Mobile Carriers Dash To Enter FCC Auction

Three of the four largest U.S. mobile operators and satellite provider Dish Network Corp plan to bid in the Federal Communications Commission’s November auction of airwaves, according to initial applications released on Wednesday.

As expected, the largest U.S. wireless carrier Verizon Communications Inc, No. 2 AT&T Inc, No. 4 T-Mobile US Inc and Dish appeared to be the largest companies to indicate an interest in bidding in the upcoming auction of frequencies known as AWS-3.

Applications from Northstar Wireless LLC and SNR Wireless LicenseCo LLC reported they had entered bidding agreements with Dish, which had indirect ownership interest in both companies.

Northstar’s disclosures showed direct and indirect ownership interest by Alaska Native corporation Doyon Ltd and indirect ownership interest by financial firm Catalyst Investors. Asset manager BlackRock Inc had membership shares in SNR, according to the documents.

T-Mobile and AT&T did not appear to plan joint bids with other companies, and T-Mobile’s Kathleen Ham, vice president of federal regulatory affairs, said the carrier had no such agreements with any company.

A Verizon spokesman did not respond to inquiries about potential joint bidding and Dish representatives declined comment beyond confirming the submission of its application, citing FCC’s anti-collusion rules.

A total of 80 entities submitted initial applications. Interested parties, which may or may not actually bid for wireless licenses in the auction, included smaller U.S. companies such as Bluegrass Wireless LLC, Guam-based wireless company Docomo Pacific Inc and individual spectrum investors.

Scheduled to begin on Nov. 13, the auction is expected to raise at least $10 billion and will include airwaves previously occupied by multiple federal users, including the Department of Homeland Security.

Dish applied to bid in the auction as American AWS-3 Wireless I LLC and disclosed joint bidding arrangements with SNR and Northstar, which in turn had to disclose ownership and other information.

SNR listed former FCC Wireless Bureau Chief John Muleta, now CEO of consulting firm Atelum LLC, as a contact. Muleta, reached late on Wednesday, declined comment, citing FCC’s restrictions.

Northstar’s disclosures listed Allen Todd, assistant secretary at Doyon, a Fairbanks-based Alaska Native Regional Corporation with numerous affiliates in various fields including oil and gas land drilling. Todd could not be reached for comment on Wednesday.

SNR’s and Northstar’s, as well as AT&T’s, initial application appeared to be incomplete, which can be caused by small bureaucratic omissions. Of the 80 applications, 47 were deemed incomplete and have to be properly finished by Oct. 15 to allow the companies to participate.

All initial applications have to put down an upfront payment by Oct. 15 to confirm participation.

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Bitcoin Use Growing

Bitcoin is gaing greater acceptance at U.S. online merchants including Overstock.com and Expedia, as customers use a digital currency that just a few years ago was virtually unknown but is now showing some staying power.

Though sales paid for in bitcoin so far at vendors interviewed for this article have been a fraction of one percent, they expect that as acceptance grows, the online currency will one day be as ubiquitous as the internet.

“Bitcoin isn’t going anywhere; it’s here to stay,” said Michael Gulmann, vice president of global products at Expedia Inc. in Seattle, the largest online travel agent. “We want to be there from the beginning.” Expedia started accepting bitcoin payments for hotel bookings on July 11.

Until recently a niche alternative currency touted by a fervent group of followers, bitcoin has evolved into a software-based payment online system. Bitcoins are stored in a wallet with a unique identification number and companies like Coinbase and Blockchain can hold the currency for the user.

When buying an item from a merchant’s website, a customer simply clicks on the bitcoin option and a pop-in window appears where he can type in his wallet ID number.

Still, broad-based adoption of bitcoin is at least five years away because most consumers still prefer to use credit cards, analysts said.

“Bitcoin is a new way of making payments, but it’s not solving a problem that’s broken,” said George Peabody, payments consultant at Glenbrook Partners in Menlo Park, California. “Retail payments aren’t broken.”

There are also worries about bitcoin’s volatility: its price in U.S. dollars changes every day.

That risk is borne by the consumer and the bitcoin payment processor, such as Coinbase or Bitpay, not the retailer. The vendor doesn’t hold the bitcoin and is paid in U.S. dollars. As soon as a customer pays in bitcoin, the digital currency goes to the payment processor and the processor immediately pays the merchant, for a fee of less than 1 percent.

“We don’t have to deal with the actual holding of the bitcoin: it’s the payment processor that takes the currency risk for us,” said Bernie Han, chief operating officer at Dish Network Corp, in Englewood, Colorado. “That’s what makes it appealing for us and I guess for other merchants as well.”

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HTTP2 Procotol Nears Completion

When it comes to amping up traffic over the Internet, sometimes too much of a good thing may not be such a good thing at all.

The Internet Engineering Task Force is putting the final touches on HTTP/2, the second version of the Hypertext Transport Protocol (HTTP). The working group has issued a last call draft, urging interested parties to voice concerns before it becomes a full Internet specification.

Not everyone is completely satisfied with the protocol however.

“There is a lot of good in this proposed standard, but I have some deep reservations about some bad and ugly aspects of the protocol,” wrote Greg Wilkins, lead developer of the open source Jetty server software, noting his concerns in a blog item posted Monday.

Others, however, praise HTTP/2 and say it is long overdue.

“A lot of our users are experimenting with the protocol,” said Owen Garrett, head of products for server software provider NGINX. “The feedback is that generally, they have seen big performance benefits.”

First created by Web originator Tim Berners-Lee and associates, HTTP quite literally powers today’s Web, providing the language for a browser to request a Web page from a server.

Version 2.0 of HTTP, based largely on the SPDY protocol developed by Google, promises to be a better fit for how people use the Web.

“The challenge with HTTP is that it is a fairly simple protocol, and it can be quite laborious to download all the resources required to render a Web page. SPDY addresses this issue,” Garrett said.

While the first generation of Web sites were largely simple and relatively small, static documents, the Web today is used as a platform for delivering applications and bandwidth intensive real-time multimedia content.

HTTP/2 speeds basic HTTP in a number of ways. HTTP/2 allows servers to send all the different elements of a requested Web page at once, eliminating the serial sets of messages that have to be sent back and forth under plain HTTP.

HTTP/2 also allows the server and the browser to compress HTTP, which cuts the amount of data that needs to be communicated between the two.

As a result, HTTP/2 “is really useful for organization with sophisticated Web sites, particularly when its users are distributed globally or using slower networks — mobile users for instance,” Garrett said.

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Chrome Climbs To Second

Google’s Chrome browser in July broke the 20% user share bar for the first time, according to recently published statistics by Web measurement vendor Net Applications.

But because the browser war is a zero-sum game, when Chrome won others had to lose. The biggest loser, as has been the case for the last year: Mozilla’s Firefox, which came dangerously close to another milestone, but on the way down.

Firefox accounted for 15.1% of the desktop and laptop personal computer browsers used in July, a low point not seen by the open-source application since October 2007, a year before Chrome debuted and when Microsoft’s Internet Explorer (IE) was only on version 7.

Chrome had flirted with the 20% mark before. More than two years ago, Chrome’s user share — a Net Applications’ measurement of the unique visitors running each browser — had come close: 19.6%. But Chrome then took a prolonged dip that only began reversing last fall.

Chrome’s July user share of 20.4% put the browser solidly in second place, but still far behind IE in Net Applications’ tallies. IE’s share last month was 58%, down slightly from the month before.

Firefox also lost user share in July, dropping half a percentage point to 15.1%. It was the ninth straight month that the desktop browser lost share. In the past three months alone, Firefox has fallen nearly two points.

The timing of the decline has been terrible, as Mozilla’s current contract with Google ends in November. That deal, which assigned Google’s search engine as the default for most Firefox customers, has generated the bulk of Mozilla’s revenue. In 2012, for example, the last year for which financial data was available, Google paid Mozilla an estimated $272 million, or 88% of all Mozilla income.

Going into this year’s contract renewal talks, Mozilla will be bargaining from a much weaker position, down 34% in total user share since July 2011.

Apple’s Safari remained in a distant fourth place behind Firefox, with a user share of 5.2%, down four-tenths of a percentage point in the last month. Meanwhile, Opera Software’s Opera browser brought up the rear with a small 1% user share.

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Apple-IBM Alliance Downplayed

IBM Corp’s recent move to team up with Apple Inc to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unfazed for now.

Top executives at Dell and BlackBerry Ltd scoffed at the threat posed by the alliance, arguing the tie-up is unlikely to derail the efforts of their own companies to re-invent themselves.

“I do not think that we take the Apple-IBM tie-up terribly seriously. I think it just made a good press release,” John Swainson, who heads Dell’s global software business, said in an interview with Reuters in Toronto last week.

PC maker Dell and smartphone maker BlackBerry are in the midst of reshaping their companies around software and services, as the needs of their big corporate clients morph.

Swainson, who spent over two decades in senior roles at IBM, said, “I have some trouble understanding how IBM reps are going to really help Apple very much in terms of introducing devices into their accounts. I mean candidly, they weren’t very good at doing it when it was IBM-logoed products, so I do not get how introducing Apple-logoed stuff is going to be much better.”

While conceding that Apple products hold more allure, Swainson said they lack the depth of security features that many large business clients like banks covet.

IBM and Apple could not immediately be reached for comment.

BlackBerry Chief Executive John Chen similarly downplayed the threat of the alliance in an interview with the Financial Times, likening the tie-up to when “two elephants start dancing.”

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Can Lenovo Succeed With Tablets?

Lenovo on Friday said it would continue selling sub-10-in. Windows tablets in the U.S., backing away from statements it made the day before, when it said it was pulling the ThinkPad 8 from the North American market and had discontinued offering a model of the Miix 2.

“We will continue to bring new Windows devices to market across different screen sizes, including a new 8-inch tablet and 10-inch tablet coming this holiday,” Lenovo said in a press release published on its website Friday.

“Our model mix changes as per customer demand, and although we are no longer selling ThinkPad 8 in the U.S., and we have sold out of Miix 8-inch, we are not getting out of the small-screen Windows tablet business as was reported by the media (emphasis in original),” the statement continued.

On Thursday, the IDG News Service — like Computerworld, owned and operated by IDG – reported the withdrawal of the ThinkPad 8 and the 8-in. Miix from the U.S. market. The ThinkPad 8 had debuted in January at prices starting at $449, and the similarly-sized Miix had launched in October 2013.

Lenovo told IDG News that it was diverting remaining stocks of the ThinkPad 8 to other countries, including Brazil, China, and Japan, where demand was stronger for smaller Windows 8.1-powered tablets.

The China-based company, which has made impressive gains in the global market — it was the world’s largest personal computer seller during the second quarter, ahead of Hewlett-Packard and Dell, according to IDC — did not say exactly when it would return with an 8-in. device. If it begins selling the unnamed device in October, typical of OEMs that seed the channel then for the holiday sales season, it will have been absent from the market for two or more months.

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Will MasterCard Sell Big Data?

MasterCard Inc, the world’s second-largest credit card association, sees business booming from selling data to retailers, banks and governments on spending patterns found in the payments it processes, a top executive told Reuters.

MasterCard, which handles payments for 2 billion cardholders and tens of millions of merchants, uses that information to generate real-time data on consumer trends, available more quickly that regular government statistics.

“It is an incredibly fast growing area for us,” Ann Cairns, who heads MasterCard’s business outside North America, said in an interview, stressing that the company respects cardholder privacy, using anonymous data rather than personal information.

MasterCard does not give figures for its information services products but “other revenues”, which include the sale of data, grew 22 percent in the first quarter of 2014 to $341 million, outpacing the growth of total revenue dominated by payments processing, which rose 14 percent to $2.177 billion.

Cairns said clients for the data include retailers, banks and governments, with MasterCard tailoring it to their needs.

“Retailers are fantastic at using the data they have available about how people shop in their store, how their inventory turns over, but what they don’t know is what happens outside their store,” she said. “The data we’ve got is ubiquitous across the whole market. We can help retailers see what they need to do to capture more sales.”

Cairns, 57, a statistician by training who joined MasterCard in 2011 after helping manage the disposal of Lehman Brothers assets in Europe, revels in the insights real-time card data can provide, such as London’s popularity as the world’s top travel destination and a rise in spending on experiences such as eating out or going on holiday rather than shopping in stores.

MasterCard has recorded a spike in spending in Brazil on groceries and a drop in spending on luxury goods as the price of food has risen ahead of the World Cup, she said, the kind of insight valued by companies such as Nike and Adidas that are hoping to sell $300 soccer boots during the competition.

While MasterCard expands in “big data”, Cairns sees no slowdown in its traditional business of processing payments, with plenty of potential for growth as 85 percent of consumer transactions are still made by cash or check.

“Moving money and doing it safely and securely is so deeply cared about by so many people around the world that it will be a business that has fantastic value now and for years to come,” said Cairns, who previously worked at Citigroup and ABN Amro.

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Is China Hurting U.S. Vendors?

Shipments of servers from Chinese vendors grew at a rapid pace while the top server vendors in the U.S. declined during the first quarter of this year.

Worldwide server shipments were 2.3 million units during the first quarter, growing by just 1.4 percent compared to the same quarter last year, according to Gartner.

Growth was driven by Chinese server vendors Huawei and Inspur Electronics, which were ranked fourth and fifth, respectively, behind the declining Hewlett-Packard, Dell and IBM.

Huawei has been in the top five for server shipments for more than a year, but Inspur Electronics is a new entrant. Inspur builds blade servers, rack servers and supercomputers, and is best known for being involved in the construction of China’s Tianhe-2, which is currently the world’s fastest supercomputer, according to Top500.org.

Chinese servers partly benefitted from the 18 percent shipment growth in the Asia-Pacific region, while shipments in other regions declined, Gartner said in a statement.

Server buying trends have changed in recent years. Companies like Facebook, Google and Amazon, which buy servers by the thousands, are bypassing established server makers and purchasing hardware directly from manufacturers like Quanta and Inventec. That trend in part led to the establishment of the Open Compute Project, a Facebook-led organization that provides server reference designs so companies can design data-center hardware in-house.

Similarly, Chinese cloud providers are building mega data centers and buying servers from local vendors instead of going to the big name brands, said Patrick Moorhead, analyst with Moor Insights and Strategy.

The trend of buying locally is partly due to the security tension between the U.S. and China, but servers from Chinese companies are also cheaper, Moorhead said.

The enterprise infrastructure is also being built out in China, resulting in a big demand for servers. There is also a growing demand for servers from little-known vendors based in Asia — also known as “white box” vendors — in other regions, Moorhead said.

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Is IBM Going After HP?

IBM has announced a unified branding for its commerce cloud based enterprise products and services with a presentation at the Smarter Commerce Global Summit in Tampa, Florida.

Hot on the heels of HP, which unified its cloud offerings under the Helion brand last week, IBM Experienceone is designed to allow companies to improve engagement with their customers by leveraging big data through the cloud.

Deployment comes from a unified offer of consulting services, software and infrastructure from IBM subsidary Softlayer, which can be used to gather data, mine analytics and improve customer commerce via a mixture of traditional and cloud services.

IBM has already committed 1,000 new employees for its IBM Interactive Experience who will staff 10 “IBM Interactive Experience Labs” that are being set up to help customers understand the rules of engagement and hopefully increase their level of customer engagement.

IBM GM of Industry Cloud Solution Craig Hayman said, “IBM Experienceone provides a secure and simplified portfolio – including innovation from more than 1,200 partners – to help clients design and deliver more valuable customer engagements. With cloud, on premise and hybrid options, IBM Experienceone quickly scales to engage every customer in the moment while protecting their privacy.”

The IBM Experienceone brand is a coming together of many acquisitions that IBM has made in the field over recent years, including Sterling Commerce, Tealeaf, Coremetrics, Unica, Demandtec, Xtify and Silverpop. The only obvious omission from the top to tail offer is a specific CRM database, however IBM Experienceone is compatible with most of the leading solutions, including those of its arch rivals. This leads to the question, could a CRM be next on the company’s shopping list?

As well as on desktop and server equipment, Experienceone analytics will also be available through apps for iOS and Android.

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Will IBM Realize Growth In 2015?

International Business Machines Corp said it is projecting growth in its hardware sector next year as the company invests in research and development and abandons low-performing ventures.

The comments come less than one month after the world’s largest technology service company reported its lowest quarterly revenue in five years, weighed by sluggish global demand for its hardware, which plunged 23 percent in the first quarter of 2014.

The company added that growth in Latin America, the Middle East and Africa remain strong, and blamed falling revenue in China on government reforms affecting state-owned clients, and on the country’s hardware-heavy portfolio.

“We move on and we spread ourselves out, more industries, more clients, cloud, data, et cetera, around there,” said IBM Chief Executive Ginni Rometty at an investor briefing on Wednesday.

Chief Financial Officer Martin Schroeter said to stabilize the hardware sector IBM would continue to “refresh” hardware and further invest in research and development.

“Quite frankly, we are seeing very good growth out of software, good growth out of services, but challenges in hardware,” said Schroeter. “We will stabilize that hardware base and I am comfortable we will make that happen in 2014,” he said.

He reiterated the company’s EPS target for 2015 of at least $20. He expects a shift to higher-value business to bring in $3.25 and share repurchases to add $2 in earnings per share by 2015.

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