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Mobile Payment is going to take a lot of cooperation by a lot of competing interests, or a clever end-run
There was a time when the two big unsolved puzzles of online finance were micropayments and mobile payments. Micropayments were a problem because no one seemed willing to make sub-dollar transfers economically viable, while mobile payments had a chicken-and-egg solution / vendor paradox. Sites like PayPal and Square seem to have finally resolved the micropayment issue, as are more out-of-left-field ideas like Bitcoins. Mobile payment is still a morass of competing solutions, however.
For a while, Near Field seemed to be the sword that would slay the dragon, but Apple’s continual refusal to adopt the technology would leave a big segment of the mobile market out of the play. Even if someone comes up with a new point of sale (POS) terminal leveraging the more universal Bluetooth Low Energy, the real challenge isn’t the hardware. The problem is getting dozens of POS vendors and all the banks that issue cards to sign onto a new standard, and getting enough stores and retail venues to adopt it. Chicken and the egg once again.
Retreading old topics can be a powerful source of epiphany, sometimes more so than simple extra-box thinking. I was a computer science student, of course I knew statistics. But my recent years as a NoSQL (or better stated: distributed systems) junkie have irreparably colored my worldview, filtering every metaphor with a tinge of information management.
Lounging on a half-world plane ride has its benefits, namely, the opportunity to read. Most of my Delta flight from Tel Aviv back home to Portland lacked both wifi and (in my case) a workable laptop power source. So instead, I devoured Nate Silver’s book, The Signal and the Noise. When Nate reintroduced me to the concept of statistical overfit, and relatedly underfit, I could not help but consider these cases in light of the modern problem of distributed data management, namely, operators (you may call these operators DBAs, but please, not to their faces).
When collecting information, be it for a psychological profile of chimp mating rituals, or plotting datapoints in search of the Higgs Boson, the ultimate goal is to find some sort of usable signal, some trend in the data. Not every point is useful, and in fact, any individual could be downright abnormal. This is why we need several points to spot a trend. The world rarely gives us anything clearer than a jumble of anecdotes. But plotted together, occasionally a pattern emerges. This pattern, if repeatable and useful for prediction, becomes a working theory. This is science, and is generally considered a good method for making decisions.
On the other hand, when lacking experience, we tend to over value the experience of others when we assume they have more. This works in straightforward cases, like learning to cook a burger (watch someone make one, copy their process). This isn’t so useful as similarities diverge. Watching someone make a cake won’t tell you much about the process of crafting a burger. Folks like to call this cargo cult behavior.
How Fit are You, Bro?
You need to extract useful information from experience (which I’ll use the math-y sounding word datapoints). Having a collection of datapoints to choose from is useful, but that’s only one part of the process of decision-making. I’m not speaking of a necessarily formal process here, but in the case of database operators, merely a collection of experience. Reality tends to be fairly biased toward facts (despite the desire of many people for this to not be the case). Given enough experience, especially if that experience is factual, we tend to make better and better decisions more inline with reality. That’s pretty much the essence of prediction. Our mushy human brains are more-or-less good at that, at least, better than other animals. It’s why we have computers and Everybody Loves Raymond, and my cat pees in a box.
Imagine you have a sufficient amount of relevant datapoints that you can plot on a chart. Assuming the axes have any relation to each other, and the data is sound, a trend may emerge, such as a line, or some other bounding shape. A signal is relevant data that corresponds to the rules we discover by best fit. Noise is everything else. It’s somewhat circular sounding logic, and it’s really hard to know what is really a signal. This is why science is hard, and so is choosing a proper database. We’re always checking our assumptions, and one solid counter signal can really be disastrous for a model. We may have been wrong all along, missing only enough data. As Einstein famously said in response to the book 100 Authors Against Einstein: “If I were wrong, then one would have been enough!”
Database operators (and programmers forced to play this role) must make predictions all the time, against a seemingly endless series of questions. How much data can I handle? What kind of latency can I expect? How many servers will I need, and how much work to manage them?
So, like all decision making processes, we refer to experience. The problem is, as our industry demands increasing scale, very few people actually have much experience managing giant scale systems. We tend to draw our assumptions from our limited, or biased smaller scale experience, and extrapolate outward. The theories we then tend to concoct are not the optimal fit that we desire, but instead tend to be overfit.
Overfit is when we have a limited amount of data, and overstate its general implications. If we imagine a plot of likely failure scenarios against a limited number of servers, we may be tempted to believe our biggest odds of failure are insufficient RAM, or disk failure. After all, my network has never given me problems, but I sure have lost a hard drive or two. We take these assumptions, which are only somewhat relevant to the realities of scalable systems and divine some rules for ourselves that entirely miss the point.
In a real distributed system, network issues tend to consume most of our interest. Single-server consistency is a solved problem, and most (worthwhile) distributed databases have some sense of built in redundancy (usually replication, the root of all distributed evil).
The App Store model has increased the uncertainty of the software release process
The recent unavailability of the Apple Developer’s Portal just underscores how increasingly dependent developers have become on third parties during the software lifecycle. For those who are not following the fun and games, the developer.apple.com sites, which include much of the functionality needed to develop Mac and iOS applications, has been unavailable for more than a week as of this writing. Although iTunes Connect, the portal used to actually deploy apps to the App Stores, has remained available, the remainder of the site territory has been off-limits. This is all thanks to a security intrusion (evidently by an over-zealous researcher.)
The App Store model has fundamentally changed how software is distributed, mostly for the better (IMHO), but it has also removed some of the control of the release process from the hands of the developers and companies they work for. As I have spelled out previously in my book on iOS enterprise development, the fact that Apple has the final say on if and when software goes into the store has required more conservative release timelines. If you want to release on the first of September, you need to count back at least two weeks for “gold master”, because you need to upload the app, potentially go through a round of rejection from Apple, and then upload a fixed version.
Android apps don’t suffer from this lag, because most of the Android stores don’t do any significant checking of the applications uploaded to them. The Devil’s Deal that Apple developers have made with Apple is that in return for the longer wait time to get apps in the store (and having to follow Apple’s rules), they get a de facto seal of approval from Apple. In other words, it is assumed that apps in the iTunes store are more stringently policed and less likely to crash or do harm (deliberately or else-wise.)
The current downtime has brought that deal into question, however. Suddenly, developers who need new provisioning certificates, passbook certificates, or push notification certificates find themselves with nowhere to go. Even if iTunes Connect is available, it doesn’t do you any good if you can’t get a distribution certificate to sign your app for the store. I’m sure that there are developers at this moment who have had their finely tuned release strategies thrown into disarray by the in-availability of the developer portal.
Being essentially at the mercy of Apple’s whims (or Google’s, for that matter) can’t be a pleasant sensation for a company or individual trying to get a new piece of software out the door. The question that the developer community will have to answer is if the benefits of the App Store model make it worth the hassles, in the long run.
OSCON 2013 Speaker Series
Note: Amy Unruh, Google Cloud Platform Developer Relations, is just one of the many fantastic speakers we have at OSCON this year. If you are interested in attending to check out Amy’s talk or the many other cool sessions, click over to the OSCON website where you can use the discount code OS13PROG to get 20% off your registration fee.
At this year’s Google I/O, we launched the PHP runtime for Google App Engine, part of the Google Cloud Platform. App Engine is a service that lets you build web apps using the same scalable infrastructure that powers many of Google’s own applications. With App Engine, there are no servers to maintain; you just upload your application, and it’s ready to go.
App Engine’s services support and simplify many aspects of app development. One of those services is Task Queues, which lets you easily add asynchronous background processing to your PHP app, and allows you to simultaneously make your applications more responsive, more reliable, and more scalable.
The App Engine Task Queue service allows your application to define tasks, add them to a queue, and then use the queue to process them asynchronously, in the background. App Engine automatically scales processing capacity to match your queue configuration and processing volume. You define a Task by specifying the application-specific URL of a handler for the task, along with (optionally) parameters or a payload for the task, and other settings, then add it to a Task Queue.
Could technology be bringing people closer together?
I had quite an experience at Maker Faire this weekend. So instead of a follow up on Google I/O today I’m going talk about how wearables, specifically Google Glass, seem to be bringing people closer together rather than farther apart. So, more on Google I/O later in the week.
A Tale of Two Events
I first broke out my Google Glass at Google I/O where Glass Explorers and Googlers filled the Moscone West sporting the device. Glass Explorers are those that pre-ordered the I/O last year and winners of the #IfIHadGlass contest. The mood towards Glass at I/O was, generally, split into the have’s and have not’s. Those with them proudly showed them off while others fell into the following camps: carefully measured excitement, cool intrigue, and those who were over it. I think for the most part the subdued reaction was a reflection of attendees wanting to be able to get into the action immediately. It was a shame that Glass wasn’t available for purchase to those at I/O this year.
In stark contrast to that reaction was the response I received from attendees of this past weekend’s Maker Faire. My first inkling of what was ahead were the whispers. I would hear excitedly, “Is that the Google Glass?” which made me smile. However, when I met up with my 11:30 a.m. appointment at his booth and started talking about and sharing the Glass with him and his colleagues a mob quickly formed. Frankly, I got scared for a moment as a mass of people forced inward towards me, and then thought what if someone just takes off with these? But, no one did. These mini-mobs happened to me twice, both times in the Electronics area (not surprisingly). The outcome of these Glass flash mobs, however, was quite simply lovely. Individuals were polite, asked me questions, wanted to take pictures of themselves with it and that was it. Throughout the day people would comment on them, stop me to talk, but it was always a pleasure with people smiling ear to ear when I had them play with the device.
What will wearables really mean to society?
The quick answer for now—who knows? I have to say I was a bit overwhelmed by all of this social engagement. I had anticipated some notice, but this? Now, granted, the attendees of a Maker Faire might skew towards being interested in new gadgets and devices but my experience was unexpected—and wonderful. I talked to more random, happy people at this event than I have in a long while. It has given me a new perspective on recent issues that have come up regarding the Glass, such as invasion of privacy and the idea that we are disconnecting with the world more and more via personal devices, when in fact I was finding just the opposite. Maybe in time everyone will have a Glass or have seen one and it won’t be a big deal. But for now, it is generating interaction and discussion about technology with young and old alike.
Oh, and here you can see what it is like to be attacked by a T-Rex from my POV via the Glass, scary stuff. Click here to see the T-Rex Attack.
This will be the first post in a series on my journey through the world with Glass.
Wal-Mart and Google pursue speedy delivery. Elsewhere, more reasons for retailers to fear smartphones, and mobile may be eBay's best bet.
Wal-Mart wants to crowdsource delivery, while Google chases same-day
On the heels of launching its in-store delivery locker program to compete with Amazon Locker, Wal-Mart has announced it’s toying with the idea of having in-store customers deliver online orders to speed delivery times. Reporting on the news at Reuters, Alistair Barr and Jessica Wohl note that, in essence, Wal-Mart would be experimenting with the growing crowdsourcing trend that works well in so many other areas, so why not for Wal-Mart delivery? They write:
“A plethora of start-ups now help people make money by renting out a spare room, a car, or even a cocktail dress, and Wal-Mart would in effect be inviting people to rent out space in their vehicle and their willingness to deliver packages to others.”
Barr and Wohl mention a few of the “why nots” — numerous legal, regulatory and privacy obstacles — but report that Joel Anderson, chief executive of Walmart.com, believes it to be a viable plan. “This is at the brain-storming stage,” he says, “but it’s possible in a year or two.”
At Bloomberg’s Businessweek, Susan Berfield points to the bigger picture: “Even if the idea never moves past the hypothetical, the fact that Anderson is even talking about it signals how serious a threat Walmart considers Amazon.” Wired’s Laura Heller agrees, noting that though there are “far too many unattractive variables” for this program to become a reality, “it shows the retailer is thinking outside of the box when it comes to competing with its online competition, Amazon.”
Visa looks to make allies with new program; PayPal Here heads to Europe; and showrooming, Google disrupt retail.
Visa looks to kick-start NFC
Visa is taking aim at the NFC mobile payment holy grail. On Friday, the company announced the Visa Ready Partner Program. Leena Rao reports at TechCrunch that the initiative “aims to help mobile device manufacturers, technology partners, mobile network operators, and others gain access to Visa IP, licenses and more,” and that Visa “will make APIs and SDKs available to allow mobile point of sale providers to connect to Visa via payments gateways CyberSource and Authorize.Net.”
Rao says the program will serve as a resource for developers and provide a way for financial institutions and retailers to adopt mobile payments solutions. One of the initial program partners announced is Samsung. Ina Fried reports at All Things Digital that per the agreement, future NFC-enabled Samsung phones “will come with Visa’s [PayWave mobile] applet and pre-certified to work with its payment system.” Fried also reports that Visa mobile chief Bill Gadja said that they’re aiming to “turn upstarts into potential allies rather than rivals” with the program.
“Since wireless carriers in the U.S. still have a say in what features are available on devices and which aren’t, there’s a chance that the Visa PayWave technology may only be available on Samsung devices sold internationally and not on most Samsung smartphones sold in the U.S.”
Reardon uses Google Wallet’s uphill battle as an example of potential obstacles Visa may face, noting that “the three major U.S. operators that have already blocked Google Wallet are investors in a joint venture called ISIS, which is building its own NFC-based mobile wallet.” You can read her full report at CNET.
Google's stores, Best Buy's online price match, Amazon's retail domination strategies, and Square's Business in a Box.
Google takes on brick-and-mortar; Best Buy takes on ecommerce
The Google retail store rumor ignited again this week. Seth Weintraub reported at 9to5Google that “[a]n extremely reliable source has confirmed to us that Google is in the process of building stand-alone retail stores in the U.S.” to be opened in time for the 2013 holiday season. The Wall Street Journal’s Amir Efrati followed with confirmation from “people familiar with the matter,” though one of those people said it wouldn’t happen this year.
Across the board, analysts seem to think it’s a good idea. Alyson Shontell at Business Insider noted that as Google becomes more of a hardware company — with its Android devices, Google Glass, and self-driving cars — analysts say it’s time for Google to work on its brand image, which will require consumer interaction, something the company hasn’t done much of up to this point. Google executives seem to agree — Weintraub reported that retail store plans started to solidify along with plans to offer Google Glass to mainstream consumers. “The leadership thought consumers would need to try Google Glass first hand to make a purchase,” Weintraub wrote. “Without being able to use them first hand, few non-techies would be interested in buying Google’s glasses (which will retail from between $500 to $1,000).”
The same-day delivery battle, NFC in vending machines, and Google as information central for holiday shoppers.
Here are a few stories that caught my attention in the commerce space this week.
The high price of instant gratification
The Wall Street Journal’s Greg Bensinger took a look this week at the e-commerce same-day delivery trend, a service eBay, Wal-Mart and Google have been experimenting with in order to better compete with Amazon, which has offered same-day service in select locations since 2009.
The obvious benefit for e-commerce retailers is being able to improve the customer experience — providing the convenience of online shopping with the instant gratification of brick-and-mortar shopping. The biggest obstacle is cost. EBay, for example, has hired couriers, paying $12.50 per hour and 55 cents per mile, Bensinger reports, but only charges $5 to deliver a minimum $25 order. Industry analyst Kerry Rice told Bensinger, “Retailers are clearly subsidizing this service to improve the customer experience. Amazon created this monster and everyone has had to jump on board to compete.”
Amazon operating at a loss to draw consumers into its ecosystem is pretty par for its business model, and its deep pockets mean companies are going to have to get creative to successfully compete. Wal-Mart is perhaps in the best position not only to compete with Amazon on this front, but perhaps even overtake and lead the same-day delivery field. Walmart.com chief executive Joel Anderson highlighted for Bensinger Wal-Mart’s advantage: “We have 4,000 Wal-Mart stores and local goods within five miles of most customers.” Each store basically serves as an online distribution center, a scale that Amazon could be challenged to meet, even taking into account its aggressive distribution center expansion plans.
In related news, Google reportedly shelled out more than $17 million to buy Canadian locker storage startup BufferBox this week. As many outlets reported, Google may be positioning itself to compete against Amazon’s Locker delivery service, which allows customers to have goods delivered to secure pick-up stations rather than home addresses.