour; he took pains to talk about how honored he was to attend, how Barcelona is now “the place to be” for the computing industry, and how the enormous success of the mobile sector to date is due to the community gathered here this week.

Some highlights:

Read the rest of this entry »

Today’s NYT has the story: putting a mobile router in school buses to offset the sometimes long commutes kids have. The students can do homework and chat online with teachers while they cover the miles to and from school and sporting events.

Yet another example of the gradual expansion of the Anywhere Network.  It’s a natural hole to fill in the network fabric.

Here’s another one: Eurostar. I was stunned a few months ago when, after settling into my seat and carefully arranging my work things around me, I discovered that the train — a bastion of regular London-Paris commuters — was completely network-free.

Given that Google seems to be inclined to make large gestures to try to stimulate the behavior of others in the marketplace, perhaps its holiday-time free airport Wi-Fi should be followed up by free Eurostar Wi-Fi — perhaps during Roland Garros?

To be sure, the school students may not be using the access for schoolwork only. But the point is this: eventually we will find it incredibly anomalous to be offline. And talk of “going online” will feel just as incredibly dated. All of the things we will want to do while we’re moving around on public transporation — including the things that the providers of that transportation want us to do, like read their safety instructions and absorb advertising for their on-board food and drink — will require the network.

When researching my new book, ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, I was fortunate to interview more than 50 thought leaders in connectivity. Their input was invaluable and their ideas, advice and examples provide very rich context for the Anywhere vision. I’m sharing selected book interviews through the blog.

In this excerpt from my interview with Axel Haentjens, senior vice president Marketing, Brand and External Communications for Orange Business Services, Haentjens provides his take on how the upcoming ubiquitous connectivity revolution will change how enterprises do business, both internally and with their customers.

What do changes like pervasive connectivity and embedded IP in broader devices mean for enterprises?
I have been in the communications business for 15 years at France Telecom [FT]. In 1995, it was very clear that the desktop had to be connected. Now we’re at the point where we have laptops, BlackBerrys, PDAs, and more. So in the last two to three years, you could access documents and e-mail through a PDA from everywhere — from a train, on holiday, etc. For Orange [FT’s key brand], that translated into a huge success for our Business Everywhere tool. We have more than 1.3 million users.

But this year, we see something else. We’re now at the point of pervasive reachability, where you need to talk to people using various means that are all integrated. We ought to be able to start one way, and then move to another.

And it’s not only human connectivity.

Right. There will be five times more objects to connect than people, at the very least. There are mature applications today in tele-monitoring, fleet management and tracking goods. Orange operates mobile networks in 28 countries, including 15 countries in Europe today: 15 percent of our mobile B2B revenue is already M2M. It comes from SIM cards embedded into devices either for fleet management or remote monitoring, and it’s growing at a rate of about 20 percent per year.

Clearly tele-metering is ready. You’ll find security companies doing it, utilities also, and energy companies doing tele-measuring for gas and electricity. We see a lot of apps in vehicles, helping to manage thousands of trucks via geo-location and route optimization.

Read the rest of this entry »

When researching my new book, ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, I was fortunate to interview more than 50 thought leaders in connectivity. Their input was invaluable, and their ideas, advice and examples provide very rich context for the Anywhere vision.

I wish we’d had room to incorporate more of our interviews in the book — but with the infinite capacity of the Web, I’m sharing some of them here.

In this excerpt from my interview with Dr. Robert Metcalfe, co-inventor of Ethernet, founder of 3Com and general partner of Polaris Venture Partners, we discuss the path to ubiquitous connectivity, obstacles to its growth, and how connectivity is accelerating human evolution.

Bob Metcalfe (c) Marcin Wichary

Universal, ubiquitous connectivity—yes or no?

Of course it will become universal. The only exception is the normal one.

What’s that?

Well, if you look at that famous picture of the Earth at night, you’ll see huge swaths of black—for instance, most of Africa.

That’s a pretty big exception.

Right. So it’s a question of time. Impatient people say the digital divide is a condemnation of technology—that it’s nothing short of criminal that we haven’t reached everyone yet. I say, ‘Au contraire. Don’t blame me for not getting them connectivity yet when you haven’t gotten them electricity, roads and clean water.’

You sound like you take it personally.

Sure. You can’t talk about connectivity without talking about Metcalfe’s Law, so how much more personal can it get? It’s not my fault there will be tribes that don’t get connected.

Read the rest of this entry »

ANYWHERE the book talks a lot about a future with many more connected devices than those we know and love today. So when I signed our book deal at the beginning of last year, I said it would be a terrible irony if we couldn’t ensure that the book would come out both in hardback and e-book versions simultaneously.

And that was the plan… but e-book publishing is still a bit new and a few technical hiccups stood in the way.

No surprise that I had to withstand a few gentle gibes during our webinar last week, when a few of you pointed out immediately that the Kindle version wasn’t on offer yet.

But as of this weekend, the Kindle version is now available from Amazon. Kudos to McGraw-Hill for pushing this through. We had a quick look at it Tuesday; while you sacrifice a few of the chapter opening graphics, it’s all there and quite readable.  How very Anywhere.

Just in time for Yankee Group’s e-reader forecast, coming out later today!  More ANYWHERE e-book developments are in the works; I’ll post more on this later.

Possibly the best proof of the value of expanding connectivity is the role it plays in providing healthcare in emerging markets. As I mentioned in today’s webinar, during the research for our book I spoke with Dr. Hamish Fraser, director of telemedicine for Partners in Health, asking him about the importance of network access in how care-givers connect with patients.

“Where we work, connectivity saves lives,” he said very simply. “The network lets us find patients, alert them to the arrival of medications, and monitor their health. When we can do that, people’s life expectancies rise — we’ve proved it. And when their children live longer, the parents invest more in their development.”

Partners in Health has done ground-breaking work in Haiti, training Haitians in community healthcare and creating Haitian-staffed hospitals around the country that have changed, and extended, many lives.

Following the devastating earthquake this week, their hospitals thankfully are still standing. If you’re looking for an organization that is on the ground in Haiti already and can benefit instantly from your support by increasing its supplies of medications, bandages, and more, please consider going to www. pih.org and making a donation on line.

For some context on the challenges of helping Haiti, see Tracy Kidder’s excellent editorial today in the NYT.

Thanks to everyone who joined us in the webinar today, officially launching our new book ANYWHERE: How Global Connectivity Is Revolutionizing the Way We Do Business. For the discussion, I was joined by five terrific thought-leaders in the connectivity space:

• Glenn Lurie, President, Emerging Devices, AT&T
• Walter McCormick, President & CEO, U.S. Telecom Association
• Paul Sagan, President & CEO, Akamai Technologies
• Sriram Viswanathan, VP, Architecture Group, Intel
• Nigel Waller, Founder & CEO, Movirtu, Ltd.

A special thanks to each of them for taking the time to chat about Anywhere and illustrate their own business’ opportunities and challenges. If you missed the presentation, the replay is below–I would be delighted to hear your thoughts.

The webinar runs about an hour: audio (mp3) and slides (pdf).