Small Ideas

Finding the next big idea by exploring small ones – by Rishi Khaitan

Archive for the ‘cloud computing’ tag

OnLive Launching June 17th

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OnLive is one of the most exciting startup launches of 2010. Why? Well, OnLive is trying to disrupt the video game industry. Here’s a description of OnLive from their recent blog post announcing the launch:

OnLive fundamentally transforms the way users experience games and interact with each other, and in time, will transform the way games are developed and marketed. By distilling specialized game hardware out of the equation, OnLive will allow games to be played as a pure media experience on virtually any device, with the same flexibility and instant-play experience that we’ve come to expect from online video and music.

You might be thinking that any company description which has the word “transform” twice in the first sentence is likely BS. So, for a more in-depth, tangible description and demo of OnLIve, I would HIGHLY recommend you watch this presentation by CEO Steve Perlman (Quicktime, WebTV) from the 2010 Dice Summit:

Game TrailersE3 2010

Even if you aren’t interested in the video gaming industry nor OnLIve, the first few minutes of Steve’s talk is very interesting. He basically runs through the evolution of media consumption. One interesting stat that’s really stuck in my head is that torrent traffic, while still representing a huge (think 50%) chunk of total internet bandwidth worldwide, actually peaked last year and is now on the decline! Steve says it’s largely because people are growing impatient. They want their media now and thus are preferring streaming/on-demand experiences.

Since their first emergence out of stealth mode at GDC ’09, the chatter about OnLive seems to be slowly shifting past “wait, does this thing actually work?” to “great, so how much will this cost?”. And it is indeed the pricing issue that is one of the most intriguing aspects about OnLive. Well, as of last week’s announcement at GDC ’10, we have the answer..at least part of it.

OnLive will charge a monthly fee of $14.95 for access to the service. This does include access to game demos and other media bits (think PSN or XBox Live), however, this does not include any actual games. Access to games will be available for rent or for sale on an a la carte basis.

So, let’s run some quick numbers:

OnLive costs 14.95/month x 12 months/year – 10% multi-month discount = $160/year

Gamefly costs $16/mo (1 game at a time) x 12 months/year = $200/year

A PS3 costs $300 and let’s say at this point has a 4 year lifetime so amortized is $75/year

So how much will games be on OnLive?  If you take a look at about the 34:30 minute mark in the above video, Perlman shows a graph of which players in the value chain get what margin of a $60 video game. In that graph, the publisher gets around $27. Perlman contrasts this with the OnLive model where his graph appears to show that OnLive is offering about a 70% publisher /30% OnLive split to developers. At that split, OnLive needs to charge about $40 per game for publishers to make at least $27/game sold. (It’s probably also worth noting that publishers also win because that game, because it’s digitally delivered, cannot be resold on the used game market nor can be pirated.)

So, let’s see..

Scenario A: Consumer owns PS3 and rents 1 game/month. Using PS3 + Gamefly that will cost 75+200=275/year. Using OnLive that would be 160+rentalpricex12. Do some simple math and rentalprice needs to be about $10 to equal the PS3+Gamefly scenario.

Scenario B: Consumer owns PS3 and buys 4 games/year (assume $60/ea). Cost of that is 75+60×4= $315. Using OnLive that in my estimate would be 160+45×4 = $340. To make the prices comparable the game purchase price on OnLive would need to be under $40.

Of course I haven’t discussed other advantages to the consumer such as being able to play any game regardless of platform. On the other hand, for gamers that already own a current-gen console, the cost of the console is a sunk cost and thus the argument for OnLive becomes more difficult. A pricing scheme that is interesting to think about is usage-based. In other words, gamers are charged per hour that they play any given game. However, I can imagine that might be a tough sell to publishers because, let’s face it, they are capturing a lot of consumer surplus from gamers who buy a game and never end up playing it much or at all.

Finally, though, OnLive does more than just enable streaming gaming. It adds a social dimension to gameplay that PSN/XboxLive haven’t fully been able to do. One example is brag clips (highlighted in the video above). I look forward to checking out the OnLive SDK to see what types of functionality game developers may be able to leverage.

To signup for a free 3-month launch membership to OnLive, signup here.  Whether OnLive is a success or not, the OnLive service represents a major milestone for all media.  OnLive proves that even the most complex media experiences (HD online multiplayer video gaming) can be delivered via a stream.  We all knew that the the disc was dead.  Well now it looks like the download is also dead.

Written by Rishi Khaitan

March 13th, 2010 at 8:46 pm

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Google is doing fine, just too overhyped

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Google Spreadsheets
Yesterday, Google announced a limited availability of their new web-based spreadsheet application aptly named Google Spreadsheets. Is it nicely-designed and does it deliver basic spreadsheet functionality? Absolutely. Is this the first web-based spreadsheet application? No. Is this the best web-based spreadsheet application? Possibly. Is this going to disrupt the MS Excel-dominated spreadsheet market? Not anytime soon. Let’s face it folks, barring some special circumstances, I can’t think of anyone who would prefer to use a web-based application instead of a locally-installed application. While Web UI technologies have improved to the point where a web-based spreadsheet is feasible, it still pales in comparison to the rich UI libraries available in any modern OS.

So does this mean that Google has failed? Not at all. Every large R&D organization has tons of development projects going on at any given time. However, in just about every other industry, the majority of those projects never see the light of day. Many projects are done just to gain internal expertise, others are skunkwork projects that never had a clear market driver, and other projects are simply cut by management for all kinds of reasons. The unique thing about the web software industry is that the cost of manufacturing is nil. If you have a piece of software, you can basically flip a switch and it’s live to the public. Google probably knows full well that many of its projects aren’t revolutionary in their present form, but there is little reason not to make it publicly available. Part of the research and design process is receiving feedback and I think that’s what Google Labs is all about. Kind of like “here’s a cool project some of us (engineers) have been hacking at…we wanna see what you think and how you guys use it”.

The problem which Google runs into is that they’ve built a brand like no other. A brand that screams innovation. Because of this brand, people expect awesomely innovative products from Google. Those of us in the tech community who follow the bleeding edge of innovation are often less than satisfied with the innovation we see from Google.

As I say time and time again, I think a lot of people in the community need to get a breath of fresh air – from outside the Silicon Valley bubble – and realize that a simple web-based spreadsheet from Google is not going to challenge Microsoft in any meaningful way for a long, long time.

Some bloggers have commented that this lack of innovation is starting to hurt Google’s brand and reputation for innovation. I don’t really think so. If you were to demo Google Spreadsheets to the average Web user, they’re likely to be wowed and comment on Google’s brilliance. However, it’s also a safe bet that they’ll still use Excel the next time they need a spreadsheet.

Note: I’m not anti web-apps. I think they will be very much be a part of computing within the next 5-10 years. Read some of my vision

Written by Rishi

June 7th, 2006 at 4:05 am

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The Lifetop: My vision for the future of personal computing

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I didn’t get the laptop of my dreams for my birthday a couple weeks ago. Why you ask? The answer is simple. It doesn’t exist yet. In fact, what I want – if it is to ever be produced – may not even really be called a “laptop”. I think I’ll call it a “lifetop”, short for lifestyle laptop. The purpose of the lifetop is to be a device for performing the simple, everyday computing tasks that you and I do in our daily lives. Tasks such as browsing the web, e-mail, RSS reading, text/voice/video messaging, and light desktop publishing. It does rely on the constant availability of a broadband connection. The lifetop is also not designed for intensive tasks like gaming, searching for extra-terrestial life, nor for mission critical work. However, I will emphasize again that this is a serious computing device. (Note that this is starkly different than, say, Microsoft’s recent unveiling of their Ultra Mobile PC, code-named Origami, which might be best described as the big brother to a Windows Mobile PDA)

Okay. So now that I have described what the lifetop can and cannot be used for, let me jump into an overview of exactly I envision it to be.

First and foremost, the purpose of the lifetop stems from its utter simplicity. After all, every day our digital lives are becoming more and more complicated. As fast access to information is becoming all but ubiquitous, our brains are being bombarded with constant streams of data. The last thing we want or need is our computing devices dictating our digital lives. The role of computers is only to provide us humans with effective, reliable, and secure means to access and manipulate the information in our lives. Nothing more. And this is where the typical PC fails. Why should you have to wait even a minute for your laptop to “wake up” so you can check your e-mail? Why should you have to waste time troubleshooting why there’s no sound coming out of your speakers? Why should you have to worry about whether you’re going to be a victim to the latest nasty virus? The answer is you shouldn’t. But, right now, you are.

Highlights:

Physical Design: Thin. Since there’s no hard disk or optical drive and not much requirement for air flow, the device can be absurdly thin. Combine that with the latest-generation LED-backlit LCD panels which are substantially thinner and I can’t see why a ¼” to ½” thickness wouldn’t be possible without trying very hard. Light. Less than 2lb. The only main source of weight is the case and the battery. The case can be made out of a carbon composite and the battery can be small because the power consumption of the device is very low. Durable. Because there are no moving parts and its light-weight, the lifteop can be handled roughly without worry.

OS: This is what really makes the lifetop. What I envision is a browser-centric UI. It’s not so much that the browser is the only application. Instead, it’s more like the browser is the OS. You press the power button and within a second or two you see a browser. Since the browser is the focal point of the UI, many of the UI elements that normally clutter up one’s screen are nonexistent. No taskbars and browser buttons (such as back, forward, stop) are conveniently located on the keyboard. So why a web browser?

The direction of software is towards being Web-based. Actually I don’t really want to say Web-based. What does Web-based really mean anyways? I mean yes a sophisticated AJAX application which provides a near-native feel is still a Web-based application in the sense that the UI is still delivered via HTML and currently that means you access it via a Web browser. But I like to think of it as rich terminal computing. If that makes sense.

The reality is that more and more of our computing tasks happen online. Think back 10 years. All computing tasks were done via local software installed on your PC. Nowdays, that’s changing very fast. The first big example was webmail. Already, in the latter half of this year we’ve seen the launch of several bonafide Web-based applications: Writely (word processing), NumSum (spreadsheet), Meebo (IM), I have to believe that we’re really just scraping the surface of what’s possible (ok uh that sounded eerily like Bill Gates in that Nasdaq commercial a few years back…I digress). Some people talk like the future is online Office. I’m not sure that’s necessarily the direction. Again, the lifetop, and the web-based applications that it will be used for, are meant for light-computing tasks. Writely has maybe 10% of the functionality in Word. It’s sufficient for 80+% of the users out there, and probably 99% of home users. However, it’s intent is not send Word into oblivion. Anyways, it seems like just about any software you want, there is a web-based equivalent that is under development whether it’s word processing, photo editing, or project management. So why deal with software license fees, install/uninstall hassles, crashes, etc?

The entire OS resides on the only permanent storage mechanism that the lifetop would have, which is a 1GB Flash ROM. A compact Linux kernel would be a good choice. There are standard releases of the OS which are automatically delivered like a 1-click firmware update. There are fixed revisions and the files in the OS are 100% read-only. At no point can any user operation make any modifications. No configuration files stored locally. And certainly no registry. Because the OS is small and stored on fast flash memory, loading is lightning quick.

Storage: There is none. Well, let’s say you have an SD card slot. The point though is that no user software nor user files are stored on the lifetop itself. Instead, they are stored on online file systems like Amazon’s recently announced S3 or Openomy. Storing files locally on your PC is inconvenient and really almost irresponsible. There’s so many ways you can incur data loss. It’s almost absurd that the average user needs to worry about whether his files are going to be intact the next time he needs them. Furthermore, online storage means access from anywhere. With the advent of online storage systems with full API’s, Web-based apps will surely be offering users the ability to store the files using them.

Multimedia: Since there is no local storage, the lifetop relies exclusively on streamed media. Which is fine because the lifetop essentially relies on a broadband connection. Streaming music has been around for what seems like ages now and video has arrived as well. Right now, streaming video generally means YouTube which is lo-def 320×240 400kbps. Soon, we’ll have DVD-quality 1500kbps XVid or maybe H.264 streams. Moreover, with software like Orb, you can easily stream media from any PC. So, if you’ve got massive music and movie collections from torrents you downloaded over the years, you can easily stream it, even over the web.

Ports/Interfaces: Ethernet to connect to LAN. 802.11 for WLAN. Bluetooth for communicating/sync’ing with your other lifestyle devices such as your phone, PDA, PC, and in some cases your car! Also it would support a Bluetooth remote. A remote for what you ask? Well, there’s a DVI out and typical audio in/out for hooking up to an a/v system for the purpose of home theater or presentations. Maybe even offer a nice little dock for this purpose. Another possibility is EVDO for broadband cellular access. There are no USB2.0 or FireWire ports since the lifetop will not support any third-party peripherals. Remember, we’re keeping things simple so no excess drivers or software to screw things up.

Price: Because the lifetop is light on hardware and doesn’t need expensive software licenses, it can and must be priced cheaply. I’m thinking $300-400 is the target. In the beginning, it would be marketed as a luxury device because for various reasons it would not be ready to be a primary computing device for low-cost users. However, as time passes, I could definitely see it taking large chunks of the home computing market.

So who’s going to build this lifetop? Well, remarkably, on the software side, I don’t think building at least a first iteration would be too difficult. Assuming you stick with a very low speed Pentium M processor, you could grab your basic x86 Linux kernel. Build some custom drivers and updating tools, add a customized version of Firefox and you should be ready to go. You would then need a nice AJAX desktop application (one can likely be acquired for relatively cheap since there’s about 10 companies which have relatively similar offerings). On the hardware side, the components are generally off-the-shelf stuff. You would need some snazzy designers to cook up a slick design for the device.

The real question is who has the marketing muscle to push such a revolutionary device. What the lifetop aims to do is nothing less than change the face of personal computing. Even if it is a great idea, you got to convince consumers to ditch their current PC’s, laptops, software, etc. that they paid good money for. Not only that, you’re asking users to leave their computing comfort zone. The one computing company that always seems to understand what people want and make it cool is Apple. However, Apple would be cannibalizing their own home-PC business (both hardware and software) so it wouldn’t be a realistic move for them. Sun is a big proponent of thin-client computing but they don’t know much about the consumer market. Motorola…hmmm…maybe. Nah. I think the best candidates would be the consumer electronics giants like Sony and Samsung. They have the money to influence markets, they understand the simplicity that people expect from their expertise in consumer electronics, they already know how to build portable computers and they have the brand image.

With the advent of Internet-based computing, The lifetop will be an amazingly simple, flexible and powerful device which will meet the needs of just about everyone. For light-computing consumers, the lifetop will be an absolute godsend and will be their primary computing device. For heavy-computing users, it’s the perfect device for when you’re not working on your primary computing rig. Best of all, though, it will be the cheapest, most reliable, serious computing device I will have ever used.

Written by Rishi

March 21st, 2006 at 4:39 am