This is a quick note to let you know that I’ve moved the newsletter to a new platform via a tedious intermediary stage —but more on that in the first (new) newsletter.

You’ll note a couple of things are a little different. Firstly, the newsletter is sent from a new site that I set up to consolidate all my writing and other thoughts in one place. I’d love it if you took a look: https://matthewcowen.org.

Future posts will be categorised as follows: A 📅 emoji denotes blog posts and short from comments, and these will not be sent out in the newsletter. The 🗞️ emoji will indicate the newsletter items. If you want to read past newsletters, there are two ways to do that. One is to go to the search and search the 🗞️ emoji or search for a keyword or phrase connected with the subject. The other is to click the Archive link and then choose the Newsletter category, where all past and new issues are archived.

Also, please keep in mind that emails will be sent from matthewcowen@hello.micro.blog. If you don’t see them, check your spam and add that address to your contact list, although you shouldn’t need to do anything on your part if all goes well.

Secondly, the look and feel of the newsletter has changed as a different platform has different ways of doing things. Below is a test newsletter so you can recognise the real one coming soon:

Coming soon means in February. Some of the reasons I chose micro.blog was to continue control of the newsletter, support an independent developer and the ideals behind that, and thereby ensure I didn’t leave one Nazi bar and walk into another, and that means adhering to a pretty decent anti-spam policy which prevents me from sending a newsletter until I have gained a level of trust with the platform. I’m ok with that and happy to wait. The first official newsletter I’ll be able to send will be in early February. I’ve written most of it already and will update it before sending it out.

So long and thanks for all the fish.

/committedtodisk

Despite being generally optimistic about technology, but not a techno-optimist, I always felt there was a risk in bringing technology to bear without the checks and balances to ensure we reap the benefits of the technology while minimising potential adverse effects. In other words, I called it The Future is Digital, but I didn’t outline if that future was good or bad. It was a hedge. It was a guess. And it was a feeling that I’ve been harbouring for a long time now, without being able to put my finger on why. The future of The Future is Digital will go into that over the coming months, and I invite you to follow and share your thoughts along the way. I will make mistakes, have bad takes on an idea, and perhaps hit the nail squarely on the head at times. When you do this kind of work, you open yourself up to the possibility of learning something deeply because writing is thinking. If you don’t like my point of view, or you feel my arguments are not good enough, engage with me. I’m open to discussion and will always remain civil in my replies. Online communication has gone to shit over the last few years, so I’d like to promote a little civility.

When I started this newsletter, I took a lot of time researching how I could get it online in a qualitative and non-ad-intrusive way. I settled on a brand new system offering a compelling argument to host my newsletter. It is free to use until you start charging people for subscriber-only access. At which point, they would take 10% + payment processing fees. I signed up to create a Substack when it was still only a niche platform with a handful of writers using it. I’d never intended to stay there indefinitely and hoped to raise enough money to self-host it elsewhere in the future. I felt it would be best to own and control a host fully in the long run, but that idea was a long way off. Hold onto that notion, as it will become more apparent in my future writing for this newsletter. Oh, and while I’m here, apologies for not keeping up a regular writing schedule; more on that later.

So, where is this newsletter as of today? I’ve written just short of 100 posts over the last couple of years and some several hundred thousand words, with a couple of popular articles:

and (unsurprisingly):

These posts were particularly popular compared to the others and elicited discussion between myself and a few people, mostly offline, given that I am not really that online despite being very “digital”. But to cut a long story short, I am about to embark on taking this newsletter to a different place in two respects. Firstly, I’ll be moving off the Substack platform as soon as possible. Then, I will be making an effort to pick up from where I let it slip over the last couple of years.

Starting with the platform shift. If you are subscribed, you shouldn’t notice any difference, save the look and feel, and perhaps the need to take a quick dip into your spam mail in the event your mail provider marks my new newsletter as spam. Here’s why.

1. Substack and the paradox of tolerance

Karl Popper’s Paradox of tolerance states:

… that if a society's practice of tolerance is inclusive of the intolerant, intolerance will ultimately dominate, eliminating the tolerant and the practice of tolerance with them.

If you’re unaware of what has been happening at Substack, let me indulge myself in giving you a brief overview in complete fear of invoking Godwin’s Law.

Dave Karpf, along with some two hundred or so writers, sent an open letter to the owners of Substack to ask that they clearly state their position when it comes to platforming Nazis. I think most of us can agree that the correct number of Nazis that you should host and tolerate is zero, or if not zero, then as close to zero as it can be. The paradox of tolerance should perfectly explain why that is. Then there was a particularly cack-handed communication roughly translated as “I didn’t know he was a racist”. If we take that at face value, the fact that he didn’t do his homework (which would have quickly and easily determined his guest’s POV), this a remarkably naive thing to have done and a complete failure on Hamish’s part. Then there was a convenient post by a different bunch of Substack writers who seem to be ok with Nazis being invited to the party and promoted by Substack. Then, after the pressure built with public announcements of several high-profile writers abandoning the platform, Substack finally stated its official position explaining that we should be tolerant of things that we are not comfortable with and therefore tolerate Nazis on the platform. It was as bad as it sounds.

The most egregious part of the stated position is the false ideology that is awash in the tech scene, that all speech is equal and, therefore, should be treated equally. In my view, this is so flagrantly naive that it beggars belief, and I am astounded that while writing those words, they didn’t have a moment of reflection to try perhaps to fully understand the gravity of what they were saying. It is like saying that all cell growth is equal, and therefore, we should give cancer a chance because it should be treated equally to any other cell growth. Cancer is cancer, and we deal with it accordingly within the means we have. Nazis, white supremacists and the like are a fucking cancer and should be dealt with accordingly. Cancerous cells will eventually take over the host, fully consume it, and ultimately kill it. So it is with Nazis. They will consume everything until they, and only they exist. It must be stopped at every opportunity.

Substack is a private platform, and I will defend its right to decide where it wants to position itself. This, however, also means that I will defend the right of writers to criticise it and demand a certain amount of reasonable censorship, transparency and equal application. I would also support anyone wanting to go elsewhere and try to put pressure on the other enablers in the value chain. And I would defend Substack’s right to associate with Nazis. But that will not stop me from expressing that I believe by enabling and promoting Nazis, they become Nazis at worst and Nazi sympathisers at best. I will be doing everything I can to help crush this cancer. I will not tell you what to do with your attention and money; that is up to you, but if you agree that Nazis should not be tolerated, then I would recommend that you unsubscribe from any Substack until such time as they start to do their best to eliminate this cancer. That is what I am doing.

You may ask why I am so uncompromising with this. Well, some of it is about the way Substack operates. Substack’s response is all well and good taken in the first degree, but when you look deeper, you’ll notice they do moderate. For example, pornography is not allowed on the platform, and they do a pretty good job moderating that. They also state clearly in their terms that hate speech and calls for violence are not tolerated. Perhaps I’m a fucking idiot, but the last time I looked, white supremacy ideologies were hate speech. I could go on, but frankly, I’m pretty wound up about this and particularly disappointed with what was once a great platform to help (very) small-time writers like me get out there. I’m going to suck it up and shift to a different platform, of which I haven’t decided yet. I’m torn between micro.blog or WordPress. Both have upfront costs associated (unless I accept ads on WordPress). It’s not a lot, and I’ll probably put it down as a work expense, as this venture was always related to my business and is probably partly responsible for my getting several consultancy opportunities.

Substack is treating us like morons and trying to avoid telling the truth about the reason why they’re taking certain decisions. Fine, go ahead and take money from Nazis and white supremacists. Just don’t expect me and a lot of other people to participate, and do expect a lot of us to find ways to stop the cancer from spreading.

2. Picking up from where I left off

The last two years have been particularly challenging for me personally. It is likely the main reason my writing output has fallen off a cliff for this newsletter. I haven’t not been writing, just not here.

I was recently diagnosed with two neurological conditions. I’d actively sought a diagnosis for one of the conditions, so the result didn’t surprise me; it was the other one that hit me unaware, and despite being grateful to have a formal diagnosis, it hit me much harder than I thought it would. And in true style, as anyone who knows me well enough offline, this happened during the world’s biggest crisis since 1918 and the Second World War. Awesome.

I’m unsure what to do with the information besides understanding it in more detail and interpreting how it affects my daily life. That’s what I’m doing, but honestly, I’m a little lost about that. I know there are mitigation strategies, and I have, over time, naturally built up some of them, but they are nowhere near being as effective as I would like. And at 53 years old, teaching the dog new tricks is harder to do. Not impossible, but a little more challenging.

To give you more detail without giving you access to my medical history, two conditions (that may or may not be related) cause executive functioning difficulties in day-to-day life. Charitably, when you have two, it is called twice exceptional or 2e for short. This is the optimist’s view. I prefer to call it twice-afflicted for the moment. And I would add that I call it thrice-afflicted, as the two contribute substantially to a third difficulty (although not a condition, nevertheless, very difficult in its own right). Again, if you know me well enough offline, you’ll know or have suspected some of this already. I have either discussed a subset of this with you. What I haven’t done is open up generally about it until now. But I’m not going to name them online for obvious reasons. (Yes, you, the morally bankrupt advertising industry on the Internet.) Feel free to reach out if you want to know more. I’ll be happy to discuss.

So, in trying to pick up from where I left off, I hope to gather the bits and pieces and develop a couple of plans to help me write more often. I have been doing some of that already, and I’m seeing some of the fruits of that labour. What I don’t promise to do, however, is write about tech in a sycophantic and all-starry-eyed manner that I was perhaps a little guilty of at first.

Contributing to the third affliction is a feeling of disappointment and an impending sense of tech being co-opted by forces that are not true to the stated ideals of its makers. See Substack above. See also the absolutely shameful bunker being built by Mark Zuckerberg in Hawaii for when the shit hits the fan, and he can say, “Fuck you, Jack, I’m alright thanks to me extracting your wealth to my bank account.”

I’ll discuss some of that another time.

Regardless, I hope you have a good holiday. Connect with what is meaningful to you. Connect with family and friends, and enjoy the break. I’ll try to write something in early 2024.

/committedtodisk

To make it up, this one is a fairly long one, despite taking an axe to the original draft. 🤣 I hope you like it, and don’t hesitate to ping me if you want me to expand on any areas that I have deliberately kept brief.

Enjoy!

Within the last ten to fifteen years, there has been an almost exponential growth in the use of the internet in the Caribbean. Typically internet use had been lagging behind that of many parts of the world. This dramatic change has occurred rapidly and, unfortunately, without the guardrails typically developed during the progressive adoption of the Internet. The Caribbean has gone from a tiny percentage point in adoption to nearly 70% of the population, totally skipping the progressive uptake as we have seen in the US, the UK and the EU.

Internet use in the Caribbean is primarily through a mobile contract, with more mobile phone connections than people in the region. Many people have two or more mobile phones, often with data connections. And even though mobile internet in the Caribbean remains relatively expensive, with certain caveats, mobile internet usage is greater than that of fixed broadband use and is, for many, the only way they interact with the internet through apps or social networking. Once a subscriber gets a smartphone and a data connection, there is an almost 100% signup rate for social media such as WhatsApp, Facebook and Instagram.

As our lives and the economy surrounding us become digitalised with ever-more products, services and processes moving into the virtual world from the physical world, so does the threat of misconduct. In the same way that crime has followed —and, in some cases, driven innovation— our lives are under pressure from actors worldwide that target us based on our weaknesses. The potential for harm is significant, from losing money to becoming unwittingly part of an organised attack on larger targets like state attacks. As the economies of scale of internet use and online life increase, so do the economies of scale of potential for crime.

This has not gone unnoticed, and small businesses and the public are starting to emphasise protection, detection, and clean-up tools in much the same way that we in the Caribbean are aware of environmental and natural disaster risks and planning accordingly. It is estimated that the biggest spenders on cybersecurity over the next three years are micro-sized and small-sized businesses – the backbone of companies in the Caribbean which are estimated to be somewhere in the region of 95% of businesses in Latin America and the Caribbean.

Cybersecurity in the Caribbean is at an early development stage, and specialised service companies that fill the requirements are few and far between. Small businesses and the public need specialised help at affordable costs to ensure they do not fall victim to cybercrime.

Read on.

The Caribbean Context

It will come as no surprise that Cybersecurity is fast becoming one of the most pressing issues for business and society in the coming years. The Caribbean perspective is no different from that of the rest of the world; however, certain specificities make the challenge more delicate and need particular attention.

The distributed and only somewhat-collaborative nature of the Caribbean (the CARICOM members) and the fractured nature of the regional geopolitical situation (French, Spanish and Dutch West Indies sharing the space with the English West Indies) require a more integrated, collaborative and subtle approach.

For the most part, the larger countries in the Caribbean have tended to follow patterns seen in larger countries worldwide. They have become more outspoken in their knowledge and response to the region's cybersecurity issues. As companies in the Caribbean have become more visible to the broader world, thus increasing risk, governments, businesses, and citizens alike have become more aware of those risks and of the need to implement adequate protection systems to fight unwarranted incursions.

There is an increase in risk proportional to the rate of economic development; thus, as the Caribbean becomes more developed, cybercrime becomes a more viable means of extracting money from any unwitting community simply because the perceived potential financial gain is much more significant. Cyber malfeasance is a business! Pure and simple.

Case Study: Costa Rica – State of Emergency

Regrettably, Costa Rica recently saw this when it had to declare a state of emergency after multiple government agencies fell foul to a Conti ransomware attack. Not only had data been rendered inaccessible by AES-256 encryption and an attached US $10 million ransom (subsequently raised to US $12 million), but government data had been extracted over several months and later leaked openly when the government refused to pay the initial ransom demand. As of late April 2022, some 97% of a 672GB data dump was publicly available. Fears for the extent of data included have mounted, and so far, no review has been ordered to determine the risks for citizens and businesses of Costa Rica. But as some of this data appears to have been extracted from health systems, customs systems and other government systems that deal with payments (Social Security and Social Development), the fear is that many may fall foul of the spread of this data in the coming months and years through phishing the general public or through highly targeted attacks on influential or wealthy individuals.

The Trinidad and Tobago Cyber Security Incident Response Team (TT-CSIRT) recently observed a sharp increase in malicious cyber activity targeting local and regional entities.¹ The TT-CSIRT urges all entities (public and private) to adopt a heightened state of awareness.

The Caribbean has been slow to acknowledge cybersecurity threats to the region. A lack of data and measurement has meant that many successful attacks on business and government have gone unnoticed by the population, exacerbated by a culture of silence. No high-profile witnesses have spoken up about their experience dealing with the initial phases, legal process, and clean up after an incident. Fear of damaging customer confidence is partly responsible for this; however, this only leads to less information on how cybercrime affects the region. It would be safe to say that what is reported is only the tip of the iceberg and that cybercrime is much more prevalent than is generally known.

Recently, governments and institutions have made more effort to address the issues, including public awareness campaigns and working with international NGOs to develop a better cybersecurity posture for people and businesses alike. One example is Get Safe Online. Get Safe Online operates through a network of Ambassadors that organise in-the-community training using the tools and training materials developed by the organisation.

Legislation and cybersecurity strategy

When it comes to cybersecurity law, the picture is not much better. Saint Lucia, for example, has an “in development” National Cybersecurity Strategy, and despite taking the lead compared to its neighbours in the OECS, it somewhat lags behind the international community. Barbados is another country with the ongoing development of cybersecurity legislation. The most significant barriers to establishing and implementing legislation are government capacity and political willingness. A government like Saint Lucia’s faces challenges on many fronts, stretching resources beyond capacity. A general lack of world-class expertise is also apparent in the region, coupled with a general feeling that cybersecurity is only an ICT responsibility, making cross-government and cross-sector priorities challenging to place at the top of the list.

In the wider OECS region, only Saint Vincent and the Grenadines has specific cybercrime legislation with the Cybercrime Act of 2016. In other countries, cybercrime is regulated under Computer Misuse Acts or Electronic Crime Acts. They are primarily focused on how technology is used to commit crimes without explicitly addressing cybersecurity and how to deal with attacks on information systems. Questions remain on the capacity of countries to adequately prosecute this type of crime which relies on having sufficient infrastructure, personnel and accompanying judicial systems. Many lack the right equipment, software, and training to identify cybercrimes correctly.

Regionally, CARICOM IMPACS has sought to establish harmonised standards of practice, expertise and systematic treatment of cybercrime. It has additionally targeted infrastructure capacity-building to increase crime detection, law enforcement investigation and prosecution. RSS, or Regional Security System, is another organisation with a mandate to prevent and defend against cybercrime that has limited scope for responding to cyberattacks, somewhat because of a lack of harmonisation of policies regionally. Like many regional organisations, they, unfortunately, lack funding and capacity to respond adequately to the modern threat landscape.

What about CSIRTS?

Similarly, the state of Cyber Security Incident Response Team (CSIRT) development in the Caribbean lags behind the South American continent and the broader region. Only Barbados, Jamaica and Trinidad and Tobago have implemented funded and functioning CSIRTS. Suriname has restarted a program after having abandoned it a few years ago.

The impact

Small and micro-sized businesses are the backbone of the private economic structure of the Caribbean, and it is precisely these businesses that are the most vulnerable and the least resourced to deal with the complexities of digital security requirements of today. This has been substantially exacerbated by the COVID-19 pandemic, in which new expectations by employees on how, when, and where to work are becoming normalised. Working from home and the expected turn towards a flexible hybrid model for workers have widened the security exposure for companies. In other words, attacks do not need to target one specific network to gain entry to a company; many distributed networks are potential threats. This makes it difficult for understaffed, undertrained and crucially under-financed IT departments to manage such distributed networks in physical and technological terms.

Whilst cloud computing is still in the early development stages in the Caribbean, not all businesses and administrations are advancing simultaneously. Some are more advanced than others, having moved not only low-hanging fruit applications like email and accounting to the cloud but have embraced the possibilities that cloud computing offers, shifting line-of-business applications and identity services and other business-critical services off the on-premises systems. Moving to the cloud changes the security exposure for the entity in question, requiring specialised knowledge to best protect and monitor for breaches and unplanned downtime.

The COVID-19 pandemic has left MSMEs with budgets for investment at historic low levels. MSMEs are typically small businesses with more pressing day-to-day issues, such as immediate revenue generation to pay the bills. With existing relationships with telecom providers, the telecom companies will likely provide cybersecurity offings soon, given the network-based nature of the threat.

The threat landscape (non-exhaustive)

Understanding global threats and their provenance will also play a prominent role in understanding the landscape and developing solutions to minimise those risks. The most common threats to small businesses and administrations in the Caribbean are estimated as follows:

1. Ransomware

Immediately after a successful penetration of defences, a small application sits in background tasks on the infected computer or computers, slowly encrypting data using a virtually impossible-to-decipher encryption key. Once the data has been fully encrypted, the user is alerted that the data is now inaccessible. A ransom of a significant amount is required to decrypt the data and allow access once again.

2. Social Engineering or Phishing

Social Engineering or Phishing is a psychological technic to garner an employee's confidence in a company or government office and then exploit that confidence to extract information or gain access to restricted data. It is often the method used to deploy ransomware and is the weakest link in the armour of cybersecurity.

3. Internal malicious intent

Although relatively rare by most counts, the risk of a disgruntled employee with access to confidential and vital data is manifest. This can be highly disruptive to a business or administration. For example, employees on social media displaying discontent can be the target for exploiting weaknesses to enter a network.

4. Poorly configured and patched systems

Even the best firewall is only as good as its configuration and patch level. Poorly configured or outdated firmware in IT equipment is a regularly exploited vector for entry into the target network.

5. Poor credential hygiene

Easy-to-guess passwords, not regularly changed passwords, and sensitive data with poor access controls are easy targets. Sparse use of two-factor authentication also plays a role in allowing those that should not be permitted.

Mitigation Strategies and Policy Guidance

The following is just a small sample of the opportunity to improve the threat landscape in the region. If you’d like more detailed advice, please let me know.

Invest in the expansion and capacity-building of CSIRTs and regional cybersecurity organisations

Only with adequate and ongoing funding will the diverse region be able to fully appreciate its desire to develop world-class cybersecurity services protecting the public of the Caribbean. We would recommend regional, local government, NGO and private sector funding be increased substantially and rapidly. Events in Barbados, Trinidad and Tobago and more recently in Martinique show the threat is here and the consequences substantial.

Development of affordable managed services for the region

Security software of the past that required an initial purchase, installation and configuration to become fully operative and successfully manage that threat cannot deal with today’s ever-changing security threat landscape. Capital purchase of security software is no longer adapted, and the business model has changed.

We recommend that a managed service provider (MSP) starts with a small but highly specialised team incentivised and remunerated on contract signups and renewals. As the business grows, so can the team and the incentive structure.

Develop and deliver targeted education for users, managers and decision-makers

As with much in life, better education is the key to fundamentally understanding and acting on the current context. There is, sadly, not enough specialised education in the region for the general public to fully understand the implications of good cybersecurity practices. Although organisations such as Get Safe Online have been doing some of this over the last few years, we recommend that governments and NGOs invest in developing local training and awareness on specific cyber security issues, such as protecting smartphone use on the internet.

Develop targeted and highly focused services designed for MSMEs

Customers need to quickly see the value of the offering and be onboarded rapidly and without difficulty. Time spent designing simplified services and automating the onboarding process for the customer will allow the customer to take advantage with less apprehension. Particular attention should be given to building modular services, allowing flexibility in the offering tailored to the customer and not the supplier.

Understand where existing services lack and fill those gaps

Conducting a gap analysis of the state of cyber defences in the Caribbean, looking at the state of government or law enforcement’s resources and role in cybersecurity, including participation from the private sector. This will likely identify complementary areas of interest, encouraging the broadest and most efficient development possibilities.

Develop Security-as-a-Service offerings sold as insurance policies

Just as we have cyberattack software as a service, we should have Cybersecurity as a Service. Software as a Service (SaaS) has been a great enabler for small businesses to use enterprise-grade software that was previously out of reach financially and technically. So it should be for cybersecurity. Providing a service offering akin to an insurance contract (leaving the details of the included/excluded services outside the scope of this report) would allow MSMEs to strengthen their defences in the most cost-effective way.

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¹ https://ttcsirt.gov.tt/threat-alert-2022/

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I wrote a paper proposal for an international hotel industry journal sometime last year. My proposal was accepted, and I started writing in earnest. The paper had a deadline, and I was on track to finish on time, which is extremely rare for me. Sadly, that went south as I progressed and began to formulate a more complete picture of the technology I was writing about and its origins.

The title was:

Is Web 3.0 the next great opportunity in tourism?

The introduction goes like this:

Since the advent of the commercial internet, businesses in the travel and tourism industry have harnessed technology to promote their destinations. Some early tourism websites tried, in vain, to replicate the marketing materials traditionally used to promote destinations, mainly hotels.

This “copy and paste” methodology was seriously limited due to the underlying factors that meant that media-rich websites were near unusable for those with dial-up internet at 56kb/s and invisible for the majority who had not yet become connected to the internet. These simplistic lists of hotels and tourist attractions displaying available amenities neither incited nor informed potential visitors.

Broadband’s wide deployment and adoption enabled a new generation of technologies that would later be named Web 2.0. These technologies allowed media-rich websites to be developed. Many hotel websites today not only market properties in attractive ways but also allow potential visitors to reserve rooms, pay for their stay, and in some cases, simplify check-in and check-out, all achieved automatically without any interaction with reception staff. Today, many of the technologies of Web 2.0 allow hotels to generate first-party data for use elsewhere in their business. For example, for marketing, demand generation or even stock control. It allows benchmarking against other hotels within the same group or in comparison to similar competition. The distinction is important, and it separates these businesses from others that operate through travel agencies, typically providing little or no valuable data for such purposes.

Today, we are at an inflexion point where technology is evolving rapidly, and the adoption is accelerating and becoming more democratised. Technologies like Blockchain, Augmented/Virtual Reality, digital money (through tokens and CDBCs), and the metaverse can allow businesses in the travel and tourism industry to take advantage of this shift. It enables better value and faster client discovery. For example, several key performance indicators, such as the technology acceptance model (TAM), perceived usefulness (PU) and perceived enjoyment (ENJ), showed how virtual reality helped maintain potential visitor interest in destinations cut off by the pandemic and how that technology affected the tendency to visit the actual site (TenAS) (El-Said and Aziz, 2021).

This paper will discuss these technologies and how they may be harnessed so that visitors and non-visitors alike can be incited to visit destinations around the globe, thus generating value for the tourism industry.

Do the new technologies of the Metaverse and web3 provide opportunities for the tourism industry?

Specifically, the following research questions will be addressed:

1. What are the new technologies, and how are they used?

2. What are the opportunities and risks associated with this technology?

3. How can the tourism industry best utilise this technology to its advantage?

The paper’s structure was pretty classic in that there is an introduction (see above), a discussion on what web3 is, a literature review, and a discussion ending with conclusions. All sections are researched and backed up with examples and references.

A lot of it has already been written. Sadly, I started this at possibly the worst possible time for the technology, as it coincided with when web3 began to be exposed for the smoke and mirrors it turned out to be.

I couldn’t faithfully finish the paper as I was becoming increasingly sceptical about the fundamentals of web3, its purported merits and far-right origins. How could I write such a paper and stand by it when I didn’t believe or support most of it?

I have always been crypto sceptical, but I have kept an open mind on blockchain tech and have publicly said so on several occasions here and as a guest on various podcasts. No longer. I’m no longer much of an enthusiast about it.

How did I get here?

Writing a paper is nothing like writing a blog post or firing off a simple observation on social media. For one, papers are generally peer-reviewed before publication. That process starts at the proposal phase, and my proposal didn’t pass on initial inspection, requiring some changes to be considered for publication. Peer review is brutal. If someone doesn’t like or agree with you, they’ll tell you straight and point out why with facts, observations and references as to where you are wrong. When diving deep into a subject, you can quickly build a cognitive bias and eventually see things that aren’t necessarily there or see something that you wish was there (wish casting). During peer review, this is spotted and called out almost immediately.

Secondly, as I researched deeper into the world of web3, I found more things that I couldn’t agree with. It made me uncomfortable and left me dealing with cognitive dissonance. Cognitive dissonances never end well. One example of the things I was struggling with was the criminal amounts of energy wasted by one of the most useless technologies ever conceived. Blockchain. Without getting into the technical details, some blockchains use what is termed Proof of Work. Linked is the Wikipedia article on what that is. Take the time to read it. Reread it if you have already. I refer to it as Proof of Waste, as I have concluded that it is a more accurate term. Blockchains waste disgraceful amounts of energy on slow validations that could easily be done with existing database technology for a fraction of the cost and an order of magnitude faster.

Yes, I know that the new shiny kid on the block is Proof of Stake, and its energy consumption is vastly reduced. But it also goes directly against a central tenet of web3, decentralisation. Proof of stake puts power into the hands of the most invested (as in money). That sounds very distributed and democratic to me. The EU has recommended that Proof of Stake be used instead of Proof of Waste, threatening an outright ban on it. Only one high-profile cryptocurrency has completed the move to Proof of Stake, taking over eight years in the process.

But here’s another aspect that many seem to have misunderstood. Blockchain is directly against the law in the EU, as outlined in the General Data Protection Regulation (GDPR). Of the advertised “advantages” of blockchain is immutability. Blocks are Immutable, i.e., permanent. This is illegal in the EU because the GDPR mandates that people have the right to correct errors and rectify false information through due process. Blockchain doesn’t (can’t) do that. Data on the chain is not erasable. Likewise, illegal. Blockchain prevents ledger data from being deleted. That data is part of the chain. Break the chain, and you break the system.

Then there’s the whole thing of NFTs or Non-Fungable Tokens. What a scam! Personified recently by a certain DT, camply cosplayed up as various imaginary Superheros, and a grift so big it could probably be seen from space.

For the paper —getting back to the subject— I’d thought about how destinations and hotels could mint tokens and sell them as souvenirs. I still quite like the idea and think it has some merit, but the ecosystem is not yet there. Regulation is missing. How do you display them? Can you resell them? What governs gains, losses, and value? Do people really want to virtue signal they’ve been to Bali in this way? How do you prevent grifters and scammers?

For the moment, NFTs are essentially simple pump-and-dump scams that prey on the unsuspecting, the vulnerable, and the plain stupid. I don’t think that is a morally acceptable way to run a business. But then again, I’m not a thief.

On the energy aspect, with energy costs rising and no near-term solution to the impending climate crisis, any project that adds to the planet’s burden should be considered illegal. Yes, you can say that my words here are useless and use energy wastefully in their production, distribution (email) and reading. That’s true. But wake me up when this uses the amount of energy of a small European country, and I’ll gladly stop. Wake me up when the sum total of all the WordPress blogs on the internet reaches the same energy levels as that wasted by Bitcoin to “prove” your magic bean is worth something. And don’t forget that there are literally hundreds of thousands of other magic beans out there too!

They presented some of the systems they’d built and yep, we were impressed. Then, with the startup CTO in the room, one of my fellow engineers asked the key question: “All these systems, are there any that wouldn’t work without blockchain?” The guy didn’t even hesitate: “No, not really.”

The above is taken from a blog post by Tim Bray (AWS). Pro blockchain or not, you should read it as it nicely sums up blockchain’s uselessness.

Even more sinister…

Back to the paper. During my research, I happened upon the following book:

The Politics of Bitcoin: Software as Right-Wing Extremism

Here’s an extract:

By far the majority of interest in Bitcoin came from technologists and those who follow and admire the work of technologists. To those of us who were watching Bitcoin with an eye toward politics and economics, though, something far more striking than Bitcoin’s explosive rise in value became apparent: in the name of this new technology, extremist ideas were gaining far more traction than they previously had outside of the extremist literature to which they had largely been confined. Dogma propagated almost exclusively by far-right groups like the Liberty League, the John Birch Society, the militia movement, and the Tea Party, conspiracy theorists like Alex Jones and David Icke, and to a lesser extent rightist outlets like the Fox media group and some right-wing politicians, was now being repeated by many who seemed not to know the origin of the ideas, or the functions of those ideas in contemporary politics. These ideas are not simply heterodox or contrarian: they are pieces of a holistic worldview that has been deliberately developed and promulgated by right-wing ideologues. To anyone aware of the history of right-wing thought in the United States and Europe, they are shockingly familiar: that central banking such as that practiced by the U.S. Federal Reserve is a deliberate plot to “steal value” from the people to whom it actually belongs; that the world monetary system is on the verge of imminent collapse due to central banking policies, especially fractional reserve banking; that “hard” currencies such as gold provide meaningful protection against that purported collapse; that inflation is a plot to steal money from the masses and hand it over to a shadowy cabal of “elites” who operate behind the scenes; and more generally that the governmental and corporate leaders and wealthy individuals we all know are “controlled” by those same “elites.”

David Golumbia continues to outline how Bitcoin embodies extremist ideologies through Cyberlibertarianism and Internet Exceptionalism frameworks. Simply put, governments should not regulate the internet, and the internet is different and can’t be governed by mere mortals that don’t ‘get it’. This is in line with the extreme right’s ideology, which has brought us to world war, mass ethnic killings, and, more recently, the genuine possibility of a wholesale destabilisation of society. Linking these ideas to the Tea Party, the John Birch Society and conspiracists like David Icke and Alex Jones, the book does an excellent job of showing how the definition of “freedom” is less clear when you question it more robustly. Presciently, he mentions how some public figures do not necessarily outwardly declare their adherence to these ideologies but have demonstrated just that. Elon Musk is one such specimen. There are others, but take note of the ongoing (December 2022) train wreck at Twitter for context. Another article cited in the book is that of Langdon Winner (1997). A must-read, in my view, in which is discussed a personality not talked about much outside Silicon Valley. Ayn Rand. She’s a darling of Silicon Valley but was almost certainly a sociopath. If you have access to the BBC, watch “All Watched Over by Machines of Loving Grace” to better understand her and her effect on the Silicon Valley mindset and culture.

To these people, freedom always seems to mean the freedom to do “what I want”, without regard for others.

The Politics of Bitcoin is short —70-odd pages— but I highly recommend it. If you are from a technical background, like me, this will provoke thoughts and perhaps challenge some of your preconceived ideas about tech in the 21st Century. You don’t have to agree, but disagreeing through knowledge is infinitely better than a position to the contrary through ignorance.

Final thoughts

The tourist industry is already under scrutiny for its environmental effects, from ecosystem-damaging hotel developments to carbon waste (mostly travel). I didn’t want to be the author of a paper that promotes or encourages damaging consequences through needless and scam-enabling technologies like crypto and NFTs. Especially not just because it is “cool stuff”. I didn’t want to be part of a group that ignorantly legitimises innovation to extinction.

There may be a future for NFT-type spin-offs once regulation and other parts of the ecosystem are ready, and blockchain might evolve to become genuinely useful. But I suspect that evolution to look remarkably similar to database technology we’ve had for decades.

This experience was enlightening, and I wouldn’t change it for the world because it helped me come to a better, more nuanced understanding. In the near future, I may propose a different paper, although I suspect it might not be accepted. We’ll see.

Share The Future is Digital

Have a great holidays, and I’ll probably write some thoughts in the new year.

I’m currently writing an article on tech regulation. I’m looking at it from a different angle that I think will be interesting. I’ll share it here as soon it is in a decent state.

Reports

Firstly, I co-authored a report for USAID Eastern and Southern Caribbean Mission, entitled “DIGITAL ECOSYSTEM COUNTRY ASSESSMENT (DECA) Eastern and Southern Caribbean”

It can be found here and is publicly available to anyone.

I’m immensely proud of the report I co-wrote with a wonderful team. We were 100% online and have still never met in person. Despite this challenge, I think we were all able to put together out some great work within the limitations of the context, but also the limitations a report like this naturally imposes.

We were able to pair it down to 121 pages (don’t be put off, it’s straightforward to read). In reality, we could have all produced around 120 pages each!

From the report, the main findings:

PILLAR 1: INFRASTRUCTURE AND ADOPTION

The broadband and mobile infrastructure for the region is generally good. While networks have appeared to stand up to increased utilization during the shift to online work and school, the COVID-19 pandemic exposed gaps in access to and affordability of the internet. Leveraging universal service funds, testing last-mile technologies, and exploring innovative policy approaches to increase competition could help make mobile data and internet access more inclusive and affordable. Coordinated action across the region may reduce vulnerability among excluded communities and foster online education, training, and work opportunities.

PILLAR 2: DIGITAL SOCIETY, RIGHTS, AND GOVERNMENT

With emerging activities rolling out under CARICOM’s Single ICT Space initiative and digital transformation projects across the region, development actors including USAID can support and coordinate complementary activities. For example, the cybersecurity action plan developed by the CARICOM Implementation Agency for Crime and Security (IMPACS) can strengthen the institutions and systems needed to support digital transformation efforts. With digital identity initiatives, data privacy concerns and misinformation starting to arise in the region, civil society and media play an increasingly important role in fostering institutional accountability. Supporting civil society and media to engage on emerging issues could foster robust and safe engagement for citizens, as digital transformation progresses.

PILLAR 3: DIGITAL ECONOMY

The region boasts some of the first adopters of central bank digital currencies and efforts to utilize new digital financial service technologies. While there have been recent set-backs, particularly with the Organization of Eastern Caribbean States (OECS) DCash pilot, efforts to responsibly pilot new FinTech solutions will inform the global community working to strengthen financial inclusion and resilience. The tech startup environment is steadily expanding. Startups are emerging in myriad sectors, yet entrepreneurs struggle to find investors comfortable with investing in technology solutions. Youth interested in tech have limited options in the formal education system to develop digital workforce skills. E-commerce offers a promising avenue for the region to connect to larger markets and foster innovation. Although the COVID-19 pandemic accelerated e-commerce uptake across the ESC, it continues to be hindered by suboptimal digital payment systems, and the absence of a region-wide strategy and supporting legislation.

I’d like to publicly thank Chelceé, Amy, Ariel, Samantha, Mansfield, and the teams at DAI and USAID that contributed.

I have continued work on the Trade Enhancement for the Eastern Caribbean (TEECA) project. I recently wrote a report on the state of Cybersecurity in the Caribbean and the opportunities in that field. The report is private, but I intend to write something here in the coming weeks.

For the same project, a couple of other reports providing guidance on the tools and services MSMEs can use to leverage cloud and automation have also been provided. Again, these are private, and I cannot share them. As these are pretty focused on the companies involved, I’m not sure I can add much value here in this format. However, if you would like to have some thoughts about those tools and how they can be leveraged, let me know in the comments, and I’ll see if there is enough demand.

I was asked to peer review an upcoming report, and I can say that it is an excellent start and something to look out for when it is out. I’ll let you know, but I can’t say more than that now.

The other big project I’ve been working on is taking shape, and I’d love to share more details about it in the coming weeks.

I’ve been working with a partner, and I think we’ve solved some problems with these reports. This information is so valuable to business that we’d like it to be available to anyone who needs it. That’s the first clue. Don’t ask for others. 😉

I nearly finished a paper on the travel and tourism industries’ potential use of web3 technologies but didn’t finish in time. As I was writing it, the space became very fluid, and the bottom dropped out of many of the (obvious) Ponzi schemes, making my analysis very difficult in such a fast-moving (and not in a good direction) environment.

I’m thinking of picking this up again and re-thinking through, now things have largely settled - or at least the big issues have calmed a little unless some billionaire shitposts something that stirs it all up again!

Podcasts

Since I last published, I have spoken on several episodes of the ICT Pulse Podcast. And today, the latest one is out, where I discuss the USAID report. Please go check it out.

For your convenience, here are all the episodes I’ve featured (latest on top):

ICTP 227: Are we there yet? Understanding the Caribbean region’s digital ecosystem and how developed it is

ICTP 187: Artificial Intelligence, key emerging issues and opportunities, with Matthew Cowen

ICTP 181: Internet Exchange Points and the data scarcity challenge in the Caribbean region

ICTP 160: Understanding how technology perpetuates bias, with Matthew Cowen, of dgtlfutures.com

ICTP 133: Confusing smart with digital, and the challenges of achieving innovative disruption in business

ICTP 080: Discovering Martinique, with Matthew Cowen of dgtlfutures

ICTP 054: Community Chat on ride-hailing services. Can they complement the public transport system in the Caribbean, and what might be their social impact?

I also spoke on the excellent Innovation, Agilité & Excellence podcast with Jean-François Nantel and Éric L’Heureux. This is recorded in French along with my silly accent 🤗. Links here (latest on top):

Épisode 66: Échanges croisés sur la transformation numérique avec Matthew Cowen

Épisode 47: Web 3.0, IA et Blockchain avec Matthew Cowen

Épisode 13: La transformation numérique avec Matthew Cowen

Presentations

A while back, I had a chance to meet with Amazon Web Services in Martinique. We chatted, and I was asked to do a quick presentation on the context of the Caribbean and how it is essential for MSMEs that wish to undertake moves towards Cloud Computing.

I’m waiting to see if the video is available. As soon as I know of a link I’ll share it here.

In the meantime, if you’d like to get a copy of the presentation slides, I’d be happy to post them here with the main talking points annotated. I think the information is useful and quickly gives you an overview of the salient points.

The next presentation share is an older video of a presentation I made for the aforementioned TEECA project. I share the results of an Opportunity Study I wrote back in 2020/2021. Again, I think this is a good summary, and although some data has changed since then (mostly improved), it gives you a good idea of the market in the Eastern Caribbean.

YouTube link here. (French)

Other stuff

I teach Informatique and English (1st year) at Vatel Business School in Martinique. Vatel is an international hospitality management school, and it is a privilege to share some of my experience and knowledge with the bachelor’s students.

It starts with using the right tools and then unfollowing everyone. (Well, not “everyone”, but most accounts). Then with judicious use of the largely misunderstood and unused tool on Twitter, the experience is much better and more productive for people like me who primarily use it as a research tool.

How to use Twitter

Let’s face it; Twitter is a hell-hole. You don’t need to be on it too long to discover this. I could (maybe I will one day) get into an extensive discussion on moderation vs privacy vs free speech, a veritable minefield if there ever was one. Despite my urges, I’ll resist.

It is also worth noting that I don’t use it for, let’s charitably call it, performative art. Virtue signalling (or empty boasting), attention-seeking and other forms of engineering to be the centre of attention are anathemas to my personality.

So armed with this, many years ago, I decided I would use Twitter for my research and resist use for entertainment and Doomscrolling. I needed to implement a mechanism that would help achieve these goals. I’m on the inattentive spectrum of ADHD, and Twitter is pretty much Kryptonite for people like me… and me. It contributes hugely to procrastination and losing focus, or, better put, moving the focus from the things that need to be done to the interesting things in the moment, inevitably leading to falling down the rabbit hole.

I’ve been on the platform since 2009. I could see its possibilities for community and exchange of ideas back then, which I would hope, is its future post-Elon Musk. I think the future of social networks is more akin to distributed autonomous organisations or DAOs than the monolithic model of social networks today. As humans, we’re just cabled to interact with thousands or millions of people in a day. We didn’t evolve that way. At best, we had immediate family and a few friends. For most of us, the maximum amount of people we’ve been in close contact with is at school, a large business or a conference. That’s why when you go to a big conference (I was a regular at one that had over 20000 people each year), it’s overwhelming at first until you get your bearings and you start to filter out the stuff you don’t need to see and concentrate on the things you do. I’ll try to write up a little more on that idea in the future, but one name springs to mind, Dunbar.

Back to Twitter, I ignored the potential downsides because the user base was almost exclusively tech at the time, and it intrigued me where it could go. Rose-tinted glasses. The reality turned out quite different.

One thing I did do from the beginning was use a third-party Twitter client. In those days, Twitter was web-only, which didn’t appeal to me. For some reason, I’ve never liked web apps. I can’t articulate why, but something feels “off” for me when I use them. I still use a third-party client, Tweetbot, on both iOS and macOS. But I have used Twitterrific and Tweetie —the first third-party iOS app for Twitter and invented the pull-to-refresh UI element that is so pervasive today— and was subsequently purchased by Twitter in 2010 and ruined.

The advantages of using a third-party app are two-fold. No adverts and a chronological timeline. Twitter has consistently tried to make advertising work for it over the years. Despite having some 86% of its revenue in 2020 from advertising, the financials don’t seem to make Twitter an ad powerhouse or act as a profit centre for them. When I’ve strayed into the official app, the ads have been useless and other forms of online media inform me better.

Similarly, Twitter has flip-flopped from a chronological timeline to an algorithmic one. In 2016 they made it the default, causing consternation and a bunch of articles on how to disable it. This was only temporary, as Twitter reverted to the useless algorithm shortly after disabling it. Then it was possible to make that change permanent, then more recently, it has become vital for Twitter to go back to an algorithm - god knows why? (Heads up: Ads)

I’m not against ads per se; I’m against crass, overly intrusive ads. With no ads, I’m not subjected to the barrage of trite that I see when I open the official web app. The chronological timeline allows me to run down a few pages and quickly get up to speed on a topic without wasting hours and being spoon-fed conspiracies and other distasteful junk.

But the most effective way to tame Twitter is a two-pronged approach and can be done with or without the official client. And, even if you’re happy with the tracking and the ads and a completely useless “promoted” timeline, this configuration will still help a little.

Firstly, I “follow” only a few accounts; as a principle, the term “follow” is nauseating for me, but that’s where we are. 🤷‍♂️

These are hand-picked, and it is not an endorsement if I follow you. I just want to temporarily see your thoughts or retweets, etc., in my timeline. This changes now and again as I audit, adding and removing follows as I see fit.

Note: If I’ve unfollowed you recently, don’t take it personally. I’m probably keeping up-to-date with you still but not in my timeline. You’ll see why in a minute.

So my timeline is a pretty quiet place, and it helps me avoid too much time-wasting. This brings me to the other tool. I think this is Twitter’s under-estimated superpower.

It’s called Lists.

Use them prodigiously.

When I thought about this shift in the use of Twitter, one thing that was evident to me was that the soup of random nonsense on the timeline was because we have to switch contexts cognitively as we scroll through constantly. One tweet grotesquely shows videos of deaths in Ukraine (complete with burning corpses), the next, a funny dog video, then a serious political news story from a reputable source, followed by a shitpost from Elon Musk or Kanye West, then the inevitable conspiracy theory skid mark.

It’s cerebrally fatiguing and draining. Not to mention the sheer effort required to understand the truth of what you’ve just seen.

I wanted to devise a way where I could be in a particular context and stay in it for the duration of the session on Twitter. This is where Lists come in. Lists allow you to add Twitter accounts without having to follow them. That way, you can keep up-to-date on a subject, research project, or any context you want without being derailed by the algorithm and other deranging information. I’ve been doing this for a few years, which has helped me a lot.

I recommend you look at this feature and put it to use yourself. The rewards are evident with a bit of effort and a little pruning.

My current lists are; Analysts, Antilles, Apple Related, Apps, Caribbean, Culture, News, Research, Researchers, Tech, and Tropical Weather.

In each of these lists is one or more Twitter accounts that are, in the majority, primarily tweeting on the topic (i.e., the list name) I’d like to read. They don’t need any explanation; I’m sure you can work out each context.

You don’t have to drink from the firehose; you can drink more sensibly.

Here’s some more information on them and how to set them up: https://help.twitter.com/en/using-twitter/twitter-lists

Thanks for reading.

Visit the website to read all the archives.

In this essay, I wanted to follow up on some of the things I wrote in Part 1, give a little context, and highlight some of the changes that have happened since. If you’re vigilant, you’ll notice that the world has standardised on Web3 and no longer tends to use Web 3.0. I have complied! I could make a joke about centralisation here, but I’ll resist.

I also wanted to discuss the “other side” of the technology and its use for good. I’m sure this is a more considerable discussion. I might dive into that another time.

I hope you enjoy this essay, tell me if you do or don’t. It’s easy, reply or ping me on Twitter (@virek), or you can find me on LinkedIn.

Web3 Part 1 Follow Up

I wrote in Web 3.0 or Web 1.0 in sheep’s clothing? at a time when I was thinking about all of the different aspects of the web and how they had changed over the years, and what I thought it might become. There’s a lot going on in my brain, and I thought that essay would help me clarify a few things. I’m not sure it did, but even little progress is progress. I guess what it did achieve, though, is that I have a clearer view of the various composite parts of web3.

However, one thing that came out of that reflection is a sceptical view of the unregulated crypto world. I (sort of) didn’t mean for it to sound as negative as it did, but to be fair, If you’ve been following what’s going on in that Wild West corner of the internet, you’ll have noticed that scams, frauds and downright theft are becoming a severe problem, as well as the new trend of crypto-romance scams1.

Another aspect you’ll have no doubt noted is that governments are starting to get serious in their thinking on how to regulate transactions and how to kerb the more significant and larger amounts of energy required to conduct transactions at a fraction of the efficiency of traditional systems. I know that the algorithm is slated to change to reduce the energy requirements substantially, but I doubt that it will have any meaningful effect for a long time yet. Take Ethereum, their planned move to ‘proof of stake’2 from the ‘proof of work’ algorithm started over seven years ago and still hasn’t been completed. Kudos for the foresight from the Ethereum founders, but that particular problem seems to be extremely difficult to solve.

Also, look at this article from the BBC, where they went onsite to see one of the mining farms in Kazakhstan. You might be surprised to learn what is needed and what cost to the environment this trend is. Here’s a link to the full documentary, Our World - Kazakhstan’s Crypto-Boom?

The other aspect that I left hanging without really taking sides on is the state of the current NFT market.

The image above represents what the current NFT market looks like today. And again, you may shrug and tell me that isn’t that what all commerce of art, collectables and the like is? And to some extent, that’s correct. The real value of something is what someone is willing to pay for it. The difference in the current NFT setup is the gambling and Ponzi-scheme structure, as discussed in the last essay:

The other elephant in the room over cryptocurrencies are the obvious parallels to pyramid or Ponzi schemes. Several articles in various reputable media outlets like the FT etc., show how much of the “value” of cryptocurrencies and NFTs is speculation. Speculation that requires new entrants into the market to prop up the value higher up the chain. With the clear Achilles heel, if the supply of those at the bottom of the stack —i.e., those who lose their investments— stop pumping money to the higher level of the stack, the whole thing will most likely come crashing down.

And again, for all the bluster and hype, there is no getting away from the fact that the system is lossy on the whole and has been single-handedly responsible for an increase in efficiency to run anonymous ransomware operations that have been responsible for closing down hospitals, disrupting critical infrastructure, and extorting banks, to the tune of over $5B a year. I urge you to read this lecture from David Rosenthal at Stanford University. This site is an invaluable resource to keep up with some of this.

Suffice to say; I’m sceptical of the solution looking for a problem, aka Blockchain, as it is in its current guise for many reasons; decentralisation (it’s not), energy efficiency (dangerously inefficient), anonymity (not quite), speed (ZX81 rapidity), security (at the whim of someone else currently, as well as contributing to a security nightmare for business and public services).

Following on from the discussion —and criticism— on cryptocurrencies, it would be remiss of me not to talk about Central Bank Digital Currencies or CDBCs. These are digital currencies that have some similarities with cryptocurrencies but are fundamentally different from a technical, regulatory and implementation point of view.

One thing that may have escaped your attention is that the Caribbean has and is at the forefront of this technology. Rather than following the word, we find ourselves leading the world. That in and of itself is, in my mind, proof of the possibilities and opportunities that exists here, despite what you may think. Homegrown digital currency companies like Bitt Inc. are leading the world and are developing projects outside the region to Africa and beyond. We are also the home to the world’s first economic union CDBC. In this context, the question becomes “What can Europe learn from us?” rather than the other at round!

Let’s look at a couple of examples in the Caribbean and what they might mean for people living in the Caribbean.

The Caribbean has traditionally suffered from economic underdevelopment, leading to a wholesale stalling of digitisation for the last ten or so years. Where some countries had started their digital transformation that then got a kick in the butt by COVID-19, accelerating those efforts, here, COVID-19 started the process from scratch in most instances. There are several consequences of that economic underdevelopment that I won’t go into here. I’m not an economist, and I’m not sure it’s worth going over old and stale ground. We all know what we’re capable of here and why it hasn’t happened yet too!

However, a couple of things are of interest when talking about the technology of money. According to a CIGI-Ipsos survey in 20173, around 65% of the eligible population (children and adults) were unbanked. A large cash economy has difficulties, notwithstanding a sizeable informal economy that provides no receipts for government or public services, let alone access to ICT-based products and services.

CDBCs promise to resolve some of these structural problems, with access to payments systems and pseudo-banks for people that have traditionally or intentionally avoided the banking system. They also provide security for cash payments, withdrawals, and transfers. That last service is more important in the Caribbean than in other regions due to the distribution of populations around the different territories in the region and beyond.

Additionally, I note that remittances to Latin America and the Caribbean are estimated to be around USD 103 billion4, with Jamaica alone counting for over USD 3 billion. Remittances that are sent need to be transformed into cash, often by relying on convenient but expensive services such as MoneyGram or Western Union. The middleman always gets his cut.

One such CDBC currently in public beta (to use a tech expression) is DCash. DCash is the official CDBC of the Eastern Caribbean Currency Union (ECCU). Having partnered with several of the local banks and businesses in the OECS, the Eastern Caribbean Central Bank (ECCB) has launched its pilot program in Antigua and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia and Saint Vincent and the Grenadines with Anguilla to join the list after the initial test period.

From a technical point of view, DCash uses an open-source blockchain co-developed by IBM, called Hyperledger Fabric, a “permissioned” blockchain, ensuring only known parties are participants, thereby contributing to the immutability and the reduced risk of fraud and theft of assets on the blockchain. It does remain to be seen if it can scale to multiple thousands of transactions per second that traditional financial systems have been doing for decades. That is just a matter of technological maturity rather than anything else, in my view. No one believed the limited capability of the original iPhone would be the cornerstone of practically all that is digital today, either.

On a regulatory note, CDBCs are regulated and controlled by their issuing central banks by their very nature. In the case of the Sand Dollar —another CDBC that was the world’s first— the Central Bank of The Bahamas (CBB) is the regulating authority. The CBB authorise financial institutions and retailers to accept the Sand Dollar and handle the valuation and volatility of the currency. This should, in theory, provide a basis for trust in the use of the technology.

However, implementing these CDBCs is not easy, as the recent problems with DCash have been highlighted. For context, DCash transactions have been suspended for over a month5, seemingly due to a digital certificate issue. At this point, it would be easy to point out these difficulties and say, “See, it won’t work!”. But to do so is to ignore the substantial potential for a project of this scale and importance. I do not doubt that the currency will be back online soon and that the teething implementation problems will largely be resolved. I am also confident that other issues will be found and will be corrected. I am also a firm believer that the broader adoption by larger countries and currency unions will be streamlined as a direct result of the in-situ PoCs happening in the Caribbean.

If these projects are successful, as it seems they will be, the transformational changes to the Caribbean economy could be profound and in a good way. For example, cross-border trade in digital and physical goods could be unlocked from current restrictions, complexity and costs, not to mention other applications (remember Blockchain Hurricane Protection from CREAD)6. Don’t just take my word for it either, How blockchain accelerates small business growth and development.7

Thanks for being a supporter, have a great day.

Visit the website to read all the archives.

6

I wrote about it here:

The Future is Digital

Digital Commerce. Blockchain (again)

Listen now | If you listened to the podcast version, you’d note I added some music. I broke out my skills in Garageband to make a quick accompanying jingle to spice up the podcast. Let me know what you think. 🎵 On to this week’s topics. I’m astonished I didn’t get roasted for completely dissing Blockchain as a useless technology a couple of weeks ago. I thought I’d t…

Read more

6 years ago · 1 like · Matthew Cowen

After my recent hiatus from writing, I’m feeling good about writing a few essays this year on some of the emerging topics that have captured the imagination of the technorati. I’ll also be diving into some other issues that, whilst not specifically about tech, have such a tech element to them they can be considered tech subjects.

If there is one overriding theme, it is that tech, or digital if you prefer, is sticking its nose into almost everything. As tech enthusiasts, we’ve been used to being sidelined or kept in the corner where we could express our undying love for our tech and not affect anything around us by accident. That is no longer the case.

Too many articles discuss how tech’s disruption has caused more unintended ill than benefits.

Does this mean that all tech is terrible? No, no. Of course not. But what it does mean is that we as tech people need to educate ourselves on nearly everything else to comprehend the world around us we are affecting, and perhaps have some insight into bringing on board those that can help us in their specialist subjects. I’ll get into that some other time, but suffice to say that the future will be equally tricky and fascinating.

Upcoming Podcast

On several occasions, I’ve been a guest on Michele Marius’s podcast, the ICT Pulse Podcast. We recently started recording what we hope will be an interesting conversation around a topic that feels far off for many of us in the Caribbean but is perhaps closer than we realise.

I’ll let Michele announce and release these before giving the game away.

I wanted to say how much I enjoy this format —an open discussion on a specific subject in approximately one hour.

Look out for it on your podcast app of choice soon, and do give us some feedback or pointers into things we may have missed or poorly explained. I’d love you to contribute.

Web 3.0

There has been a lot of interest of late over this thing called Web 3.0. It is hard to accurately describe what it is precisely because no one definition exists. Web 3.0 is whatever you want to suit your world view of the tech environment. I wanted to jot some initial thoughts I’ve had and submit them for discussion. I don’t pretend to be an expert in all of this. I’m trying to figure this out too. I’m just doing it out in the open here, from the perspective of a longtime tech expect.

Of course, there are some common elements in all definitions, but that doesn’t tell the whole story.

Most people agree that Web 3.0 is a collection of new technologies that will provide a fundamentally different experience on the internet from the world of Web 2.0. Some of those technologies you’ll have heard of or even have dabbled in, like Cryptocurrencies, NFTs and VR/AR.

“But Juanita never comes to The Black Sun anymore. Partly, she's pissed at Da5id and the other hackers who never appreciated her work. But she has also decided that the whole thing is bogus. That no matter how good it is, the Metaverse is distorting the way people talk to each other, and she wants no such distortion in her relationships.” — Neal Stephenson, Snow Crash

I’ve avoided the early 90’s noun coined by Neal Stephenson in his novel Snow Crash, Metaverse, purposefully because I have a feeling that, for the moment, it is just one massive land grab on the internet to get it “out there” that you are the most critical player in this field. Again, I’m not judging it as a concept. Even I declared having seen a part of the future when Marshmallow performed in Fortnite to 27 million fans in my essay The New Reality. Still, it is a little cynical in my view for companies to pretend that is it the next big coming purely for the benefit of themselves solely.

I’ll leave you with one last thought. I wrote about Fortnite hosting a live mega-concert for Marshmellow, with something like 10.7 million concert-goers — not counting the countless Twitch streamers (estimated at a total of 27 million people all told). I wondered then, as I do now, how could this technology be used for more “serious business” purposes. I was a regular attendee of Microsoft Conferences over the last 13/14 years, conferences that attract up-to 25 000 attendees in one place I have a badge and a letter to prove it 🏅. So how could Microsoft replace these conferences with an entirely digital experience? One thought that comes to mind is precisely that blueprint trialled by Fornite.

However, let’s start with the technology.

Web 3.0 is based on three technologies slowly gaining ground in capability and notoriety. Blockchain (and hence cryptocurrencies and NFTs), Augmented Reality, and Virtual Reality. I am starting with the former in this essay.

Despite different use cases and outcomes, I tend to group Cryptocurrencies and NFTs in essentially the same basket. I know they’re not the same but bear with me. These technologies are based on Blockchain tech, and honestly, I genuinely think that Blockchain is interesting tech with some compelling use cases:

the underlying technology of these currencies is actually quite interesting and has place for use in Digital Transformation, hence why I’d like to talk about it in this week’s issue. That technology is, of course, Blockchain, or as it was originally known as, Block Chain. — Blockchain ≭ Cryptocurrency

Blockchain’s current problem is that it is both slow and energetically inefficient. Scaling Blockchain to applications that require hundreds of thousands of transactions per minute (banking anyone?) is currently a pipe-dream, despite advances being made regularly. But a little like Linux Desktop, it’s always ‘coming soon’. From an energy standpoint, it seems a little immoral to me that extraordinarily greedy systems, from an electrical perspective, operate without the slightest regard for the environment.

Take a look at what happened in Kosovo and in China,1 2 where the governments have banned crypto mining because of the strain on the electrical grid and illegal electrical supply diversions being employed by the less scrupulous. There are attempts at cleaning the face of this technology. For example, an initiative to carbon offset NFTs is a thing3 but is unlikely to have broad appeal or affect the energy requirements of Blockchains materially.

The other elephant in the room over cryptocurrencies are the obvious parallels to pyramid or Ponzi schemes. Several articles in various reputable media outlets like the FT etc. show how much of the “value” of cryptocurrencies and NFTs is speculation. Speculation that requires new entrants into the market to prop up the value higher up the chain. With the clear Achilles heel, if the supply of those at the bottom of the stack —i.e., those who lose their investments— stop pumping money to the higher level of the stack, the whole thing will most likely come crashing down.

We should additionally consider the two central tenants of the “reason” for Blockchain. Decentralisation and Immutability.

Starting with the latter, immutability is the unique property of an entry in the distributed ledger (we’ll get to that in a minute) that, once written, is permanent. That is, it can’t be altered. Let’s look at that a little closer.

The most popular Blockchain of the moment is Ethereum. Countless projects have been built on Ethereum to mint and distribute stable coins, CBDCs, NFTs and unbacked cryptocurrencies. Late last year, a bug was discovered in Polygon, a scaling project of Ethereum. It was such a severe bug as to allow all assets to be put at risk of being taken away. Stolen is the technical term. Twenty-four billion dollars were at stake.4 And, Polygon paid bug bounties that amounted to nearly $3.5 million5, but not before 2 million dollars were lost. This is not a one-off either. Several “hard fork” instances have had to be enacted to save the Blockchain from total pillage, thus resetting the original assets to $0.

And good luck in getting redress if it’s your asset that was stolen.

This brings us to the second tenant, decentralisation.

The growing backlash against “Big Tech” has fuelled a view that stripping any one entity of absolute power is the answer to abusive centralisation. Meta (who are you kidding Facebook?), Alphabet (née Google), Apple and Microsoft, amongst others, are all accused of abusing their power and essentially rent-seeking6 their users.

The idea behind decentralising the Blockchain is to prevent it from being domiciled on any one platform or property. The apparent advantages are resilience and allegiance. By definition, a distributed system is more resilient as failures in any single node are unlikely to disrupt the whole. Similarly, by decentralising the system, if one participating actor becomes abusive or otherwise falls out of favour, it’s easy to turn off the tap and squeeze them out of the system.

But what most people don’t realise is that this distributed nature of Blockchain is mostly a myth, and at best, being grossly overstated.

The issue lies in using the APIs necessary to build Blockchains such as the aforementioned Ethereum. There is only a tiny amount of APIs used currently, with prevalent ones like Alchemy being used by many. These APIs oversee the read/writes to the ledger. Other APIs used to pull information from the Blockchain are developed and run by a minuscule population. That is, a lot of trust is being placed on a tiny group for pretty much all Blockchain interaction.

Additionally, if you want to buy or sell assets, like NFTs, again, only a handful of platforms exist currently. You may have heard of OpenSea, for example. They account for around 95% of the NFT market.

Then ask yourself the question about where all this stuff runs? On the cloud, of course. But who’s cloud? Amazon’s and Microsoft’s, for the most part.

There are instances of whole markets becoming inoperable —i.e., no trading, no consuming— during AWS cloud outages.7 Thankfully they are not that often, but when they do occur, the inconvenience is enormous.

Then remember where the actual data for the NFT is stored. Generally on someone’s shared drive on a cloud drive service (at best) or a home-built server somewhere, god forbid.

This doesn’t sound as decentralised as perhaps you first thought.

To be clear, I’m playing Devil’s Advocate here deliberately to inform you and to provoke discussion. I’m crypto-neutral for the time being. I can see huge benefits, particularly to the unbanked or the vulnerable that are slowly being excluded from taking part in society. I can see the “value” of digital assets in the same way a 16th Century oil painting by some obscure bloke can be worth millions. Why not?

But without proper oversight, redress in the case of fraud/theft and backing from governments, I can only see risk and potential for propping up devastating illegal activity with my blessing. It’s no surprise drug dealers are turning to crypto. I can’t morally take that position and refuse to prop up Ponzi schemes.

In the following essay, I’ll get into the other aspects of Web 3.0, namely AR, VR and a few additional thoughts. Let me know if you have anything to contribute. It would be my pleasure.

The Future is Digital Newsletter is intended for anyone interested in digital tech and its effects. Feel free to contribute. A little share from time to time would also be most appreciated.

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Visit the website to read all the archives. Have a great day.

I know as a writer on the internet, that shouldn’t matter. I should churn out post after post because that’s how the online world works if you want the algorithm to work. Sadly, that’s not how I work or align my priorities. I’ve always strived to provide value in my writing and analysis, and I have largely succeeded in doing that. But these past few months have been complicated for myriad reasons (global pandemic, anyone?).

I think I’m getting back on track, and I hope to kick-start the writing again as it is something that I profoundly enjoy in that masochistic way only writers will understand. It drives me crazy, and it is such a cognitive effort for someone with a condition like mine, but I am compelled to do it for better or for worse.

When I started this newsletter, I had ambitions of producing something that organisations across the Caribbean could rely on for timely, nuanced, and practical analysis of the burgeoning field of Digital Transformation. That didn’t quite work out, and my writing struggled to find its target and nail it head-on. That has more to do with my mental state rather than the quality of my writing, or at least that’s what I tell myself.

I tried to diversify the offering by narrating the writing via podcast that I started in February 2020. Initially, it went well, but eventually became a burden, requiring a lot of time to put something together that was both ‘listenable’ and digestible —I don’t have the most Radio DJ friendly voice in the world—, for what was, on average, around two thousand words each time. That translates to around 10-15 minutes when I speak at my usual pace.

But as I learned, most people don’t realise that 10-15 minutes of recording is around 3,4, or even 5 hours of editing, structuring, chaptering, imaging, and uploading. It is not something you can do if you have many other priorities in life. I also learned that despite assurances to the contrary, the download/listen rate was low compared to the open/read rate of the raw text in email form.

I’m not sure what to make of that because the idea of the podcast was to make it more available and easier to consume, but it didn’t add anything to what I’d built with the text-only newsletter. So I decided to drop it and see if that affected anything. It didn’t. Perhaps I should do it as YouTube… I’m kidding.

So what does all this mean going forward?

One thing, I refuse to let this newsletter die. I think it has the seeds of something good and has an opportunity to provide value for its readers. Additionally, I hope to change things up a little and make it both easier on you and easier on me to produce. As I hinted above, writing is something I have to do, but I struggle with it for many reasons, some cognitive and some motivational. I want to find a better formula for research, writing, and delivery.

I’m not entirely sure what that is for the moment, but I have a few ideas, and I’m actively discussing things with people I trust.

If all goes well, I’ll re-launch in the new year. I plan to provide even more detailed analysis and more value down the line. However, I thought I’d take this opportunity to solicit a little feedback to gauge how you’d like the newsletter to be organised.

There’s a (very) short questionnaire here:

Feedback

The first question helps me get a sense of length and frequency preferences?. More frequent? Less so? More text? Less text?

The second question is open for general feedback, and I’m cool with all suggestions. I’m leaving it open until the 16th of January 2022.

Please, if you can, spare a minute to click the button, even if it’s only to answer the first question.

Regardless, thanks for reading. It means a lot to me.

I’ll be back sooner rather than later. In the meantime, may I wish you a Happy New Year 2022.

Matthew

I have to say, overall, I’m more optimistic than I am pessimistic. Not that you could tell from this piece. 😁

What do you think? Hit reply or post in the comments.

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We’re entering the era of computational everything.

For many of us in the IT industry or those of us who are closely related to tech, it comes as little surprise. But what is surprising is just how much “computational” is enhancing and augmenting our capacity as humans.

Steve Jobs famously said that computers were bicycles of the mind. He quoted a study in Scientific American, where the Condor was outclassed by a human using a bicycle in terms of efficiency (distance travelled versus calories used). Humans were classed well below average without the bicycle. This is what computational-everything is exactly like.

Much of what we do today, and have been doing over the last couple of decades or so with computers, has largely relied on skill. Your raw talent or your tenacity have generally determined if you have become highly skilled or an expert in your chosen domain. Malcolm Gladwell’s 10000 hours principle.

But computational doesn’t mean computing. Let’s have a look at what I mean by computational.

Computational beginnings

Before computers were the ubiquitous tools we all interact with in modern times, with much work completed manually. Simple tools developed over hundreds, if not thousands of years, enhanced calculations and reduced errors. From the abacus to the slide rule, these basic augmentation systems had a profound impact on human’s ability to complete more and more complex tasks.

Moving forward, the first computers —in the modern sense of the definition— like ENIAC (Electronic Numerical Integrator and Computer) or CNC (Complex Number Calculator)1 pathed the way for people and businesses to exploit their powerful and rapid algorithms to produce results faster and with fewer errors than teams of humans. Business ledgers rapidly took advantage of the new possibilities and these have essentially stayed the same since then. Accounting applications today, despite being much faster, are ostensibly no different from the early versions, save a few bells and whistles.

Modern computers, or more precisely modern CPUs, have evolved to such an extent that an entirely new way of computing is now possible. Hence, the term Computational chosen

And once again, ARM is at the forefront of this revolution in computational implementations. Based on ARM designs, Apple’s in-house designed and developed M1 processors that were recently revealed and are used in its line of Mac computers as well as the new iPad Pro features a 16-core Neural Engine —the hardware required for Machine Learning. The computational advantages, the bicycle for the mind if you like, are startling, allowing developers and scientists to imagine uses beyond what used to be possible.

We’re starting to see today’s applications gain some of that capability in mundane productivity applications like Microsoft Word or in writing augmentation applications like Grammarly. Translations tools are only just starting to show their promise, and tools like DeepL produce text so good that only the pickiest natives can spot errors…in multiple languages too!

The bicycle for writing, the bicycle for … Just about anything we will do on computers is upon us.

Computational photography

A few years ago this new era of computational photography kicked off with the introduction of applications that could suggest ameliorations and more for your photos. Apps designed to enhance your meh photos into something presentable.

Portrait Mode, Studio Lighting, these computational photography aids, let us take photos of subjects in ways that were prohibitive or expensive. Computational photography has only just started to scratch at the surface of what is going to be possible. Take a look at framing for example. Framing is an integral part of photography skills. Learning how to Frame an image is often the difference between a good photo and a great photo.

New devices and apps will soon tell you ‘how’ to frame the image. The phone fine-tuned to analyse in realtime the image touching the sensor and calculating in a matter of a split-second that the tree on the left would look better a little less at the edge, or that the face orientation would be better slightly turned more to the right and aligned on the right ⅔ line, prompting you to tell the subject to turn a little right.

That’s not all. The apps will post-process previously taken photos with the eye of a seasoned expert, extracting not only the optimal image quality based on exposure, temperature, and a few other basic metrics easily adjusted, but by image enhancements using Machine Learning to digitally enhance otherwise lost parts of the scenery (Pixelmator already does this to some extent). But it will frame the photo better, suggest or automatically apply a degree of touch up only the most trained and experienced could do in hours of work, in a fraction of a second. The edit notes all saved so that any one or more, separately can be removed or modified manually.

Computational audio

Just this week, Apple introduced Spatial Audio to its music streaming service Apple Music. Spatial audio enhances the separation between voices and instruments to provide a more “inside the music” feel to your listening. For now, these tracks are limited to a few thousand in the catalogue, with more on the way soon. But in the not too distant future, computational audio will be capable of real-time post-processing to enhance the audio you feed it.

Suddenly old tracks or tracks recorded on the master tapes in mono will gain stereo or spatial audio simply by request.

Currently, Spatial Audio is a bit hit-and-miss, as it requires a good mix from a good producer. Not all are that good. Soon, computational audio for music tracks will auto-analyse and re-mix music to sound better with little human intervention.

Other forms of audio, hearing aids, or headphones, will all gain capabilities that augment the experience. Purists may baulk at this, possibly with reason, but it is an inevitability that will be widely welcomed by those that are just looking for a decent sound. Those with hearing issues will rejoice.

The computational audio applications don’t stop at playback, recording may be fundamentally affected too. Microsoft and Apple both include microphones that automagically enhance the voice audio for online meetings. Possibly exacerbated by the pandemic, but the perfect testbed for even more integration of CPU and microphone to provide a better and simpler recording experience. 

Anyone who has run a podcast will tell you how the microphone setup is important for the sound quality of the recording and hence the quality of the show.

Apple’s WWDC keynote featured just such an application with Voice Isolation mode. It showed a leaf blower just behind the video conferencer being completely obscured by the computational audio application. A “coming soon” feature that can only get better and processor and programming experience increase. Conversely, it also features Wide Spectrum mode for when you want all the sounds included.

Computational everything

And this is where this essay is leading. Too much time, effort, or words spilt on Artificial Intelligence, and how the robots are going to take over the world do us no good. In some sense, yes they are, of course. But that doesn’t automatically mean the world will be ruled and driven entirely by them. What it means is rather more subtle. Possibly more of the framework I outlined above. By having computational everything, much of our lives can be enhanced and augmented, the bicycle for…, if you wish.

Autonomous cars are a long way off still, by computational driving is already here and will get better. Lane Assist, Park Assist and the various cruise-control augmentations are nothing, if not computational driving.

Even the most mundane of products can be augmented by liberal CPU usage. Your washing machine for example designed to reduce the water and detergent required simply applying ML to the load in the drum. Analysing (chemically) the water coming in, the type of detergent, the clothes, and their makeup, Cotton or other, this bicycle for washing machines would substantially contribute to more efficient usage of scarce resources and perhaps even better control the rejected “dirty” water.

Without writing a list-ickle, I’m sure you yourself can see a plethora of bicycle of the … applications.

Computational evil

It would be remiss of me not to discuss the negative side of this coming wave. As in all technology, not only does it enhance those with good intentions, but also those with bad intentions. And those with evil intentions get to ride on the bicycle too.

Augmented, or enhanced, everything means exactly that. Enhanced crime. Enhanced Racism. Enhanced Sexism, etc. You cannot have the good without the bad.

The Internet has shown us this.

I’ve been an Internet fanboy for as long as I can remember —at least, as long as I learnt there was a big network of computers that we could all use, connecting us closer together.

It was fun in the 90s. I had to connect from the university network, JANET, to NIST (National Institue of Standards and Technology), then out to the big bad world of what was still essentially ARPANET.

The World Wide Web was still in an experimental state in CERN. I hadn’t even heard of it at that point. We used the Internet like animals; terminal commands, long waits, FTP, Gopher, WAIS, and Usenet, none of the graphically oriented interfaces that we see today. As I fell in love with the Internet and I stumbled upon an early copy of Wired Magazine in 1993, imported into my native UK. I fully bought into the idea that the Internet was nothing but good for the world.

It would connect us, it would open our eyes to other things, would educate us, and it would even feed us. It would completely revolutionise the way the world works, for the better. It was the bicycle for the social experience.

I had no idea at the time that the very fact that the world became more and more connected, actually drives us more and more apart.

We, as humans, can comfortably ingest, process, and analyse only a few cognitively demanding elements simultaneously. At school, you would have only a handful of friends, and only one or two you could call a best friend. If like me, you were in a large secondary school of around a thousand pupils, it was overwhelming to be in a general assembly (with the whole school in one room). The morning going to school, with its never-ending procession of pupils arriving, break time with the crowd pilling out of the building to run around on the playground. All these people surrounding us are too much for one human to get to know, either intimately or on a cursory level.

The Internet completely explodes that model, and we are confronted with tens of thousands, if not millions of possible interactions whilst connected. Twitter, Facebook, Clubhouse, and their indifference of their capacity to overwhelm us is creating a different type of human culture that is, in my view, detrimental to the world. Polarisation, populism, the immediacy of need. These are all consequences that are not propice for the sain development of the world and a direct result of Computational Socialising. 

I wish I had understood this when I was first becoming charmed with the Internet. Perhaps I could have contributed to doing something to protect us from its inevitable negative consequences. Funnily enough, it was all there then for us to see. Read Neuromancer, and you’ll understand what I’m talking about.

It’s a dystopian view of the Computational Everything world I’m discussing in this essay.

I hope you liked the topic. Let me know.

Photo by Adi Goldstein on Unsplash

I have some good news and some bad news. The bad news first as is customary. There’s no podcast version of this essay yet. It’s actually a very time-consuming process, and I’ve had a lot on my plate recently. Furthermore, the stats show that it isn’t as popular as some had led me to believe. I’m thinking of changing up the format and doing a more “traditional” podcast that complements these essays, but I haven’t quite finished thinking that through. I’d love a regular partner to podcast with. Let me know if you’re interested.

Now on to the good news … well, for me anyway. I got my first COVID-19 vaccine today and looking forward to the next dose. It’s the least one can do to protect the vulnerable around me. I hope you get yours soon too.

On to this week’s essay.

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Thoughts on Clubhouse

I got on to Clubhouse, so you don’t have to. It is actually a fascinating idea but one I can’t quite adhere to fully for numerous reasons, some of which I’ll dive into here. 

But first, whenever I jump into a room on Clubhouse, there is literally nothing that couldn’t be better served in podcast format. The ability to stop/start when you like, the offline capability and the accompanying show notes that often point you to supporting materials, are all clearly missing from Clubhouse. This has been confirmed by the fact that many presenters are actually recording and publishing their “talks” through podcasts and YouTube post-room.

In fact, that’s the primary reason I got on the platform, to try to understand its relation to podcasts and to see if it would disrupt them as so many have been predicting. I’m happy to say that no, Clubhouse will not put a nail in the coffin of podcasts any time soon. If anything it is more like to become the model on which conference panel discussions get digitalised (and subsequently marginalised in value). There’s scope for the democratisation and digitalisation of many of the panels that are hosted around the world. COVID-19 has accelerated the acceptance of that reality. As a panel host/guest speaker invested in that market, i.e., if it’s your main job, I’d be worried about where well-paid work will come from in the next couple of years.

In fact, I’d go as far to say that if the platform becomes very popular, it could decouple live panel discussions from conferences and even kill off local discussion in-person forums. And like any platform on the internet at internet scale, the problem quickly becomes discovery. How do you find out about those interesting and informative conversations? How do you stop from getting placed in a social bubble (remember you’re linked to your contacts)? What part does moderation play in this?

But what is Clubhouse? I think a good way think about it is a cross between a phone-in radio show from a small town, populated by procrastinators, narcissists, and grifters. Its sudden popularity has meant that it is the latest target for dollar store wisdom mongers, snake oil merchants and outright fraudsters. That is not to say that there aren’t any interesting and enlightening discussions taking place on the platform, of course there are, just like we’ve seen on TED. But boy, there’s a lot of absolute crap out there too! If you do join, just beware of the VCBS and the pathetic rich-splaining like ‘Ooh look at me, I’m a millionaire’ or “Get More Clients in 2021”. I think I’ve said enough.

Clubhouse

From an analytical point of view, I can see it as an ancillary service in digital conferencing —something that despite trying, we still haven’t cracked meaningfully, particularly the conference-goer interaction space. You’ve all been there, when the filthy mic gets passed around the hall in the Q&A session. You’ve probably all spent time in a Zoom-like conference wanting to get to talk to the panel/presenter and couldn’t because the tools don’t allow for that yet. Using Clubhouse as a digital alternative might possibly be very compelling.

The big question, of course, is how is Clubhouse going to monetise. I’ll put that to bed immediately because there is only one proven solution to qualitative tools on the Internet. Ads. Only businesses pay for quality (ahem) software. Consumers wilfully (or ignorantly) allow spying to be performed on their footsteps in cyberspace for that to be monetised later using some flaky and downright fraudulent claims on accuracy and ROI. And so it will pass. Clubhouse will become Clubhouse + ads. The funding round mostly from A16z practically guarantees this. They have bet big and will want big returns or nothing.

There is also a technical and practical dilemma for Clubhouse too. How it can interject adverts without the speakers announcing “This room is sponsored by …” —something I’m not even sure is possible in the T&Cs. (Note to self: Check the terms for advertising clauses). If it is audio, i.e., the primary reason you get on the platform, then having your favourite show interrupted by an advert about a website builder or better yet, the next “hot” Clubhouse room is so user hostile that I can only imagine adverts inserted as you enter or leave a room. Interstitial adds are super agressive and frictional to the point that many of us might reduce the use of the app. The other option is visual ads either static of video-based. Again, this is a tricky prospect as many people open the app, join a room and turn the screen off listening on headphones, the phone’s speaker or AirPlay-ing it to the voice in the box. I mean, where’s the moat? How is this different from live-feed podcast?

As it stands today, Clubhouse is just a feature waiting to be copied by the big boys in the classroom. Twitter and Facebook have started doing just that. They’re unlikely to stop until they can kill off the disruptor before it gets a foothold or be told to stop by legislation. It’ll most likely be achieved through two strategies; using their already hard-won networks and graphs, and out-featuring the features of the product for nothing more than is little more personal data.

I wrote this passage a few weeks ago as I was taking notes using Clubhouse:

Just as an aside, a note about building the network. Clubhouse requires, yes requires, you to upload your entire contacts list if you want to invite someone to the party. You get two invites when you’re successfully integrated. If you store contact details on any European citizen (regardless of where you like), you are defect breaking GDPR laws unless you’ve got permission from the person being invited. I make no judgement, I inform. Think about that for a minute. I currently have 1346 contact cards on my Mac (some are old or defunct), but Clubhouse wants 1300+ just to send two invites. I suspect around 800 or more of those contacts are EU citizens; therefore I’d be breaking the law over 800 times.

That paragraph is meaningless today, as the app has been updated to allow an invitation to be sent to individual phone numbers thus avoiding the wrath of the EU for now. Who knows if they’ll go after those who have already broken the law. 🤷‍♂️ For them, Clubhouse has provided means by which you can delete the contacts you uploaded. Looks a bit like shredding the papers before the inspectors to me. As far as I’m aware, French authorities have opened an investigation to determine if there was indeed a breach of law by Clubhouse.

I doubt much will come of it, though. But it is a sign of the very different times in which startups in the tech industry are trying to get off the ground, of which they will be no doubt acutely aware.

Podcast: Innovative disruption discussion on ICT-Pulse

You may well recall that I have been a guest on the ICT-Pulse podcast a couple of times in the past; well, a while back, Michele Marius released an episode we recorded together with Tunde Mottley, where we talked about the state of innovation in the Caribbean, and what we perceived as confusion between Smart and Digital. I’ll write about the second topic in the future, but I thought the first topic would be good to expand upon here. The format of the podcast is to propose a question and then discuss it unscripted. My proposed question was:

Does our size, complexity, lack of investment and poor data preclude the Caribbean from truly innovative disruption in business?

This is a multi-layer question and one that can’t be answered in one paragraph, and to be honest, depending on how many words I end up writing past this point, I might break it up in the smaller essays. 😰

What got me thinking about this in the first place is the evidence of a complete lack of popular services we take for granted in parts of the US and Europe. The Uber’s, the JustEat’s and Deliveroo’s of the world are all absent here. Even the well-implanted franchises like McDonald’s and KFC don’t offer the same services as their counterparts in other regions. Why is that?

When you take the Caribbean basin in total, some 44 million people, it could be equated to around ⅔ of the population of the UK or France. Those are big markets and provide plenty of scope for business development. A market of 44 million people should be comparable in terms of GDP, but according to my research, that is far from the case.

Of several structural issues, the Caribbean is a disparate, separated geography that makes it counterproductive to large-scale development. The 44 million people are spread over 31 countries separated by sea, language, currency and political persuasions that break the Caribbean down into small chunks that on their own cannot command the scale of funding, development and potential sales to attract investors.

Our banks and our investors have no appetite for the types of funding required to produce the kinds of startups —that once built could be exported across the globe— because they refuse to bet money the way the likes of Andreessen Horowitz does. They want an immediate return on their cash and guarantees that are inexistent in the startup world. That is not how much of the new world of business that understands internet assumptions are built.

Benedict Evans revealed in 2016 some startling figures that enlightened us on how returns on VC were broken down. Around half of the investments returned less than the initial investment, i.e., made a loss. Perhaps even more surprisingly, approximately 6% of investments returned 10x, which made up 60% of all returns.

Without attempting to oversimplify, and to be fair it is more complicated than these aggregate figures suggest, it would appear that investors would need to accept significant losses but keep going to find those breakout projects that return well above expectations, paying for all the other bets. We have no organisations/investors that have the stomach for that here.

When we look at companies that are flying high, take DoorDash —not to be confused with Deliveroo that is having a bad time on the FTSE—, it’s the leading to-the-door food delivery service in the US, but in its recent IPO prospectus, DoorDash notes that it made 149 million US$ from revenue of 1.9 billion US$. And that is after losing hundreds of millions of dollars over the last few years. Clearly, there’s potential in a market that can afford these kinds of losses over multiple years until the internet-sized scale tips things in their favour. With a population of 300 million and essentially, one jurisdiction, the incentives are clear and easy to spot.

Where do our innovators and entrepreneurs stand in the local markets? Multi-jurisdictions, multi-currencies, multiple languages and cultural differences would not seem propitious for development in the digital economy.

The 44 million in the Caribbean living in a digital divide that is still marked, together with a just-getting-going digital economy, can we build lasting value-added services? The internet is only part of the solution. Until the other pieces are in place, there will be slow growth and no breakthrough innovation. I wish I had a few billion to spend! I know we don’t lack ideas or the technical chops to wow the world, my research has shown me that over the last few years. And, the Caribbean has done it before1. It can do it again.

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1 Search for “History of Reggae Music”

I’ve been on a hiatus for a few weeks as I wind down a multi-month project researching and investigating the state of ICT in the Eastern Caribbean, I hope you don’t mind. Rather than the 2,000-ish words I write here, I’ve written and re-written over 50,000 words in the last month or so. Looking at the statistics for Grammarly —yes, I use it happily— I have written over half a million words over the previous year, despite being on a reduced schedule. I’m back malgret tout(1), and I’m hoping to share some of the insights and information I’ve been researching.

In addressing COVID-19, the good news here in Martinique, infection rates are stable, and there is much hope to look forward to with the start of vaccination campaigns soon throughout our region. If I have a bad word to say, it’s about France’s strategy, which frankly was woefully inadequate and too reserved for dealing with a national and global tragedy like we’re seeing. Things are picking up now, so hopefully, we’ll have more good news in a few months. If I have any explanation for the French government’s attitude, it is rooted in technology, as almost everything is these days.

This is a discussion for another day, but France is one of the most vaccine skeptical nations globally, so much so, the government was forced to introduce legislation that barred school children from attending schools if they didn’t have their vaccinations up to date. Social Media, particularly Facebook, had played a significant role in the amplification of misinformation. As a result, more and more parents had chosen not to vaccinate their children, making herd immunity less effective as the absolute numbers of vaccinated people dropped. I’d like to dig into regulation and control of “Internet Power” in the future, and I’m gathering my thoughts and researching, to bring you an informed point of view, hopefully.

Back to COVID-19, around the Caribbean, the story is a mixed bag, but on the whole, the Caribbean has suffered far less from the virus in terms of infections and death, but paradoxically suffered far worse than others from the economic effects as the effects of substantially reduced tourism is affecting our region.

I thought I’d start the 2021 season with a quick outline of some of the trends I see in the global market and how they may or may not affect us here. Let’s get started.

Some of the trends I’m seeing

Cloud Computing

Despite the best efforts of various despots and nationalists worldwide, we are living in an increasingly global marketplace where local trends are being driven from outside sources, having profound effects on how a business operates locally. The increasing use of Cloud Computing, for example, is a trend that started outside the region and has now shoehorned itself into local politics and business strategy. COVID-19 has accelerated that push, but it has also exposed many weaknesses in our digital infrastructure that will profoundly affect our countries over the coming years. Subjects like Digital Health and Digital Healthcare are now starting to be taken more seriously than at any time in the past and looming regulations of “Big Tech” are also on the list of topic discussions for governments and businesses throughout the Caribbean.

Cloud Computing is a catch-all term used to describe the tools and services offered by companies managed and controlled by remote data centers dotted around the globe. For example, in the region, Digicel has built a data center network in Jamaica and Trinidad and Tobago to host Infrastructure and Software services throughout the region to its customers. The two most prominent players in the market are Amazon with AWS (Amazon Web Services) and Microsoft with its Azure offerings.

Cloud computing, as an opportunity, is still massive for the region, with IDC predicting more than 2T US$ of global cloud sales by 2023 with a reasonably even split over the types of service offerings (IaaS 9%, Managed Services 20%, Consulting 16%, SaaS 19%, and Support 17%) for the Microsoft Partners surveyed. (Source: IDC Software Partner Survey, January 2020). The Caribbean will be no exception in the coming years.

Digital Transformation and Work from Home

You know I’m not a fan of this overused and abused term, but it still resonates for many businesses just starting to open their eyes to the prospect of integrating at a deep level, digital technologies in their businesses. But it is precisely because it has become ubiquitous that there is now a serious drive around the world for companies to embark upon their transformative projects. COVID-19 has probably done more for the cause than any big-budget marketing campaign from the likes of Microsoft and Google.

Lockdowns and new working practices are now beyond the point of being stop-gap solutions to stem a hemorrhage of income. Companies have been forced to experiment with new ways of working together, initially entirely remotely —which didn’t go down well for some— and now in a more hybrid mode. Indicators are starting to appear to suggest that we are in the midst of a sea change of working practices that legislation will likely adapt to. Vacant office space is at an all-time high in some cities, and immigration/emigration figures between different states in the USA show that a recalibration of resource distribution is taking place.

The COVID-19 pandemic has forced a significant shift in working remotely, collaboration and the need to be in a single-space to produce. For many years, we have talked about this possibility, but very few organisations have been able or willing to make the human and financial investments necessary to enable this new way of working. COVID-19 has come along and wholly blown all previous notions out of the water, making all but the most resistant organisation think deeply about how they can change their working practices to take advantage of a situation. That is not likely to be resolved in the next few months.

Digital Transformation will be the backbone, or the operating system if you will, of this adoption. Companies that adopt digital throughout the value chain will be those that adapt to the new.

Security

Security is becoming a defining differentiator for solutions that are becoming increasingly complex as the old-world security perimeters are broken down as we move more services to the cloud. Security is no longer limited to firewalls, passwords, and antivirus. Technologies like two-factor authentication (2FA), Virtual Private Networks (VPN), encryption, and Single Sign-On (SSO) services are increasingly in demand and an example where expertise is not readily available in the region. These services cannot be isolated from the implications to business, marketing, and operations as sophisticated attacks are no longer driven by teenagers driven by pride and disruptive cyber-graffiti exploits. In 2018, the island of Sint Maarten (Dutch side) suffered an incident that took offline government services for the 40000 or so population, and according to the Caribbean Council, Saint Vincent and the Grenadines was the target for ISIS originated hacks on Government websites, although details are scarce on the impact. Therefore, knowledge of the whole security stack and its integration with the business value chain is imperative to develop valued services and advice, such as risk management, BI, and Data Analytics.

COVID-19 has provided an almost unlimited opportunity for individual, organised, and state actors to target users over COVID-19 fears. Just days after the UK Medicines and Healthcare Products Regulatory Agency (MHPRA) approved Pfizer’s COVID-19 vaccine for emergency use, a sophisticated hack and phishing campaign was mounted to attempt to steal information concerning the logistics process.

Regulation

Besides the global pandemic of COVID-19, if 2020 has taught us anything, it is that regulation of a largely unregulated sector of the economy is about to start in earnest. Initially, it is likely to affect the multinationals such as Google, Facebook, etc., mostly. However, make no mistake, much of the legislation that will be implemented on national and local levels will affect businesses down to the small suppliers of technology. The GDPR of 2016, implemented in 2018, ostensibly protected European citizens from personal data transfers and data mining abuses. It affected every company on the planet that needed to collect and store personal data of European citizens. Online marketplaces and social media sites were the legislation’s apparent targets, but any business that dealt internationally was required to hire, train, and implement a Data Controller and Data Protection Officer responsible for ensuring compliance. Liabilities and penalties were harsh for non-compliance, the most mediatised being either a €20 million or 4% of annual worldwide turnover fine for a serious breach.

GDPR is but one example, with others becoming hot topics in the coming years, such as COPPA (Children’s Online Privacy Protection Act), Do Not Track Legislation, ePrivacy Regulations, the Digital Markets Act, and the Digital Services Act, for example. In this climate, businesses will be required to update current and upcoming legislation continually and implement training, auditing, and compliance adjustments continually through training and consulting services from specialists.

Many industries are subject to specific, technical regulation, such as Pharma, Oil & Gas, Finance, Utilities, and Cars. Tech and ICT are about to join that list with specific regulations affecting specific issues. It is essential to understand that rules are not usually implemented as wide-brush solutions, and that regulation is highly targeted to treat a particular problem as defined by the various regulatory authorities. “Banks” have never been regulated, only specific products and services in the banking industry are regulated, Deposits, Credit Cards, Pensions, Trading, Mortgages, Futures and Options, by way of example.

Regulation may also lead to an increase in digital sovereignty, with the above example of GDPR showing how this may come to be. The Great Firewall of China is another extreme example, and the fact that China and India now count for more internet users than the rest of the world in total is showing us how the balance of power over the Internet is moving from being US-centric to something more international. One thing to bear in mind is that regulation is designed to protect a specific point of view. The US-centric perspective is more about keeping prices lower —which explains why the free-to-use products have mainly been let off until now— whereas the European-centric position is about healthy competition and consumer protection. This divergence will play out over the coming years and influence every stratum of business.

Digital Health

In an era of ubiquitous access to internet-connected devices from almost anywhere, one of the pre-pandemic concerns was an issue that has been questioned by humanity for centuries; Is the next-generation spending too much time with technology? Much debate had been made over the amount of time people were spending with technologies connected to the Internet. Screen time was such a hot topic that many software providers stepped up with solutions to monitor and control the time people, particularly children, could spend on these devices.

It is in this direction that new insights about screen time will evolve, and it will be a debate about quality, not quantity. It will be about how we can implement “good” screen time and then monitor and control it. It will be about preventing “bad” screen time with quantifiable justification and suggested preventative solutions. This will likely affect the education sector hugely by providing tools better adapted to this new paradigm. We are only just at the end of the beginning of a change in digital health.

Disinformation

Disinformation and conspiracy theories have been part of human nature for millennia. However, recent technical advances like social networking and recommendation algorithms have fuelled to an extent never witnessed, the spread and belief of such disinformation that has consequences for society and possibly even democracy. Today, businesses focusing their marketing and revenue-making activities online should be aware that they could be subject to organic and organised campaigns to discredit their work, profession, or any other attribute that is the current target for attack. An example of this extreme took place in the United States, the United Kingdom, and Italy when nurses suddenly went from national heroes to national conspirators over misinformation about Coronavirus vaccines.

Disinformation is no longer the “graffiti of the Internet”; it is being used politically and weaponised in cyber-attacks throughout the world—one to watch for.

Automation and Artificial Intelligence

Over the last few years, we have seen an explosion in the number and prevalence of automated systems, from website chatbots that provide first-line support services to deeply integrated automation-development platforms such as Zapier and Microsoft Power Automate. Many predict an increase in spending on automation over the next three years, with services companies well-placed to take advantage of this opportunity by providing help in implementing these systems.

Two main types of automation are emerging as the development targets: Robotic Process Automation (RPA) and Business Process Automation (BPA). RPA can be applied to many general and industry-specific tasks such as Procurement, Marketing, HR, Retail, Telecommunications and Banking, to name a few. BPA is best suited to the processing of unstructured data sets such as voice, images, and natural language systems, and often rely on Artificial Intelligence to accomplish line of business help, for example, real-time translations over video conferencing. GPT-3 is one such language model that has produced human-like text for human interactions through chatbots etc. Currently, only developed markets such as the US, Europe and Asia-Pacific are investing heavily in these capabilities, but the Latin American market is predicted to grow five-fold by 2025, according to learnbonds.com.

I don’t know what the future will hold, of course, but looking at trends in the wider world can at least give us a heads-up that can help us better understand and adapt. Here’s to a better 2021.

Thanks for being a supporter, have a great day.

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1 Despite everything

On a more positive note, as we draw ever-closer to deploying what might be a solution to our number one problem of the novel coronavirus, I thought I’d take a look at what the pandemic has exposed and what digital transformation means today.

One last note on housekeeping, the keen-eyed will notice that I have moved this newsletter to my companies’ domain (dgtlfutures.com). Everything else stays the same and all the existing links still work. It is now easier to find, as it is at newsletter.dgtlfutures.com

The state of Digital Transformation in 2020

When the pandemic appeared to be a real threat to the countries in which it took hold, many including myself estimated that this might be the impetus required to get companies to start, deploy and finish their digital transformations. The reality couldn’t be further from the truth, and it comes back to some difficulties I’ve been discussing for years.

Let’s take a look at where we are in digital transformation today. I’ll go on to show what is missing, what is needed and how we get there.

The first wave - The implementation of computerised back-end systems

The likes of IBM with their AS/400 and DEC with their VAX minis and mainframes were the masters of this. Not because it was hard, but because it was easy and it was a licence to print money. Ever since the first VisiCalc spreadsheet showed the CEO that he or she didn’t need to manually calculate the columns and rows themselves (or have one of the minions to do it), it was inevitable that computerised system would penetrate deeper and deeper in businesses. Those that afforded the outrageous costs of the time, were given an advantage that had not been seen since the invention of the wheel (the innovation that disrupted the movement of atoms from one place to another).

Quickly, IBM and their competitors spun up massive sales teams that crisscrossed the globe demonstrating and selling stock control systems, basic accounting ledgers and simple statistical reporting programs. On the back of this, software-focused companies ramped up work producing ever more complex designs that piggy-backed on the already-deployed hardware. Being that the business model of the IBMs and DECs of the era was to sell high-margin hardware and lucrative support contracts for that hardware, they were pleased to let the software houses integrate their software as it made the hardware even more desirable.

This symbiotic relationship even gave rise to the “Killer App” moniker we use today.

The businesses that needed to make ever-quicker decisions wrote practically open cheques to the manufacturers, as they were confident that the returns on the investments would outdo the spend. And they were right to believe this, as the entire industry structured itself to become a self-fulfilling prophecy.

A long time ago, I interviewed for a support role in one of the world’s largest banks, in their London office. I was applying for a position as a support engineer that would be dispatched to the trading floor. I was genuinely intrigued by the floor and asked if it would be possible to see the environment in which I would be working. After a short pause, the IT manager agreed to the unusual request and led me down the stairs to the big oak doors that displayed an ominous sign on a big brass plate. “Do Not Feed The Animals” it read. I chuckled and braced myself for the spectacle that was a Trading Floor in the early 90s. I’ll tell that story another day. But what I most remember was that each trader had two complete AS/400 systems under their desks. This, a room with perhaps 60 to 100 people in it.

That would be a multi-million pound budget by today's rates. But this was standard issue, as the opportunity cost was so high for traders that were just that slightly slower than their competition during trading hours. Their killer app was the trading platform that operated on super-slim timing to augment the trader’s abilities.

The second wave - The paperless office

After the fury of this first wave of digital transformation, it was clear to businesses that they needed to go further, and hunting season was declared on paper—a hunting season that has not, by any stretch of the imagination, finished yet even in 2020.

But that is beside the point.

End-user facing documents and reports were the next low-hanging fruit, and businesses proceeded to digitise these objects as and when they could based on the technologies at their disposal. Very few companies bought software with the sole intention of moving paper reports to digital versions of themselves. It was just the icing on the cake for most. So now, timesheets, TP reports (see Office Space) and countless other document types were converted.

Operators would export data from the ERP systems like SAP, import them into Excel and produce the charts that ended up in Word and PowerPoint documents. But even at this stage, paper wasn’t entirely eliminated, as often these reports (and I see this still today) were printed out in colour and distributed manually or by mail (the physical internal and external postal systems) for analysis and treatment. At some point, people realised that this could be made more efficient. With the advent of internal email systems gaining popularity, sending the PPT over email was the method of choice that enabled faster and better “collaboration”.

I used the quotes, as, by today’s standards, this could be nothing but further from the truth of what collaboration is. The back-and-forth of individually saved and edited documents on the network led to an exponential growth in data storage needs for both the email systems and the personal data storage systems.

When working on sophisticated archiving systems, I discovered that it was not that uncommon to have approximately 100 copies of the same documents on the network. That email sent to 20 colleagues, saved on their “personal space” produces in one step 41 copies!

The third wave - The age of collaboration

When the apparent limitations of this model became apparent, and the software had caught up, we started to build-out specific collaboration software to address these limitations.

As a side note, it must be said that IBM was (not for the first time) way ahead of this curve. Whilst the likes of Novell and Microsoft were supplying the pipes to connect businesses with unstable and simplistic networking hardware, IBM bought and extended a company that built a virtually limitless collaboration system that was too much too early. Lotus Domino was the first “proper” collaboration tool that let business easily deploy just-what-was-needed software to decision-makers. It included storage, sharing, app-building and elementary database capabilities that were far ahead of the curve at the time. Its complexity and frankly, the hostile user interface was part of its downfall, but it was an essential step in the computing-business interface building world.

Fast-forward to pre-pandemic, and the state of collaboration today. We see that companies that had implemented the new generation of basic collaboration systems could provide some semblance of business continuity. Whilst those who hadn’t yet taken the steps, scrambled to implement tools, shoehorning them into day-to-day operations. With varying degrees of success, it should be noted. The pandemic has forced many companies to evaluate if the tools work. They work that is for sure, and work surprisingly well, as they are developed from years of research and experience testing. Forcing them on to unprepared staff will only expose the frailty of your operations if you don’t do the hard work of real digital transformation.

But back to the pandemic. Businesses that have been forced to close their doors to receiving public in their offices and shops have turned to their most pressing problem of managing the customer relationship. How do I sell to someone who would previously wander around my shop for 15 minutes before picking an item and purchasing it?

Facebook and WhatsApp, for example, have provided a means to interact with the client, and possibly vehicle some sales. I’d argue that those sales were probably not lost in the first place, but let’s not split hairs. However, they don’t address the fundamental problems of a wholesale shift in the customer journey fro discovery to purchase and beyond. Plasters on broken leg might make you feel a little better, but they don’t repair the break! So, as we progress in the pandemic, most are preoccupied with the customer-facing elements, ignoring the opportunity to implement real change that would set them up for the afterworld.

In trying to schematise the idea, I’ve settled on three blocks; the back-end, the operations and the customer-facing parts.

Source: Matthew Cowen

The back-end has been deployed for many years and is efficient at what it does. What is doesn’t do is the problem we have today, however. Legacy AS/400 and DEC systems are still prevalent all around the world. Those legacy systems are notoriously difficult to interface with, notoriously poor at real-time and notoriously poor at providing reusable data for business intelligence, or BI.

But the customer-facing elements are the new centre of focus. It doesn’t take much work to find hundreds and hundreds of businesses that increase your visibility online and help to market and promote your wares, and that’s just in our region. If you think about Internet assumptions, each one of these businesses competes with the millions around the world that are providing the same thing. It’s the reality of the Internet. But let’s not get hung up on that, and focus on the value-added service they’re providing in a world where it increasingly more challenging to be found. This value-add is only limited in that it doesn’t interface well with the real issue for businesses tackling digital transformation, the operations and the back-end. You can sell online, great, but how does that affect the whole value-chain and all the interlacing parts in your business?

The fourth wave (we’re not here yet) - Reimagining the value chain

The elephant in the room is that big block in the middle; Operations. Real digital transformation comes from looking at the whole can of worms that make up your daily operations. The simple tasks, right up to the complex multi-layer, multi-purpose and multi-approval workflows.

I’m not diminishing the value of the fire-fighting going on today in any way — it is a case of survival in many instances—, but the real work should start now. Businesses need to evaluate in detail every single process that makes up their very existence. In assessing, they need to determine three things; 1) the reason a process exists: is it there simply because that’s the way it has always been done? 2) the worth of the process, or to put it another way: what value does that process bring to the business? And 3) the justification for the process: which is not the reason, nor the individual value, but more of an evaluation about how it fits into the whole. Is the sum of its parts greater than the whole? 

Redesigning and redeploying those processes is necessary and the only path to digital transformation that will bear its fruits in the future. It will undoubtedly put in question your back-end and will almost certainly change your front-end. And as hard as it will be, it will likely be the difference between your businesses prosperity or ultimate demise.

Intel’s Disruption Followup

I’ve been studying and writing about the disruption taking place on Intel’s x86 line for several years. I’ve written substantially about it here (here and here) in this newsletter and in unpublished form. I explained why it is hard to spot disruption, even if it is happening in front of us. It becomes doubly hard when we are focused on our businesses staying alive, as so many of us are in this current pandemic:

From Intel’s Pohoiki Beach and Disruption Theory:

The problem with theories like these is that it is pretty much the same problem we have when we discuss human or animal evolution. We find it hard to understand the future direction of the evolutive process in real-time, mostly because it happens so slowly and over many generations. From a retrospective position, we can see what happened, and we can often even, have an informed guess as to why it happened. Reliable prediction, it seems, is just unreachable. With modern digital technologies and the pace with which they evolve, we might be able to see enough into the future to discern and predict outcomes for companies in this new world.

I described the history behind Intel’s disruption:

Intel is a well-run long-established microprocessor design and fabrication company, with a phenomenal marketing arm and deep links to the most important companies in the computing industry. Founded in 1968, a year before AMD, it has run head to head with AMD and in nearly every battle beaten AMD on just about every level that means anything; marketing, price, availability, design, availability, to name a few. 

The new entrant in the microprocessor market is known as ARM, or as it was previously known, Advanced RISC Machine and before that Acorn RISC Machine — giving you an idea to its origins, powering Acorn Archimedes personal computers. Founded in Cambridge, UK, in 1990 (22 years after Intel), the processor design was a complete revolution and rethink of classic processor design, with the clue in the companies’ original name; RISC.

RISC means Reduced Instruction Set Computer. The Instruction Set of a processor is a fundamental element to how the processor behaves but more importantly, how it is directed to do things, what is more commonly known as programmed. Modern terms, such as coding are basically the same things. Different microprocessors can have the same instruction set, allowing programmers to write the same code, or for the compilers — software designed to turn more human-readable code into native machine language, that is virtually impossible to understand as a human — to translate into the same instructions.

Compared to ARM, Intel microprocessors are CISC, Complex Instruction Set Computers. Without going in to microprocessor design, an instruction is a type of command run by the processor to achieve a desired outcome, like a multiplication, division, comparison, etc. Complex instructions can be of variable length, take more than one processor cycle to execute (processor cycles govern how fast the microprocessor can operate), but are more efficient in memory (RAM) usage. RISC instructions are more simplified and standardised, and critically, take only one processor cycle to execute. They have trade-offs, managing memory (RAM) less efficiently and require the compilers to do more work when translating the code into machine language, i.e., potentially slower development times whilst waiting for the compilation to finish.

The memory issue was only an issue until recently, when memory has become effectively abundant and cheap, allowing hardware designs to incorporate huge amounts of RAM in their designs.

At the begginingg of my writing, I’d tried to frame it in terms of Clayton Christensen’s Disruption Theory, an observation that was, at that time, not frequently put forward. A recent blog post on Medium by one of Christensen’s students vindicated what I’d been writing about for a long time. Have a read if you’re interested in the theory. He does a great job of articulating it.

But it got me thinking about how one could spot disruption or more importantly, one could use the framework to try to provoke disruption. In this essay, I’m delving into that first point.

How do you spot disruption?

Going back to the basics, and ignoring all the incorrect uses of the word —no, disruption is not just doing the same thing but cheaper— I thought I’d try to give you the tools to see disruption happening in your markets.

The big red flag to look for is a product or service that does some of what your existing product or service does, but does it better on a couple of metrics simple metrics; price, efficiency and friction. 

Cheaper is not disruption

A less-expensive product alone is not a sign of disruption. What is, however, is a product that evolves steadily providing more and more features and competing on more and more parts of your product or service all whilst its price is significantly lower than yours. Again, it might just be a cheaper product to produce and sell. You have to ask from the customer’s point of view. Is it fulfilling the job to be done? Is it good enough that it makes your buyers question the need to pay your prices? Can your customers successfully integrate and use the competing product despite its shortcomings over your product and still find value?

Efficiency is key

If the competing product is more efficient, be that in the sales cycle, the use-cycle or the complete lifecycle of the product, buyers will, of course, investigate and evaluate that product. Can the product do essentially the same job as the existing product on the market? Does it do this faster, better with more predictable outcomes? Efficiency might afford you competitor lower costs too.

Friction is proportional to sales

Friction is often overlooked as an important force that influences buying habits. The more you reduce friction in the purchase operation and reception of the product, the more chance the buyer tends to have in choosing your product over a competing one. If the new entrant has substantially reduced this friction compared to the friction required to purchase your product, this should be another indicator that things might be difficult from this point forward for you.

Loyal customers may soften the impact at first, but even the most faithful will switch if the product fulfils several of the criteria I have highlighted above.

But that alone is not enough, you need to have historical data, or you need to develop a way to project into the future and make assumptions about where you think the product and service are going or where it could go. Just look at the image that explains disruptive innovation below. Looking at the “Entrant’s disruptive trajectory” line as compared to the “Mainstream” line shows how, eventually, disruptive innovation will surpass the mainstream product or service when “performance” is evaluated based on the metrics I’ve highlighted above (to name a few).

Source: HBR

If you are the incumbent and you wish to stay profitable and dominant, you have but two choices. Embark on a “sustaining trajectory” or innovate your own disruptive innovation. Just be aware, a sustaining trajectory has its upper limits!

The Future is Digital Newsletter is intended for anyone interested in Digital Technologies and how it affects their business. I’d really appreciate it if you would share it to those in your network.

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On to this week’s topics.

I’m astonished I didn’t get roasted for completely dissing Blockchain as a useless technology a couple of weeks ago. I thought I’d talk about an example where I’m actually quite bullish about the technology. But first I wanted to expand upon a thought I had following a conversation I’d had with someone, discussing why digital commerce is so different from brick and mortar commerce. Follow on for my thoughts.

The unique challenges of digital commerce for physical goods

The difficulty for online retailers selling physical goods in the digital economy is that the value of digital products is significantly reduced, and in some cases, is virtually zero. That inherently puts pressure on the value of physical goods that are commoditised. Fortunately, luxury goods are seeing less pressure on their perceived value, but that is more a function of time rather than real value.

Luxury goods houses and retailers are seeing these changes and are starting to act. Apple today has changed its retail sales processes to resemble more of a luxury brand one-to-one service rather than a Walmart get-it-off-the-shelf-yourself operation.

From Apple’s press release:

When iPhone 12, iPhone 12 Pro, and iPad Air are available Friday, October 23, customers can get their all-new products directly from Apple through tailored purchase experiences offered online, by phone, or in store. From a chat session with a Specialist that starts online and finishes with contactless delivery, to visiting select Apple Store locations for a one-on-one session with an Apple Specialist, customers can find the best way to get the products they’re looking for.

Source: Apple

So, the question is, how do businesses make money now that the products they sell are virtually worthless (economically speaking)?

Answers to some of that lie in the services surrounding the product. Be that sales (see above), installation/delivery, support, subscription, ongoing help and many other possibilities, the key lies in giving the customer an ‘experience’ rather than a sale. Deriving value comes from developing and innovating on several levels to create a whole greater than the sum of its parts.

If we look at the above example from Apple, you’ll note they’re selling a phone. But that phone is so much more than a simple “… Widescreen iPod with touch controls, a revolutionary mobile phone and a breakthrough internet communicator.”. The iPhone has replaced by some estimates, over 50 products; mobile phone, point and shoot camera, a torch, calendar, SatNav, personal assistant, to name a few. But it is a product in a sea of other products that are designed to resemble each other closely. There is little material difference between the flagship Samsung and Google devices that are directly competing with the iPhone. And, Smartphones themselves are becoming commoditised, as is evidenced by the increasingly smaller and smaller gains made in hardware design and technologies deployed. The differentiator is the software and what that software can enable hardware to do for the overall end-user experience.

Two excellent examples are computational photography and health analytics.

In computational photography, we are nearing the phase whereby even specialist cameras of the past are being innovated out of existence. It is only a matter of time before the computational aspect will outperform pure optical limitations of smartphone camera modules. In health, simple movement sensors initially enabled step tracking, instantly killing a growing market segment, and eventually enabled detailed sleep tracking that has (itself) been out-innovated by smartwatches. It is no longer science fiction to imagine the doctor’s office on your wrist.

The overall experience of owning these products and their potential beyond the initial use-case is what I mean when I say ‘customer experience’. Apple has gone that step further and developed and Covid-friendly white-glove shopping experience previously reserved for the rich and famous. You book a 1 to 1 either in-store or directly on the Apple Retail site, and you are led through your purchase to contactless delivery or pick-up. It is a personal shopping service for the rest of us.

Who doesn’t want to be made to feel special when buying something?

Blockchain. Again

I’m surprised I didn’t get more of a roasting from my somewhat sceptical articles about Blockchain here and here:

According to a detailed academic-style “peer-reviewed” study by the Centre for Evidence-Based Blockchain and reported in the FT:

“… outside of cryptoland, where blockchain does actually have a purpose insofar as it allows people to pay each other in strings of 1s and 0s without an intermediary, we have never seen any evidence that it actually does anything, or makes anything better. Often, it seems to make things a whole lot worse.”

Worse, the report repeatedly highlights that the technology is a solution currently looking for a problem. The antithesis to the Jobs to be Done theory that helps us better design and provide solutions. With over 55% of projects showing no evidence of useful outcomes, over 45% showing “unfiltered evidence” (i.e., next to worthless), it would appear that Blockchain is a belief-system rather than a technological solution.

And …

…it is a huge energy consumer and hence by definition is inefficient. That, sadly, is not its only efficiency problem. Blockchain is actually extremely limited in its speed and quantity of transactions and scales poorly. So much so that in 2016 several banks exploring the possibility of using the technology in the personal and business banking sector abandoned the work as blockchain was just too slow.

Quite the downer if I’m honest. But whilst many projects show no use for Blockchain, some projects show promise. One such example is Dominica’s Economic Growth team at the Climate Resilience Execution Agency for Dominica (CREAD).

They are currently developing a parametric insurance product that uses blockchain technology to help small businesses and the typically underserved by traditional insurance products, manage their risk of natural disasters in an innovative way. It’s called BHP or Blockchain Hurricane Protection. From the article on LinkedIn:

BHP aims to extend coverage to those excluded from traditional indemnity insurance, and provide Dominicans with a flexible and affordable tool for managing climate risk. Total damage from Hurricane Maria which struck the island as a category 5 storm on September 18, 2017 was US$1.3 billion, representing 226% of GDP. Uninsured losses were US$1.1 billion, or 86% of total damages. Damages to the housing sector totalled US$520 million. MSMEs suffered US$73 million in damages, and agriculture also suffered US$73 million in damage. In the years since Hurricane Maria, premiums for traditional indemnity policies have increased by more than 80%.

This was the background to Dominica’s drive for innovation to better protect itself after multiple incidents that substantially affected citizens and businesses over the last decade.

So, what is a Parametric Insurance and why blockchain?

From Wikipedia:

Parametric insurance is a type of insurance that does not indemnify the pure loss, but ex ante agrees to make a payment upon the occurrence of a triggering event. The triggering event is often a catastrophic natural event which may ordinarily precipitate a loss or a series of losses. But parametric insurance principles are also applied to agricultural crop insurance and other normal risks not of the nature of disaster, if the outcome of the risk is correlated to a parameter or an index of parameters.

What’s great about this project is that it is intelligently using technology in the right places to fulfil the “Job to be Done”. Again, from that LinkedIn article:

Once customers have downloaded the mobile wallet to their smartphone, they simply indicate the level of coverage that they would like to purchase, tag the location where they want the policy to apply, enter some basic information, and pay the premium. The policy is then issued and stored in the blockchain. In the event of a triggering event that meets the criteria of the policy, the payout is generated automatically and delivered to the customer's mobile wallet within three days of the triggering event.

This product reduces friction at the critical stages of an insurance lifecycle; the signup and the payout.

You’d be right in asking why a “normal” insurance product couldn’t do the same. And there’s no reason traditional insurance can’t reduce friction when it comes to the signup and management of the product. Payout is where the difficulty lies. Frequently, insurance companies need to wait for a “Natural Disaster” to be declared or during a smaller indecent, assessors and inspectors to audit and report back to the insurer before the insurer can start the payout process, which itself can be lengthy and time-consuming.

In this product, they are disrupting traditional insurance at a particular level — this is not general insurance — and that disruption, like all disruptions, is to the benefit of customers in the way of simplification and increased speed in onboarding and payouts. Not to mention the pricing that makes it more accessible and hence more likely to be adopted, benefitting all in the process.

But the interesting aspect from a tech point of view is the use of blockchain. In this instance, it is playing to blockchain’s strengths and not trying to overcome its weaknesses (see above). And that’s the intelligent way to use it.

BHP is a product that doesn’t need to scale to hundreds if not thousands of transactions per millisecond like traditional banking systems deployed around the world. For one, Dominica (thankfully) doesn’t suffer a significant natural disaster every day, and secondly, its population is currently only around 73 000 people. Today’s blockchains are more than capable of sustaining the likely transaction requirements of this implementation. And suppose BHP is available to a broader audience throughout the Caribbean, it is still unlikely to overwhelm the system, as processor designs and energy efficiency gains are around the corner.

A cursory glance shows that the major chip designers and builders are all exploring the possibilities of tailoring their products for blockchain applications to overcome the shortcomings of the technology.

https://www.amd.com/en/technologies/blockchain

https://www.intel.com/content/www/us/en/security/blockchain-overview.html

Interesting times.

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Too much choice is ultimately a bad thing.

I’m currently researching the ICT industry in the Eastern Caribbean, and the same data points appear continually. Small businesses are trying to survive by offering the same services competing with the same compatriots on the same value propositions. It is not only a zero-sum game, but it is also so misaligned to what is possible if we consider internet assumptions.

I’ll write more about this topic in the future as I clarify my thoughts and the research reveals further insights.

I thought I’d write a follow-up on the last newsletter, as pretty-much right after I’d recorded and published news broke about the sale of the subject of that issue, ARM. Read on for my thoughts on this.

ARM’s History

When I wrote about the disruption of a part of Intel’s processors’ design and build process, in the issues: The Tale of Intel’s Disruption and Blockchain is Useless and Intel’s Pohoiki Beach and Disruption Theory, and I delved further into Disruption Theory, in Disruption Theory. Is Wizzee a Disruptor? I was trying to give you an overview of Disruption Theory and how it may apply to your own business. I recommend you read those articles for a better context of this essay.

Getting back to that news. I was aware of the potential sale of one of the most important actors in that field, ARM Holdings. What I didn’t expect was such a quick sale and a sale to a company that logic would reason is not best suited to the type of business it was buying.

Let’s back up here just a little and recap on the timeline and where I think this is going.

ARM Limited, as it is now known, was initially incorporated in 1990 under the name Advanced RISC Machines. Funnily enough, even that wasn’t its original name. It was born as Acorn RISC Machine, from the Acorn Archimedes computer that was powered by the new microprocessor design. The change was apparently at the request of Apple that objected to the name of a competitor in the name of one of the processors it was responsible for jointly designing and using in that ill-fated (but arguably necessary step) of the Apple Newton. Advanced RISC Machines became ARM Holdings for the Initial Public Offering (IPO) that took place in 1998.

In 2016, Softbank, a Japanese Telecoms company with an appetite for Venture Capital, purchased ARM for an amount of approximately 32 billion USD. That transaction guaranteed the operations to continue as they were. That is a UK headquarters and offices in Silicon Valley and Tokyo. It allowed ARM to be close to the world’s disrupters and designers (Silicon Valley) and the world’s builders (Taiwan and China). ARM capitalised on this, and the catalogue of products that currently use ARM chips designs is un-fathomable. Just about every device that requires a processor of some kind, that isn’t a computer, contains an ARM chip. And that’s before we even talk about the just-starting revolution of the Internet of Things, or IoT.

Image: nvidia

ARM has just sold to Nvidia for an announced price of 40 billion USD, an 8 billion USD premium over its purchase price, or a 25% profit over four years. SoftBank will retain a 10% stake in ARM too. This money will go some way to stopping the haemorrhage it recently suffered when it indicated that it might lose up to 80 billion USD from failed investments—WeWork (cough, cough).

As a recap, ARM makes no processors itself. And in some cases, it doesn’t even design the subsequent generations of some of its processor designs. ARM licenses its intellectual property, or IP, to anyone, following a long tradition of British tech design houses that have sprung up of the last couple of decades, like Imagine Technologies and ARC International. Depending on the license terms, companies are more or less free to use the designs as they see fit. ARM presents itself as the Switzerland of processor designs i.e., neutral. ARM reports that its designs are in around 180 billion processors in use to date.

Qualcomm uses them for their processors that run a majority of Android phones, and most famously Apple has a lifetime license (from the days it was one of the original designers) and uses its asset to design and implement the most advanced mobile processors on the planet currently. But even Apple doesn’t build those processors; it farms that work out to the specialist I mentioned in the last newsletter, Taiwan Semiconductor Manufacturing Corporation, TSMC. You can’t get a more explicit name that reflects the companies’ primary purpose than that! Which leads me to where I think this is going.

ARM-ing the Future

The big question is why a graphics card builder like Nvidia would splash for a chip designer? 

Part of the answer lies in the fact that Nvidia, itself, is a licensee of ARM, and presumably that annual fixed cost will be removed from the books being that it is now the owner of the company it used to buy a licence from. It’s an upfront investment that pays off over several years, and if the value accumulation of ARM continues, the investment might be justified relatively quickly (from an accounting point of view).

But I think it goes beyond that. I hinted earlier that ARM processors are just about everywhere and are integrated into more and more devices in the form of SMART tech. The fridge, the toaster, the Espresso machine are all candidates for a coming home-smarts revolution. And the already processor-enabled world of home appliances like washing machines will be enhanced by the technological possibilities available to their builders.

The TAM, or Total Addressable Market, for their IP is almost infinite. The ubiquity of wifi and the incoming 5G avalanche only goes to reinforce the inclusion of ARM-type processors in devices: even the comms technology itself, the routers, switches and amplifiers, use ARM processor designs. ARM is set to become the de facto processors of things that are not traditional PCs.

Besides Apple, Microsoft is using more and more of the technology in its designs. The new Surface Duo is an ARM-based foldable phone/tablet hybrid with impressive screen technology, all running on a customised ARM design. The Surface X Pro is a new generation of the popular Microsoft Surface PC line, and is also ARM-based, running a customised ARM compiled version of Windows.

Beyond Computers

But again, it goes beyond this, to what will inevitably be as pervasive a technology as oil-powered personal transport has become. I’m talking about AI or Artificial Intelligence.

From simple statistical models to more advanced nuanced-based algorithms like GPT3, AI is set to be included in everything from your everyday carry phone to the entertainment system of the future. Think Bladerunner 2049. Where does Nvidia step in then?

From the Nvidia Deep Learning AI website:

I AM A VISIONARY, A HEALER, A CREATOR, AND SO MUCH MORE. i am ai.

POWERING CHANGE WITH AI AND DEEP LEARNING

AI doesn’t stand still. It’s a living, changing entity that powers change throughout every industry across the globe. As it evolves, so do we all. From the visionaries, healers, and navigators to the creators, protectors, and teachers. It’s what drives us today. And what comes next.

Many Data Scientists and technology teams around the world realised that they needed powerful processors to perform a highly reduced and specific set of calculations, for which only specialised and extremely expensive super-computers could perform. Super-computer makers like Cray and IBM sold their systems to large research institutes and universities with high profit-margins on the back of their uniqueness in their ability to calculate rapidly and massively parallel, an important factor when designing calculations of that type.

On the other end of the computing spectrum, users wanted to get better quality graphics for video-gaming and image manipulation. Nvidia started to design and build and sell specialised video cards to OEMs (Original Equipment Manufacturers) like DELL, for integration on their motherboards for a win-win situation. Better graphics meant that computers became more desirable as games or design machines. These designs evolved over the years and are sold as separate cards for builders to include in their offerings.

In a quirk of circumstance, the type of processing required to produce detailed and fluid graphics for games was also ideal for the type of calculations required for AI. At a fraction of the cost, scientists and researchers could equip banal PCs with a bank of processors that could compete with the multi-million $ super-computers. As you’ve guessed by now, these cards are powered by ARM processors. With Nvidia as a pioneer in AI, it has developed a deep understanding of the field as the above website indicates. That pivot let Nvidia surpass Intel a few weeks ago, as the worlds most valuable chip maker.

With AI becoming ubiquitous, like it or not, the purchase of what Nvidia sees as a cornerstone of its technological chops, the purchase of ARM will no doubt allow Nvidia to extend a lead in the AI world.

Challenges remain in that ARM licenses its technology to direct competitors like AMD (Advanced Micro Devices) and just how they will navigate those forces is unclear. If you think about it, Nvidia has to develop and execute a way it can successfully operate and profit from two very different business models. Selling IP is nothing like selling processors, and that job has just become much more complicated with the inherent competing forces of buyers of the IP and the manufacturers.

For now, Nvidia has stated that the business will continue to run as-is with Nvidia itself being one of many of ARMs customers to “buy” the technology. Only time will tell if they manage to pull this off, but I’m currently positive on the long term prospects of the deal.

Intel’s Disruption Train

As you know, I firmly believe we are witnessing a considerable disruption of an incumbent in the tech industry. It doesn’t happen as often as the tech press would like you to think. But it is an exciting spectacle to observe from a purely theoretical point of view. There will be many articles and possible books written on the subject if we still have books by then.

With the Nvidia acquisition of ARM, Intel’s woes in the mobile processor, AI and Datacenter fields, have just got worse. Above, I purposely stuck to a more consumer side of the implications. But it is in the Datacenter that the next battle for processor superiority will commence in earnest soon. We’ve already seen inroads that Google and Amazon are making with the design of ARM-based servers that slot into the racks alongside thousands of other servers all furnishing your email, photo management and countless other modern-day necessities.

With Nvidia, the risk for Intel is that they successfully manage to vertically integrate the ARM designs in their products in a much tighter manner, thus producing even more effective cloud server designs for specialist applications like AI and Machine Learning. They could, of course, do this without having to buy ARM, but the ARM acquisition may give them a head start that puts the nail in the coffin of significant business for Intel.

I have no crystal ball, and I may be horribly wrong, but I think the next few years are going to be critical for Intel for it to survive in its current form. As I’ve noted in other essays, it is not lost on Intel, and they are making business decisions that keep their margins up and fix the short term. I would like to see Intel be bold and try to out-disrupt itself. I think this deal allows Intel an opportunity to profit from the scepticism in the industry surrounding Nvidia’s long term intentions and stun us with something truly new. It is the time for Intel to look at the research labs for the next thing and give it a shot. That’s easier said than done, however.

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I decided to take a summer holiday, of sorts, retiring myself from the pressure of writing these articles. If you know me, you’ll recall that I’ve pretty much not had a holiday since I started my professional life—much to the consternation of my family. So I decided to take a little time for myself this year. Being that this year has been, er, rather unusual to say the least, I thought this would be the perfect opportunity.

These articles are a labour of love and earn me absolutely nothing in monetary terms, so I have to work at the same time to earn a living in my day job, putting pressure on the time I have for this writing. I really enjoy the writing and hope to make it a significant part of my professional life in the near future.

Speaking of which, I have a small favour to ask of you, my dear readers. I’m running a small study about the ICT industry in the eastern Caribbean and have concocted a short survey to give me an overview of the market. If only half of you respond, I’ll be well on my way to having useful data to work with. I’m sure you can be that half :)

It’s not all one-way either. The better the data and the more data I have, the more I’ll write about the results here directly to your inboxes. You give, I give. What could be fairer?

You can take the survey here:

Quick Survey

Thanks for your help.

Disrupting Intel

Last year I wrote about Intel’s intention to ignore the threat of disruption to its core business if it continued to follow, virtually to the letter, Clayton Christensen’s Disruption Theory. From that article:

If we follow DT to its conclusion, it is possible to see the risks Intel poses for itself, namely being innovated out of business. I’m clearly not suggesting that Intel will fail next year, but I think the long-term future is at risk if there is not some kind of reaction, with Intel creating further opportunities.

I wrote at the time, that the fact that Intel was concentrating on moving further up the stack to increasingly more profitable zones, avoiding the threat of the lower-end processor makers like AMD, Pohoiki Beach was designed to ensure Intel’s prosperous future.

It was a good strategy on the face of it. Desktop and laptop chips were increasingly under better-than-ever competition, something that was not the case when Intel was in its heyday. The real threat, Advanced RISC Machines’ ARM designs, were only beginning to poke their head out from the development studios, and whilst they had ambitions of capturing a small percentage of the market (10% if I recall well), this together with AMD provided real pressure on Intel. Intel had to react, and it did by going upscale and upping margins on those products because of reduced unit numbers.

The thing many people don’t understand is just how phenomenally expensive it is to design a CPU. It takes months of research and prototyping, and each iteration and innovation adds substantially to those costs. As CPUs are designed using smaller and smaller transistor sizes, costs go the other way, and exponentially. Costs of design are often dwarfed by the costs of tooling too. Tooling is the process of the building and bringing online fabrication plants to build the processors. Marketing is another expensive cost centre. Intel has famously pilled millions into elaborate marketing campaigns to get the public to think that laptop chips only come from them. 

Other factors influence the costs too. It should be noted that CPUs are defined not only by their speed —something that has mostly been maximised today, in that we can’t get the electrons to move any faster or for long periods without breaking the silicon— but are now defined by the transistor size in nanometers, or nm. When you look at processor specifications, they will talk of 14nm, 10nm and smaller. Looking at the following chart from International Business Strategies will give you an idea of the estimated costs, and how they have multiplied as semiconductors have reduced in size:

Source: IBS

In the beginning, when it was a simple arms race of raw processor speeds, Moore’s law —i.e., the number of transistors on a dye will double every 18 months or so— meant that Intel could produce faster and faster chips for their target markets, namely desktop and server devices. The server-specific chips came further down the road after Intel saw the opportunity to custom-design and build what was essentially desktop-class chip to supply a burgeoning market of businesses that saw the need to store documents and applications centrally. It followed the second-level of the Digital Transformation model I wrote about in Issue 4: The Digital Transformation model in detail:

Internal Exploitation

The second level, Internal Exploitation, is defined by the process in which organisation attempt to integrate the different silos of information systems and datasets with the aim to produce a ‘whole’. Integration is difficult, slow and often results in failures when starting out from a base that is not adapted to integration. Just how do you get the Accounts, Stock, HR, Sales systems integrated?

There are two types of integration, technical and business process interdependence. According to the model most enterprises spend more time on integrating on a technical level than on the business processes.

Since then, the battle has become more technical and has required close coordination between the designers wants and the builders’ capabilities. So far Intel has been outpaced by the likes of TSMC in reducing the size of its transistors who have become world leaders in producing the most densely packed systems-on-a-chip. TSMC is not the only one either, Qualcomm and a couple of others are also at the forefront in the production of ever-tinier devices year in, year out.

The keen-eyed among you will note that I switched from talking about CPUs and processors to systems-on-a-chip (SoCs, pronounced Socks). That is where the most prominent battleground is playing out currently. Not on pure CPUs but on chips that contain several previously separate ancillary systems on the same dye. Graphics, memory and other components are being reduced in size and brought physically closer to the processing units. In these minute devices, even a fraction of a millimetre can wield significant gains in data-exchange, or processing.

Intel seems to be having trouble developing and manufacturing smaller transistors reliably, which in part, explains the reason for multi-core and multi-processor CPU designs from them. Their designs don’t need to be too concerned with size, power and heat dissipation requirements. A desktop or a server is plugged into an infinite power source for all intents and purposes, and the cooling systems put in place in server rooms or the space in an office affords all the heat sink required to ensure stable operation. 

Since the beginning, Intel took the responsibility to design, make, market and ship the chips to PC and Server makers. This vertically integrated strategy served them well, so well in fact, that they became the de facto leader in the world for processors. Remember Intel Inside? But as recent news highlights, something that is a traditional force for an organisation can be turned into a weakness when disruption theory is well understood and utilised by competitors.

Intel has now shown that it is nearly a whole generation, or “node” as it is known in the industry, behind TSMC. As a result, they have stated that they are going to outsource some of their production to... none other than the company outpacing Intel in chip building. TSMC of course. From the FT:

“To make up for the delay, Intel said it was considering turning to outside manufacturers from 2023 onwards for some of its production — a plan that appeared to leave little option but to subcontract its most advanced manufacturing to TSMC. The shift raised the prospect of a change in Intel’s business model, according to some analysts, forcing it to consider abandoning more of its manufacturing to focus on design.”

Classic disruption theory!

Cementing TSMCs lead in processor manufacturing is another piece of news that may send shockwaves around the industry. No doubt most of you heard the long-awaited news that Apple, following a successful transition from PowerPC processors to Intel processors years ago, announced their intention to move its entire line of Macs to its in-house designed A-series processors. The same family of processors that power their iPhones and iPads and probably countless other items in their inventory.

These SoCs are currently world leaders in speed, power and cooling capabilities. For reference, the release of the iPhone 11 and iPad Pro showed that Apple-designed processors were faster than most of the Intel and AMD processors found in laptops of the day. Apple has successfully designed its processors using a small, relatively unknown player in the CPU market to produce a succession of world-beaters. That partner is ARM or Advanced RISC Machines. If you’re interested I could bore you with the in’s and out’s of the different philosophies of instruction sets in the CPUs — The RISC bit stands for Reduced Instruction Set Chip. They are all built by TSMC.

Once Intel lets go of this market, it will be all but impossible to get it back in the future. Don’t worry, they’re not going out of business anytime soon, and will undoubtedly record higher profits and better margins in the future as they shift their production away from a market that looks set to transition lock, stock and barrel over to ARM-designed processors and SoCs. Intel’s own mobile-focused processors are starting to get better, but it is too little too late in my opinion.

Blockchain, Schmockchain

Regular readers will know that I have been mostly sceptical of the utility of Blockchain in its potential to change the world. It is currently a big, slow database that complicates things rather than simplifying them. From Blockchain ≠ Cryptocurrency, I said :

... that it is a huge energy consumer and hence by definition is inefficient. That, sadly, is not its only efficiency problem. Blockchain is actually extremely limited in its speed and quantity of transactions and scales poorly. So much so that in 2016 several banks exploring the possibility of using the technology in the personal and business banking sector abandoned the work as blockchain was just too slow.

According to a detailed academic-style “peer-reviewed” study by the Centre for Evidence-Based Blockchain and reported in the FT:

... outside of cryptoland, where blockchain does actually have a purpose insofar as it allows people to pay each other in strings of 1s and 0s without an intermediary, we have never seen any evidence that it actually does anything, or makes anything better. Often, it seems to make things a whole lot worse.

Worse, the report repeatedly highlights that the technology is a solution currently looking for a problem. The antithesis to the Jobs to be Done theory that helps us better design and provide solutions. With over 55% of projects showing no evidence of useful outcomes, over 45% showing “unfiltered evidence” (i.e., next to worthless), it would appear that Blockchain is a belief-system rather than a technological solution.

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This essay is based on a small presentation I did to talk about COVID-19 and how we could kickstart after the worst of the pandemic is over. This essay expands on the first part of that presentation exploring the themes in more detail. Look out for the second part in the near future.

Enjoy! Your feedback is welcome.

Leave a comment

The digital Caribbean

I’ve written here several times about the state of digital in the Caribbean, and I encourage you to read those earlier essays, you can find them all in the archives.

However, what I didn’t emphasise is just how connected we all are in the Caribbean, but only connected in ways that are mostly ephemeral. Out of the nearly forty-four million people in the Caribbean around 77%, that’s thirty-three and half million people are connected with a data-capable mobile phone. More than 26 million people connect to the internet using a computer. But critically, over 50% of us regularly use social networks, a percentage that is higher than most places in the entire world.

Which begs the question, why are our services, our stores and our governments not online?

It would appear that COVID-19 might be the impetus that finally changes that, and I think that we have more chance that this will change because of this pandemic rather than an earthquake or even a hurricane. I feel that we are in a big, forced experiment where the entire world is collectively conscious at the same time and that we all have some amount of control on our outcomes, which is entirely different from a natural disaster that a) we have virtually no control over our outcomes, and b) nothing works during the disaster event.

If you look at the islands in the North Leewards that suffered greatly in the 2017 hurricane season with Irma and Maria, and the Bahamas during last years’ terrifying and unimaginably tragic passing of hurricane Dorian, all islands affected suffered a complete breakdown of most if not all services, digital services included. With COVID-19 there has been virtually zero downtime and zero outages. Sure, many people could not work when their jobs were centred around physically being at work, but those who could work albeit remotely continued with relatively little effort —if we ignore Zoom fatigue that is— which is a real thing.

To answer the above question, I’m noticing more and more services coming online, like the recently announced online Immigration and Customs Form for travelling to Barbados. It’s great to see this move but it provokes the question about why it took so long. The real answer, of course, is the will or lack thereof. There are virtually no technical reasons in 2020 to not have most services online, it was even possible ten years ago. And even those services that cannot be completed fully online, a major component can be digitised to make processes easier.

Quite often, in the companies I consult for, I see multi-step manual processes in use, despite the company being willing to digitise its processes, for example, A ➔ B ➔ C. These processes cling on in manual form often because process A cannot be easily or successfully digitised despite B and C being eligible. The result is the abandonment of the digital process change. There are, of course, at least two ways to go about this. One is to digitise processes B and C, with process A being manually entered into the system for B and C to run the data. Or, as I tend to analyse, why not re-think the process from start to finish seeing if there is a way to digitise not only B and C but a part of A. It looks like this; A1 (manual) ➔ A2 (digital) ➔ B ➔ C. Going a step further the process can then be redesigned, considering the desire to eliminate manual processes; X ➔ Y ➔ Z, for example. XY&Z achieves the same goals but the data entry and data processing are reorganised to eliminate as much manual entry as possible. In this case, this new process no longer resembles the original process. I’m simplifying the work of course, but you get the picture.

 The digital reality

We’re living in a new “digital reality” and approaching an inflexion point where the majority of our lives will be online and those that fail to embrace and effect change will feel pain in many areas of their society. Which is why these first steps cannot come soon enough and why politicians and businesses need to start to radically change their minds to adapt to what is coming, not what is current.

So, how do we achieve this?

The first thing to understand is the current state of affairs, my writing on the current state of digital in the Caribbean goes some way towards this, but further research is needed to look further into the economic, socio-political and business world in the region. Again, I’m doing some of this and intend to do even more going forward, but funding is needed for this to be more widespread.

A few examples of my research can be briefly summarised here in five important categories; discovery, purchasing, payments, aggregation/uberisation and automation. Let’s take a quick peek at each of those in turn.

Discovery

In a world of virtually infinite information, content generation and a never-ending avalanche of information flow, we can extrapolate that the chances of information types we want do not exist are virtually zero, in other words, the information is there somewhere. The issue is in finding that information. This is initially where Google stepped in. Google understood that the exponential growth of websites on the internet would render the old model of listings and directories useless at best and dissuasive at worst. Google’s trick was to ignore the direct listings of names and URLs and concentrate on understanding the relationships between all online sites. PageRank was designed around this principle and was implemented to provide more “relevant” results to people’s searches. Up to that point, the internet had logically reproduced the physical Yellow Pages world.

As a result, a whole new industry was born around getting better visibility for businesses on the internet, it’s called Search Engine Optimisation or SEO for short. A name born in the generation when Search was the primary tool used online. This name is already becoming redundant as the “optimisation” is not restricted to search engines, but relevant to all online platforms like Twitter, Facebook, etc., which run their own in-house developed algorithms of their users’ content.

Purchasing

Purchasing habits were being fundamentally altered even before COVID-19 hit. Today’s purchasing can be easily resumed as a few words :

Buy online. Pick-up in-store.

According to qudini, a specialist SaaS Retail Experience company, in a recent survey, 76% of respondents said they had purchased items using in-store pickup after researching and evaluating online. This is only part of the story, as the online retail giants like Amazon are putting greater effort into reducing friction at the point of sale enabling easier and faster consumption. And, despite this, there is still room for the niche markets to be highly profitable businesses, simply because of the sheer scale of the internet. A niche on the internet is a misnomer.

Payments

There is an ongoing trend of mass democratisation emerging in the financial world. Banking is being disrupted, with online-only banks not only reducing friction to access your money but providing more timely services for a fraction of the cost of traditional banks. And as nothing exists in a vacuum, traditional banks are not ignoring this and are implementing new strategies to ensure survival, for example, pivoting some sectors as online banks using a different brand. Consolidation in the back end additionally helps capitalise on the opportunity to become the guarantor for the online banks.

Payments are being simplified and increasingly more integrated with online platforms from everything from membership systems to complete online marketplaces. Stripe is probably the most known and capable in this industry. However, more and more banks are starting to roll out their own online payments solutions. Not willing to let Stripe eat their lunch so easily they are hoping on keeping their clients in-house. They’ll need to be careful of hidden fees, simplicity and friction reduction to do this… something the banks have shown they are not very good at up until now.

Investing is also opening up and becoming easier for the public. Efforts like Betterment and Wealthfront are only the first step of a wholesale dismantling of the staid and exclusive boys clubs that are current investment bankers. Not only that, as we’ll see later, but their use of technology is also outperforming traditional investment experts:

Betterment portfolios outperformed average advised portfolios 88% of the time.

Aggregation and Uberisation

Aggregation is largely an internet phenomenon. It’s an extension of a well-trodden path from the powerful retailers using their muscle to keep clients coming back, thereby using that power to entice suppliers to prioritise their stores (being that the stores can guarantee customers), rinse and repeat. The traditional giant stores like Macy’s and Debenhams rode this wave for several decades. With digital distribution being essentially free, the value chain has been turned upside down meaning that those who integrate throughout the value chain and commoditise their supply generally increase their profit over the incumbents.

The uberisation of services is another trend that appears unstoppable for now. Uberisation facilitates a peer-to-peer driven business model enabled through the use of technology to simplify the on-demand delivery of physical goods and services. The growing use of mobile and the constant connection to the internet allowed Uber to deliver an application that works for both drivers and passengers, hooking them up without the need for a central taxi operator to get involved. The model has been further developed and exploited by food delivery services, interestingly Uber has just acquired Postmates on the back of a decreasing amount of mobility and an increasing amount of online ordering. It doesn’t take a giant leap to see how this could become a deliver-anything service.

Automation

Automation, more specifically Machine Learning and Artificial Intelligence are the last key element. Their democratisation by the Microsofts of the world (see Azure Cognitive Services), is allowing a completely new generation of software designs. Simple operations like the scanning and treatment of receipts direct-to-accounting software are freeing up administrative staff to be better used in more valuable roles. Even simple workflow systems like Microsoft Power Automate can tap directly into the APIs of these services and perform simple repetitive tasks as an aid to decision-making.

Which brings me to the availability of online automation products, of which IFTTT was probably the first to hit notoriety. If This Then That simplified the creation of fun automation that switched on your lights as you neared home or flashed the lights in the colours of your favourite team when they scored. It went even further by hooking into popular SaaS products allowing you to “join” together previously disparate systems. Zapier and Power Automate take this much further, with examples of users replacing no-longer-supported legacy software with modern workflows that are modulable and allow for data analysis, unlike the systems they replace.

The second step is to try to envisage what the future will bring. Easier said than done, but current affairs do give us a few hints at what the future may hold for the internet and business on the internet. In my research three factors come up time and time again. Regulation, health and information misuse.

Regulation

I like memes so I couldn’t resist:

The EU has restarted efforts on its Digital Services Act, a far-reaching proposal to regulate Artificial Intelligence and data collection. Even the traditionally Wild West US is hauling its biggest tech CEOs to testify before Congress in an investigation to determine if the AAAF (i.e., Alphabet, Amazon, Apple and Facebook) are using anti-competitive practices (they are). We can expect the end to the free-for-all that is the current posture in most countries. Regulation will affect not only the giants online but all the supporting systems and smaller operations. GDPR was only a first attempt but its implementation has given impetus for the next wave of regulation, one that will bite harder, there is no question.

Regulation will not just stop at competition and data harvesting, but it will also start to regulate what information can and cannot be published on the internet, much like how traditional media cannot publish absolutely anything. The days of self-regulation are soon over, as, just like the banks, the internet is incapable of regulating itself effectively. Regulation will be very difficult and full of competing ideologies pulling against each other. Just how we are going to shoehorn a global internet into the current state of political divisions around the world is still open to question for the moment. I suspect the EU will move first, and any businesses that are in some way reliant on the EU will feel the early pain, including us here in the Caribbean.

Health

When I discuss health, I’m talking about what is increasingly a difficult subject for parents and concerned parties like schools and businesses, that of Digital Health. Often reduced —incorrectly in my view to screen time— digital health will become a subject that every employer and supplier has to be cognizant of. They will be forced to take it into account when developing systems and processes to prevent people from being adversely affected.

Employers will have to better discern good screen time from bad, to ensure their employees are not overly exposed to bad screen time. But what is bad screen time? How do we define it? How do we measure it effectively? How do we control it? These and many other questions are starting to be debated the world over. Like regulation, it is only a matter of time before it becomes a central aspect of your digitalisation strategy.

Information misuse

The most prominent danger for those of us who spend most of our working and personal lives online is fake news. A phrase the short-fingered vulgarian in the White House likes to overuse when attacking his imagined foes. But fake news is absolutely real, and ironically often created and perpetuated by the likes of Mr Drumpf. It is the fact that it is easy to produce and distribute, making it such a danger to the world and contributes to making it difficult to regulate.

Another problematic innovation we’re seein g in currently limited use is that of deepfakes. They’re not completely indistinguishable to real photos, film or audio. But they are getting better, and with the use of machine learning their efficacy is accelerating. Legislation and regulation have not and likely will not catch up with these developments any time soon. It’s a disaster waiting to happen if it hasn’t already, and we just haven’t noticed it yet.

Interesting times

In summary, we can see that digital integration of business is evolving and accelerating, in part due to the current pandemic, and in part because of the natural changes in a society that is more exposed to digital than previously. Customers in the Caribbean are becoming more digital, although not for the reasons we thought they would —convenience and availability— but for reasons more to do with safety in the face of a virus we still know little about. We see business and structural changes brought about by investment or governmental and organisational willingness to face one of the most damaging crises we've seen to date.

We also see that the very nature of the internet is about to change and change significantly. With more and more governments and populations favouring some form of regulation, it is only a matter of time before whole sections of the internet come under some framework of operations that have previously been rejected. Media, social media and sales of goods and services are likely the first areas regulated, but make no mistake regulation will follow for everything else soon after. The fact that the internet provides a scale of possibilities hitherto unseen, logically means that regulation will affect on a mass scale too.

Even without the pandemic, we were living in interesting times. Adding COVID-19 to the mix has been like pouring water into a boiling chip pan. Hold on tight.

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COVID-19 has accelerated the use of digital throughout the world, the question is, is the Caribbean ready for the change and made the recent difficulties at Digicel a cause for concern?

Before getting into this week’s essay, I wanted to let you know that I got some pushback from my last article dealing with online and virtual conferences. I thoroughly appreciated the discussion I had, and I got some more exposure to other solutions to some of the problems I highlighted. Taking that a little further, I did some more in-depth research and found this graphic that highlights all the solutions surrounding digital conferencing. There’s a lot there, wow! The main point of the feedback was that I said that there weren’t solutions to the problems I mentioned. I was —sort of— wrong. There are lots of solutions as the graphic shows. But one thing that they all fail on is massive scale. I should have been more explicit in my essay, explaining that I was targetting large-scale conferences, conferences that typically have tens of thousands of visitors over a few days. None of these solutions scale to that level sadly. Let me know if I’m wrong again, I’d love to hear from you. 😀

Is the death of Digicel greatly exaggerated?

There's been a lot of ink spilt recently on the death of Digicel in the Caribbean. To paraphrase and to misquote simultaneously… the reports of Digicel's demise are greatly exaggerated.

Here's why.

To understand what is happening, it is essential to understand not only the history but the current context. If we look at it in detail, two aspects need to be taken into consideration; the offer and the usage. It is here we see the first signs of a strategy that is no longer in line or adapted to the current market and the emergence of a strategy targeted to the way we use mobile phones today.

The Context - Digital in the Caribbean

In the last several years, it is clear that three things have become increasingly important and more frequently used than at any other time in history; digital technologies, mobile and social media. With a global population of 7.7 billion, we now see more than 4.5 billion people use the internet. Social media boasts 3.8 billion users, essentially making around half of the planet using some form of social media. The COVID-19 pandemic has done nothing to stem that growth, if anything it has likely increased usage and signed up many more users that would have eventually got on board.

Interestingly, of all internet usage, mobile data usage will top 50% for the first time this year 2020, with the average time spent on the internet of 6 hours and 43 minutes. Basically a full workday is spent on the internet, either for business or pleasure, most likely a mixture of both. Of that time, users around the world spend on average 2 hours and 24 minutes on Social Media. Growing categories such as Ride-Hailing, Digital Marketing and Online Shopping are all being affected by the growth in access to data on-the-go. 

I previously wrote a brief piece about digital in the Caribbean, so it is pertinent to revisit this with the latest statistics I could research. As with the original essay, all data is from wearesocial unless specified otherwise.

Starting with literacy, which is table stakes when it comes to using digital technologies like computers and mobile phones, sadly, the Caribbean still has much work to get the population above 90% literacy in the region. Looking at the general breakdown, women’s literacy rates are 88% with men’s only slightly above at 89%. To look at this the other way around, over a tenth of the population are unable to read and write by the age of 15. How are they going to buy food online or use other digital services?

Internet penetration (the number of internet-connected people compared to the total population) is again, sadly, lagging even our closest neighbours. With 60% penetration in the Caribbean compared to Brazil’s 72%, or Central America’s 66%, that translates to roughly 17 million people in the region still unconnected. But it’s not all bad news, as growth in internet-connected users is a healthy 8.5%. Meaning that 100% connectivity is still more than a decade away, but it’s moving the right direction. If the COVID-induced recession is not as damaging as feared, I suspect that growth will accelerate. 

Devices are an important part of getting online and globally, only 3.3% of users have “feature phones” (yes they are still on sale in the region) that get internet connectivity, compared to 91% of smartphone users. The only reason to get a smartphone is to use the internet. This is corroborated by the fact that 53.3% of all web traffic is from mobile phones, an increase of 8.6% globally, at the expense of traffic from fixed devices like PCs and laptops, tablet devices and consoles, all reducing in usage; -6.8%, -27% and -30% respectively. Mobile connectivity as a percentage of the total population is currently 77% in the Caribbean. As a comparison, most of the “developed” nations run at over 100%. However, the distribution in our region is less than even. Antigua and Barbuda is third in the global table with mobile connectivity at 195%, just behind the USVI at 198%. The French West Indies (Guadeloupe, Guyane and Martinique) are at an average of 138%. All this drives an average of 7.2 GB of data per month, per mobile connection in the world, with Latin America and the Caribbean running at half of that, i.e. 3.6 GB.

Social media usage in the Caribbean runs at around 51% of the total population, an increase of 11% since 2019. Some of our islands make it to the top ten list, with Aruba and Cayman Islands coming in 6th and 7th with social media penetration rates of 90% and 89% respectively. Looking further into the data, eligible users are defined as children 13 years and older, which puts the Caribbean above Europe in the use of social media, 64% compared to 62%. Incidentally, Aruba tops the chart when it comes to Facebook eligible audience numbers, a full 96% of 13+-year-olds are available on Facebook. We’ve never been more connected.

What are we all doing online? Well, according to the data, 90% of users watch online video content, 70% are streaming music, and 47% and 41% listen to online radio stations and podcasts respectively. Mostly, entertainment services make up the bulk of internet usage, goodbye traditional TV and Radio seems to be the order of the day. Looking at the apps currently used, it is chat (mostly WhatsApp), social networks (Facebook), video apps (YouTube), shopping and (Google) maps, when looking at global usage. Unsurprisingly, social media makes up the lion’s share of that usage; in fact, a full 50% of the 3h40 minutes is attributed to social media. This usage is also corroborated by the top three most visited websites (globally); Google, YouTube and Facebook coming in third place. Interestingly, and something I’ve noticed for quite a while, the younger generation, Gen Z, are the least interested in Facebook, with only 3.1% of males and 2.5% of females on the site, only the over-65s have less presence!

The History - The offer in the Caribbean

If we ignore the smaller players that are primarily localised to a specific market like the Dominican Republic or the US Virgin Islands and Porto Rico, there are two leading operators, Digicel and Flow. Flow is the incumbent and has been in the region in one form or another since the early twentieth century, as this map of the Eastern Telegraph Companies network shows. Digicel is a newer entrant, but by no means unique to the region. Digicel launched in 2001 in Jamaica and has quickly spread across the region and into other overseas territories in the Pacific Islands region in 2006.

Source: Wikipedia

Both operators are well implanted and serve the wider Caribbean with mobile phone, data and other services such as broadband and television. Digicel has recently got into the mobile money transfer business with Digicel Mobile Money launched in Fiji in 2010 and is looking to expand around their markets.

Without taking on exhaustive research to compare offers, services and pricing (which is incidentally about as transparent as mud), it is difficult to get a detailed picture across the region. Complications such as currencies and fluctuations in exchange rates only further obfuscate value comparisons. Suffice to say though, that if you live on an island that has a small population you are likely to get less for your money! Broadband pricing ranges from an average of 25 USD per month for a broadband fixed-line connection in Saint Martin (French side) to an average 179 USD per month in the British Virgin Islands, that’s according to cable.co.uk, a firm dedicated to researching broadband pricing globally.

But that’s not the real issue, as far as I can tell, most offers are geared toward the old-reality of the internet. That is to say that once upon a time we were entertained by television and would communicate with friends and family using a phone. The current offers are squarely aimed at that, with classic triple-play deals; TV, telephone and (limited) internet. Note that the internet is last on the list!

The Future - The way we’ll all be using the internet

Source: Apple

Habits on the fundamental way we’re consuming entertainment are changing concurrently with the way we are communicating. As more and more streaming opportunities coming online, people have got used to watching what they like, when they want, not when a TV station dictates. There’s no surprise of the rise of Netflix and the up and coming services like HBO Go, Disney+ and Apple’s own attempt, Apple TV+. In this reality, content is king, and the internet providers are reduced to simple data pipes, shipping IP bits backwards and forwards at the demand of both the customer and the content creator/owner or platform. Their bread and butter is being commoditised and the value being sucked out. A reality that they are undoubtedly very uncomfortable with, which is why the triple-play is still so prevalent as it ties the user into one service where profits and losses can be spread. When evaluating the worth of one supplier over the other, I’m sure you’re no longer interested in call quality over a landline, you Skype, you FaceTime or WhatsApp with better voice quality than many operators can supply using POTS. 

However, what the new generation wants is entertainment, social networking and ephemeral communications. In other words, what they want is data. Data is the backbone that supplies them with YouTube, TikTok, Instagram and all the other services that are so far outside the purview of traditional media, and it is mobile! Looking at mobile data costs, the French West Indies comes out on top with average GB pricing lower than the rest of the Caribbean with prices at around $2.5 US, compared to $23 US for the Cayman Islands. More and more is being done on mobile, whether it is in the home or on the go. The mobile phone or tablet device is the item on which people are being entertained, checking the bank balance, buying stuff and communicating. Fixed broadband is being deprecated by people’s real-world use.

But here’s the point, unlike the other operators, Digicel’s Wizzee brand in the French West Indies has done something different, and it is that something that is probably going to be part of the future of mobile operators. Currently, mobile subscriptions in the Caribbean are either data limited or so expensive as to radically limit the amount of data used (see above). With the world moving to more data-only services, music, television, video conferencing/chats (thanks COVID), and even plain old voice calling replaced with FaceTime voice or WhatsApp calls, networks are going to have to rethink their inadequate data allowances to evolve and allow their traditional cash cows to starve. As the state of digital in the Caribbean above shows, how services are being consumed is fundamentally shifting. Bits are taking over, and the younger generation are only going to get hungrier for more bits and more mobility, eschewing satellite, cable and other essential services.

Digicel’s Wizzee is the first attempt, and a pretty good one at that, of moving to a data-only world. 50 GB per month for €10 clearly emphasises data. When you look at the offer, you pretty much don’t care how many minutes or SMSs you get (does anyone still use them?). Wizzee is essentially a data offer with voice and SMS thrown in for free. As GenZ gets older, and a newer even more data-hungry generation comes along, the pressure to provide data-only services is going to grow, not diminish. 

COVID-19 has given us all a glimpse into the future of data communications, and some would say communications period, and it is that world that operators need to start to pivot their offers towards. For what it’s worth, I think that the Digicel brand in the French West Indies will disappear with Wizzee disrupting its parent. It will continue steadfast in the rest of the Caribbean but will need to pivot to primarily data-first services to survive.

The Future is Digital Newsletter is intended for anyone interested in Digital Technologies and how it affects their business. I’d really appreciate if you would share it to those in your network.

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I’ve had a tough time being productive over the last few days. The events around the world currently are a lot to process, and as I’ve said before, I’m not the type to react instantly with hollow missives. I need time to think about it, reflect upon it and do some research to know more about it. I’ve struggled over the last few days to come up with a response here for this newsletter, to try to fully come to terms with what some are only just waking up to acknowledge. I’m fifty years old now, and have lived through a few life shocks —I don’t need to bore you with the details. Suffice to say, what is currently happening is deeply troubling to me and I’m starting to form a bigger picture of where the world might go in the future, and I’m not comfortable with it.

On to administrative matters. I’ve decided to simplify the delivery of this newsletter and narrated podcast. There will now only be one email that contains both the text and the podcast version ensemble. You do not need to do anything to continue to enjoy it. If you prefer reading, the full text is in the email and if you prefer listening, keep pressing play as you’ve previously done. For those that pick up the episode through your podcast player, the show notes contain the full text as well. It’s to make it easier for you to consume these essays. Additionally, in the event of another interview issue, it’ll allow you to follow along with the conversation while listening by browsing the show notes.

DM me at @tfid_newsletter if you want to know more. The door is open.

On to this weeks’ essay.

The Conference Bundle

Last week’s issue was a little, shall we say, unstructured. I apologise. There was a reason. I wanted to write down what it is that makes a conference. I probably could have done a better job at explaining what the constituent parts of a conference are for starters. So I thought I’d expand upon those initial thoughts and try to give it some structure.

The conferences we know today were developed in the pre-internet era. The earliest reference I could find was the Convention Nationale of 1792 in France. The assumptions made during this development have applied to all conferences since. Get a bunch of people in the same city at the same time, mix it up and see what good comes from it. For conferences to become digital, those assumptions will be ignored, and a new digital conference template will emerge, one that is based on internet assumptions.

Looking at conferences (or conventions if you prefer), several parts are common to all meetings. Firstly, there is content. Content is delivered in different forms; presentations, Q&A, etc., the content is also an opportunity for marketing to spread its message to the attendees. Additionally, conferences rely on the physical structure and cognitive separation from day-to-day work, providing opportunities for attendees to meet, chat and learn. Many sales-oriented attendees are present simply because they know that potential clients will be in the same city at the same time. At large conferences, people often don’t even attend any of the content provided; their expectations simply targeted to compress several months’ worth of meetings into a multi-day conference. It saves on travel expenses and not least, time away from the office and family. Packaged together is the social aspect that tries to engineer meet-ups and new introductions —like side meetings, social evenings, corridor chats— in an attempt to enlarge the ecosystem and the potential for business for the conference hosts and sponsors. Some conferences even attract attendees to the host city without having any intention at all to attend the meetings. WWDC is an excellent example of this. The conference is typically limited to 5000 attendees with several thousand more present in San Jose during the week it is on. Again, the aim is to take advantage of the gathering of the people they need/want to meet during the conference. Lastly, most conferences have at least some expo capacity. Tens if not hundreds of vendors set up shop and promote their wares for the duration of the conference in the expo hall. It’s a convenient gathering to browse and scout out new products, services and businesses.

So if you think about it, a conference is a bundle of products, and much like Microsoft 365 is a bundle of solutions for productivity or your triple-play TV/Internet/Phone service is a bundle for entertainment, the conference will appeal to different needs for different jobs to be done. And like all bundles, not all users will use all the products and services included during the week. The trick for conference hosts is to provide enough of a value for each attendee profile. I detailed the Conference Bundle in the diagram below:

Matthew Cowen

Looking closely at each part of the bundle, it’s not difficult to see that pretty much the only part that has been solved for the digital and online world, is that of content. In record-time, many conferences across the globe pivoted to “virtual” meetings very quickly. Some of the biggest and most prestigious conferences, like Microsoft Build, the WWDC as mentioned earlier from Apple, or VMworld have all shifted online, simultaneously avoiding cancellation (unlike Google’s I/O) in offering more than before. I’ll get to that in a little bit. The proximity problem of side-meetings has also largely been solved, in that it is easy to schedule individual one-to-one meetings during conferences. Again knowing that your colleagues and friends are attending allows this, but how is that any different than planning a one-to-one outside the conference? Does the conference itself bring value in that instance?

What has not been solved, however, is the organically generated social nature of large gatherings that attract like-minded and open-to-learn individuals cooped up in the same room. Something that, by circumstance, breeds the kind of interactions I attempted to highlight in the last issue, i.e., the impromptu lunch meetings, the corridor conversations, the sometimes-awkward socialising over vendor-provided drinks. These interactions, however brief or however staged, are part of the experience, in that they add to the value of your presence. How do we solve for that in the digital world?

Outside of the presentations and social interactions, exists the show floor, or the expo hall. This element of the bundle doesn’t currently have a digital equivalent. Wandering around the expo hall, fulfils two jobs to be done. One is the exposure to new products and services, and the other is access to technical staff or to C-suite execs of companies you may be interested in learning more about. It’s quite efficient when you think about it. If of course, you take advantage of it. But how do you transfer that discovery experience into digital, an experience that solves the jobs to be done puzzle?

This change in the nature itself of conferences provides some insight and ideas on their future. The most significant difference during the pandemic is not the fact that some conferences have become cheap or free, it is that their reach has widened to such an extent that the potential audience for a popular conference is now up to 4 billion people! It is also interesting to learn that even niche conferences may develop into international affairs.

Looking at the expo hall, it is entirely possible that in some instances an online expo hall could take on some of the attributes of a contemporary massive online multiplayer game like Fortnite or PUBG. The Marshmello concert in 2019 and the more recent Travis Scott show directly in Fortnite taught us that entertainment in an online setting had the potential to be just as enjoyable as in a typical concert venue. It provided a glimpse into the future of online events. You may be recoiling at the thought of this, but there’s no easy way to put this, our time on this planet is limited. The generations following on from us are growing up with entirely different frames of reference, ones that are based on internet assumptions. Organisers of conferences of the future will also have those frames of reference and not 18th-century shackles in which to operate. This will free up their imagination, and when they design future gatherings, the contemporary conference will be a completely different beast.

Taking that a step further, the interactive nature of a conference, and if I’m continuing the comparison with online MPGs, players (you can substitute attendees) already use multi-channel communications in realtime. When kids play Fortnite today, those with a PS4 create a “Party” and invite each other to join. The non-PS4 players join the game too but interact using WhatsApp or FaceTime. What you get is a realtime interactive tissue, where the common interest is the game and different branches of communication join the participants. It should give designers of future conferences encouragement to be more ambitious and organic in their development.

From one of my presentations

With more and more people now meeting and dating online, interestingly doing so without third-person intermediaries, is it too far-fetched to believe that this could provide a model for online conferences also? Many of the social taboos surrounding meeting on the internet have all but disappeared where dating is concerned, why not for business meetings? Perhaps future conference software may include an attendee directory that, when browsed with the relevant filtering, you could swipe right to set up a meeting?

What about Virtual Reality? For what it’s worth, I don’t currently believe for a second that VR will take an essential role of this new wave of online conferences. In its current form, it is just too restrictive and too cumbersome to be used in that way. The friction required to enter the virtual world is too significant, it is too uncomfortable for prolonged use and too illness-inducing for many for it to be a serious consideration. Virtual reality sickness is a real thing and cannot be ignored.

As a side note, the imposed shift to digital has, interestingly, enabled a rethink of the tariffs and reach of all conferences. Conferences are traditionally an exclusive club. The investment in time and money is too much for most people and most small organisations that would benefit most from them, and the returns on that investment too small all things considered. The opportunity cost is just not high enough to for that audience. That’s why it is encouraging to see more online conferences that are either low-cost or free. WWDC, for example, is open and no cost to all registered Apple Developers. That’s a 100$ per year subscription that replaces the previously stiff price tag of 1599$. Microsoft Conferences, like Build, were somewhat exclusive too. Covid-19 opened the doors to all comers, for free. A full 48-hour content package was deployed in a way that was easy to jump in and out of as needed. The benefits of a much wider audience for Microsoft was duly noted. An estimated 100 000 people took part in this years’ conference. For comparison, its offline event last year attracted only 6000!

For now, I think I can safely say that in-person conferences are not a thing of the past and that pretty soon many of us are going be on a plane flying off to a convention in some far off city. But I do think that the conference experience has changed forever, and that in-person conferences will include remote participation simultaneously with in-person content, with new smart ways for us to communicate together. I can imagine a Microsoft conference that holds 10-20 thousand people in a convention centre in Florida for example, with another 100-150 thousand connecting from around the world. A convention where in-person you get to see in realtime, and dialled-in you can follow time-shifted to your preferred timezone or follow live if required, all while feeling like a full participant in the event.

Until we meet again.

The Future is Digital Newsletter is intended for anyone interested in digital technology and how it affects business. I’d really appreciate if you would share it in your network.

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Evening all. Today I’ll dive a little into the forced change that is taking place in the Caribbean and show how we still have a long way to go, and I start an analysis on digital conferencing, firstly by looking at what exactly conferences are for and why they exist using a model I’ve developed to help explain this. In another newsletter, I’ll get into the discussion about what digital conferences can and can’t offer and what the future might hold.

Enjoy.

The Future is Digital Newsletter is intended for anyone interested in Digital Technologies and how it affects their business. I’d really appreciate if you would share it to those in your network.

Share The Future is Digital

If this email was forwarded to you, I’d love to see you on board. You can sign up here:

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Thanks for being a supporter, have a great day.