If anyone needed any further proof that the interweb tubes were acting as a disruptor to the media and entertainment industry, this story from Wired has to be a wake up call.

It’s been interesting watching the trends when it comes to the effect the internet has been having on the media and entertainment industry. You’d have thought they’d have picked up on this a bit quicker…since the trends have been pretty clear for at least ten years (see below), and the trends have started in the US–home of the world’s largest entertainment industry (“Hollywood“).

It all started with music
First hint at the huge disruptive impact of the internet came waaay back in 1999 when Napster was released to the world by Shawn Fanning. Sure there were other music sharing apps out there, but Napster went viral, and soon enough dominated the field. The music industry’s reaction? At first indifference, then they swung wildly to the other end of the spectrum: inappropriate overreaction and panic. Instead of embracing the new technology, the music industry (read the RIAA) decided to attempt to fight it. Didn’t anyone over in the RIAA realize that trying to oppose advances in technology is akin to trying to dig a hole in the water in the middle of the ocean? Sure you may win a couple of fights…but you’ll never put the genie back into the bottle. But hey, if you are scared sleepless by something in the US, what do you do? Launch a lawsuit, of course. The RIAA did win the battle with Napster, but it inevitably lost the war.

And things progress…
Then in November of 2003, along comes The Pirate Bay. Building on Bram Cohen’s bit torrent technology, The Pirate Bay became one of the internet’s most popular sites for discovering torrents (although the site, itself, didn’t host any content, it provided an invaluable “tracking” service to discover torrents. Again, the entertainment industry’s reaction: sue. And so they did. Of course, the flippant attitude (and quite appropriate “pirate” responses–which, by the way, were hilarious) of the site’s operators only goaded the suits to pursue their lawsuits…and eventually The Pirate Bay was also deluged with a blizzard of lawsuits and legal costs (though it should be noted that the site does continue to this day). Did the industry learn anything? Evidently not. Or maybe they did?

Hulu
Finally understanding that the internet/web might pose an opportunity rather than one big threat, NBC, Fox, and ABC teamed up to create Hulu–a website which features their content and delivers it, streaming, via the web. Of course, the old titans of the broadcast industry still had some old fashioned notions which illustrated that the old guard was still out of touch with how things work with the internet/web (and still had a view of the internet as a threat rather than an opportunity), but hey, you can only hope the old dog learns a few new tricks, I suppose. Nevertheless, Hulu has proven to be largely successful…and hopefully will lead the old guard into the new age of video content.

Netflix
Of course, it’s not just the broadcast media that’s been affected. Everything in the entertainment industry has been affected–including the movie studios. Nothing illustrates this better than Netflix, and the disruption it has caused the traditional distribution mechanisms of the movie studios. Here, too, the industry has been slow to respond…first insisting that new movies would be released on DVD/BluRay after a delay so that their traditional distribution systems (read: movie theaters) could make money/profit off of the new releases. What the studios will eventually realize is that the market would like immediate releases of movies on the internet/web. And that the potential for immediate profits is huge: imagine a movie being released worldwide–and getting gross receipts for the entire world, at one time (instead of the piecemeal release studios do today on a country/geographic basis). Instead of waiting a month (or two) to get worldwide receipts, studios could potentially pay off their investment in days. In addition, word of mouth these days spreads within hours–not in weeks. If they have a dog on their hands, the best chance to make money is by making the movie available immediately everywhere…before word of mouth closes off some markets (yes, that’s a bit Machiavellian…but it’s true nonetheless). Economics will force the studios to adopt this new way of doing business–and those companies which embrace it first, will reap huge rewards…

Lessons Learned?
Im using “learned” loosely here–mainly because I’m convinced the media and entertainment industry still doesn’t, by and large, “get it”. The bottom line is this: expect instant distribution of media. Monetize that distribution by reducing costs (afterall the cost to distribute a movie via the web is significantly less than the cost of distributing via theaters…reduce the cost of a movie, say, to $5/viewing would immediately boost sales while at the same time increasing revenue due to an expanded market base…and the commoditization effect is inevitable anyways…for proof of that, just look at the iTunes store).

So, adapt or die. It’s something that we’re all extremely familiar with in the tech industry (and a basic precept of evolutionary theory). But, unfortunately, it seems as if it’s still largely not understood in the media and entertainment industry (to be fair, they’re not alone–same thing is evident in the news/newspaper industry, and to a lesser extent the publishing industry–which is being dragged kicking and screaming by the likes of Amazon and now Apple). Within five years, I suspect, the landscape will be significantly different. If you’re a movie theater owner, by the way, you better find some differentiators that’s compelling enough for people to fork over 3x the amount they’ll be charged to view the content online in order to survive. I’m fairly pessimistic that the theater owners can adjust that quickly (or have the capitalization to effect the changes they’ll need).

So kick, back, have some popcorn, hook up your lappy to your TV (eventually that cable will disappear and you’ll just be able to stream it–yes the technology exists today, but it’s always too geeky for widespread adoption…it should literally be a couple of button presses/clicks), and enjoy your favorite entertainment. Produced by the former broadcast networks (which will increasingly, I believe, resemble movie studios as producers of content rather than the delivery mechanism)…

Spence goes looking for an ultimate DVR/fileserver/webserver/mail server solution for his home…ideally all on the same machine. Well. It didn’t quite work out that way.

So one day I had the epiphany: wouldn’t it be cool to have one server that could basically take care of my home computing server needs. I’ve gotten a bit spoiled, I have to admit: I became somewhat addicted to timeshifting my favorite TV programs to a time which would fit into my somewhat hectic life (it’s the gym workouts which did it–I would go to the gym every Tues and Thurs nights, and that required a DVR to record some of my favorite nights of TV). I also had a number of other servers running–a web server to serve this site as well as a half dozen others, a mailserver to support the various domains I owned, and a fileserver to make it convenient to access files no matter what computer I was using at the time (iPhone, laptop, gaming rig, etc.). I also loved the ability to share files between the homestead and work.

The Old Setup
For years, I had the following servers setup to service those needs:

• Web/Mail Server: I was using a Linux variant (Fedora) with a LAMP stack to service my web and mail server needs. This server was basically bullet proof, having never really crashed on me for years.
• File Server: An old Pentium 4 running Windows XP acted as my File Server, again, pretty reliable, and very simple to hookup from my other Windows machines in the house.
• DVR: Time Warner DVR box. Capable of recording hi-def television, the box was very flakey, and frequently would need to be rebooted.

Wouldn’t it be nice, I thought, if I could combine all of these services on one machine? Afterall, it’s not like I was serving high traffic websites, had huge amounts of email, or was recording every other television program on the planet. In fact, my websites had pretty minimal traffic, and I only recorded a few channels. So after looking at a number of solutions, this is what I came up with:

• Uber Server: Running Windows 7, with XAMPP (Apache, MySQL, PHP, Mercury Mail), FreeSSHd, Windows Media Center.

I had an old Dell Dimension 8400 machine I could put all of this onto with 3GB RAM, 500GB x 2 HDs, an NVidia GT240 video card with 1GB DDR3 RAM, and a Hauppauge WinTV PC-250 tuner card. Perfect, right? Well, not so much.

Windows 7
Having been a beta tester for Win7, I was busy telling people just how much of an improvement Win7 was over Vista. And, in fact, I still believe that (as do many others). But imagine my chagrin when I installed Win7 on my old Dell Dimension 8400…and it failed. Not a driver failing. Not an app failing. The install failed. The machine would just randomly freeze during the install. After testing the memory, stress testing the CPU, removing every card (except the video card–which I changed), and changing out the PSU, there was only one conclusion: my old Dell Dimension 8400 simply couldn’t hack Win7. It seems that Win7 may press the machine beyond it’s capabilities (I was able to reinstall WinXP/Media Center Edition 2005 back onto the machine without ill effect).

Windows Media Center for Windows 7 has some interesting features, including plugins (for Netflix, for instance, and fantasy sport player tracking)

So, I decided to bite the bullet: use WinXP (and it’s old version of Media Center 2005–which lacks some of the niftier features of Windows Media Center for Win7) and see if I could set up the server to work with the other services I needed. I downloaded XAMPP and installed it within five minutes…MySQL no problem. Apache, no problem. Setting up the server as a file server, no problem. Porting over my Linux Apache settings, no problem. Moving the MySQL server no problem. Getting Mercury Mail working…not so much. In fact, I spent about four hours getting Mercury Mail configured properly…getting it to forward email to an external mail system, setting up anti-spam systems, etc. Finally, I got it set up…and started getting very strange error messages about interactive services (which shouldn’t have happened), as well as random crashes. Add on top of that the fact that the anti-spam features of Mercury Mail were letting numerous pieces of spam get through (80 or so a day, compared to the 1-2 that my old Sendmail system was letting through), and I wasn’t too happy.

Then the server started to freeze/lockup. Evidently a memory leak in Mercury Mail was causing Windows Media Center to run out of memory and fail when it needed to record a TV show. Throwing up my hands–and worried that one site my server was servicing (which wasn’t my own) was going down and staying down for hours on end…I finally fired up my old Linux server and took down the Uber Server.

In the end, I’ve ended up with the following:

• Web/Mail Server: Back to the old LAMP stack running reliably on a P4 machine.
• DVR: Broke down and bought a new motherboard (dual Atom processor with 2GB RAM–more than sufficient for the very light duty this machine will incur) and case…scavenged the RAM from the old Dell Dimension 8400, along with the Hauppage tuner and the graphics card (the mobo had a PCI-Ex16 slot, a PCI-Ex1, and a PCI slot–allowing me to plugin a decent graphics card and the TV tuner card)…all running Windows 7 for Media Center.
• File Server: Another new server, running Windows Home Server. This cool piece of software allows me to do the nifty trick of “borrowing” HD space from other machines, and adding it into one big file system. There’s also plugins for Windows Media Center/Win7 to allow integration between the media center and the file server. The machine is another ATOM based machine, using the mobo integrated graphics (just need it for install, since WHS is designed to be headless), as well as a SATA expansion card so I can hook up additional HDs as needed in the future.

Lessons Learned
Yes, I ended up with more servers…but at least I got rid of the pain-in-the-ass TWC DVR, as well as their ridiculous $30/monthly fees ($20 for the DVR service, $10 for the DVR rental, itself). The cost? $80 per mobo and CPU ($160 total), and another $60 for a new case. The memory I already had in my “uber machine” (2GB went to the Media Center box, 1GB to WHS–which btw, only requires 512MB to run). The HDs also came from the uber machine, as well as the video card. So in 8 months, I’ll have broken even ($240/$30 = 8mos) and I’ll have a modern DVR which can do other nifty things (like access Netflix streaming content, track my favorite sports teams and players, stream my ripped MP3s, and even allow me to access it all via my iPhone). WHS lets me to a number of cool things, too…like easily add additional capacity, manage files through Media Center, and backup all of my Windows machines automagically–something I used to do in a very ad hoc way.

Other Options Looked At
I did experiment with a number of other options (mostly DVR software), including all sorts of Open Source/Linux offerings (my initial thought was to make my Uber Server a Linux box since I absolutely loved the performance of my web and mail servers). Boxee, XMB, MythTV were all tested…and failed for a variety of reasons (only MythTV could record live TV broadcasts…and it’s interface was so bad, that I rapidly got annoyed…it also, for some reason, couldn’t recognize my very standard Hauppage WinTV-250 tuner card). XMB and Boxee had very appealing skins, but couldn’t record live TV, so was of limited interest. From a file server standpoint, Linux did very well, as I just created a SAMBA mount, and, voila, that was complete. However, to backup my Windows machines, I had to install Amanda…which worked, but was a pain in the ass to configure…say what you will about WHS, but it is exceedingly simple to install…it just “works”. Tried a number of other backup systems, too, including Bacula and rsync. So in the end, while Linuix was a very powerful platform, it was too much of a pain for me to configure and even worse to maintain.

The real question is how this configuration will work long term. I don’t expect any problems with the web/mail server. It’s been solid for years. What will be interesting to see is how Windows Media Center, and even more so, WHS hold up in the long term. I’ll let you know if I run into any major hurdles down the road…

There exists in the marketplace today two dominant operating systems that consumers user–Windows and MacOS. Yes. Linux is there, but let’s be honest, folks, the vast majority of consumers don’t know (or care) what Linux is…if we were talking about OS’s on developer desktops, that’d be a different story. But we’re talking consumer desktops here…

So what is this new OS? Well, it all more or less depends on how widely adopted tablet/slate computers become. One thing you may notice about a number of the annoucements at the recently concluded CES 2010 conference was the sheer number of e-readers and tablet computers. What’s the commonality? Most use this new OS: Android.

What will be interesting to see is not just how Android impacts the mobile marketplace, but how Android impacts tablet PCs. Could Google find a route onto consumer desktops via the tablet PC? It would give Google it’s first real opportunity to do so (I never bought into the whole “GoogleOS” notion of an internet based OS anyways–afterall, you’d still need a local OS of some sort running on the device you’d be using to access the internet).

Microsoft and Apple have clearly taken note–Apple is due to announce it’s new iSlate tablet, while Microsoft announced it’s own partnership with HP. But Microsoft’s offering is running Windows 7 (ouch for a tablet), while the latest rumor is that Apple has smartly chosen to leverage the iPhone MacOS derivative–and the 100K+ apps already developed for it. A number of the tablets running Android (from Dell, Notion Ink, ICD), the real question will be whether these tablets have access to the Android Marketplace…and what modifications developers would have to make for their apps to run on the larger form-factor devices.

Chrome OS?
What’s not so obvious is how Chrome OS fits into this picture. By offering, in essence, two operating systems, Google has the potential to split the marketplace with competing offerings, confusing consumers, and doubling up the work of developers. If Google doesn’t muzzle Android tablets (by restricting access to the Android Marketplace, for instance), Chrome will be at a significant disadvantage–as Android will start with 7.5K apps already written for it. So, it’ll at the very least, be interesting to see how Google handles Chrome OS, and specifically it’s rollout.

All of which means fun times for me…
Since it’s my job to sit back and watch developments in emerging technology, I’m looking forward to seeing whether Android gains further traction, and what happens with Chrome. But if nothing else, Microsoft and Apple have a lot to be concerned with here: any traction is likely to be at their expense (either in the mobile or desktop markets–or, worse, both). How each company has thusfar reacted (Apple relatively strongly with their tablet, Microsoft a lot less so with a disappointing HP partnered tablet instead of the widely rumored Courier) gives some insights as to how well prepared each company is to deal with the new kid on the block.

As for me, I’m happy: Google has finally found something that lets them evolve from the one-trick pony they’ve been for a disturbingly (and unnecessarily risky) long period of time…and gives me some optimism that they can diversify. My most significant concern regarding Google entering into the OS and device space is there virtual lack of experience in dealing with end-consumers with either devices or highly complex operating systems. Time will tell whether Google can rise to those challenges…

Working as an Emerging Technology Strategist for “the world’s largest IT company” (at least in terms of number of employees and physical presences around the world–not to mention the diversity of industries it plays in), I am often asked by people I’ve just met at parties or at informal gatherings “so what cool things are happening in the field of emerging technology?” To which I sigh, and say “if I told you, I’d have to kill you.” No, not really. I’m not that cheesy.

What do you mean when you say “emerging technology”?
Although that’s an easy question to ask, like so many questions, it’s not so easy to answer. How so? Well, think about it for a moment: do you mean what new hardware will be coming out that you should be paying attention to? Is it what cool new software will be debuting next year? Or is it a subset of that–what cool web sites or web apps might you need to look at? Is it something more high level–like data analytics as applied to genomic research as applied to clinician patient information? Or perhaps how economic theoretical models could be impacted by forces emerging in, well, emerging markets around the globe? Or could it be green technology related–like leveraging nanotech to make batteries out of paper?

All well and good, but, afterall, it’s my job to stay on top of emerging technology. With that in mind, here are five things to keep an eye on in 2010:

1. App marketplaces continue to explode; Android’s Marketplace exceeds AppStore in terms of # of apps available…one thing to keep an eye on in the Android Marketplace: apps designed to protect one’s device from malicious apps (it’s an open marketplace, afterall)
2. Because of the explosion in app marketplaces, micropayments becomes big business (already happening with X-Box Live, iTunes, AppStore, Android Marketplace, Amazon, Lala, etc)…
3. Cloud Computing does NOT take over the world. At least not this year.
4. Multi-function mid-sized internet devices (aka tablets) experience rapid market growth…and in 2011 (not 2010) starts to replace iPods/MP3 players as the most prevalent “must have” gadget for the masses. See? That’s a prediction for 2010 AND 2011. Yeah, I am seriously nutty that way.
5. Green IT gets a lot of press, but again doesn’t have the huge impact predicted by most. It takes *time* to add in infrastructure, folks. Look for it to become a much larger story in ‘12 and beyond…

So there you go. Check back in at the end of 2010 and we’ll see how I did…

The coming disruption the big software companies are blind to…

In my last post, I laid out the reasons as to why software development was about to experience a serious disruptive force. I made the argument that open source software, while highly valuable, couldn’t continue to try to live outside the economic realities of our real world lives. But OSS has obviously worked: look at the successes we’ve seen to date. And I concede the point. However, I believe that OSS has been able to carve out a niche because there have, up until now, been no viable alternatives. And that may actually be changing…

Enter SaaS Marketplaces, Collaborative Development Environments, and The Future.
Which is where SaaS marketplaces enter the picture: what if there were online environments where developers could create, collaborate, and connect? What if they could have a central “hub” which allowed them to connect with potential employers? What if they could collaborate on common components, assemble those components into larger entities (i.e. applications), then sell those applications (or utilization of those applications) and…and here’s the kicker…actually be compensated for their work. Imagine if you leveraged the freedom of OSS and at the same time appropriately compensated developers for their effort. Afterall, the value developers creates far exceeds that which an assembly line worker back in the 50’s contributed to the overall profits of a corporation—one developer has the potential to significantly contribute (or, conversely,  redact) from the bottom line. The problem with corporate software development, today, is that it is actually setup to discourage exactly the very kind of contributions which could have significant impact (where’s the incentive for the developer?)

“Rather than tie themselves down to a specific job with a specific company, instead developers will become software development consultants—bidding on projects, winning projects, and executing on them when they are hired by clients.”

Now for the Disruptive Part…
What’s most interesting is what happens when one considers the implications of a marketplace, as envisioned, above: software developers become, in effect, contract “mercenaries”. Rather than tie themselves down to a specific job with a specific company, instead developers will become software development consultants—bidding on projects, winning projects, and executing on them when they are hired by clients. Interestingly, this also has some nice side benefits: it allows the developers to sidestep the downward spiral of the “specialization” effect on their skill set, thus granting them a huge level of freedom (getting tired of working on back-end systems? Try your hand at GUI work, instead).  Developers can suddenly work on a diversity of projects, with a diversity of colleagues. Development teams would likely naturally form (as developers discovered other developers and team members that they like to work with), but nothing ties the developer to said team: they can decide at any point to take on an entirely new project with entirely new team members. This, in addition, broadens a developer’s professional network, exposing him/her to a much broader base of experiences as well as techniques—arguably making for a better developer in the end.

For the corporations, this actually works out too. Remember when we earlier talked about offshoring? In effect, should software development evolve along the lines stated, above, you’d have a kind of nullification of the offshoring effect: it’s not a matter of where it’s cheaper to house employees—it’s more a matter of who the best developers are—regardless of location. Sure, cost will still factor into the equation, but at least the playing field will be leveled in that companies will naturally value creative solutions which provide them the maximum of flexibility over the “cheap” solution. This means that a good developer—no matter if you’re Ukranian, Indian, Chinese, American, Spanish, or Dutch, would get the work. And for the corporation, it actually maximizes their efforts by most efficiently utilizing resources (read: money) spent on development efforts.

“…companies which fail to adapt to the new realities of software development will find themselves in danger of irrelevance. This new paradigm cuts out the middleman—and thus potentially could disrupt the entire software industry.”

In the end, it’s the application of marketplace economics on software development—something we’re already seeing in the form of marketplaces for web services (StrikeIron is a great example of this) and in componentized apps (widgets and mashups are another good example). If the market should move in that direction, it will pose an immediate and significant challenge to traditional software companies (IBM included): companies which fail to adapt to the new realities of software development will find themselves in danger of irrelevance. This new paradigm cuts out the middleman—and thus potentially could disrupt the entire software industry.

The benefits, however, far outweigh the potential negative consequences, assuming corporations are willing to adapt to the new realities. In essence, it’s nothing new, really: companies are forced to adapt to change constantly. The question is which companies will embrace this new model, and which will attempt to fight it? Answer that question, and you’ll know who will be the dominant players in the software industry ten years from now.