Blogarithms
Doug Kaye's thoughts on web services, web hosting and managed services.
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Pickled Herring. I always read Rafe Needleman's Catch of the Day from Red Herring, but the analyses often seem superficial. (Okay, at least they're longer than those in my own weblog.) In tomorrow's COD, Rafe says, "the economics of producing streaming video are awful. You have to pay for producing video, for storage, and for each user's bandwidth. All to support a small audience and a terrible advertising market that's competing with an existing, efficient delivery mechanism -- television."
While Needleman's story emphasizes entertainment video, and he does go on to report that Virage and e-Media are making most of their money on LAN-based applications, it's important to remember that streaming video has suffered from the same unrealistic expectations as did dot-com attempts to revolutionize retailing. It depends on the genre, audience and business objectives. For instance, one can probably produce a video recording of a conference session or lecture for less than it would cost to record in audio and manually transcribe to text. Let's not blame the medium when it's used to deliver the wrong message.
And storage? I'm not sure which "storage" Rafe is referring to, but storage is not a significant element for streaming video applications such as those I described. As for bandwidth, that's what the CDNs are addressing. And if the bandwidth is too expensive, you're trying to do the wrong thing.
One can't summarily say that the economics of producting streaming are awful. That's like saying that cars are too expensive. There are appropriate applications, and there are inappropriate ones. Over time, as the economics evolve, more applications will become appropriate, but certainly some of them are already.
Posted Sunday, August 19, 2001 9:38:47 PM 
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Web services segmentation. In his weblog, John Robb, the new president and COO of Userland Software, identifies three segments of the nascent web services market: (1) enterprise web services, (2) consumer cloud services, and (3) person-to-person web services. The groupings reflect John's background and current position, but I come from a somwhat different world, and to me he has missed a big one: transactional services over the wire.
Even before we called them "web services," we had things like CyberCash and CyberSource for processing credit card transactions. These are pre-XML and pre-SOAP, but they've long (by web standards) been web-based services. This will be a huge category.
Posted Sunday, August 19, 2001 2:08:31 PM
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The cost of five 9s. A study by The Yankee Group shows that providing 99.999% availability – the vaunted "five-nines" standard – can cost $472,000 a year in-house, but $380,000 when managed externally. Why? Service providers are focused on their core business, says Larry Buchsbaum, author of the report. [Source: Knowledge @ Wharton]
Posted Sunday, August 19, 2001 1:16:41 PM
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