Silicon Shecky

Extra charges for single online pay, 4G outages, the FTC starting to look at their business practices. Verizon, what have you done?

I was going to give a review of the Motorola Droid Razor today, but decided to push that off. See the Razor is available only through Verizon, and I noticed yet the start of another outage of 4G services this morning. Verizon has said these outages are growing pains, and were the 4G network brand new, I would accept that, but it is not. Verizon has had their 4G network up for just over a year, and should know how to handle growth. They were the ones who didn’t have the issues AT&T had with the explosion of smartphones. Of course that was CDMA vs. GSM. Now its LTE vs. LTE, and AT&T might have the advantage.

See both are using the LTE network, which requires the use of a SIM card. AT&T, whose network is still known for poor quality, and lots of drops, at least has a head start in dealing with the issues of a network that requires the SIM cards. I wish I had proof, but it seems that the SIM cards, or at least networks that require them, are not as stable here in the States as a network like CDMA which has no SIM card. (At the time of writing this, the 4G network just came back up after being inaccessible for an hour). It would be interesting to hear from someone on the differences between the two networks and why the ones that need SIM cards seem to be more unreliable.

Now this is on the heels of the FTC announcing it was probing Verizon over the $2 convenience fee it was going to charge and then pulled back on. Verizon’s statement is that even paying online has its costs. And they are right, there is equipment and software costs, maintenance on the systems, and hardening the equipment against hackers and other forms of data breaches. Still the costs are the same, whether for an automated system or if people pay individually. That is, unless they have to use 2 separate systems, or the company that is processing the payments is charging them an extra fee. Either way, there are other options to reduce the cost. If you think about it from a security standpoint though, the single payment, which I use, is a safer bet, not just from people knowing they have the money in their account, but from a security breach standpoint.

Just think about it. If you sign up for Automated payments, Verizon and the third party who processes the payments, both have your bank account or credit card information saved on servers. These servers are supposed to be PCI compliant. Even if they are, PCI compliance is a joke. Think of the banks (all of which have to follow at least PCI compliance) or stores (Which have to be PCI compliant) or anything that does online transactions, and how many breaches we hear of. Now think about how many breaches we don’t hear of, at least not immediately. Now look at single payment options, where you can choose not to save the payment info on their servers. Yes there are still problems that can arise from man in the middle attacks, spoofed SSL certificates, etc.. but once you make that payment, the info is not supposed to be stored anywhere. That means if Verizon, or their third party payment processor, has a security breach, your payment information should not be compromised. In reality it might just me being paranoid, but from a logic standpoint it does seem safer.

Now, Verizon did withdraw the $2 fee idea pretty quick, but expect to see it show back up again and again. The bigger thing Verizon has to worry about right now is the amount of bad press they are receiving. They need to remember that pissing one customer off means that customer is going to tell their friends and family, and eventually it can and will take a toll on business.

So Microsoft is declaring this year, yet again, the year of cloud computing. I’m going to a meeting with a different partner on cloud computing. You hear that cloud computing is the wave of the future and can save SMBs money. while all that might be true based on a cost per on site server and maintenance versus cost of having a hosted solution, there are reasons why cloud computing hasn’t quite taken off the way everyone figures it will.

The biggest issue with hosted solutions, otherwise known as cloud computing, can be summarize in one word, bandwith. From experience with my clients, they get a T1 line, a business class cable line, or some other line that at best offers them maybe 3MB upstream and 6MB downstream. Most use T1′s which is only 1.5MB up and down stream. Heck I have clients that constantly complain about their speed, and yet are not willing to pay more than the $500-$1000 that they are already paying for Internet access. Some have remote locations where a user or two sits, and then complains about load times (even when they are just going into a terminal server) because of lack of bandwith.

Now, you take an average SMB office and the people in it. for a 5person office, you have e-mail, documents, maybe some web sites they need to connect to. Now add on the family type atmosphere that allows, music streaming, YouTube, and all sorts of other fun stuff that can eat up bandwith. All of a sudden that T1 is filled. Now if you try to move that server up to the cloud, you hit more traffic that needs to go up and down that 1.5MB pipe. Talk about lag city.

Unfortunately, we are a culture where T1 is fast has been ingrained in our brains. My home Internet has 1.5MB upstream but is 18MB downstream. Yeah, that’s 12 times as fast. People who have Verizon’s FIOS can get 50-100MB up and down. A T1 line now compared to what one can get for their house for way less, is like a 36K modem compared to a T1 10 years ago. The pricing for a T1 is way out of whack with the times, and faster speeds for business become cost prohibitive. The slow upgrade of the ISPs to a full cost effective fiber solution is the biggest barrier to point of entry for cloud computing.

The day will come when bandwith will be affordable enough that cloud computing will take off. That day though, is not here yet.