Monday, December 7, 2020

How Google Falls - By Jay Valentine

"There are decades where nothing happens; and there are weeks where decades happen." —Vladimir Lenin

This has been such a week or several weeks.  Everything seems to be happening.  Most of it not so good.  And it ain't over.

At such times, it is easy to become despondent.  Americans are watching cherished institutions crumble in the face of leftist ideology: the FBI, the courts, election officials, the Justice Department, ballots in trucks, ballots in suitcases.  No need to review that here.

Well, there is something else going on, and maybe it's time to dig into it a bit.

Stand back from the political maelstrom, take a deep breath, and let's talk technology.  No, let's go deeper and talk software.

Marc Andreesen, a leading venture guy, wrote an important piece years ago: "Why Software Is Eating the World."

His thesis is that software runs about everything, so software, the computer instruction set, will run the world.  OK, let's leave it there.

America just lived through the first wave of what might be called a one-sided software war.  Software, as in Google, Facebook, Twitter, and other "Big Techs," worked together to impact an election cycle.  Nobody disputes that, not even the techs.  Actually, they are pretty proud of it.

Americans, particularly the ones daily censored on Twitter and Facebook, look at these monoliths and see eternal weaponry arrayed against them.  Their senators and reps will never break them up.  Most take money from Google, and the rest live in fear of crossing them.

One man's monolith is another man's dinosaur.  Don't fear these guys; they just got there first.

Looking at the technology behind all these firms, one finds they are using conventional software stacks, the kind pretty much everyone uses today.  They just have scale — they spent billions on hardware, software, programming.  An impossible hurdle to duplicate.

But it's not.  Not at all.

We are at the end of a technology cycle that began in the 1960s, driven by Moore's Law.  Hardware got twice as fast and half as expensive every two years, so software could get fatter and more inefficient and still work great.

That world has changed.  We are about at the end of the road for engraving chips any smaller, otherwise electrons jump around and screw up everything.  Stuff is not getting faster or cheaper; it is going the other way.  Deeper dive here.

The disruption coming to software is on par with the development of the cell phone, the graphical user interface, and the personal computer. 

There are software technologies in production now, just entering the mainstream enabling a major corporate application to be rewritten in a quarter, run 1,000 to a million times faster, on hardware you can hold in your hand.

Want an example?

For a test, some friends took the world's largest billing system.  You are probably one of its customers.  It is for cell phone stuff.

Well, right now, it costs a billion dollars a year to run.  It took 20 years to build.  It takes 25 days to process 50 million bills in a data center so large you need a golf cart to traverse it.  It consumes the energy equivalent of 100,000 homes.

Using new software paradigms, they rewrote it in 45 days.  It produces bills for 100 million customers in minutes, not days.  The data center:  a small group of inexpensive computers on a dining room table.  Cost a billion dollars?  Nope.  Ten thousand dollars for the computers, excluding the dining room table.  Energy usage?  Less than charging a Tesla.

OK, so what does this mean?

Where some see Facebook, Google, Amazon as tech giants, others see their complete dependence on obsolete technology.  That means they will always be the highest-cost producer.

Sure, they will have the same opportunity to adopt some of this new software technology if they choose.  But first mover advantage does have its downside.  They would have to essentially rewrite everything, and they just cannot get there from here.

You will see new Facebooks and models not yet envisioned because anyone can now build a community if he has essentially free, or almost free technology and a user base. 

The hurdle of raising tens of millions of dollars for massive data centers and armies of programmers is over.  Any group of competent developers can now deliver a Facebook-like community, running 100 million users in months.  The hardware would fit on that dining room table.  The cost would be trivial.

If you ever watched the movie Zulu, Michael Caine's first, you see a handful of British soldiers, at Rorke's Drift, hold off an army of Zulu warriors with spears and hide shields, for days.  The Brits had modern weaponry.

Well, try the same movie if the Zulus had the same weaponry.  Different result.

So be of good cheer, because the technology world is shifting under our feet.  Massive disruption is happening, and we at the edge are seeing it.  So will you if you look.

"Out on the edge you see all kinds of things you can't see from the center.  Big, undreamed-of things — the people on the edge see them first." —Kurt Vonnegut

The Zulus are about to get the rifles.

Jay Valentine is president of ContingencySales, bringing disruptive technology to market without venture capital.  Jay's website is