Slashdot Mirror
The Winner-Take-All Trend In Tech (newyorker.com)
An anonymous reader writes: A pair of articles about the tech industry serve to highlight a growing trend. First, Om Malik writes in The New Yorker about the failure of ride-sharing company Sidecar, backed by Richard Branson, and how it's one more example of the winner-take-all tendency with modern tech firms. "This loop of algorithms, infrastructure, and data is potent. Add what are called network effects to the mix, and you start to see virtual monopolies emerge almost overnight. ... The more we use it, the more data we give the company, and the more it is able to control where we turn our attention."
The second article is from Jacques Mattheij, who notes a different side of the trend toward one winner and a whole lot of losers: unnecessary reliance on cloud-based components to force vendor lock-in. "In many of these cases if you look a bit more closely at what is being sold you'll realize that these are just instances of a business-model that was grafted on as an afterthought onto something that would have worked really well stand-alone but where the creators weren't happy with a one-time fee from potential buyers." Companies who hit it big early can't help but stay dominant if they force users to rely on their servers.
The second article is from Jacques Mattheij, who notes a different side of the trend toward one winner and a whole lot of losers: unnecessary reliance on cloud-based components to force vendor lock-in. "In many of these cases if you look a bit more closely at what is being sold you'll realize that these are just instances of a business-model that was grafted on as an afterthought onto something that would have worked really well stand-alone but where the creators weren't happy with a one-time fee from potential buyers." Companies who hit it big early can't help but stay dominant if they force users to rely on their servers.
That is why standards are so useful and we need to keep making them.
When winner-takes-all happens, it's better to have the standard be the winner. Not some company.
Because when winner-takes-all happens with companies you get a monopoly and abuse of that monopoly (possibly from the pressure of the stock market demanding better and better numbers).
New things are always on the horizon
who are we if we cannot share what has been freely given to us all? conspire to employ the truth,,, our spiritual (r)evolution has been postponed for centuries already?
but she doesn't have a lot to say
Google's a pretty nice girl
but she changes from day to day
I wanna tell her that I love her a lot
but I gotta get a belly full of wine
Google's a pretty nice girl
someday I'm gonna make her mine, oh yeah
someday I'm gonna make her mine
<blink>down the rabbit hole</blink>
From a business point of view, the use of cloud components is not unnecessary but required, since they want to lock us in. Built-in vendor lock-in is nothing new either, companies have attempted it with patents, diverging standards and underhanded business practises for over a century.
If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
It's almost like unregulated competition in the software market has resulted in large players dedicating resources to innovating ways to lock in customers rather than competing. Microsoft desperately wants in an Adobe's subscription game, which is why they're pushing Windows 10 so hard. Who would have thunk it?
I know that economics has a bad reputation. Rightly so. Keynes doesn't make sense, but seems to work and the crazy libertarians make a lot of sense in theory, but got us 2008.
Yet some models and explanations are solid and work. One of them is the concept of the natural monopoly. I would argue that Facebook, Microsoft (Windows and Office) operate in markets with natural monopolies.
Markets with a natural monopoly don't work well in a market economy. They either need to be heavily regulated or simply taken over by the state and out of the private industry. Both models aren't ideal.
But Microsoft isn't regulated. Facebook neither. This happens because of globalization. Nation states would need to regulate them, but since those companies operate on a global scale, there is little interest by national regulators to step in. Since there is no international regulator, there is no regulation. Hence these companies are free to exploit their natural monopoly.
See, when you only have so much capital, cloud shit is a way to get an expensive IT system without having to shell out so much money at one time. You got cash for other things - like marketing.
And then there's the sales pitch.
They show these shivering big eyed IT workers locked up in their cubes - some bandaged and missing limbs - and the sales pitches say, "They need help."
And they interview some of them. "I have to keep fighting." , the IT workers say with their bald heads.
They interview their tearful mothers. They show videos of those poor IT workers being wheeled into work on their chairs.
And at the end they say, "For just $25 a day, you can help these poor IT workers!"
It just tugs at the heart strings and you want to sign up for cloud services.
It's "winner-takes-all". It even says so in the The New Yorker article.
People take whatever they're given, don't make any mental effort to discriminate between it and other options, then go with it. Uber is here and will stay because its always been here, and Millenial Sally has the app on her phone. Why would you use that "other Uber" ?
In a dog-eat-dog world, you end up with one very fat dog. Not always one, sometimes two. Most of the world's beer is made by two megacorporations. Most of the world's cars are made by less than a dozen companies, and a few megacorps have the lion's share among them (Volkswagen Auto Group, General Motors, Toyota). Most of the world's computers are made by Foxconn. It's the same with everything. Capitalism only sort-of works with a small population and lowish amounts of automation, and with a credible communist rival to keep it in check. Outside of capitalism's narrow butterzone, it's just low competition between exploitative megacorps and runaway inequality until the system implodes.
I also hate the way tech has been going for a long time now, towards walled-garden computing, unnecessary use of centralized online systems, user privacy violation, and worker exploitation. A disgusting industry that I hate and would like to get out of now.
"When information is power, privacy is freedom" - Jah-Wren Ryel
At the end of the day, it is just a matter of risk assesment. Joe six-pack might follow the right path some of the times. An educated Slashdot reader shall fare far way better than that.
Crazy Libertarians caused government created entities like Fannie Mae and the FHA to get people to take out mortgages they couldn't afford to pay?
Google, Microsoft and others are working toward self-programming machines and expect to have them by 2020 within specific business-compatible contexts.
This means that once the data is in the cloud, they can create better applications in an automated manner (or just take the code from clients and rebrand it) to monopolize horizontal markets. The end-game with the cloud isn't to get everyone to move their apps there, but to cut out all the "middlemen" (developers in disparate shops across the world) to get more money out of their real customers (the end-users of those applications they host.)
Isn't that where someone is already going to a specific destination and you ask if you can come along, giving them a small amount to cover the cost of gas?
Or is the new fantasy version where you actively contact someone to take you a specific location that person would otherwise not have been going to, sending up a situation where you are required to pay them for their time and effort and they are required to include this money as income on their taxes since they are operating a business?
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
I would really life a nice ip webcam, with remote movement and such.
However they all seem to pretty much become useless unless you subscribe to their cloud system.
I want my own system.
The really sad thing is these cameras are not even cheap.
Anyone making an unencumbered ip camera?
+----------------- | What is the question!
This trend is not confined to tech and didn't originate there. Companies have attempted to turn us all into annuities. They prefer to think of us as warm bodies and themselves as bloodsucking mosquitoes with permanently installed straws. They just have to fly by every month and let a little blood out into their coffers.
So we consumers are left with choosing which bloodsuckers will be allowed to feed on us. Death occurs when you are sucked dry. You won't be able to afford the water bill, or the electric bill to keep the machines you need to live running, etc.
Dude,
That is the power of the Maker movement. The information on how to quickly and inexpensively make your own is out there. You just need to invest in yourself a little and you have to power to unplug.
JC
Since when? Apple's iPhone killed proprietary Adobe Flash Player in favor of what led to the free* HTML5 standard.
* With the exception of patented audio and video codecs that were not only unchanged from Flash but also existing industry standards.
There needs to be a tax on network effects to replace taxes on economic activity.
Libertarians need to think more deeply here. The state of nature is one in which a natural person has de facto rights to fight for his survival — which includes not just his own personal survival but the right to sire and raise children to equally viable adulthood. When I use the word “fight” I mean it: Animals will fight for territorial access for the lives of themselves and their progeny. The Austrian and Lockean schools fail to recognize the situation which arises in nature when an animal is without the means of intergenerational sustenance, and the necessity of aggression in some of those situations. Civilization attempts to ignore this by proclaiming “property rights” as “natural” against “aggression”. This foolishness at the heart of these schools of thought renders them forever vulnerable to collectivists. The way out is trivially obvious: Follow Lysander Spooner’s definition of legitimate government as a mutual insurance company into which men voluntarily invest their natural rights in exchange for shares in and dividends from the company. The premiums paid for property rights take the place of taxes. The dividends (sometimes called "universal basic income" or "citizen's dividends") neutralize collectivism's bureaucratically controlled social welfare. The violation of this simple and obvious paleolibertarian construct sacrifices the bedrock principle of liberty upon which civilization is founded for the high purpose of becoming politically impotent against collectivists. Just look at the Presidental campaigns of Ron Paul and his son Rand.
As for socialists, all they need to do is find out who is responsible for ignoring Martin Luther King Jr’s final advice which was quite congruent with this paleolibertarian notion of natural rights investment being compensated by a race-blind dividend, rather than racial preferences such as affirmative action:
Socialists need to find out who is responsible for ignoring MLK’s advice, given just before his assassination, as a part of his "Poor People's Campaign" that attempted to be inclusive of the white working class. Socialists need to find out who -- and do whatever it takes to neutralize their power — and I mean whatever it takes.
I’d start with the Southern Poverty Law Center as they were an offshoot of the "Poor People's Campaign" and were, after MLK's demise, instrumental in diverting policy away from MLK's race-neutral basic income, and toward waging the war on the white working class's reaction to affirmative action's de facto race-based tax on that demographic group. If Sanders was serious about defeating Trump, he'd take this advice to heart and do it NOW.
An immediate transition to a paleolibertarian mutual insurance company would be too big a leap for existing institutions. An intermediate step would be to replace taxes on economic activity with a tax on the liquidation value of net assets owned by natural persons. This would take the place of Spooner's property insurance premium. By being on "liquidation value", this tax would fall most heavily on network effect profits and would provide the revenue for the unconditional basic income (as the proxy for the dividend payment to members of the mutual insurance company).
This would, by the way, also resolve the old conflict between the gold standard thesis and the central bank fiat antithesis, with a new monetary synthesis.
The liquidation value of legally recognized assets would provide the backing for the money supply. This provides all the counter-cyclical monetary control needed, and can get rid of much if not most of the government's bureaucracies (including much of the military if you follow the Swiss model of national security).
Seastead this.
Break the laws until you can make the laws.
These tech assholes make sure to pull up the ladder behind them.
We all bought into capatalism one way or the other. There is no 'sharing' in Capatalism and no sense of 'common good', so you're always going to end up with a few players at the top. There are mergers everywhere, not just in IT. Why do you think the wealth gap is happening in the first place?
In Capitalist theory the large companies are supposed to break up naturally as they become unsustainable but since the American government is more interested in keeping these companies going rather then giving someone else a shot at their market I'm afraid most of us are screwed.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Parent said:
Actually, the most profitable and larges products have all been products that followed lots of standards.
You know how many standards a car has to comply with? Or a television set?
We tend to ignore how many standards products follow even if we call then "proprietary".
The standards you mentioned are *legally mandated*. This makes all the difference in the world. Absent a legal mandate, standards will be extended, broken, or abandoned by vendors as it hinders innovation and commoditizes their products.
There are plenty of self-contained IP cameras, including D-Link.
There are also dozens of apps for iOS and Android that turn phones and music players into IP cameras.
And if you want something cheap and completely under your control, you can set up IP cameras from a Raspberry Pi and a camera module. That's the cheapest and most flexible option.
None of this is technical or economic... this is herd following sheep following each other around. You deserve to be abused.
There is a simple solution to winner-take-all. Create protocols, instead of services.
The sidecar example in the article is a great one. It points out that Uber is winning because more customers and drivers have the Uber app installed. How silly! If instead, there was a ride-sharing protocol, then someone could call for a taxi run by Uber, Lyft, or Sidecar. No vendor lock-in.
Unfortunately, users aren't smart enough to reject these services that offer lock-in. Instead, people seem to really enjoy picking thier "favorite app" or "favorite service." When Joe uses "MySpace" and Bob uses "Facebook" it doesn't seem to occurr to them "Hey, wouldn't it be great if these two systems worked together?" Venture capitalists aren't in the business of creating open protocols since they want lock-in, so they won't help. We don't want the government involved. So how do we get back to the way things used to be? The initial set of internet protocols was created by academics and visionaries.
The second linked article points out how stupid it is for cloud services to be integrated into things unnecessarily. How do we educate users to reject these services? When I point out to someone that the flashlight app on their phone requires access to their contact list, they just don't care. When they have to give their email address to their television, they don't care. People are more interested in the consumption and freeness than in the debacle that it causes. They will bemoan their loss of privacy, but seem blissfully unaware that the Windows Operating system doesn't actually require a Microsoft account in order to install it. How do we change user behavior?
Ironically, the geeks complain the most about this, but the geeks are the ones implementing these services! We create the problem, then whine about it!
Open standards help the industry innovate in an environment where only a few large "winners" exist. But they don't really stop the winner take all results of the IT industry. This is because this situation is caused more by high barriers of entry, network effects, and the benefits of user data.
In the article, the attributes Google had which led to its dominance would not have been mitigated by open standards. Their initial benefit was a better approach to search, but that was very short lived. Their dominance was the result of having more user searches to train their algorithms, more infrastructure to crawl the Web more often and more efficiently, and brand name awareness.
The traits which led to Google's dominance are not unique. Almost every case of a dominant IT company can be attributed to accumulated user data, high infrastructure costs / benefits of scale, brand name awareness, network effects, and vendor lock in. Open standards only help with the last one, and even then only a little.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
How are individual people who decide to help people getting around a vendor lock in?
Forcing people to use government-approved taxis is vendor lock in.
A lot of these discussions are red herrings. The problem is that monopolies are generally bad economically. Government is a public monopoly; when private firms become too large of monopolies that's equally harmful. The real underlying principle should be competition. In markets like residential broadband in the US where there is no real private competition, the government offering public service should be beneficial, because it injects competition. In other markets, the government could be unnecessary or even a monopoly itself.
I am suspicious of claims of natural monopolies in tech because the network effect and lock-in is so strong, along with hype. Companies (and individuals) end up making very short-sighted decisions because of hype, ceding control of things to others that shouldn't be. Often individuals are ignorant of alternatives that would be just as beneficial, if not more, and don't understand the costs of jumping on something too soon.
There's so much hype. People should value self-control of informational resources in the same way they value privacy (although I suppose that's a telling comparison in itself).
we'll all be speaking Mandarin in fifty years
I set one up with a raspberry pi for around 50$. Before that I used a PC-104 running debian and before that, a generic 386 computer with a $35 video camera from IBM and RHEL 5.0.. This is a nerd website. It's hat nerds do. Why are you here other than to bring the quality of discussion down?
This is the monetization of the data taking its normal course. Its great for business, but very sad for our collective knowledge.
It is why we have enough data to know many great things, but cannot get all the data in one place to find those great things.
Standards are good to enforce a schema for data, but they have failed at providing a cooperative means of sharing monetized data.
We need a way to allow for some monetization, but also provide an incentive for sharing the data for the 'greater good' (undefined greater good).