Work, Wine and Wheels

Lots of good reporting lately on the $13.9B purchase of EDS by HP. Many are saying its the clearest sign yet that cloud computing has fully arrived. Others say the purchase is more about buying market share and becoming the world’s #2 IT outsourcing company, behind IBM. Rob Hof of BusinessWeek has a really good roundup post with some different perspectives:

http://www.businessweek.com/the_thread/techbeat/archives/2008/05/is_hp-eds_deal.html

One question interesting to me is whether a giant company like HP/EDS can make the concept of cloud computing more palatable to the federal market. EDS is the 19th largest contractor to the federal government, with $2.4B worth of business in 2006. The combined company would seem well positioned for even more government work. Here’s Government Executive on the deal:

http://govexec.com/dailyfed/0508/051308bb1.htm?rss=getoday

Security isn’t mentioned in any of the above articles. That’s a good reason the government is cautious about outsourcing infrastructure over the cloud. At the foundation of Internet transport is the DNS system, a simple protocol that translates IP addresses into the shorter domain names familiar to us all like amazon.com and yahoo.com. It was not designed originally with security in mind, and needs to be “hardened” as more and more critical applications ride along above it.

Here’s an article yesterday from Government Computer News that makes this point very strongly. What is being described here is mandating that the government implement DNSSEC — Domain Name System Security Extensions — although the article doesn’t use the term. DNSSEC allows the the digital signing of DSN responses for authenticity, in other words ensuring the reply (IP address) is coming from the right server. This prevents spoofed return addresses and helps defend against DNS cache poisoning and Distributed Denial of Service (DDOS) attacks.

http://www.gcn.com/online/vol1_no1/46262-1.html

Gabriele and I are just back from a visit to San Francisco. Of course we did a Napa Valley day, and that will soon provide content for a nice long post. We finished a fun day of vineyard visits and tastings with dinner at Greystone restaurant, a fantastic place operated by the Wine Spectator and the Culinary Institute of America: http://www.culinary.edu/restaurants/wsgr/

Close friend and noted local gourmand Manik Rath strongly suggested we have dinner there, and we’re glad he did. The beautiful building was constructed in 1889 and was once the largest stone winery in the world. It was sold to the CIA in 1990 by the Heublien company for a fraction of its value, and the CIA has been operating there since 1995. It’s a beautiful setting for a meal, right on Rt. 29 in the heart of Napa.

Inside the dining room was a broad expanse of tables on one level, with pleasantly muted lighting and a low hum of contented diners. We both had fish — Gabe had a grilled mackeral and I had onion crusted halibut. Both were excellent, as were the apps — an artichoke salad and french onion soup, a Greystone specialty with a full gruyere cheese souffle on top. Service was attentive and knowledgeable. We wanted a pinot to go with the fish, so we chose one of the “flights of fancy” 3 ounce tastings, sampling a Schug 2006 Caneros, a Londer 2006 Anderson Valley and a Merry Edwards 2006 Russian River Valley.

The Merry Edwards blew the other two totally away. The Schug was sharp and a bit astringent, and the Londer was a bit better but similar. The Merry Edwards had better, more balanced fruit and was much smoother. It’s a great buy IMHO at $42 a bottle off their website: http://www.merryedwards.com/

It was the perfect dinner to conclude a wonderful day in Napa. More on that coming soon.

Saw an interesting news item that broke Monday courtesy of DomainNameNews and SlashDot that hasn’t been broadly covered yet. Apparently VeriSign has been awarded a patent for the resolution of mis-typed domain names. This was at the heart of the controversy back in 2003 around their SiteFinder Service. Amidst a storm of criticism ICANN insisted VeriSign shut down the service, and the company eventually agreed.

Patent: http://www.domainnamenews.com/registries/verisign-receives-sitefinder-patent/1559

SiteFinder: http://www.itworld.com/Man/2681/031006sitefinder/

Personally I believe if VeriSign had been less secretive about its plans and had briefed important Internet constituencies beforehand about this change to how the Internet operated, there would have been less criticism. VeriSign and ICANN eventually settled their differences re SiteFinder, and as part of the re-awarding of the .com franchise VeriSign promised never to bring a SiteFinder-like service back. But, this patent is interesting for what it means in the present, not the past.

Many companies currently resolve incorrect domain names to pages that contain advertising. They don’t do it the way VeriSign did it, by changing the way the root server operates for .com addresses. But the result is the same, and would seem to be covered by the patent. Companies like Earthlink, Verizon and OpenDNS bring their customers to advertising pages every time they “fat-finger” a domain name. Just think about how  often we all do this, and you can imagine the amount of Internet traffic potentially involved. Some of these companies weren’t re-directing this traffic safely — there were security problems with the ad partner Earthlink chose to deal with:

http://www.portfolio.com/news-markets/top-5/2008/04/21/Hackers-Can-Exploit-Error-Page-Ads

So, the government seems to have handed VeriSign a new revenue stream. Letters may be going out shortly demanding a licensing fee — or maybe they’ve already been sent.

RCR Wireless broke a story last week about AT&T buying millions of femtocells from British company ip.access LTD. According to research and banking firm ThinkPanmure, AT&T plans to offer the devices for as little as $100.

http://www.rcrnews.com/apps/pbcs.dll/article?AID=/20080424/FREE/895619934/1014/rss01

Why is this important? Because femtocells can solve two critical wireless problems — poor indoor cell coverage for users, and congestion on the Radio Access Network (RAN) for carriers.

A femtocell looks like a typical router or modem, and sends in-home wireless calls via the user’s broadband connection, rather than through the airwaves to the nearest cell tower. It’s very similar to the popular Hot Spot@Home service introduced by T-Mobile last year, which uses Wi-Fi to transmit calls made at home, and the cellular network elsewhere. But a special dual handset is required, and the Wi-Fi use drains battery life quickly.

Femtocells use the same spectrum licensed to the carriers for all calls. Since a dedicated broadband connection replaces the RAN portion of the signal transmission, call quality is greatly improved and (critically) traffic is off-loaded from the carrier network. So, it’s very much in their interest to get these devices in the hands of consumers. Here’s a good round-up piece by Business Week from last July (ignore the part about Google possibly using femtocells to offer phone service to consumers):

http://www.businessweek.com/technology/content/jul2007/tc20070730_802787.htm?chan=search

The report doesn’t say if AT&T is subsidizing femtocells to offer them at sub-$100 prices. But even if the company is, it’s a good investment. That is a mass adoption price point. Look for there to be a lot of noise about these devices very soon.

Of course, you can add this service to the list of benefits households don’t get to enjoy if they don’t have broadband access, whether due to geographic or economic reasons.

(graphic credit New York Times)

Interesting article in the Times today about the battle between Research In Motion (RIM) and Apple for dominance of the smartphone market. Smartphones are becoming so capable these days I call them $79 personal computers. As the article notes, until the introduction of the iPhone the market was focused on the enterprise, not on consumers. The success of the iPhone has changed that, and the dominant player RIM is trying to adapt.

Brad Stone lays out a compelling simple narrative, as he should for a horizontal publication like the Times. However a few things get missed or glossed over in his straight-forward RIM vs. Apple telling of this story. The focus is totally North American — it goes unmentioned that Symbian is the most popular OS for smartphones globally by a wide margin, but has very small presence in NA. Here’s the link:

http://www.nytimes.com/2008/04/27/technology/27rim.html?_r=1&th=&emc=th&pagewanted=print

First off, he seems to give RIM an unquestioned advantage in the area of security, and giving enterprise IT departments what they need. Seemed strange to me that he made no mention of the service outages that have plagued RIM as recently as last month. That’s a security concern right there to companies that can’t afford to lose access. Post from engadget on March outage questioning RIM’s explanation:

http://www.engadget.com/2008/02/13/blackberry-outage-shows-that-rim-learned-nothing-in-2007/

Second, I know from personal experience that some potential customers, primarily government, see RIM’s operation of its own Network Operating Center (NOC) as a deal killer for any adoption. Defense agencies in particular need to control their communications, and will not work with a solution that depends on an external, third party network.

Finally, there are new entrants into the market that give enterprises strong and effective security solutions for their distributed workforces, no matter what operating system drives the devices. For all these reasons, better security IMO isn’t the strongest factor supporting Blackberry’s market leadership here in North America.

Two factors are more important than security to maintaining RIM’s lead. One is the exclusive focus on the smartphone market the article mentions - unlike their competitors this is all RIM does. Second and even more important is their strategic decision to work with the major carriers in NA, rather than try to go around them. Of course RIM really has no other choice. But I give their co-ceo Jim Balsillie kudos for being so honest on this point:

R.I.M. makes its alliances clear. “We are sort of polite and amiable and we gently interrelate with the carriers and try to find compatibility,” Mr. Balsillie said. “It may be a better strategy to fight the carrier. We may be wrong. The carrier may get disintermediated, in which case we fade with them.”

Pretty clear-cut! RIM is betting on the carriers and the business model that has been constructed in NA over the past 12 years or so. As long as RIM continues to innovate its offerings to enterprises and provide more features consumers want in their devices (a big caveat I realize), they either dominate or stay a very strong presence.

If Apple and Google succeed with their open network push and disintermediate (big word for go around) the carriers and appeal to consumers directly, RIM becomes a niche player fast.

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I bought a 2001 530 back in September. BMW made the E39 5 Series from 1997 through 2003. It is a fantastic mix of comfort and performance, and in the opinion of many the last “classic” body style before the 5 Series design went in a very different, modernistic direction. Here’s how Edmunds described the car in 2001 when it named the 530 the “Best Midsize Sedan Over $30,000:” “Can the company that creates ultimate driving machines offer supreme luxury and a compliant ride while creating a vehicle that goes, stops and turns with the best sporting sedans on the market? The answer is yes.” http://www.edmunds.com/reviews/mostwanted/2001/60914/article.html

I took my time, since demand is strong for well kept E39s and I wanted a manual transmission, which is much scarcer than automatic. Also wanted the sports package, which came with enhanced suspension, tires and a few other goodies.

My car had low miles but the previous owner was not a car guy, some things had been neglected. Dings, no fluids had been changed except oil, rims all curbed up and never cleaned, that sort of thing. I’ve been bringing the car back up to code as time and budget allows.

Latest project was new rims and tires. The car has the original rubber on it when I bought, so first thing I did was have the rims reconditioned to make presentable. It worked well, but they were never coming all the way back. So I put snow tires on them to get through winter. (Of course, after I did so DC had a very mild one with almost no snow).

For the past two months I’ve been looking forward to putting new rims and performance tires back on the car. The options out there are almost endless, and it took me a while to decide on which way to go. It’s like a lot of things these days — it’s easy to go way overboard. This car is for street use only so I was looking for a good price to quality balance. No need for $250 tires and forged rims that can easily run $800-900 per.

I eventually decided to go with 18 inch Monet New Age rims with Sumitomo HTR Z III tires, 245×40 all around. These tires got a great review from Tirerack and are priced well below comparable summer tires:http://www.tirerack.com/tires/tests/testDisplay.jsp?ttid=93

It took me a while to find a rim I liked for the car. I wanted something a little different but not too out there, from a company that had been around a while. Monet has a wide variety, including a replica that looked almost identical to my stock wheels, which I like a lot. I decided to go with what they call the New Age rim:

It’s already been a new age of handling with the snows off the car. Now I’m set on this front until around Thanksgiving. But the project continues…

Friday morning I attended an interesting event put on by the Association for Corporate Growth, National Chapter. ACG National is a who’s who of the DC business community and puts on quality events. I’ve been a member for two years and volunteer on their marketing committee: http://www.acgcapital.org/

On Friday Stan Soloway was addressing trends in government contracting. Stan is President of the Professional Services Council and expert in the areas of government outsourcing, acquisition and procurement. To paraphrase Dickens, right now it’s the best of times, and the worst of times to be providing professional services to the federal government.

It’s the best of times because the market continues to grow. The government services industry is now a $270 billion market, and it will continue to grow because the government simply doesn’t have the program and project managers inhouse to handle ever more complex procurements and implementations. It’s the worst of times because there is a lack of consistency to the market, and in Stan’s view government contracting is becoming a proxy for congressional frustration over the Iraq war.

The lack of consistency has a lot to do with the use of continuing resolutions since Congress and the President can’t agree on budgets. 2009 may be the third straight year, which makes forecasting when contracts happen very difficult. Soloway described three main issues moving forward.

• In January 2009 the new President might have different priorities, but most military dollars are fixed, not discretionary. Iraq is ongoing, BRAC (Base Realignment and Closure) costs have been woefully underestimated, and military healthcare costs are escalating faster than the private sector. In this environment more money will be spent outsourcing, even though the government is growing their internal program managers 15% per year. This just can’t keep up with demand, or backfill federal retirements.
• Policy — there will be a lot more shouting, but the argument against contracting is over. The government can’t do without it. But there is plenty of debate about how to construct the business relationship. Unfortunately, it’s complicated and Congress doesn’t have many members who really understand all the nuances. One recent loss is VA Congressman Tom Davis, who really did understand. According to Soloway every spending bill now has specific procurement language that must be deciphered, and there is a lot of fuzzy language. He predicts there will be a lot of contractor bashing during “show trials” on the Hill to occur in the May timeframe. A lot of the frustration directed at contractors is really caused by the lack of a quick fix for Iraq.
• Competitiveness — perception vs. reality. Soloway cited a lot of coverage that portrayed a big increase in sole sourced contracts. But look beneath the surface, and you see that only “full and open” competes are considered in those percentages. Well, the majority of awards today are either SBA set-asides or task order level contracts, neither of which are open. In fact, task orders are up over 300%. He does think there is a competitiveness problem, however. Because the SBA size limits are too low, contractors have to be either very large, to have a chance at prime contracts, or very small, to get set-asides. This leads to a “balkanization” of the contracting community — there is no support for the mid-size contractor, no seeding of the market with growing companies like in the private sector. The SBA is looking to revise the size definitions, but are very late in doing so.

I’ve seen some of these issues first-hand working for b2g clients at Strategic. We’ll see if the next Administration and Congress can change the dynamic at all.

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Saturday night Gabriele and I had a very enjoyable experience at Evo Bistro in Mclean. It describes itself as a “tapas and wine tasting bar” and was recommended by a friend. Here’s the Post’s take from last November:

http://www.washingtonpost.com/wp-dyn/content/article/2007/11/21/AR2007112100830.html

It was clear something was up as soon as we arrived. There was an air of conviviality about the place, and there was not a table to be had at 9:30. It’s not a big place, but being busy at that hour is a good sign for a suburban restaurant.

After a few minutes we were seated, and every plate we ordered was well done. The prices are a little higher than usual for a tapas place, but the plates are also a bit larger. Before I get to the wine, let me mention the excellent Evo crepe — a spinach crepe stuffed with lump crabmeat. The Charcuterie was also very good.

Evo offers a broad selection of wines, many by the glass. That’s what we decided to do this evening (without the debit card method offered by the restaurant). We started with a 2005 Clos Pegase, Mitzuko Vineyard Pinot that had very good structure, strong but restrained fruit and a nice clean finish. After that we tried the 2005 Turkey Flat Butcher Block Shiraz, which was predictably rounder, fuller and more fruit forward with a lingering finish. Both wines went well with the various plates we ordered.

What really made the evening however was the result of total chance. Driss Zahidi, the head chef was seated right next to us entertaining a table of friends. The tables were not very far apart, and at one point he asked us how we were enjoying our evening. We said very much, and I told him we like wine, and were curious what he was having with his meal.  Before I had time to decline, he poured us a taste of the 2004 Merryvale Profile they were having with their beef and lamb. It was an impressive example of a big and powerful Californian cabernet, with a lot of body and a long finish. His generosity was striking, and even more so when he sent over a couple of glasses of Muscat for our dessert. Our creme brulee was clearly freshly made and deliciously eggy.

Suffice to say, we felt welcomed into the family by the time we left. Evo offers a unique “debit card” approach to wine tasting that we’ll try next time we’re there. If you enjoy wine, highly recommend you pay Evo Bistro a visit. 

Get Social with this post:

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European researchers this week issued a report that portrayed the U.S. Internet infrastructure in a positive light. The study was commissioned by the World Economic Forum, and conducted by Insead, a business school near Paris. It ranked the United States fourth, behind just Denmark, Sweden and Switzerland.

This struck me as strange. Turns out the study uses an index of 68 variables, pulling in things like political system and regulatory environment to reach the ranking. Here’s an article from John Markoff of the Times:

http://www.nytimes.com/2008/04/09/technology/09internet.html?th&emc=th

I found this sentence revealing — “The Insead assessment offers a stark contrast to other appraisals based on single measures that have portrayed the United States, the nation that invented the global data network, as both lagging and declining in the broadband boom.” Some single measures seem very valid to me — like whether someone can get broadband or not, and if they can what do they have to pay?

You don’t have to go far outside of Washington DC to get a picture of the challenges. The Post did a story last December that looked at broadband access in Loudoun county, only about 30 miles from the capitol. Your access to broadband is very limited if you happen to live in the more rural western part of the county:

http://www.washingtonpost.com/wp-dyn/content/article/2007/12/01/AR2007120100109.html

I reached out to Drew Clark, founder of www.broadbandCensus.com, for his take. Caught him on the phone and he shared the following:

“First off all I know is what I read — I haven’t reviewed the report. But it sounds like they are incorporating a lot of soft variables in their rankings. Not to say these aren’t useful, and a country certainly needs a solid legal and regulatory frameworkto foster productivity. But you really need hard numbers to make relevant comparisons. That’s the reason I started BroadbandCensus.com, to provide like-to-like numbers straight from users, rather than filtering data through government organizations. Right now we’re focused on the U.S., but some day I’d love to extend it internationally.”

I’d love to believe the U.S. is number four in the world. But looking at the variables that really matter — percentage of population reached, average speed and average cost — there’s no way. Our Internet is #4 the same way our healthcare is #1 — only if you focus on the haves, and ignore the have nots.

Links to socialize:

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How consumers are tracked online has been an issue for years. Until recently the main vehicle for this tracking has been the cookie, a small file placed on a visitor’s browser that identifies repeat visits and online activity. The latest chapter of this debate to reach critical media mass concerns Internet Service Providers (ISPs) contracting with companies to place hardware inside their networks to track all user online activity. This tracking produces profiles that aim to target advertising of interest to users, better supporting the online advertising market and giving ISPs a slice of the revenue.

Saul Hansell of the New York Times wrote a good article recently that has attracted over 60, mostly angry comments:

http://bits.blogs.nytimes.com/2008/04/03/can-an-eavesdropper-protect-your-privacy/

Bobby White of The Journal had it back in December: http://online.wsj.com/public/article/SB119690164549315192-9g6E0Km1JMR4eAm55Es_16QrvkU_20081205.html?mod=rss_free

The technology has progressed, yet these are the same exact issues I dealt with when I was VP of Corporate Communications at Advertising.com. It was the beginning of the pay-per-click (PPC) era, and cookies were a new and scary concept. People were upset that their travels could be seen across the Internet — recall the famous New Yorker ad with the caption “On the Internet, no one knows you’re a dog!” Well, that level of anonymity was never accurate, and it’s getting less so every day.

Back then (circa 1999-2000) we were active with industry groups like the Network Advertising Initiative and the Online Privacy Alliance and worked hard to educate consumers regarding exactly what was happening when they were online. We (and hearings at the FTC) helped put in place a set of principles that tried to balance the needs of advertisers and the rights of online users. Basically they’ve been in place since then and encompass:

2. Notice and Disclosure

3. Choice/Consent

4. Data Security

5. Data Quality and Access

Most of the media coverage on this includes claims there will be some kind of consent given, but how clearly will it be spelled out? Supposedly there will be safeguards so the data can never be personally identified with me — but what exactly are they, and how will they be enforced? Surely there will be an economic incentive to include more and more personally identifiable information to justify higher advertising rates.