Fudge Sunday - Betting Odds and Ends Justify the Means of Production
This week is a bit of a potpourri of links and concepts. The title is a play on words to cover four topics in one newsletter issue. Let’s get to it.
Last week we look at the world of data portability from 2005 to present. Along the way, we examined how long it can take for the impact of data gravity to be felt and the responses the market provides in the wake.
Betting odds: Science Fiction and Smart Devices
One of the pandemic pastimes in modern economics is taking in a variety of streamed movies. Lately, I’ve noticed that it is only a few decades between the movie depiction of a futuristic plot device and a news article that warns of dystopia on the horizon.
It’s a quick throw away moment to stoke dystopian big brother-esque tattle tale technology thought but Ewan McGregor’s character uses a smart urinal in a no-pun-intended cheeky scene that is otherwise a throw away trope.
If you want to think in Quantified Self terms, the next logical progression in the smart devices market will be “smart toilets". As you might imagine, there is clearly a health related data play.
However, with all “smart devices” that might connect or share data to third parties, implications of privacy are top of mind. For example, how will opt-in and opt-out defaults separate individual data privacy concerns from greater good desires of community population early warning systems for everything from communicable disease management to environmental toxin exposure.
Odds and Ends: What's old is what's new again?
I was lucky to start my career in wholesale turnkey Internet Service Provider (ISP) marketplace back in the glory days of telecommunication as everything went IP. What was a small community back then seemed to have all but disappeared until recently.
Back in my ISP days, the ability to “self-host” was pretty common practice amongst peers. In part, you had to “eat your own dog food” or “drink your own champagne” to truly develop empathy for your own customers on the exact same network or service because you would “roll your own” just like the downstream customer would do.
For the past 15-20 years, virtual private servers (VPS) then cloud computing then SaaS offered a way to get out of the ISP and hosting business. Now, it seems the patterns are shifting back as new varieties of symmetric broadband, precipitous cost drops of servers, and fronting proxies take hold of an emerging market that longs for greater efficacy and control.
Recent coverage of AWS margin estimates are interesting. There’s an old saying in the service provider world that when your margins exceed 20 points there will be new competitors that arrive to challenge that margin.
It’s entirely possible that, within a decade, the history of AWS, Azure, GCP, OCI, AliCloud, IBM, and others will public filings will point to a time when margins were amazing before they were far more normalized. Also, it is likely that scaled execution, fiscal discipline, and newer niche entrants (not M&A) that determines true differences between market share leaders.
Ends justify the means: Institutional Monitoring
What happens to corporate values, company values, and the values of workers as technologies associated with systems (of machines) are used and applied to people?
Assume that Microsoft has around 180,000 employees that work on products that enable remote work. Further, assume that almost 60,000 work just in and around the Seattle area.
Now, imagine what happens when 60,000 Microsoft employees take a survey after over a year of working from home instead of an office. Finally, imagine the back and forth interpretation of survey findings from a sample group with an “in the office” culture is suddenly asked to transform to a “remote first” culture.
Maximizing of all the things seems to be the eternal quest. Just as people, systems, and devices are increasingly treated as interchangeable concepts, it’s clear that much of the lifecycle is being ignored in terms of press coverage.
Setting aside an Amazon only perspective, the “hard charging” work cultures (China’s 996 and Silicon Valley live to work) mythos may turn out to be as crude as rubbing together sticks when compared to a truly quantified organization. Now, consider the holistic worker health, anti-burnout, and related movements in the startup world where the treatment of the employee as the device under test combines impactful monitoring, telemetry, access modes, measurement, and feedback loops to truly reach our fullest potential.
The means of production: Chips ahoy!
There’s always a XKCD… so…
If you’ve tried to buy something recently that relies upon microchips then you’ve probably heard the dreaded words “because of a chip shortage”. Well, it might be more accurate to expand these words to be “because of an underlying dependency within the chip industry supply chain itself”.
Recent coverage has even started to include dependency topics such as substrates within the chip industry supply chain itself. In fact, chip suppliers are all responding with a common tactic: investment.
As I mentioned in a recent Sunday Fudge series, there are strong moves in terms of investment to consider:
Intel has invested ~$20B in New Mexico since 1980 which includes ~$3.5B in upgrades… this year.
TSMC will invest ~$12B in Arizona… this year.
GlobalFoundries will invest ~$2.5B in New York and Vermont… this year.
One last thing...
While I’m starting to refine my flow a bit more that the exhaustive issues of the past, I’ve overlooked adding my disclosure for more than few of these issues. Management (as in me, myself, and the “you can’t spell id without” I in this case) regrets the error and will be retroactively editing online issues.
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