[iDC] MySpace staff cuts

[Michael Bauwens]

Dear Andreas,

Thanks for the calculation and reminding us that indeed, the internet and its services rests on a costly social and private infrastructure.

But I would also suggest that one of the reasons that platforms like Google and YouTube costs a lot of money is because of the choice of highly centralized and controlled infrastructures, which requires a high treshold of capital outlays and therefore serves as a competitive advantage.

Perhaps if some of the companies went bankrupt in the future (as many web 2.0 services have already done), the hacker community would discover that they could be rebuilt as truly distributed networks, thereby distributing the costs as well. In this way, like the Wikipedia and Linux production, the private interests would become substantially more periferal and the relative power of the community relatively stronger,

Michel

 


----- Original Message ----
> From: Andreas Schiffler <aschiffler at ferzkopp.net>
> To: "idc at mailman.thing.net" <idc at mailman.thing.net>
> Sent: Thursday, June 25, 2009 11:21:42 AM
> Subject: Re: [iDC] MySpace staff cuts
> 
> 
> 
> 
> If the Internet should or shouldn't be about making money is really 
> besides the point. To "run the net" costs money - boatloads of money - 
> hence one cannot disjoin the internet from "things that have to do with 
> money" including making some from nothing but electrons flying around in 
> wires and semiconductors.
> 
> I think it is helpful to provide some context to where these costs are 
> coming from ... just calling out bandwidth isn't doing this justice. Let 
> me try to develop a chain that needs to be put into place for something 
> to happen. Assuming we want to engineer the average June 2009 page view 
> after time-traveling from the stone age, we'd need to build and operate 
> this:
> 
> Client Device/Connection - Last Mile Provider - Cloud Providers/Telecoms 
> - Hosting Facility - Server Device - Operating System/Software - 
> Programmer/Designer - Content
> 
> Next let me try to estimate some cost numbers for each item, say for the 
> US, for one year, for fancy commercial stuff.
> [Disclaimer: These are just crude order of magnitude estimates without 
> much research backing them up. Maybe we can crowd-source better numbers!]
> 
> Client Device/Connection: 150M online devices at $100/year for power, 
> maybe 30M new devices/year at $500 a device = 30B
> Last Mile Provider: 10M new hookups/year at $1K a pop (pays for provider 
> infrastructure and personnel) = 1B
> Cloud Providers/Telecoms: 10 providers, 10B each/year in revenue, 25% is 
> internet (pays for provider infrastructure and personnel) = 25B
> Hosting Facilities: 10 big/100 small facilities, 10M setup+10/100M in 
> power/cooling costs = 2B
> Server Device: 1M servers at $1000 each = 1B
> OS/Software: 1M servers at $2K each = 2B
> Programmer/Designer: 300K people at 100K/year each = 30B
> Content: priceless ... not really, 10B stock images/sounds/blogs at $1 
> each, 100M books/videos at $20 each = 12B
> 
> Now let's split this into two groups (a) what crowd sourcing/open source 
> can affect in terms of price and (b) what needs to be payed to "the 
> system" anyways:
> (a) open/crowd-sourceable: Last Mile Provider, OS/Software 
> (Linux/apache), Programmer/Designer (phpBB/mozilla), Content 
> (wikipedia/flickr) = 50B
> (b) corporate system: Client Device/Connection (PC/Power Utility), Cloud 
> Provider/Telecoms (ATT/Akamai), Server Device (HP/IBM) = 56B
> 
> So even if open/crowd-sourcing is 100% effective, the corporations who 
> run "the net", make "the gadget" and provide "the juice" still need to 
> come up with the other half of the bill. Thus I conclude it will never 
> be a profitless enterprise. The current preoccupation with advertising 
> and user generated content is in my view partially a fad (yes, many 
> people don't care about many of the services) and partially an economic 
> reality (it pays, as Google demonstrates so well).
> 
> To cut something out of (b) many, many people would need invest into 
> devices that use less power and last much longer, build community mesh 
> networks and mini-clouds, and consume less server-based streams.
> 
> And another note on the original discussion about mySpace layoffs - one 
> of the biggest chunks of the cost in the chain is the personnel as one 
> can easily see in the above estimate. So if a company wants to loose 
> less money (YouTube) or make more profit (mySpace), they just fire most 
> of the people who made the software but keep the servers running. This 
> will go without anybody noticing anything (this works for at least a 
> year - been there, done that).
> 
> --Andreas