Dana Blankenhorn

Cloud Czar Conundrum

In 2021, governments around the world hate the Cloud Czars.

They don’t like seeing companies both build infrastructure and rent it out to competitors. They don’t want Amazon to compete with Netflix or Walmart. They don’t want Microsoft hosting Salesforce, then building its own suite. They don’t like Google doing search while it rents its cloud. They don’t like the Apple app store. They blame Facebook for Trump.

It’s not just here. China is doing all the things Americans just pretend to want, taking down Alibaba, Tencent and Baidu with new regulations and demands. Of course, the same people who want Facebook destroyed pretend that China is going after Alibaba because “it’s communist” and Jack Ma a threat to the regime. (As if Mark Zuckerberg isn’t?)

Here’s the problem. Clouds are expensive. The price started a decade ago at $1 billion/quarter. Now it’s about $5 billion/quarter. That money isn’t borrowed. It all comes from cash flow. The game was said to be too rich for AT&T, too rich for IBM, too rich for HP and Verizon.

Redistribution of Technology Wealth

The redistribution of technology’s wealth is indeed trickier than I thought. 

When I first began covering open source in 2005, Amazon.Com was worth $19.6 billion, Google had just passed $100 billion  and Facebook was a start-up.

The “incumbent” software companies of that time were IBM, which was worth $140 billion, Oracle at $63 billion, and Microsoft at $273 billion.

Open source was an underdog technology. Closed source or “proprietary” software was where the money was. You licensed software. The company that developed it accepted all the costs of growing and maintaining it. The cloud was barely a gleam in Larry Page’s eye, a headache made necessary by Google’s roaring success in search.

Be Your Own Brand, Become your own business

This is the first piece of advice I give young journalists. It’s one I was taught in the 1970s was anathema.

Be your own brand.

When I was at Northwestern’s Medill School, in the late 1970s, I was told a journalist “is someone who works for someone who buys ink by the barrel.” This has since been changed to “bits by the gigabyte” but it remains true. Journalists are defined by who they work for. You are your job.

(This is a publicity picture taken at my first post-Medill job, with the Houston Business Journal.)

But it’s a one-way street. You can give your publisher all your loyalty and, should the needs of business demand it, you’ll still be on the street. (I've been there.) The only way to protect yourself is to define your beat, to specialize, and become “the leading expert” on it. Then (and this is the hard part) monetize it.

This is the part of the new job journalists hate. I feel for you. I hate it, too. But if you want to make a living at this, you must do it.

This starts with social media but doesn’t end there. If you’ve gained expertise advertise it and become a source. Start a side gig, a blog or e-mail newsletter. Incorporate, and treat yourself as a business. This means that you can consider stepping over lines your j-school taught you never to cross, but which your publisher-employers crossed as easily as you walk across the street.

It used to be that the only alternative to a newspaper or magazine job was to go into PR or ghost write. That’s not true anymore. You can solicit advertisers or take money from politicians if you like. You can go on TV and spout off if you’re asked. You can do podcasts, send out your own press releases. You can mine your market, in any way you can, if you’re willing to take the risks that every other businessperson takes.

Who Writes, Who Reads, Who Buys Your Story

If you don’t take responsibility for the medium you create someone else will. And they won’t have your interests at heart. 

This has been my “pinned tweet” at Twitter for a year and a half. But there’s a corollary, which I thought was obvious.

Taking responsibility is gonna cost ‘ya.

Print publishers have understood this for centuries. Credibility is the coin of their realm. But print publishers are paying for what they publish. The checks control the content. Publishers are also subject to business’ morality, not that of the journalists they hire. If ethical compromises must be made, they are empowered to make them, and take responsibility for the result.

There’s wiggle room here for everyone but the writers.

The Big Tech Conspiracy That Wasn’t

Once you show you like something, I offer you more of it.

Is this a conspiracy?

Not unless I’m a scaled Web site. Because this is at the heart of the charge against “Big Tech,” the companies I call Cloud Czars.

• Show a preference for certain videos on YouTube and YouTube offers you more videos like them.
• “Like” things on Facebook or Instagram, and you will get more things like them.
• Follow certain celebrities on Twitter, you’re offered more like them.
• The same with Amazon Kindle books. When you buy something from Amazon, you’ll be followed for days by ads offering the same thing.

The algorithms follow human nature. Chances are that if you like a book about 12^th century monks who solve murders, you might like another one. If you like Henry Winkler, you’ll probably like Ron Howard.

The problem is that if you like crazy conspiracy theories on Instagram, or videos describing the terrors of the Illuminati on YouTube, you’ll get more of them. Like those, you’ll get more. And more and more.

Defending Facebook

Let’s start with something that should seem obvious.

Facebook is no longer a social network. It’s the global telecommunications company.

It became this by offering free services on a global scale. This came about thanks to its investment in cloud, beginning early in the last decade. While AT&T sat on its assets, along with all the companies once known as PTTs (Postal, Telegraph and Telephone services), Facebook put $1 billion/quarter and up into a network of cloud data centers.

Facebook did it the same way Amazon did, with cash flow. It made its services free, like Google.

Netiquette: The Issue for 2020

I covered the biggest issue of 2020 back in 1988.

I covered it in two ways.

On the one hand I covered the Electronic Networking Association for Newsbytes.

The ENA featured such cutting-edge minds as Mike Godwin and Joichi Ito. They met online, using software called PARTIcipate. They were communicating across nations and time zones. It was exciting.

They didn’t want to spoil it. They developed rules known as Netiquette to define proper behavior.

Netiquette can be summarized thusly: be nice. Assume goodwill. Be polite. Accept disagreement as legitimate. Don’t lie to make a point. Remain inquisitive and friendly. Understand that the person reading what you “say” can’t read your body language. Account for that.

Twilight of the Cloud Czars

In 2019 five companies dominate the global economy.

I call them the Cloud Czars.

They are Microsoft, Apple, Amazon, Google, and Facebook.

These companies have a combined market cap of over $4 trillion. The smallest of them, Facebook, is worth more than AT&T and the Walt Disney Co. combined.

The Cloud Czars dominate retailing. They dominate media. They dominate computing and communications. According to politicians of both the left and the right, this means they’re illegal monopolists and should be broken up.

This idea is dumber than anything Donald Trump ever said.

The Ghost of the Eternal Now

I’ve been a reporter for over 40 years, and I’m still angry at the same thing that upset me in journalism school. (That's me on my first journalism job, wondering why someone is taking my picture.)

This is the attitude of an eternal now. It’s driven by this old chestnut – a journalist is someone who works for someone who buys ink by the barrel. The key to that sentence is the phrase “who works for someone.” Journalists are supposed to leave their minds and hearts at the door of the newsroom.

Reporters are taught to have no sense of history, or of the future. Mainly we’re taught to pretend we know nothing, and everything we’re told is equally valid. As a result, most reporting has no context, and we can’t call out stupid when it’s right in front of us.

That’s how Trump gets away with it. Any reporter who likens what he’s doing to Jefferson Davis or Adolph Hitler is accused of malpractice by agents of stupid at The New York Times. We’re just supposed to print what he says and repeat what he does, like good little stenographers. Then let Bret Stephens or Ross Douthat tell us what it means. Everything’s fine.

It’s even worse in business, which is my beat. Because we are taught to ignore the broad sweep of business history, we send readers down blind alleys. We pretend that making cookies is as cutting edge as writing software.

The past and the future have always been there in front of us. It was clear in 1979 that oil was taking over from manufacturing, but people reported from Detroit then as if that city could be saved. It was also clear that oil was a boom-and-bust business, but I was told to report from Houston that the boom would go on forever.

Tolerance, Technology, and the American Hitler

Donald J. Trump is the closest thing to Hitler America has yet produced.

He is the crisis. In becoming the primary object and fascination of the world, Trump has revealed both his character and that of everyone supporting him.

He is a racist. He is a fascist. He seeks dominion over the world only to seize its wealth for himself and his friends. His allies use power only as a tool against other religions, or other races, or against strawmen (and women) of their own devising. They beat the chains of their followers into swords.

We know this, now. In the summer of 2019, many believe there’s nothing to be done, that his final victory is inevitable. They see Democrats as feckless and divided. More important they see technology as Trump’s ally.

It’s this last point I come to challenge. While there are features in technology that assist any surveillance state, and the war of all against all, technology as an industry is the greatest boon to human liberty yet created.

The reason, as I’ve written here many times, is that human capital is now the gating factor to economic growth. It’s the human mind’s ability to conceive of new problems, and of ways to solve those problems, that delivers economic growth. Access to capital, and to other minds that might execute on plans, becomes a multiplying factor.

But first comes the idea. First comes the experiment. First comes science, and engineering. Later you need money, and marketing. All these things are maximized where human minds are free, where capital can choose its own home, and where people can choose their own leaders.

Capitalism. Democracy. Liberty. The more of these you have, within an ordered system, the more growth you have. It’s the need for order, for restraint, that has many people confused into thinking China’s rise at America’s expense is inevitable.