Global Nerdy

I've been thinking about this story over the morning and, no matter how I look at it, it seems like a pretty bad idea. A New Scientist article has a laywer/professor calling for ISPs to be liable for distributed denial of service (DDoS) attacks emanating from their networks:

Internet service providers (ISPs) should be made legally liable for the damage caused by "denial of service" (DoS) attacks carried out via their networks, a leading internet lawyer says.

At a conference called Blocking Denial of Service Attacks on the Internet, to be held in London on 13 November, Lilian Edwards, an internet lawyer based at the University of Southampton, UK, will argue that legal measures must be taken if these attacks are to be stemmed. Edwards notes that ISPs currently have no legal obligation to check data relayed to and from internet users. She thinks, however, that governments could require them to do so.

Where to begin? Let's start with the fact that once you accept a government mandate that ISPs are somehow responsible for some harmful traffic (DDoS packets), what's to stop ISPs from being held responsible for all harmful traffic, such as the transmission of (wait for it…wait for it…) child pornography (that's right, I'm doing this for the kids)? Furthermore, the definition of "harmful" is important. I think traffic on peer-to-peer network protocols should be treated by default as benign, but I'm sure Big Content would think otherwise. How about "hate literature," or propaganda from the terrorist enemy of the day? You see where I'm going with this: the ISP marketplace can only function if the job (as defined by the government) is that of a neutral carrier of traffic, shuffling every packet with equal disinterest.

Moreover, the marketplace is actually fielding the kind of services Ms Edwards describes. Both AT&T and Verizon, to cite just two examples, tout security in their backbones, including the ability to detect and defuse DDoS attacks before they hit their customers' network gateways. DDoS attacks are, ultimately, an economic problem—they degrade network performance, and can halt online business—and the victims can and should treat it as a business risk to be mitigated through technological means. There are plenty of ways for them to do so without the government mandating that ISPs carry the bag.

It's a curious choice of target for the involuntary assigment of liability and risk transfer. Surely the ISPs of the world aren't the most responsible party in a DDoS attack? What of the companies who provide vulnerable operating systems? The customers who misuse, misconfigure, or undermaintain those systems, making them ideal zombie targets? ISVs whose software defects render systems vulnerable? And, of course, we have the criminals conspiring to commit these crimes themselves. There's enough blame to go around that it seems strange to focus the blunt instrument of government regulation on ISPs in particular.

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Tags: DDoS, ISP, liability, regulation, security

I wouldn't expect Arik "Byte of the Apple" Hesseldahl to come out with a rave for Zune, but I do expect him to be clear-eyed about the prospects for Microsoft's latest iPod challenger. That's why I actually take it seriously when he says Zune is "Falling Down on Cool."

Remember the three rules of cool, as documented by Malcolm Gladwell in The New Yorker almost a decade ago. First: The act of discovering cool causes cool to move on. If you accept that the iPod is still cool, as many still do, then the Zune can't help but seem an arriviste, an interloper, poseur product encroaching on well-defined "cool" territory. When the uncool discover a cool place, the cool take their business elsewhere. Microsoft's a little light on the cool bona fides, despite the Xbox 360.

The Zune will seem a not-pod, proving the second rule of cool: It cannot be manufactured, only observed, and then by those who are themselves cool. An iPod is a requisite accoutrement of cool. This is the result of a carefully constructed marketing effort on Apple's part. Any attempt that Microsoft makes to market the Zune will fall short of the high bar set by Apple, which has an almost natural sense for turning its ads into entertainment. Describe for me three Apple TV ads you remember from the last two years. Now, try to describe for me three Microsoft ads. Bet you can't. That's the Apple marketing machine at work.

Finally, there's the third rule of cool: You have to be cool to know cool. And since when is Microsoft cool? The iPod was cool from birth. The Zune will be seen for what it is: a me-too product that is expressing Microsoft's envy at not being cool. It will carve out its own niche of the market, but by this time next year, it will be considered a dismal failure.

A lot of tech punditry focuses on the feature set ("feeds and speeds") and buzzword compliance ("it's social-x!") of new new things, which means it almost always loses sight of the irrational, emotional factors that go into making one product a hit and dozens of other similar, perhaps even more capable, products duds.

Rules for cool may be as hit-and-miss as rules for happiness, or rules for art, but the fundamental observation—that iPod is a smash in large part because of its inherent cool factor—points to a giant challenge for Microsoft.

The popularity of a closed system is determined by its ability to fulfil on the expectations of the customer (and not because IBM annoints you as the perferred OS for their new PC thingy). In a mass consumer electronics market where the only performance concern is battery life (you can't meaningfully claim music performs better—3x faster!—on one digital audio player over another), and there's no exclusive content advantage (all online music and media stores come to offer basically equivalent catalogs over time), Microsoft can't just say "Newer! Better! Faster! More! Now with Office for Zune!" It comes down to the customer's personal, inarticulate desire. If that desire is for "anything but an iPod," Microsoft's in luck. If it's for "something cool, like an iPod," then Microsoft has to hope there's something about the Zune people aren't seeing yet. 

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Tags: Zune, Microsoft, cool, iPod

Looks like Meebo and Reddit are being cast as the El Mariachi of the startup world. Hits that got made largely outside of the "studio system" for an almost mythically low amount of money. The $7,000, financed on credit cards movie became something of an archetype following Rodriguez' success. The Times is doing their best to establish the same mythology in the technology world:

In the last couple of years, hundreds of other Internet start-up companies in Silicon Valley and elsewhere have followed a similar trajectory. Unlike most companies formed during the first Internet boom, which were built on costly technology and marketing budgets, many of the current crop of Internet start-ups have gone from zero to 60 on a shoestring.

Some have gone without venture capital altogether or have raised far smaller sums than venture investors would have liked. Many were sold for millions before venture capitalists could even get in. That has been a challenge for venture capitalists, who have raised record amounts in recent years and need places to put that money to work.

“V.C.’s hate it; they want you to take big money,” said Jay Adelson, who is the chief executive of two start-ups, Digg and Revision3. Digg took some venture money, but far less than backers offered, and Revision3 has been running on about $850,000 raised from a group of angel investors.

Won't somebody please think of the venture capitalists?

The article is right in that it takes a lot less to get an online business off the ground these days. A lot of the expensive infrastructure built out of the telecom boom (bandwidth, data center capacity) is available for much less than it initially was being sold for. Combine that with rich free (as in speech and beer) and open platforms, languages, and development toolkits, and a better understanding of how to turn HTML and JavaScript into a real application UI, and you can deliver real software but as a service.

Scaling up won't even impose the same costs it has. Imagine building the next Meebo not on rented servers, but out of virtual appliances deployed on something like Amazon.com's Elastic Compute Cloud (EC2) and Simple Storage Service (S3). You get to leverage Amazon.com's buying power and management efficiencies, and you don't have to scale in advance of your worst-case-scenario capacity forecasts.

Even so, don't expect to see your favorite general partners tapdancing by the highway for nickles any time soon. Besides not knowing of any VCs who can tapdance, a company still needs serious money to serve a global audience, particularly if it wants to get to that level quickly. Bootstrapping and cadging together angel money is a slow process. Moreover, the low barriers to starting up a company mean that there's just that much more noise in the market. Breaking free of the crowd is an expensive proposition, and a few million bucks wouldn't hurt.

So, while starting your technology company has gotten cheaper, it certainly hasn't gotten any easier. Nor has it become magically inexpensive to grow your company for the long run. Rember, once the studios discovered El Mariachi, the $7,000 wonder, they spent several times that amount on print transfers (from 16mm to 35mm, if you must know). Without that later stage, larger scale investment, nobody would have seen the movie.

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Tags: Meebo, Reddit, startups, VC, El Mariachi, Amazon.com, EC2, S3

Big news day for Zune, and it's not really spinning in Microsoft's direction. The Wall Street Journal's Walter "Uncle Walt" Mossberg and the New York Times' David "I Haven't Got a Nickname for Him" Pogue both published their thoughts on Microsoft's new player today. Pogue bottom lines his experience this way:

Competition is good and all. But what, exactly, is the point of the Zune? It seems like an awful lot of duplication — in a bigger, heavier form with fewer features — just to indulge Microsoft’s “we want some o’ that” envy. Wireless sharing is the one big new idea — and if the public seems to respond, Apple could always add that to the iPod.

Then again, this is all standard Microsoft procedure. Version 1.0 of Microsoft Anything is stripped-down and derivative, but it’s followed by several years of slow but relentless refinement and marketing. Already, Microsoft says that new Zune features, models and accessories are in the pipeline.

For now, though, this game is for watching, not playing. It may be quite a while before brown is the new white.

While Mossberg concludes:

Overall, the iPod and iTunes are still the champs. Still, I expect the Zune to attract some converts and to get better with time. And this kind of competition from a big company with deep pockets and lots of talent is good for consumers in the long run.

So neither of them trashed Microsoft's newest pretender to the iPod throne, but this is a high-stakes game, and these aren't ringing endorsements, either.

Seriously, do you want your stuff being sold as "good for you in the long run?" That's the way you sell cod liver oil, not a digital music player.

Tags: Zune, Microsoft, Mossberg, Pogue, Apple, iPod

I woke up to some sad news today: Microsoft, once the most feared company in the world, is a total wuss. They've cut a crazy deal with Universal Music Group to pay a $1 royalty for every Zune device they sell (in addition to any royalties for UMG music they actually manage to shift). The New York Times has the details:

In a rare move, Microsoft said yesterday that it had agreed to pay a percentage of the sales of its new portable media player to the Universal Music Group.

Universal Music, a unit of Vivendi, will receive a royalty on the Zune player in exchange for licensing its recordings for Microsoft’s new digital music service, the companies said.

UMG is shaking down the new kid on the digital music block, trying to get from them what they haven't been able to get from Apple: a cut of the hardware sales. Microsoft, desperate to have all the major labels on board, folded like a cheap suit, and set a precedent that'll affect their relationships with the other major labels (who probably have "most favored nation" clauses in their contracts with Redmond).

It's clear that the overriding motive for Microsoft was desperation:

In discussing the rationale for the royalty, Chris Stephenson, general manager for global marketing in Microsoft’s entertainment unit, said the company “needed people to rally behind” the new device and service.

“It’s a higher-level business relationship,” he said.

A higher level of punk-itude, maybe. Anyway, I'm sure it wasn't lost on anyone at Microsoft HQ that this would eventually make life tough for Apple when it came time to renegotiate their licenses with the majors.

The rationale for the major labels is simple: Apple's done better, in gross dollar and margin terms, from the hardware than they have from the music they've sold, and they want a piece of Apple's cake, too.

Remember, these companies have sold many of us the same music over and over again (In my case, I can pick out tracks on my iPod that I've bought on vinyl, tape, CD, and now as downloads). Apparently making money from the business they're supposed to be in isn't enough. The fact that every MB of disk space on an iPod isn't occupied by tracks from the iTunes Store  is all the backup UMG et al need to justify their position:

The move also reflects Universal’s recognition that, for all the runaway success of gadgets like the iPod, consumers are still not buying enough digital music to make up for declining sales of music on compact disk. Universal said it was only fair to receive payment on devices that may be repositories for stolen music.

“It’s a major change for the industry,” said David Geffen, the entertainment mogul who more than a decade ago sold the record label that bears his name to Universal. “Each of these devices is used to store unpaid-for material. This way, on top of the material people do pay for, the record companies are getting paid on the devices storing the copied music.”

He added: “It certainly changes the paradigm.”

Yes, from one where record labels got money for the music they sold, to one where they get money because they assume their customers are thieves.

It would appear that Universal's thirst for royalty justice is small, however: a one dollar royalty is, after all, the equivalent of one track per device. I'm with Om "GigaOm" Malik when he says:

If Apple had to pay at least $1 per device for every iPod sold over past two fiscal years, its cost would be $62 million at minimum: or about one more song per device. If music industry cannot sell one additional song to consumers (and has to blackmail for more money) then, you as a business, have lost grip over your core competency.

Which makes it all the more appalling that Microsoft has caved in. Surely Apple's precedent meant that they didn't have to.

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Tags: UMG, Microsoft, Zune, royalty, shakedown, Apple, iPod, Big Content

No, Apple's not licensing Mac OS X to Dell, they're getting rid of the "Mac guy" in their commercials. As Radar sees it:

Apple's "I'm a Mac" campaign is almost perfect: It's funny, memorable, and efficiently lays out the advantages of Macs over PCs. Its only defect: Virtually everyone who watches it comes away liking the "PC guy" while wanting to push the "Mac guy" under a bus.

Small wonder, then, that as Apple prepares a new batch of commercials, "Mac guy"—aka Justin Long, of Dodgeball and Herbie: Fully Loaded semi-fame—is nowhere to be found. A rep for Long confirms that his days as an Apple pitchman are over: "Every ad you see Justin in is for that previous time period only," she tells Radar. "There's no long-term deal with him." She adds (somewhat implausibly, perhaps), "Justin's a movie star, not a commercial guy."

Snotty much? He was in TV's Ed too, guys. Jeez.

I've always liked Justin's "I'm a Mac" character (to be fair, I'm the kind of insufferably superior Mac user normal people fantasize about beating up), but Hodgman really is the star of these little gems, even when Giselle Bundschen's onscreen. Frankly, finding someone to hold their own against Hodgman while striking the right tone will be tough.

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Tags: Apple, I'm a Mac, advertising, Justin Long, Jonathan Hodgman

Gliffy: Slick, free, basic drawing tool a la Visio. Online and done in Flash. If you need to bang out a flowchart, or some basic UML, this is a pretty nifty option. Of course, you get a good helping of Web 2.0-style document collaboration features, allowing Gliffy users to share documents with others, allow them to edit, and keep track of document versioning. The best feature?

The ability to embed Gliffy-hosted images on your own site.

Tags: drawing, Gliffy, Visio, Office 2.0