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it roundup

The IT Roundup: News we're still talking about in June

June 04, 2014

AT&T to acquire DirecTV

Will you disrupt the market, or will you to let another company’s business disrupt you? That might have well been the question that DirecTV execs asked themselves before locking into a merger with AT&T this past month. Citing Dish Network’s failed acquisition of Sprint, Forbes writer Jeff Bercovici says the driving motivation is that “the future of subscription TV isn’t about piping signals into homes, but beaming them into mobile devices.” From this standpoint, the deal gives both AT&T and DirecTV a competitive advantage.

AT&T and DirecTV will now be able to reach consumers through satellite, Internet, wireless phone and AT&T’s U-Verse video service. This is in addition to the added clout AT&T will acquire to negotiate lower rates from content providers due to DirecTV’s sheer size and reach.

DirecTV is reported to bring AT&T access to 15 million more homes around the country, beefing up the wireless provider’s already formidable customer base. However, critics argue that AT&T could bring its services to the same number of households for a sixth of the cost of the deal.  

The wireless industry will have to wait and see what the FCC rules, but experts tend to think that the deal will go through, paving the road for Dish Network to woo its own wireless carrier.


Are we in a tech bubble?

The question has developed traction this year, especially after the headline-making acquisitions of Nest, WhatsApp and most recently Oculus Rift. Other start-ups—ones we haven’t even heard of yet—are gobbling up money from venture capitalists (VCs) and scrambling to attract a roster of users so that they can be the next success story. A no-revenue model has become the norm, as long as the fledgling company can boast access to a couple million people’s eyeballs or personal information. In this regard, reporters and analysts on both sides of the bubble argument agree that start-ups are increasingly overvalued. However, what that means for the tech world as a whole is a matter of perspective.

Adam Lashinsky at CNN Money argues that when tech startups are pitching sales of stock shares ahead of an IPO—to a journalist, no less—the market inflation is clear. Lashinsky writes from personal experience, having lived through the last tech bubble. The sheer amount of news coverage on Silicon Valley activities (many of which he says are “micro-scoop” stories of no real interest to the general public) is further proof of the market’s disconnect from reality. And a Wall Street Journal article notes that in the first quarter of the year, 83 percent of companies that went public had negative net income.

Others note that if we are in a bubble, it’s a tiny one. “The potential 70 tech IPOs this year is relatively small compared with 369 in 1999 and 261 in 2000,” wrote Chris O’Brian in the LA Times last month. “Even if venture capital keeps its current pace, it would pale in the face of the $100 billion invested by venture capitalists in 2000.”

Whether the bubble is real or imagined, big or small, the startup culture that once seemed so alluring is turning to ashes in our collective mouth. At least, that’s how I felt after reading an article in last month’s issue of Wired on a startup called Boomtrain—a sobering story that squashes the dreamers and gives them the cruel gift of a reality check. (Moral: you’re always working for “the man”). And in the end, a reality check is exactly what will burst the proverbial bubble. Here’s hoping it’s a small one.

Security and the Internet of Things

While writing my blog post on Heartbleed last month I noticed that every single post I’ve written this year has discussed (in some way) the serious security issues we face, not only at the business level, but as individuals. I’m especially shocked by stories of how remote administration tools (RATs) are used to victimize and blackmail people with their own computers. The pure invasiveness of these crimes gives me the shivers. It was slightly comforting to read about the mid-May global FBI bust on users of Blackshades software, but so much more needs to be done.

Despite the fact that we scarcely seem able to protect the information we already share digitally, we are at the cusp of a movement to shift control of our analog lives from the hands in front of us to the Internet of Things.

Every time I turn the TV on, I see an ad for how my life can be made simpler by giving my cell phone—a piece of hardware that people regularly lose or are robbed of on the streets—the power to turn on my car, unlock my house and adjust my thermostat. If hackers can make my life miserable by taking over my laptop and webcam, how much more terrible would it be if they were able to gain control of my car and house?

“As technology becomes more entwined with the physical world, the consequences of security failure escalate,” wrote Forrester analyst Andrew Rose. It’s clear to me that the Internet of Things cannot—and moreover, should not—take off until we figure out security provisions that will reliably and consistently protect us from the dangers of digital security vulnerabilities. Until then, I’ll be watching the Internet of Things unfold from the sidelines.

Interested in reading more? Check out my recent posts on A user-friendly future for healthcare and The IT roundup: news we’re still talking about in April.

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