Dana Blankenhorn

Beyond the Cloud

Another earnings quarter is in the books, and it wasn’t great for the Cloud Czars.

Microsoft, Google, and Apple reported strong quarters. Facebook crashed. Amazon was saved by its investment in Rivian, which has been falling since the start of the year.

But there’s more to tech than the Cloud Czars. There’s even more to the cloud.

The Clouds are evolving into tech’s landlords. Amazon, Microsoft, and Google dominate in market share, other players are falling, but that masks another reality. The market is growing at 40%/year, at scale. Anyone can spin-up a set of cloud servers inside a data center REIT, then scale globally by running excess capacity with one of the Czars. If you need capacity near customers, just use a Content Delivery Network, a company like Akamai or a “cloudless cloud” like Cloudflare, which also provides security.

The TV Content Crash

Ever since the Web was spun, over a quarter century ago, TV content providers have been getting squeezed out of the advertising market.

That’s not how it’s reported. But fewer people have cable than can watch a broadcast. Fewer still have access to streaming. What’s left of broadcasting now are mostly one-set news shows, cheap reality and game shows, endless re-runs of movies and old TV, people sitting around tables talking, or sitting in chairs yelling. Cable is evolving into the same wasteland.

Streaming is where it’s at because of ARPU. That’s Average Revenue Per User. Broadcasting is free, cable brings in very little to most channels, but a streaming subscription costs $10-15/month and the programmer only shares that with the producer.

Bottom Up

The relationship between the Washington press corps and its readers has become as abusive as anything Donald Trump ever drew up. The same is true for the relationship between “Lefty Twitter” and the left.

As usual, it’s a question of business models. You make money by getting clicks. You get clicks by energizing people, by making them angry or scared, preferably both. Straight news doesn’t pay.

That’s why The New York Times, Washington Post, The Hill, Politico, even CNN and MSNBC, have become trolls. If Politico writes a story saying the economy is improving, with numbers attached, no one is going to read it. But if they throw in a “but,” leading with a counter-example – a place where it’s not growing, people who are being left behind – that draws readers. Talk seriously about vaccines and you hear crickets. Write up some anti-vaxxer and its happy days. You’re getting clicks.