Thursday, January 30, 2014

Amazon's Q4 2013 Results

Jack Clark at The Register estimates that Amazon's cloud computing business put over a billion dollars on the bottom line in Q4 2013. The competition was left in the dust:
This compares with a claim by Microsoft that its Azure cloud wing was a billion-dollar business when measured on an annual basis, and Rackspace's most recent quarterly earnings of $108.4m for its public cloud. Google also operates its own anti-Amazon cloud products via Google App Engine and Google Compute Engine, but doesn't break out revenue in a meaningful format.
Of course, much of this profit comes from selling computing rather than storage, but this is further evidence against the idea that "the cloud is cheaper". Cloud services can save money in a situation of spiky demand, but for base-load tasks such as preservation they are uneconomic.

Monday, January 13, 2014

Economics of the PC Market

Charles Arthur has an interesting, well-researched piece at The Guardian detailing the terrible economics faced by makers of Windows PCs, and the resulting threat to Microsoft posed by Chromebooks:
The PC business is in a slump which has seen year-on-year shipments (and so sales) of Windows PCs fall for five (imminently, six) quarters in a row, after seven quarters where they barely grew by more than 2%.
And it's not only growth that's fallen. Analysis by the Guardian suggests that as well as falling sales, the biggest PC manufacturers now have to contend with falling prices and dwindling margins on the equipment they sell.
In the first quarter of 2010, the weighted average profit per PC was $15.71 - a 2.55% margin. (So the overall per-PC cost of manufacture, sales and marketing was just under $599.)
So much so that by the third quarter of 2013, the weighted average profit had fallen to $14.87. That actually marks an improvement in margin, to 2.73%
It has been true for a long time that Microsoft made more money from each Windows PC than the makers.
The most obvious beneficiary of every Windows PC sale is Microsoft. It gets revenue from the sale of the Windows licence - but it then captures extra value through the high likelihood that even consumer buyers of PCs will buy its Office suite, and probably buy another version of Windows at some point in that computer's life. It's the reason why Microsoft is so fabulously profitable, while PC manufacturers are struggling.
The makers used to get enough to live on. Now they don't. Selling Chromebooks is a way of cutting Microsoft out of the picture.

Friday, January 10, 2014

Alex Stamos at EE380

Alex Stamos gave an excellent talk yesterday in Stanford's EE380 course. The video is linked from the EE380 schedule page. His title was Building a Trustworthy Business in the Post-Snowden Era, and the talk was based on analyzing the source material that has been released, rather than the media interpretation of those materials. The video is well worth your time to watch because, as Alex says, even if you are sure you will never do anything to attract the attention of the NSA:
  • You have to assume that, in a few years, many of the capabilities the NSA has today will be available in the market for exploits and be usable by the average bad guy.
  • Among the few products whose markets the US still dominates are Internet services and networking hardware. Success in these markets depends heavily on trust, and the revelations have destroyed this trust.
  • In particular, you have to assume that much of the software on which the integrity of your archive depends have backdoors inserted at the request of the three-letter agencies.
More generally, Robert Puttnam in Making Democracy Work and Bowling Alone has shown the vast difference in economic success between high-trust and low-trust societies. The way the revelations have been able to repeatedly disprove successive Government denials is, together with the too-big-to-jail banksters, a serious threat to the US and other developed nations remaining high-trust societies. So even if you think you don't care about this stuff, you do.

Matt Blaze's piece in The Guardian is well worth a read too.

Saturday, January 4, 2014

Threat Model for Archives

Discussing the recent vulnerability in the Bitcoin protocol, I pointed out that:
One of the key ideas of the LOCKSS system was to decentralize custody of content to protect against powerful adversaries' attempts to modify it. Governments and other powerful actors have a long history of censorship and suppression of inconvenient content. A centralized archive system allows them to focus their legal, technical or economic power on a single target.
Today Boing-Boing points us to a current example of government suppression of inconvenient content that drives home the point.
Scientists say the closure of some of the world's finest fishery, ocean and environmental libraries by the Harper government has been so chaotic that irreplaceable collections of intellectual capital built by Canadian taxpayers for future generations has been lost forever.
Many collections such as the Maurice Lamontagne Institute Library in Mont-Joli, Quebec ended up in dumpsters while others such as Winnipeg's historic Freshwater Institute library were scavenged by citizens, scientists and local environmental consultants. Others were burned or went to landfills, say scientists.
Read the whole piece, especially if you think single, government-funded archives are a solution to anything.

Wednesday, January 1, 2014

Implementing DAWN?

In a 2009 paper "FAWN A Fast Array of Wimpy Nodes" David Andersen and his co-authors from C-MU showed that a network of large numbers of small CPUs coupled with modest amounts of flash memory could process key-value queries at the same speed as the networks of beefy servers used by, for example, Google, but using 2 orders of magnitude less power. In 2011, Ian Adams, Ethan Miller and I proposed extending this concept to long-term storage in a paper called “Using Storage Class Memory for Archives with DAWN, a Durable Array of Wimpy Nodes”. DAWN was just a concept, we never built a system.

Now, in a fascinating talk at the Chaos Computer Conference called "On Hacking MicroSD Cards" the amazing Bunnie Huang and his colleague xobs revealed that much of the hardware for a DAWN system may already be on the shelves at your local computer store. Below the fold, details of the double-edged sword that is extremely low-cost hardware, to encourage you to read the whole post and watch the video of their talk.