As the world around changes, services are rapidly changing from human rendered services, to bots and applications that run on your mobile device. Ranging from your local pizza shop, to a multi-billion corporation – all are rapidly moving to the bot/application economy paradigm – in order to facilitate growth and lower their TCO.

According to SkyHigh Networks study, the following may come as a shock to most – but most  enterprises will use up to 900 different cloud applications. These require an amazing number  of over 1,500 different cloud services in order to work. Out of these 1,500 cloud services, a group of 50 top-most cloud services can be observed, normally relating directly to infrastructure – we’ll call these “Super Clouds”.

The “Super Clouds” can be divided into several “Primary” groups:

– Infrastructure Clouds (Amazon AWS, Google Compute, Microsoft Azure, etc.)
– Customer Relation Clouds (Salesforce, ZenDesk, etc.)
– Real Time Communication Clouds (Twilio, Nexmo, Tropo, etc.)

It is very common for a company to work solely with various cloud services – in order to provide a service. However, using cloud services has a tipping point, which is: “When is a cloud service no longer commercially viable for my service?” – or in other words: “When do I become Uber for  Twilio?”

Twilio’s stock recently dropped significantly, following Uber’s announcement – http://bit.ly/2rVbzxG. Judging from the PR, Uber was paying Twilio over $12M a year for their services, which means that for same cash, Uber could actually buyout a telecom company to do the same service. And apparently, this is exactly what’s going to happen, as Uber works to establish the same level of service with internal resources.

Now, the question that comes to mind is the following: “What is my tipping point?” – and while most will not agree with my writing (specifically if they are working for an RTC Cloud service), every, and I do mean EVERY type of service has a tipping point. To figure out an estimate your tipping point, try following the below rules to provide an “educated guess” of your tipping point – before getting there.

Rules of Thumb

  • Your infrastructure cloud is the least of your worries
    As storage, CPU, networking and bandwidth costs drop world-wide – so does your infrastructure costs. IaaS and PaaS providers are constantly updating prices and are in constant competition. In addition, when you commit to certain sizing, they can be negotiated with. I have several colleagues working at the 3 main competitors – they are in such competition, where they are willing to pay the migration prices and render services for up to 12 or 24 months for free, in order to get new business.
  • Customer Relation Clouds hold your most critical data
    As your service/product is consumer oriented, your customers are your most important asset. Take great care at choosing your partner and make sure you don’t outgrow them. In addition, make sure that if you use one, you truly need their service. Sometimes, a simple VTiger or other self hosted CRM will be enough. In other words, Salesforce isn’t always the answer.
  • Understand your business
    If your business is selling rides (Uber, Lyft, Via, etc), tools like Twilio are a pure expense. If your business is building premium rate services or providing custom IVR services, Twilio is part of your pricing model. Understand how each and every cloud provider affects your business, your bottom line and most importantly, its affect on the consumer.

Normally, most companies in the RTC space will start using Amazon AWS as their IaaS and services such as Twilio, Plivo, Tropo and others as their CPaas. Now, let us examine a hypothetical service use case:

– Step 1: User uses an application to dial into an IVR
– Step 2: IVR uses speech recognition to analyze the caller intent
– Step 3: IVR forwards the call to a PSTN line and records the call for future transcription

Let us assume that we utilize Twilio to store the recordings, Google Speech API for transcription, Twilio for the IVR application and we’re forwarding to a phone number in the US. Now, let’s assume that the average call duration is 5 minutes. Thus, we can extrapolate the following:

– Cost of transcription using Google Speech API: $0.06 USD
– Cost of call termination: $0.065 USD
– Cost of call recording: $0.0125 USD
– Cost of IVR handling at Twilio: $0.06 USD

So, where is the tipping point for this use case? Let’s try and separate into 2 distinct business cases: a chargeable service (a transcription service) and a free service (eg. Uber Driver Connection).

  • A Chargeable Service
    Assumption: we charge a flat $0.25 USD per minute
    Let’s calculate our monthly revenue and expense according to the number of users and minutes served.

– Up-to 1,000 users – generating 50,000 monthly minutes: $12,500 – $9,625 = $2,875
– Up-to 10,000 users – generating 500,000 monthly minutes: $125,000 – $96,250 = $28,750
– Up-to 50,000 users – generating 2,500,000 monthly minutes: $625,000 – $481,250 = $143,750

Honestly, not a bad model for a medium size business. But the minute you take in the multitude of marketing costs, office costs, operational costs, etc – you need around 500,000 users in order to truly make your business profitable. Yes, I can negotiate some volume discounts with Twilio and the Google, but still, even after that, my overall discount will be 20%? maybe 30% – so the math will look like this:

– Up-to 1,000 users – generating 50,000 monthly minutes: $12,500 – $9,625 = $2,875
– Up-to 10,000 users – generating 500,000 monthly minutes with a 30% discount: $125,000 – $48,475 = $57,625
– Up-to 50,000 users – generating 2,500,000 monthly minutes with a 30% discount: $625,000 – $336,875 = $288,125

But, just to be honest with ourselves, even at a monthly cost of $48,475 USD, I can actually build my own platform to do the same thing. In this case, the 500,000 minutes mark is very much a tipping point.

  • A Free Service
    Assumption: we charge a flat $0.00 USD per minute
    Let’s calculate our monthly revenue and expense according to the number of users and minutes served.

– Up-to 1,000 users – generating 50,000 monthly minutes: $9,625
– Up-to 10,000 users – generating 500,000 monthly minutes with a 30% discount: $48,475
– Up-to 50,000 users – generating 2,500,000 monthly minutes with a 30% discount: $336,875

In this case, there is just no case in building this service using Twilio or a similar service, because it will be too darn expensive from the start. Twilio will provide a wonderful test bed and PoV environment, but when push comes to shove – it will just not hold up the financial aspects.This is a major part why services such as Uber, Lyft, Gett and others will eventually leave Twilio type services, simply due to the fact that at some point, the service they are consuming becomes too expensive – and they must take the service back home to make sure they are competitive and profitable.

When Greenfield started working on Cloudonix – we understood from the start the above growth issue, and that’s why Cloudonix isn’t priced or serviced in such a way. In addition, as Cloudonix includes the ability to obtain your own slice of Cloudonix or even your own on premise installation – your investment is always safe.

To learn more about our Cloudonix CPaaS and our On-premise offering, click here.

Recently, I can’t but escape the feeling that a great portion of the high tech industry is taking crazy pills, as part of its morning diet. Seriously, if we are not taking crazy pills, you can’t explain the overload of Legacy Tech that is rapidly making a comeback – under a new name and flag. Yes, buzz-words were always a thing of this industry, but seriously, don’t you feel this is getting a little over-done lately?

What am I talking about? Well, let’s take a look at some recent buzz-words and go through them:

IoT – Internet of Things

If you lookup the term in Google, you will surely find the following on Wikipedia:

The Internet of Things (IoT) is the network of physical objects—devices, 
vehicles, buildings and other items—embedded with electronics, software, 
sensors, and network connectivity that enables these objects to collect 
and exchange data. The IoT allows objects to be sensed and controlled 
remotely across existing network infrastructure, creating opportunities 
for more direct integration of the physical world into computer-based 
systems, and resulting in improved efficiency, accuracy and economic 
benefit; when IoT is augmented with sensors and actuators, 
the technology becomes an instance of the more general class of 
cyber-physical systems, which also encompasses technologies such as smart 
grids, smart homes, intelligent transportation and smart cities. Each thing 
is uniquely identifiable through its embedded computing system but is able 
to interoperate within the existing Internet infrastructure. Experts estimate 
that the IoT will consist of almost 50 billion objects by 2020.
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Cool – isn’t it? Well, the Internet of Things existed far before the term was invented. It simply looked a little different. We had devices with SIM cards or devices with some other form of interaction technology – and we didn’t use IP, we used something else. But the minute it used IP, it got the name “Internet of Things”, simply due to the relation to the IP protocol. Almost 10 years ago, an Asterisk based plant irrigation project was shown on the web. Is that IoT? maybe not, but the overall result is similar. Actually, it is exactly the same, 10 years before IoT – but if you can’t see that it is the same, you are taking crazy pills.

Contextual/Task Oriented Chat Bots

Oh my god – when people showed me slack for the first time, I really didn’t understand why they are so excited about it. To me it looked mostly like a glorified mash-up between IRC, EggDrop and fancy Pseudo-Agile management system.

Chat bots that do stuff? really? In 2001 I worked at a company where I had to monitor and
control a set of servers, interconnected with 6 different SMS connections to various carriers. In order to get this stuff working and also get it working from my mobile phone, I used a combination of Nagios, Kannel, EggDrop and IRC. I used the IRC server as my command and control interface, EggDrop carried commands from the IRC server over to the Kannel Server and the Nagios servers, to run remote tasks and test various elements.

In 1999, I consulted a company that was called eNow (back then, ChatScan). They were scanning thousands of IRC channels to Internet trend analysis. Now, think about it, we scanned these IRC channels using EggDrop. Simple, TCL based, IRC Bots that would roam the IRC networks in search of interesting things.

If you are wondering what EggDrop is, check out: http://www.eggheads.org/

Over Virtualising

Can someone please explain me the following scenario: You lease a cloud based, small foot print server from any of the cloud companies, you then run Docker it and create additional virtual machines on the VM instance.

Dude, might as well just have your own server with Proxmox, KVM or some other virtualisation container. I just don’t get it, the fact that you can do something, doesn’t always mean that this is what it is meant for.

The following video just shows this is the funniest way ever:

 

 

 

Confession – I’m what you would call a Hyper Connected person. I’m constantly connected to my Note 4 mobile phone, I check my mail on a regular basis at least once an hour, my phone constantly beeps with Instant messages and information being delivered directly to my device.

Professional tend to describe Hyper Connectivity as a state called FOMO – Fear Of Missing Out. According to wikipedia, FOMO is:

Fear of missing out or FoMO is “a pervasive apprehension that others might be having rewarding experiences from which one is absent”.[2] This social angst [3] is characterized by “a desire to stay continually connected with what others are doing”.[2] FoMO is also defined as a fear of regret,[4] which may lead to a compulsive concern that one might miss an opportunity for social interaction, a novel experience, profitable investment or other satisfying event.[2] In other words, FoMO perpetuates the fear of having made the wrong decision on how to spend time, as “you can imagine how things could be different”.[4]

https://en.wikipedia.org/wiki/Fear_of_missing_out

Now, Hyper Connectivity has its associated costs to your life – You are constantly at anybody’s reach, if you are sometimes out of reach – people take it as being rude and eventually, it starts hitting your health and productivity.

So, about 2 weeks ago, I started my own little social experiment – and I decided that everybody on my contact list should be part of this experiment. I’ve done the almost obscene thing to do, I’ve turned my mobile device notifications off. No more SMS beeping, WhatsAPP groups are now muted, e-Mail no longer beeps like crazy.

Initially, for the first two days, I thought I was going mad. My phone was quite, suddenly, I was fully capable of doing the work and having the life I wanted. I was able to concentrate on my tasks, apart from a phone call here and there, I was fully capable of actually getting stuff done – without being interrupted every 15 minutes. Can you imagine living your life in 15 minute intervals? that was the story of my life for the past 5  years.

One of the amazing results of this experiment was that the feeling of “rudeness” was purely in my head only. When people sent me an email, or a text, and I didn’t respond within 30 seconds, or even 30 minutes, people acknowledged as: “ok, he’s probably busy and will return the minute he can”. That had two very interesting impacts: first, when I did reply, I spent enough time thinking about what was asked from me, and I was able to respond in a highly comprehensive manner. The second one was, and that was the shocking bit, I was conversing less by email and text, as things became clearer.

Imagine this, I “communicate less” and “converse more” – amazing!

It also made me realise something else – really productive people aren’t hyper connected, they are hyper engaged. The are fully engaged with what they do, not with the means of communications. The engage their tasks in a dedicated manner, able to focus completely on one task – and getting it done the right way. I also noticed that some of the people on my contact list, the highly successful ones, actually take a fairly lengthy time to respond – not because the are rude – it is because they are respectful. They respect themselves by allowing themselves the time to focus, and they respect their colleagues by focusing on their requirements in a devoted and centred manner.

If like me, you are Hyper Connected, I urge you to try and disconnect for a bit – it will change your world and perspective on how to get things done.

The following post doesn’t really fit in line with the normal spirit of the blog, simply because it’s not funny nor directly related to technology. It’s called Business 2.0, as it relates to the ever problematic question any business owner has: “When should I grow and how?”.

As you may know, I’ve been a freelance Asterisk Platform developer since early 2003, turned to freelance development (Penguin for hire) around April 2007. Since that time, I’ve built systems and platforms for some of the better known brands around the world. Be it working directly with the customer or through a 3rd party (as a sub contractor) – I can easily say that I’ve completed over 120 different large scale projects within 3 years time. Now, when I refer to projects, I’m not referring to installing PBX systems, I don’t do that at all – I’m referring to highly complex application level development, creating some of the most innovative Asterisk based systems I’ve ever seen.

Image representing Jajah as depicted in CrunchBase

Image via CrunchBase

Vodafone

Image via Wikipedia

Putting aside everything, finalizing a rough estimate of 40 development projects on a yearly base, most of these performed solely by myself is a fairly challenging task. Sure, at times I’ll outsource some work to other freelancers like myself, specifically in fields where I’m not all that fluent (Database, Web Development, UI) – but yet, doing that means that I’m conducting 3 – 5 projects on a monthly basis.

After doing so for 3 years now, I can’t help but start thinking about expanding my business, taking it to the next level by hiring more people and building it up to a new level. Question remains for this: “How? What is the natural track of expanding your business?” – of course the simple answer would be: “Just hire another developer or two, and start doing more sales” – it’s not as simple as it sounds. After thinking about it for some time, I’ve concluded there are a few models of expansion:

Model 1: Organic Growth

Organic growth can be described as the simplest way of growth: “Hire a new guy and get more work in”. The problem with this model that it is fully reliant on your ability to sell more. However, as you concentrate on sales more, you take time from the development and delivery process – thus, the addition of the new developer is not a 100% addition, it’s actually 100% (developer) minus 40% (you) – so you are not at 200% capacity, you are 160% capacity. Surely 160 is 100, however, for the initial 6 months, till the guy learns the ropes, you are not at 160, you are actually at 80 – can you and your business sustain that?

Thus, the main issue with Organic growth is cash flow, can your business sustain the elevated expenses with less income for the period of transition? If the answer is NO, then you need a different method. If the answer is YES, then you are in the best place in the world, however, bear in mind that taking someone to work for you is a responsibility – people are not resources, they are human beings, with families and children – taking someone to work for you is like taking responsibility for their lives.

Model 2: The Partner

Panama Business and Investment
Image by thinkpanama via Flickr

A partnership with a person who is equally matched to you is always a good option. Technically speaking, it means that you are teaming with someone who generates as much work as you do and is capable of finalizing the work as fast and as good as you can. Yet, taking a partner doesn’t negate the requirement for a new employee or two. In this case, you may end up with too much sales with too little staff to deliver – that is a big problem.

Another issue with partners is the issue of trust. While most partners tend to rely on each other and trust each other, that trust can easily be broken (in most cases by stupid things). It’s enough for one partner to now carry its weight in sales/development to initiate a chain reaction, shortly ending in the partnership dissolving.

So, the partner is a good option, however, may prove to be problematic if the wrong partner is chosen – in addition, dissolving a partnership solely on these issues isn’t all that simple – and usually ends up in litigation and other judicial issues – YUCK!

Model 3: Un-intrusive Angel

Some people ragard Un-intrusive Angels as “Stupid Money” – an Angel investor that doesn’t interfere in your company business model and operations. In many cases, this is how start-up companies start – someone gives them a lump sum of money to start their business, signing off to own a portion of the new company.

An un-intrusive investor usually gives you the money and pays you a visit once every few months to see how his money is spent. Don’t expect to raise a whole lot from these people, usually you will get anything from 25K$ to around 250K$ – tops. If you are getting an investment from an Angel, make sure you plan your business carefully – and make sure your investor knows what he is getting into. The Angel is not a found piggy bank, he is a business man looking for profit – if you make sure his expectations of profits (time frame, amount, percentage, etc) are kept within the reason of your business – he will make an educated decision and invest accordingly. Promises like: “you’ll double your money in 3 years” are stupid – make sure it’s realistic and to the point. If you promise the moon, and reach a star – that’s a problem, if you promise the skies and hit a start – that’s wonderful.

Model 4: The Strategic-Intrusive Angel

Jeff pulver

Image by TheFemGeek via Flickr

A strategic angel is similar to the previous one in terms of funds, however, he is more capable in assisting your business meet its goals. Usually, it would be someone who is already a well established figure in your business sector, had made his money from previous companies and is now looking for new ideas and businesses. I call him an intrusive Angel, as sometimes he may have ideas as to where your business should go – and he will make sure you hear his ideas. You may regard it as annoying, but you should still listen to your Angel and pay him the respect he deserves.

Sometimes this Angel may invest in your business due to the fact that he has a hidden agenda. An agenda can be: The angel looks at your business and see a certain potential you are not planning, he’ll invest and try to re-direct your company to the agenda he sees. This is usually the case when your angel is invested into several endeavours that is either parallel to each other or may have orthogonal intersection points. These angels can be the builders of your business or the destroyers, it is up to you to make sure the latter doesn’t happen.

Prolog:

So, which model did I choose? – I didn’t choose yet, I’m still figuring it out myself. What ever the model may be, the choice isn’t simple nor straight forward. At best, whatever choice I’ll take will have a profound impact on my business and me – so I’ll need to weigh my options carefully. If you can think of an additional model, I’d love to hear about it – so just comment on this post.

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Tux, the Linux mascot

Image via Wikipedia

When I started using Open Source software, it seemed like all Open Source projects are driven by philanthropic agendas. We were all focused on “sticking it to the man” – showing all these would be software vendors that community driven projects can do just as well – if not better.

"When I was a child I spoke as a child I 
understood as a child I thought as a child; 
but when I became a man I put away childish 
things." - I Cor. xiii. 11.

Well, I’m not claiming that Open Source is childish – absolutely not, however, when you are a student you tend to look at things in one way, when you have a family to care for – you start looking at things differently. You remember these days in life when your dad said: “When you’ll have children you will understand” – well, now I do.

So, what am I rambling about exactly? I’ll tell you. The day before Passover I attended several meetings, which when I came back home had pissed me off immensely. I feel an urge to write all about these meetings, including who I met exactly, however – I won’t do that. However, I will give a rough idea of these.

Meeting 1 : A world recognized Mobile application player

I came into the meeting with this company, where the CTO of the company explained to me that they are looking to create an Asterisk based solution for their application’s users. My initial question was: how many users? what is your concurrency level? – The answer that I got was: “Oh, we don’t need something major, just a few lines of configurations in Asterisk config files in order to make this work”.

I left the meeting slightly pissed off, thinking to myself: “You bloody inconsiderate prick! You bring me to a meeting, spend my time – and then telling me that this is just a few lines of configuration. If it is that simple, why don’t you do it yourself? you have 20 developers in there, 4 IT people and god knows how many outsourced workers off-shore – if it was that simple, you would have done it already – so probably it isn’t – right?”

Meeting 2 : A well established IVR services vendor

The second meeting was with a well established IVR content vendor, this company runs around 16M minutes of inbound IVR traffic every month. They invited me in order to talk about expanding into new countries, wishing to get premium based access numbers in various countries. So, we started talking, and the guy indicates that he wants a certain kick-back payout, which I know is impossible – at least without charging the user more. Actually, the guy indicated that out of the interconnect fee, he wants to get almost 90% as a kick back.

Meeting 3 : A start up rendering IVR content

The third meeting was the most amazing one – these guys wanted to build an Asterisk system to server around 4000 concurrent channels – outsource the entire development to my company – and pay as a revenue share. When I asked for their business model, marketing plan, investors, profiles – I got a response of – we don’t yet have all of these, we only have an idea at this point that we want to implement.

Garage based companies are built by people who can do the work themselves, not the other way around.

Photograph of Mark Shuttleworth by Martin Schm...
Image via Wikipedia

At this point, you are probably asking yourself: “What does this have to do with the title?” – Well, all of these meetings had one thing in common. The people I met were under the impression that Open Source is some form of philanthropy. Or to be more exact, people who deal with the Open Source market are philanthropists. My question is this: “Why are we perceived as philanthropists? don’t we have families to care for? don’t we need to pay mortgages and bills just like everybody else?”. I guess when people read about the various Open Source entrepreneurs, such as Mark Shuttleworth – the immediately associate Open Source with Big Exists – this is not the case.

At some level, this is purely our fault – we educated people that Open Source is a highly economical methodology of solving technical challenges. No where along the way, had we educated the public that behind the model there are people, people who need to make a living.

If you are an Open Source consultant, developer, evangelist or just someone who may have an opinion on this, I’d love to read what you say.

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