Tuesday, August 30, 2011

Avoiding Metro Manila Traffic (article from Manila Standard)

AS a motorist, I’ve never been a big fan of the Metropolitan Manila Development Authority. The mention of the agency conjures up images of traffic aides skulking around the bend, waiting to arrest hapless motorists on bogus “swerving” charges. Invariably, the arrest is followed by the descent of a small mob of other traffic aides who mill around the unfortunate victim like a wake of vultures hovering around carrion.

With these images hardwired into my brain, I was pleasantly surprised to see another side to the MMDA, one that helps rather than hassles motorists. Metro Manila Traffic Navigator (http://mmdatraffic.interaksyon.com) is a Web-based application designed to give the public quick access to live traffic conditions along six major Metro Manila thoroughfares: EDSA, Quezon Avenue, Espana, C5, Roxas Boulevard and the South Luzon Expressway.

Developed by the MMDA in cooperation with TV5, the Web site is a nifty tool for planning your route before heading out to the crowded Metro Manila streets. The default system view shows what looks like a subway map, color coded to indicate traffic conditions along those streets: green for light, yellow for moderate and red for heavy traffic. Clicking on any major intersection opens up a window that tells you how long ago the information was updated. The MMDA says information is updated every 15 minutes, which seems often enough to be truly useful.

Clicking on any of the six major routes on the left side of the screen opens up a line view, which clearly indicates traffic conditions on all major intersections along the thoroughfare. Clicking on the magnifying lens icon brings up the chosen route on Google Maps. Traffic Navigator is the brainchild of Yves Gonzalez, 28, a lawyer and iPad developer who joined the agency’s chairman, Francis Tolentino, when he first took over the agency in July 2010.

From conception to public beta, the Traffic Navigator took about nine months to develop, Gonzalez says. Data comes from the MMDA’s network of closed-circuit TVs, traffic enforcers with hand-held radios, and from the public through Twitter (@MMDANavigator) or SMS (0933-7401258). The Navigator team then plugs in the information into Navigator using a Web-based backend, and is reflected on the front-end for the public to view.

In cases where a public report is from an unknown source, Gonzalez says, the data is first verified by having a traffic enforcer go to the area if it is not covered by a CCTV. “I am now looking into ways to improve or automate the data collection for the Navigator so that we can improve our data’s accuracy,” Gonzalez says.

He adds that efforts are underway to expand the Traffic Navigator to include Ortigas Avenue, Marcos Highway, and Commonwealth Avenue, and to extend the C5 line all the way to Tandang Sora Avenue. Even at this early stage, the Traffic Navigator has received positive feedback, both from end-users and other developers. In fact, the project recently won a Boomerang Award, which recognizes the outstanding work in Internet and mobile marketing, for the innovative use of applications, technology or platforms.

“For me, this award symbolizes the power of combining technology and public service to bring real positive change to our country,” Gonzalez says in a post on Google+. Gonzalez, who has also been responsible for the MMDA’s use of social networks, says the move has already reaped many benefits, including the ability to quickly and efficiently get information out to the public, including the traditional media.

Social networks also allow the agency to get the message out to a broad audience at a minimal cost, he adds, compared to the now defunct radio and TV operations that used to cost the MMDA more than P15 million a year in salaries, equipment and leases. Gonzalez, who was recently named traffic czar for Metro Manila, adds that social networks allow the agency to respond to the public’s needs in real time, from basic inquiries to situations that require immediate action.

“Wherever I am, I can monitor Twitter to know where there are problem traffic areas that require immediate attention, so that I can then dispatch my enforcers where they are needed most. This would not have been possible before without social media,” he says. The downside?

“For those of us tasked with monitoring Twitter and Facebook 24/7, it can be very time-consuming as it eats up a lot of our personal time,” he says. For motorists who benefit from the MMDA system, however, it’s time well spent. Our own suggestions to improve Traffic Navigator: 1) Add flood alerts to indicate areas that are impassable during heavy downpours; and 2) Add icons to indicate where the traffic aides are lurking.

Tuesday, August 23, 2011

Why Software is Eating The World

Why Software is Eating the World (Marc Andreessen, Wall Street Journal)

This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I've observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.

In an interview with WSJ's Kevin Delaney, Groupon and LinkedIn investor Marc Andreessen insists that the recent popularity of tech companies does not constitute a bubble. He also stressed that both Apple and Google are undervalued and that "the market doesn't like tech."

In short, software is eating the world.

More than 10 years after the peak of the 1990s dot-com bubble, a dozen or so new Internet companies like Facebook and Twitter are sparking controversy in Silicon Valley, due to their rapidly growing private market valuations, and even the occasional successful IPO. With scars from the heyday of Webvan and Pets.com still fresh in the investor psyche, people are asking, "Isn't this just a dangerous new bubble?"

I, along with others, have been arguing the other side of the case. (I am co-founder and general partner of venture capital firm Andreessen-Horowitz, which has invested in Facebook, Groupon, Skype, Twitter, Zynga, and Foursquare, among others. I am also personally an investor in LinkedIn.) We believe that many of the prominent new Internet companies are building real, high-growth, high-margin, highly defensible businesses.

Today's stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies. Apple, for example, has a P/E ratio of around 15.2—about the same as the broader stock market, despite Apple's immense profitability and dominant market position (Apple in the last couple weeks became the biggest company in America, judged by market capitalization, surpassing Exxon Mobil). And, perhaps most telling, you can't have a bubble when people are constantly screaming "Bubble!"

But too much of the debate is still around financial valuation, as opposed to the underlying intrinsic value of the best of Silicon Valley's new companies. My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.

More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.

Why is this happening now?

Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.

Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.

On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries—without the need to invest in new infrastructure and train new employees. In 2000, when my partner Ben Horowitz was CEO of the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon's cloud costs about $1,500 a month.

With lower start-up costs and a vastly expanded market for online services, the result is a global economy that for the first time will be fully digitally wired—the dream of every cyber-visionary of the early 1990s, finally delivered, a full generation later.

Perhaps the single most dramatic example of this phenomenon of software eating a traditional business is the suicide of Borders and corresponding rise of Amazon. In 2001, Borders agreed to hand over its online business to Amazon under the theory that online book sales were non-strategic and unimportant. Oops.

Today, the world's largest bookseller, Amazon, is a software company—its core capability is its amazing software engine for selling virtually everything online, no retail stores necessary. On top of that, while Borders was thrashing in the throes of impending bankruptcy, Amazon rearranged its web site to promote its Kindle digital books over physical books for the first time. Now even the books themselves are software.

Today's largest video service by number of subscribers is a software company: Netflix. How Netflix eviscerated Blockbuster is an old story, but now other traditional entertainment providers are facing the same threat. Comcast, Time Warner and others are responding by transforming themselves into software companies with efforts such as TV Everywhere, which liberates content from the physical cable and connects it to smartphones and tablets.

Today's dominant music companies are software companies, too: Apple's iTunes, Spotify and Pandora. Traditional record labels increasingly exist only to provide those software companies with content. Industry revenue from digital channels totaled $4.6 billion in 2010, growing to 29% of total revenue from 2% in 2004.

Today's fastest growing entertainment companies are videogame makers—again, software—with the industry growing to $60 billion from $30 billion five years ago. And the fastest growing major videogame company is Zynga (maker of games including FarmVille), which delivers its games entirely online. Zynga's first-quarter revenues grew to $235 million this year, more than double revenues from a year earlier. Rovio, maker of Angry Birds, is expected to clear $100 million in revenue this year (the company was nearly bankrupt when it debuted the popular game on the iPhone in late 2009). Meanwhile, traditional videogame powerhouses like Electronic Arts and Nintendo have seen revenues stagnate and fall.

The best new movie production company in many decades, Pixar, was a software company. Disney—Disney!—had to buy Pixar, a software company, to remain relevant in animated movies.

Photography, of course, was eaten by software long ago. It's virtually impossible to buy a mobile phone that doesn't include a software-powered camera, and photos are uploaded automatically to the Internet for permanent archiving and global sharing. Companies like Shutterfly, Snapfish and Flickr have stepped into Kodak's place.

Today's largest direct marketing platform is a software company—Google. Now it's been joined by Groupon, Living Social, Foursquare and others, which are using software to eat the retail marketing industry. Groupon generated over $700 million in revenue in 2010, after being in business for only two years.

Today's fastest growing telecom company is Skype, a software company that was just bought by Microsoft for $8.5 billion. CenturyLink, the third largest telecom company in the U.S., with a $20 billion market cap, had 15 million access lines at the end of June 30—declining at an annual rate of about 7%. Excluding the revenue from its Qwest acquisition, CenturyLink's revenue from these legacy services declined by more than 11%. Meanwhile, the two biggest telecom companies, AT&T and Verizon, have survived by transforming themselves into software companies, partnering with Apple and other smartphone makers.

LinkedIn is today's fastest growing recruiting company. For the first time ever, on LinkedIn, employees can maintain their own resumes for recruiters to search in real time—giving LinkedIn the opportunity to eat the lucrative $400 billion recruiting industry.

Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. In today's cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite and GPS networks. The days when a car aficionado could repair his or her own car are long past, due primarily to the high software content. The trend toward hybrid and electric vehicles will only accelerate the software shift—electric cars are completely computer controlled. And the creation of software-powered driverless cars is already under way at Google and the major car companies.

Today's leading real-world retailer, Wal-Mart, uses software to power its logistics and distribution capabilities, which it has used to crush its competition. Likewise for FedEx, which is best thought of as a software network that happens to have trucks, planes and distribution hubs attached. And the success or failure of airlines today and in the future hinges on their ability to price tickets and optimize routes and yields correctly—with software.

Oil and gas companies were early innovators in supercomputing and data visualization and analysis, which are crucial to today's oil and gas exploration efforts. Agriculture is increasingly powered by software as well, including satellite analysis of soils linked to per-acre seed selection software algorithms.

The financial services industry has been visibly transformed by software over the last 30 years. Practically every financial transaction, from someone buying a cup of coffee to someone trading a trillion dollars of credit default derivatives, is done in software. And many of the leading innovators in financial services are software companies, such as Square, which allows anyone to accept credit card payments with a mobile phone, and PayPal, which generated more than $1 billion in revenue in the second quarter of this year, up 31% over the previous year.

Health care and education, in my view, are next up for fundamental software-based transformation. My venture capital firm is backing aggressive start-ups in both of these gigantic and critical industries. We believe both of these industries, which historically have been highly resistant to entrepreneurial change, are primed for tipping by great new software-centric entrepreneurs.

Even national defense is increasingly software-based. The modern combat soldier is embedded in a web of software that provides intelligence, communications, logistics and weapons guidance. Software-powered drones launch airstrikes without putting human pilots at risk. Intelligence agencies do large-scale data mining with software to uncover and track potential terrorist plots.

Companies in every industry need to assume that a software revolution is coming. This includes even industries that are software-based today. Great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google owns a major handset maker).

In some industries, particularly those with a heavy real-world component such as oil and gas, the software revolution is primarily an opportunity for incumbents. But in many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. Joseph Schumpeter, the economist who coined the term "creative destruction," would be proud.

And while people watching the values of their 401(k)s bounce up and down the last few weeks might doubt it, this is a profoundly positive story for the American economy, in particular. It's not an accident that many of the biggest recent technology companies—including Google, Amazon, eBay and more—are American companies. Our combination of great research universities, a pro-risk business culture, deep pools of innovation-seeking equity capital and reliable business and contract law is unprecedented and unparalleled in the world.

Still, we face several challenges.

First of all, every new company today is being built in the face of massive economic headwinds, making the challenge far greater than it was in the relatively benign '90s. The good news about building a company during times like this is that the companies that do succeed are going to be extremely strong and resilient. And when the economy finally stabilizes, look out—the best of the new companies will grow even faster.

Secondly, many people in the U.S. and around the world lack the education and skills required to participate in the great new companies coming out of the software revolution. This is a tragedy since every company I work with is absolutely starved for talent. Qualified software engineers, managers, marketers and salespeople in Silicon Valley can rack up dozens of high-paying, high-upside job offers any time they want, while national unemployment and underemployment is sky high. This problem is even worse than it looks because many workers in existing industries will be stranded on the wrong side of software-based disruption and may never be able to work in their fields again. There's no way through this problem other than education, and we have a long way to go.

Finally, the new companies need to prove their worth. They need to build strong cultures, delight their customers, establish their own competitive advantages and, yes, justify their rising valuations. No one should expect building a new high-growth, software-powered company in an established industry to be easy. It's brutally difficult.

I'm privileged to work with some of the best of the new breed of software companies, and I can tell you they're really good at what they do. If they perform to my and others' expectations, they are going to be highly valuable cornerstone companies in the global economy, eating markets far larger than the technology industry has historically been able to pursue.

Instead of constantly questioning their valuations, let's seek to understand how the new generation of technology companies are doing what they do, what the broader consequences are for businesses and the economy and what we can collectively do to expand the number of innovative new software companies created in the U.S. and around the world.

That's the big opportunity. I know where I'm putting my money.

Sunday, August 14, 2011

Bill Gates on the Past, Present, and Future of the PC

The most significant innovation in personal computing over the last 30 years has been the evolution of natural interfaces, with the GUI, speech recognition, gestures and touch receiving equal weight, according to Bill Gates, a co-founder and the former chief executive of Microsoft.

As the PC turns 30, PCMag.com asked Gates, as well as other industry leaders, for their thoughts on the most significant innovation in personal computing, and how PCs have changed people's lives for the better – or worse. Finally, PCMag.com wanted to know what the future holds for personal computing – and maybe whether the "Personal Computer" would exist in its current form.

While Apple's Steve Jobs and Steve Wozniak arguably invented and popularized the personal computer, Bill Gates, Paul Allen and later Steve Ballmer at Microsoft crafted and shaped the Windows operating system which became synonomous with the term "PC". The Apple Macintosh and Windows pushed the graphical user interface into the mainstream, driven by the increasing performance of microprocessors from Intel Corp., and later from chips designed by Advanced Micro Devices, Cyrix, Via Technology, and others.

"The truth of Moore's law has made remarkable things possible," Gates said.

"On the software side, I think natural user interfaces in all their forms are equally significant," Gates added. "We just take it for granted now, but the graphical user interface was an amazing breakthrough that made computers dramatically easier for almost everyone to use. Today, we're seeing speech recognition and speech synthesis technologies coming into the mainstream. Touchscreens on phones, tablets and PCs have opened up an incredible new world of applications. And we've barely scratched the surface with new interfaces such as those in Kinect, which incorporate facial recognition along with gesture-based and voice control."

Gates has evolved much as the PC has: in its infancy, the personal computer was a hobbyist product, and expanded into a consumer device, a business tool, and then an ubiquitous device that has helped shape human culture. In his role as the co-founder of the Bill and Melinda Gates Foundation, Gates has taken his technology and business acumen on the road, using technology as a tool to crack fundamental problems facing humanity: education, poverty, health care, and agricultural research, among others.

It's the role of the PC as a cultural touchstone for which Gates seems most proud. When asked if the PC had changed people's lives for the better, Gates replied, "There's no question that it has."

"The PC has improved the world in just about every area you can think of," Gates said. "Amazing developments in communications, collaboration and efficiencies. New kinds of entertainment and social media. Access to information and the ability to give a voice people who would never have been heard. All of these have their roots in what the PC made possible, amplified and extended by other devices.

"But we're still falling short in some areas," Gates added. "Education is one example, where the impact of technology lags behind almost every other part of society. There's so much more that can be done to utilize technology in engage students, help teachers, and customize learning for each child."

The question now is how the personal computer will evolve. Clearly, the days of the desktop PC are over; in Oct. 2008, laptops began outpacing the sales of desktop PCs, and that trend has continued to accelerate. And phones have made the computing experience even more personal; the addition of GPS chips to phones allowed the phone to provide location-based services, a capability that notebooks simply haven't been able to adequately duplicate.

Computing devices have become gateways to the Internet, Gates said, and will continue to serve that role.

"On a personal level, technology will be more seamlessly integrated into our lives. We see this taking shape now – so many things are becoming available in digital form and are accessible to us wherever and whenever we need it," Gates said.

"On a societal level, technology will contribute to solving many of our greatest challenges," Gates added. "In global health, it will advance scientific discovery, diagnostics, and delivery of health services to the world's poor. In education, it has the potential to ignite student interest in learning and help teachers understand what's working and what's not in the classroom. And in many other areas, including energy and the environment, computers already are and will continue to be an essential tool for data collection, analysis, and innovation."

And what's on the road ahead? Who knows. "The next 30 years are going to be equally remarkable as the last 30," Gates said. "We're really still just at the beginning of what's possible."

Wednesday, August 3, 2011

Stanford University Free Online Course

Stanford University professor Sebastian Thrun and Google director of research Peter Norvig are making their artificial intelligence class this fall free to anyone online. The online course will run in tandem with the actual class from October to December, and online students will be expected to watch the lectures, complete the assignments, and take the exams. Although online students will not earn college credit for the class, Thrun and Norvig say they will receive grades and a certificate if they pass it. Since the course was announced in late July, more than 8,000 people have asked to be put on an email list for more details. The researchers want the online students to interact with Stanford's students, and are encouraging that interaction by having the courses run simultaneously. The professors recommend that online students buy the class textbook and dedicate at least 10 hours a week to the course, which is an intermediate-level class, requiring some mathematical and programming knowledge. Norvig says the course might appeal to students at universities that do not offer similar courses, to technology professionals, or to ambitious high-school students.