Playing massive multipayer online

Having written before about the trend towards web-based a.k.a cloud computing it's time to examine the green back of the issue: l'argent.

Business case: You are CEO of a large-ish software company. Your customers are twenty- and thirtysomething tech-savvy broadband users.

Option one is to go to the trouble of having plastic discs distributed with your software, including release-time bugs imprinted on them, and let users rip, I mean install and store them. One copy per customer, many users per copy. They pay you once, you bleed for years. Okay. You know this, you've been doing it for years, but it is a sub-optimal state of affairs to say the least.

Now option number two is to take a leaf out of the book of MMO games. You may distribute discs, but basically your software is either online or useless without a live connection. To use this software people pay a monthly fee. You now have subscibers, a.k.a. massively multipaying customers, tied in to your product for years to come. You invest once per version, and cash in for years. It requires a lot of upfront investment in datacenters, expertise and some reading up on how to protect your systems, but once your good to go you can start earning in earnest.

My oh my what to pick? Decisions, decisions... Option two!

Of course the above is a huge oversimplification, but the point is clear: delivering online is a very attractive model for software developers, because of the steady income of subscriber fees and the sterling piracy protection. No wonder everyone from Microsoft to garage startups are into this one: it's a sure thing. Everything from Office software to games (especially games) is now offered trough the internet for the low, low price of 1/Xth of a retail software DVD per month.
In other words, within x+1 months you, the kind customer, will have been skinned, used, abused, shaken out and taken for a ride by your friendly neighborhood software giant. On the other hand, if there is a significant upgrade around every x months you'll be better off, purely looking at the cost of owning software.

Fun detail: Software houses get to sue each other's socks off now that one has a patent for delivering gaming as a service¹.

But the multipaying doesn't quite end there. Two common species of tech company, the Internet Service Provider or ISP and the Content Delivery Network or CDN are waiting in the wings to go all Ebenezer on your wallet. You have to pay for your internet connection before you can use online software, that's where the ISP comes in. CDN's such as Akamai make sure the content you crave is delivered to a server near you^tm for easy downloading.

Now the ISP, thinking tuppence is tuppence, would like to charge both you and the CDN for the use of bandwidth, and/or would like to charge you a 'special rate' for using 'special services' such as online gaming, video and music. Instead of selling bandwidth as 'fast internet', ISP's want to sell the right to transfer a certain amount of data to and from your computer. As everything becomes more web based do you think your data usage will go up or down?

Now to be fair to the poor ISP's, when they started to attract customers with 'high-speed' a.k.a. broadband connections they didn't figure that people would actually use that bandwidth to have a very different online experience than they did using dial-up connections. So whereas the ISP thought it could sell it's capacity with a huge amount of overbooking, the reality turned out to be that their margins are threatened by people who live online and get everything, including their software and content, trough their broadband internet connection. Customers can and do use up a lot of what the ISP can give in terms of throughput by watching Bad Romance again and again while Skyping all their friends at the same time and listening to Grooveshark.

So who pays for what? Content providers pay content delivery networks who pay internet service providers. Customers pay content providers and internet service providers. Service providers win, customers loose, content providers and delivery networks do okay. Welcome to the internet, MMO-style.

The next step after the current death of net neutrality (it's nearly done, hippies, I'm sorry) is an internet fenced in by regulations and divided by selective bandwidth allocation. The government will let you watch wikipedia but not wikileaks, not without knowing proxy-fu. The ISP lets you watch youtube but not netflix, not without extra cash. Depressing, isn't it?

The good news is that the pendulum will swing back again. Especially once quantum computing and communication have been properly implemented, I cannot see a lot of censure going on by either government or commerce. Until then, the days of internet freedom are over for most of us, but, looking at the bright side: we do get to contribute a lot.

The risks and opportunities of regulation

Information technology is famous for changing faster than climate predictions. Once in a while new technology upsets the status quo, and impacts society quite a lot before being assimilated and 'normal'. Lawmaking is by nature a reflective craft, it must address societal changes after the fact. Its challenge is to be balanced in its approach to regulation: neither too slow to be effective nor too fast and restrictive, which would stifle innovation. This balance is seldom achieved, and often a new status quo is achieved trough litigation.

It presents an interesting conundrum to the early adopter: implement the bleeding edge and risk unknown future legal or compliance costs, or wait and watch the taillights of your competitors? Behavioral advertising such as Phorm quickly drew the public, and then the EC's ire, and had to tone it down a notch. Virtualisation technology is infamous for the complicated licencing issues it engendered. Social networks may be on the business end of a recast of Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data.¹ In short: it's a minefield out there.

For consumers, the emergence of the internet as a Valhalla of digital content distribution has completely changed several industries and led me to wonder what happened to people's idea of property.²  Napster came, saw, conquered, and was sued to pieces in a span of only two years. Apple stock went from 44 dollars at the last split in '05 to well over 300 nowadays, riding the wave of legal music downloading, always staying far behind the early file sharers, right behind the lawyers and regulators, and just in front of mainstream consumers, who perceive the company's products and services as the toast of consumer technology.

All IT companies still try to be Microsoft: to have the vision and entrepreneurship to establish an industry and reign supreme for a decade or two as Redmond did with the personal computer. However, consumers and lawmakers dislike monopolies, as much as they tend to create them by liking and adopting standard approaches to computing. It's a risky business, because you need a lot of investment to compete, and the dynamics of the industry, if not completely winner-take-all, are unfriendly to anyone not in the top three of their segment. Knowing what to expect in terms of regulation would be like a visitation from on high to the companies jockeying for position.

It's not all threat and doom what comes from lawmakers' efforts. The current European Commissioner for Digital Agenda, Neelie Kroes, is well known for her incisive decisions and has tangled with IT companies before during her time as Commissioner for Competition. These days she could be giving some of them a big break by harmonizing copyright legislation across member states.³ 
CDN operators such as Akamai and Internap will be watching with bated breath to know whether the floodgates of distributable content will open. A pan-European Netflix has yet to emerge, and Apple, Microsoft and Sony have compatible devices ready to bring it all to your living room.
Before that the Copyright Directive was a famous example of tech lobby winning big, although it was understandably unpopular with consumers. Now net neutrality is hanging in the balance as the FCC, the courts, and various companies and groups duke it out to determine what we will have the pleasure of paying for online. The outcome has the potential to be yet another game-changer, and might provide huge opportunities for service providers while punishing content providers and customers.

The takeaway here is that the legal implications of new technology cannot be foreseen, and can make or break companies, especially in the fast-paced IT industry where waiting it out is never an option. Lobbying lawmakers is only going to become more important as the stakes get higher, and centralized authorities in the US, Europe and Asia decide on the merits of new tech for vast numbers of companies and consumers.

Assange

A post on this topic is as hard and controversial as it is overdue. Julian Assange is imprisoned. WikiLeaks is not. The whole WikiLeaks matter has more thorns than a hedgehog, and Assange's persecution is but a small part of it.

Governments owe their constituents transparency, honesty and diligence. The business of running a government, however, becomes nearly impossible if it is constantly scrutinized, because then every statement is made with accountability in mind, rather than factual correctness or intended effect. The whole idea of diplomatic communication is that, because it is privileged, it can give an honest picture of the situation abroad. If a diplomat cannot afford to slight a leader by assessing him honestly, he is of very little use to his home base in providing an accurate appraisal of his host.

Is the idea behind WikiLeaks a good one? Most certainly. A bit of proper journalism keeps even the best of governments just a bit more honest than they would be when completely unsupervised.

Is the publication of the diplomatic cables a good idea? Most certainly not. We can be all anarchist about it and celebrate proof that 'governments are evil' and 'diplomats are phonies and spies', but the fact of the matter is that the diplomatic service, and diplomatic secrecy exist to keep the peace and make sure that countries can communicate out of the spotlight, as is sometimes necessary, and it works rather well. Diplomatic relations have suffered a great deal for no good return: We know nothing about Medvedev or Karzai or Obama that CNN and BBC and what have you didn't already tell us many times.

Of course diplomats are covert operatives and used to gain every possible advantage abroad. Better to be completely infested with diplomats than with paratroopers. Of course things are secretly said about heads of state which wouldn't be misplaced on Saturday Night Live or The Roast. Better to call a crook a crook than to call him a good man and be cheated. Of course there are secret places, bases, people and plans. WikiDepartmentOfDefense doesn't work, nor does drawing attention to your weak spots.

WikiLeaks should cherish a world which allows it to exist, and never forget that the much lambasted American government and it's allies still allow them, and many of us, a lot more freedom than elsewhere in the world, and abusing this freedom opens the door to a system that is not so kind. Publish the helmet cams, the controversial statistics, and as many blacklists as you can find. Fight censure and misinformation. Don't publish these cables. It's does lot of damage to things that matter too much, in return for very little we didn't already know or could safely assume.

So what about this arrest? A smear campaign? Duped by a honey trap? It seems likely. The timing is just too damn convenient. However, what point and purpose does his arrest now serve? As if Wikipedia would stop working two days after Jimmy Wales gets busted for having a really penetrating gaze. As if the revelations are less important because the founder of the site is an alleged rapist.

An arrest on bogus charges would be strange move by the powers that be. Kick a bear, expect a swipe. In that sense it is not unexpected for governments to pursue Assange. But because it does not ease the sting of the publications nor stop their continuation, it is really rather pointless to arrest him.

And as unlikely as I think that is, maybe Assange did some things he shouldn't have done to some nice ladies in Sweden. If so, he should stand trial and do his time. If it is indeed a trumped-up charge, he will be free soon enough. I have that much faith in the judicial system.

Either way his arrest and persecution are now so public that it would serve everyone's best interests, including that of the United States, Sweden and the United Kingdom, to make sure Assange stays alive and well for very long time hence. If cablegate becomes killergate Assange will justly become a martyr for the freedom of information and WikiLeaks will be mirrored, imitated and expanded beyond all power of censure. That's why I think he is fairly safe for the time being.

Meanwhile the infowar continues, and brave servers everywhere are bearing the load of titanic efforts designed to take out WikiLeaks. It will be interesting to see what legal changes this battle engenders, as the issue of control over the internet is once again front and center in the minds of policy makers. Governments fear and mistrust the internet like never before. Assange's legacy is assured.