2014 is nearly gone and while the champagne is chilling (Champagne Aubry this year) I thought I’d look back on the year-that-was, tech-wise …
This story broke in 2013, but has only deepened in 2014 as new documents have been released. We found that the NSA has active efforts in place to hack cell networks worldwide, can read a lot of SSL/TLS traffic, and most recently is able to listen in on any Skype call. President Obama proposed reforms for the NSA, that Snowden assessed as “incomplete”.
The discussion on amnesty for Snowden has already begun. For my part I hope that happens in 2015.
Privacy & Security
One unsettling thing about the Snowden revelations is that we always knew, at some level, that the NSA was doing lots of stuff, but we chose to ignore it. Movies like Enemy of the State and The Simpsons Movie showed NSA capabilities in futuristic and/or tongue in cheek ways, so the actual (and mostly unintended) warnings in these films were easy to dismiss.
In the private sphere we had no such excuses. In August, nude photos of Jennifer Lawrence were published online, together with photos of 24 other celebrities. Apparently this was accomplished with a simple brute force password attack, combined with an Apple “find my phone” bug. Of course we faceless masses have some safety, in that the return – in money or in prestige – in attacking a single one of us is much less than the return in attacking a public figure. But it is only a matter of time before peoples’ online bank accounts and other financial resources get targeted in a systematic way.
If you don’t know by now, your password is not secure. It hardly matters how clever you are in devising multi-word mnemonics, tools like WordHound will crack it. The main method I use for passwords I care about is the Schneier Scheme, by worldwide security alpha-dog Bruce Schneier. Better still are 2-factor authentication systems, like RSA SecurID – if your online financial institution supports them, get it fast as you can.
While it may be that, on the internet no one knows you’re a dog, Gamergate showed us how many of these dog-indeterminate creatures are totally determinant jerks. It all started with some painfully obvious observations about sexism in gaming – I mean we have sexism in politics, in entertainment, and in business, why not in gaming? But, it turns out these sexist gamers have Reddit accounts and they’re not afraid to use them. The backlash against women game developers and culture critics went beyond typical trollish/crude commentary to include threats of violence. Amazingly there are those who contend this was a real debate about ethics in the gaming industry.
I feel this sad episode achieved resonance because it is the application of attack politics to an everyday thing. Even if the US Supreme Court rules that violent threats on Facebook are are criminal offenses, I’m afraid that is just the start of the civility journey for 2015.
Satya Nadella & Microsoft Reborn
In February Microsoft got a new CEO when Satya Nadella replaced monkey-boy Steve Ballmer. Since then Microsoft stock, long a moribund performer, has gone up about 26%, compared to increases of 15% and 9% for NASDAQ and the Dow, respectively. How did this happen?
One factor is that Microsoft’s cloud business, started under Ballmer, is growing extremely fast, doubling in the past year to a total of $4.4B. Next, despite rumors of selling the XBox business, that segment also did very well, selling double the number of units in fiscal 2014. Finally the company made shrewd moves that unite the consumer and enterprise spaces, like offering a free version of Office for tablets, and announcing Skype for Business which unites the enterprise Lync business with the consumer-oriented Skype business.
Unifying all this is a vision Nadella articulated in a memo to employees:
At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more.
Nadella talks a lot about the “dual user”, someone who uses technology for work but also for their personal life. A simple observation, but a powerful one. There is probably no company better positioned than Microsoft to surf this wave.
Apple & iPhone 6
Apple’s market-cap hit $700B in November, making it far and away the most valuable company in the world. Despite the doom and gloom of Tim Cook’s early days as CEO, today there is little doubt CEO Cook is a worthy and effective successor to Steve Jobs. The iPhone 6 launch in September was a huge success, with Apple selling over 10 million units of the new models in the first 3 days of availability. Cook has also diversified the product line with items like the iPad Mini and iPhone 5c, cheaper ways for customers to get into the Apple fold.
On the strategy front, Cook has spent some long-hoarded cash on acquisitions, like Beats Music & Electronics, and mobile podcast streaming app Swell. In fact since acquiring the Cue personal productivity app in Oct. 2013, Apple has acquired 13 companies, all over the tech and consumer space. In a ground breaking move, Cook closed a deal with China Mobile to sell the iPhone in the biggest market in the world. Finally on the enterprise front, Apple created a partnership with IBM to bring a full spectrum of “made for business” apps to the #1 consumer platform in the world.
All is not perfect in the Apple universe. Reports persist of supply-chain partners exploiting workers. The long-anticipated Apple Watch is not a runaway hit. Apple Pay is a solution in search of a problem. And, the company does not have the advantages of a content-based part of its business like a Facebook or a Microsoft; Apple is a platform where you access non-Apple content.
Lots of people have bet against Apple and lost. I expect those people will still be losing in 2015.
Energy prices dropped like crazy in 2014. Oil is $59 a barrel, down from the $100 price that persisted since around 2010, and well down from the $140 peak price in 2008. The cost of solar is plummeting even faster, with the cost of panels now less than the average cost of retail electricity. Here at the Salazar household we are in the midst of putting in a 7.85 kW system that on many days, I expect, will completely cover our power needs.
This energy glut is certainly an old-fashioned economic shot in the arm, but more importantly I think it will catalyze massive innovation in storage, monitoring and optimization. Bill Gates is investing in liquid metal battery technology, that enables storage of power close to the consumers, new SaaS solutions are emerging that allow building operators to optimize energy use, while the internet of things – broadly-realized telemetry of any device – will enable energy management of just about anything.
This is economically counter-intuitive – usually when the price of something drops the incentive to manage and conserve that thing also drops. I think everyone is acting on future expectations that energy prices, and the costs of “externalities” like pollution and global warming, will all go up.
Uber, the “sharing economy” & Big Data
Transportation-booking app Uber seemed to live by the rule that any publicity is good publicity. Some of the items in the Uber-feed: An Uber exec threatened to “dox” a journalist who wrote a negative article; Uber drivers across the globe have been implicated in rapes; taxi drivers worldwide have protested against it; and, the company is reputed to have booked thousands of fake rides on rival service Lyft. Yet, the valuation of the company is an astonishing $40B – for a company with assets that are almost entirely intangible, that is extra-amazing. I guess that is good publicity, people figure this app must be worth using, since they company does at least $10M per week revenue in just its top 5 USA cities.
Uber, like room-renting service AirBNB, came up on the notion of the “sharing economy” – a business model where through coordination services that enable anyone to be a service provider, we all benefit. I have an extra room, why shouldn’t I rent it? I have time (goodness knows how) to give people rides, why shouldn’t I get paid for it? What makes this possible is born on the web big-data technologies like MongoDB, Python, Node.js and others – with these, any team of 5-6 reasonably talented developers can build a perfectly good Uber. Now, Uber has 550 employees. My guess is the vast majority are customer service or other logistics roles. There are probably no more than 50 people in all engineering and technical operations for the company – 50 engineers for a $40B company.
I believe (and hope) that these disproportionate valuations and expectations will level out in 2015. Uber is a good idea. However this year I used similar services in Singapore, Kuala Lumpur and Beijing that were every bit as nice, and got me rides in accredited taxis, not with a “sharer” of unknown skills and motivations.
Silicon Valley – Let’s Not Go There, It Is A Silly Place
Uber is an example of 21st century Silicon Valley, where there’s an app for everything and business models rule. “Disruption” is the must-have word in every pitch – if you are not disrupting something, why bother? I think it is hard to see something like Uber as anything but exploitative – the “disruption” doesn’t create anything new, it just shifts it from the current owners to the disrupters. But isn’t this innovation the engine that drives our economy and makes our lives better?
No, it makes the VC’s lives better, as Andrew Leonard writing in Salon points out. A key paragraph:
The reality of our current situation is that the rich are getting richer while the rest of us flounder. Some of the “sharing” economy companies that Andreessen invests in offer a perfect demonstration of this thesis. The founders and investors in Airbnb and Lyft stand to become millionaires while the consumers of these services stretch their dollars by giving each other rides or renting out their spare rooms. That’s a business mode that not only perpetuates growing inequality but actually profits from the desperation of people having a harder and harder time making ends meet.
Ok, they are in business and the need/urge to make a buck is understandable. But some of these guys are just plain wacky. Look at Bitcoin. Tons of Silicon Valley insiders are buying in to the “cryptocurrency”, apparently unaware that logically speaking Bitcoin as a currency is worse even than gold.
The real thing about Bitcoin and why the Valley-types love it is the Libertarian connection. As a synthetic currency Bitcoin is not tied to any government or physical place. This is exactly what you need if you plan to move yourself to a government-less Libertarian artificial island.
Finally, I came across a great article in the latest issue of Harpers: Come With Us If You Want To Live (Among the apocalyptic libertarians of Silicon Valley), by Sam Frank. (paywall link). I can’t give you the whole thing, suffice to say if you read it you will come across vegans and Crossfit-ers arguing about hedons vs. utilons, debating the pros & cons of DAOs (distributed autonomous organizations) and still others doing Bayesian optimizations of their personal thought processes. One such visionary informs us about the imminent cataclysms faced by our society:
“There are all of these different countdowns going on … There’s the countdown to the broad postmodern memeplex undermining our civilization and causing everything to break down, there’s the countdown to the broad modernist memeplex destroying our environment or killing everyone in a nuclear war, and there’s the countdown to the modernist civilization learning to critique itself fully and creating an artificial intelligence it can’t control. There are so many different … ways in which the self-modifying intelligent processes that we are embedded in undermine themselves.”
Note to self: Great idea for an app, “MemeplexID”, a single photo taken by cell-phone identifies for you which destructive memeplex you are confronted with.
And that’s it.
All I can think of right now about 2014. Soon will be moot anyway, as 2015 will soon be here with its own new memes, streams and themes. Here’s hoping they all play nice, in the real world as well as in the memeplex. Peace.