What Is the “Race to Zero” and Why Does It Make Tech Companies Nervous?
Cloud computing has completely changed the tech industry, but it has a dark side for the companies competing in the market, something those in the industry call “the race to zero.” There’s so much competition in the cloud industry that cloud companies keep cutting their prices, even while they increase their storage limits.
There are a couple of reasons for this. For one, computer storage keeps getting cheaper. A gigabyte’s worth of storage on a hard drive in 1993 cost more than $9,000, but it cost a mere 4 cents in 2013. But you can really thank Amazon for making sure that cloud computing companies pass those savings along to customers. As its costs drop, Amazon cuts its prices for its cloud. Amazon Web Service had 44 price cuts in about the past six years, it says, thanks to a culture of “frugality.” Amazon is increasing revenue by gaining more customers and adding ever more services for which the customers are willing to pay, even though those customers pay less for each as time goes on. The company is treating computer services like a retail store. You are more likely to stock up your cart with more stuff if you are getting a bargain on every item you buy.
Microsoft and Google have vowed to keep matching Amazon’s prices while beefing up their selection of services. And that means the whole cloud industry has to cut prices as time goes on, not raise them. Aaron Levie, CEO of the cloud storage company Box, just told the Information, “We see a future where storage is free and infinite.”
That’s great news for those of us with a growing stash of documents, photos, and smartphone videos. But it also means that companies like Box, Dropbox, Google, Microsoft, HP, IBM, and others have to come up with unique cloud services that people are willing to pay for.
For instance, Microsoft and Google have put Office apps in the cloud, and they toss in the cloud storage as part of that. Box, which still hopes to go public one day, is doing a similar sort of thing. It offers extra security around files, something enterprises are willing to pay for to make sure they comply with all laws. Box is also building other applications, things like a project management app. That’s like a GitHub for documents, where all the files for the same project live in one place and people can collaborate, or a sales portal that lets salespeople see which customer has been given which bit of marketing materials.
Meanwhile, every new company in the cloud computing war is looking for ways to offer special services beyond renting apps or storing files. When Cisco announced it would spend $1 billion on the cloud last summer, the executive leading the project, Nick Earle, was quick to declare, “Our strategy is not to follow AWS on the race to zero.” All the big players have declared much the same thing as they’ve spent billions on their clouds: IBM, HP, Oracle.
But when push comes to shove, the price war is on, and Amazon is determined to keep it on.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
This Is What Happens When You Eat Olive Garden for 7 Weeks Straight
Olive Garden’s “Never Ending Pasta Pass” is about to expire. For $100, the pass offers 49 straight days of unlimited pasta, breadsticks, salad, and Coca-Cola beverages. Olive Garden sold only 1,000 passes, which all expire Nov. 9.
John Greenough, a research analyst for Business Insider Intelligence, was one of the 1,000 Pasta Pass holders. We asked him about what it was like having access to free Olive Garden every day for the past seven weeks. At the beginning of the promotion, Greenough said he had planned to take full advantage of the pass and go to Olive Garden every day. But the salty pasta has gotten the best of him.
“I ate there, I think, 20 of the first 25 days, but stopped for a week because I started to get horrible canker sores from all the salt in the pasta,” he said. (According to the Mayo Clinic, the exact cause of canker sores is unclear, although triggers can include highly acidic certain foods like tomato sauce.) “Since then, I’ve gone sparingly because I felt really unhealthy from the pasta,” Greenough said.
He said he has typically ordered take-out and found the service slow and unreliable.
“The take-out experience was horrific,” he said. “Some days I had to wait 45 minutes to an hour to get the pasta. They had no real system in place for the take-out and would often get confused. It was really bad in the beginning, but kind of got better over time.”
Overall, the best part of the deal has been the savings, he said.
Greenough estimates that he has eaten at Olive Garden nearly 30 days so far, saving him about $500 in total, when accounting for the $100 he paid for the pass.
He said he has typically eaten the pasta for dinner and saved the salad for lunch the following day. He calculated the savings by estimating that he’s spent about $20 a day on those meals.
Calculated another way, Greenough has saved about $9.99 every day that he has eaten Olive Garden, since the company is running its $9.99 “Unlimited Pasta Bowl” promotion at the same time as the Pasta Pass offer.
Greenough said the most disappointing part of the promotion has been the food.
The worst part was the pasta and how bad I felt after eating it so much,” he said. “I ate a variety of the different pastas and sauces but overall would give the pasta a 5 out of 10 and 3 out of 10 for New York City standards. The pasta always came with the sauce just plopped on top. It was never mixed in and was unappetizing to look at.”
Asked whether he planned to return to Olive Garden in the future once the promotion ends, he said simply, “No.”
Chart: What Stocks Did Last Time the GOP Took Congress with a Sitting Democratic President
Tuesday was Election Day in America.
The historical stats show that stocks usually rally in the months following a midterm election.
Now we know that the GOP has taken the Senate, while President Obama is, of course, a Democrat. Would this make things particularly bad? Some would argue that gridlock can actually be bullish for the stock market.
UBS’ Julian Emanuel considers the recent history. “Gingrich and the 'Republican Revolution' steamroll Clinton & Co. in 1994’s midterms,” Emanuel wrote on Monday, referring to former House Speaker Newt Gingrich. "Markets pause, hesitate, then begin a bull run in 1995.
“History doesn’t usually repeat, but it often rhymes.”
Why Cats Are So Drawn to Boxes
The video originally appeared in Business Insider.
Dr. Stephen Zawistowski of the ASPCA explains why cats can't resist boxes.
Follow Business Insider Video on YouTube and watch more videos: They've Finally Figured Out If Caffeine Before A Workout Is A Good Idea
London’s 2.4 Billion Bus Journeys, Visualized in Maps
In 2013, Londoners took 2.4 billion bus journeys. They were prescribed 116 million items by doctors, and found themselves joined by more than 1,750,000 American tourists.
Meanwhile, in one small, financial corner of the capital, the population, in every 24-hour period of the year, spiked from 222 residents to more than 127,000. These staggering statistics are the work of geographer James Cheshire and visual artist Oliver Uberti, who have merged to create a new series of maps depicting London as "the most data-heavy capital in the world."
The maps and infographics are as diverse as the information they cover—highlighting, for example, the 2,580 mobile phones left in a single year at Heathrow Airport, and charting the 1.1 million phone calls the emergency services took in 2013. Approximately 32,500 of them, by the way, came from incapacitated binge drinkers.
In "There is order and beauty in the chaos of your commute," Cheshire and Uberti capture London's commuting routes using data from Oyster travel cards logged by University College London. Tracking the likes of train journeys and taxi fares and digitalizing their movements, they arc to form a colorful algorithm of details.
"Almost every journey taken in London leaves a digital trace in its wake," explain Cheshire and Uberti on their website. "It may be hard to appreciate as you squeeze onto a Tube or bus in the morning, but you are one of millions adding to the beauty of the currents captured."
In "Generation rent," the graph on the left shows the change in median monthly rent prices from January 2013 to April 2014. On the right, there's a visualization of the cost increase for two-bedroom apartments along the Tube's Central line, with inner stations costing far more than their suburban neighbours.
It's one of 100 new maps and graphics in the pair's new book, London: The Information Capital, and Cheshire admits referring to London as such is a bold claim.
On his website, he explains: "We think it is justified for two reasons: London not only generates a huge volume of data, it shares an unprecedented amount with its citizens to use as they wish.
"Open data initiatives exist in other cities, not least in Europe and North America, but what gives London an information edge is the belief that data can not only record social change but also instigate it."
"Lost and found," seen below, looks at all the items lost at Heathrow Airport in 2013. In the 12 months, 1,060 wallets were misplaced, alongside 5,090 computers, tablets, and electronics, and 650 sets of keys.
Traveling through Heathrow Airport is Uberti, an American with a passion for London's availability of data and information.
He says on his site: "As an American, I couldn’t believe how much government data was publicly available and how easy it was to access it online."
Uberti and Cheshire used Google Hangouts to discuss the project and see it in motion; together inspired by questions about London and finding out what makes it tick.
The UK capital is a very diverse city. In fact, three million of its 8.2 million citizens come from overseas. Below, "Twitter ink" highlights tweets by home country and projects Twitter users from places such as Kuwait, Turkey, and Italy.
Cheshire used data analysis in open source software to find his statistics, while many of Uberti's images started life as hand-drawn sketches. Numerous Freedom of Information Requests and compiled information nestles alongside artistic experimentation and creativity.
This chart features the top 20 nations by spending, per visitor, in 2012. The US, by far, had the most tourists—but it was Saudi Arabia, right down at the bottom, whose citizens spent most. Each individual parted with thousands.
“Blended Reality” Is the Next Tech Buzzword, and HP Is Ready
You’ve probably heard of “virtual reality.” That’s what you get when you put on an Oculus Rift headset and feel like you’ve entered a completely new world.
Maybe you’ve heard of “augmented reality.” That’s what you get when you put on Google Glass and it projects Google-y facts or images on the world. Or you run an app like Star Chart on your smartphone, hold it up to the sky, and it superimposes the constellations on your view of the sky.
Surely you’ve heard of real reality, the stuff that happens when you aren’t sleeping. But a few days ago, with the introduction of HP's jaw-dropping new Sprout PC, something called “blended reality” has arrived. The Sprout PC replaces a keyboard and mouse with touchscreen, scanner, and other features that let you take actual objects and easily “put” them into your PC. For instance, you can set an object on a computer pad, and it scans a 3-D image of it into your machines.
But the real magic happens when you take the Sprout PC (available next week, Nov. 10) and combine it with a 3-D printer, a device that instantly manufacturers things, as easily as printing a document.
HP also announced a new 3-D printer (expected 2016), that could be a breakthrough in 3-D printing, able to use a wider variety of materials at a lower cost than current printers. If HP’s plans for it pan out, it could put 3-D printing into the hands of every business and home. (First up, HP has a plan to put 3-D printers into places where people can share them, along the lines of a FedEx Kinko’s, as Recode’s Arik Hesseldahl describes the plan.)
Put the Sprout and 3-D printer together and you’ll be able make actual objects move in and out of your computer with a swish of your hands. For instance, you scan an object, make changes to it, hit print, and in a few minutes, you get the real life thingamabob you just dreamed up. But that could be just the first step for “blended reality,” just like a Fitbit or Pebble smartwatch is a first step in the wearable computer market.
“Blended reality” is a term used five years ago by futurist think tank Institute for the Future. The IFTF envisioned it as a sort of tech-enabled sixth sense, which will be worn or maybe even implanted into our bodies and interface with our computers. “We are literally beginning to see and feel the world through a new set of eyes and ears—things that were previously invisible become visible, and we see the familiar in a new way,” as the IFTF describes it. For instance, with blended reality glasses, you can add a “good mood” filter to keep you happy.
Here’s how the IFTF imagined blended reality back in 2009.
And if you really want to understand where all of this might be going, read Kim Stanley Robinson’s 2012 sci-fi bestseller 2312. It describes a mind-blowing world 300 years in the future based on technologies being developed today. You won’t be able to forget it.
See also: Meg Whitman Is Breaking Up HP Labs
Apple Has Forced a Huge Change at Samsung, and Its New Phones Prove It
The end of the war was dramatic, although it was months coming: Samsung reported a staggering 20 percent drop in sales and an even worse 49 percent collapse in its profits because its flagship Galaxy S5 phone saw big declines in the latest quarter.
The reason: Consumers held off buying them ahead of the launch of Apple's iPhone 6 and iPhone 6 Plus phones in September in big-screen sizes that competed directly with the Galaxy S5 and the Galaxy Note 3 and 4, Samsung's other giant-size high-end models, the Financial Times says.
Now, Samsung has made a major shift.
And the price is key: Samsung is basically saying it suddenly got a lot harder to compete against the iPhone on high-end prices with top-flight models, so it must compete instead against cheaper low-end Android manufacturers like China's Xiaomi by offering quality devices at reasonable prices.
It might be good business, but it must be painful for Samsung.
Employees are probably delighted over at Apple, too.
For years, Apple stayed away from the big-screen phone category, apparently in the belief—as founder Steve Jobs once said—that Apple's small 3.5-inch and 4-inch iPhones were just the right size for consumers because they could use them with one hand.
That was Apple's big mistake: Consumers did want big phones, and Apple basically ceded two years or more of big-screen sales to Samsung.
In 2013, Apple finally realized that big screens were driving growth in phone sales. And in September this year it launched two phones to address that. That move appears to have killed off much of the demand for Samsung's big phones.
Samsung execs acknowledged it on their earnings call, per the Financial Times:
'Our high-end smartphone sales result was somewhat weak,' Kim Hyun-joon, a senior executive at the IT & mobile division, told analysts on a conference call.
Samsung's problem now is that it is being squeezed in the middle.
The company has a huge range of cheap, low-end Android phones that yield big sales (as free wireless contract upgrade phones, for instance) but small profit margins. Chinese Android manufacturers have been gutting that business by making super-cheap Androids that are actually nicely designed and quite good. Xiaomi is probably the most fascinating phone company on the planet right now, with its unbelievably cheap Androids that have superior design.
Western consumers will be shocked to know that Xiaomi is now the third-largest phone manufacturer by shipment volume worldwide—and it hasn't even started selling phones in the West!
Xiaomi stole Samsung's low-end business, in other words, while Samsung was trying to solidify its lead as the high-end big screen leader.
Now it looks as if the market is moving away from Samsung in the high-end war with Apple. It will probably continue to supply its flagship Galaxy S5 and Note 4 phones. (They're great phones by the way; I've tried them both and prefer them to iPhone.)
But Samsung's new fight must now be based on price and quality in the Android market, not the iPhone market.
Microsoft Employees Are “Worn Out” Over So Much Change
As news broke on Wednesday that part three of Microsoft's huge multi-phase layoffs had occurred, employees at the company are having mixed feelings.
Not surprisingly, all this change "wears on" a lot of Microsoft's employees, said a former employee who left the company shortly before the big layoff was officially announced in July.
Remember even before it was announced, employees spent months waiting for news of a layoff as a consequence of the company's $7.2 billion, 25,000-employee acquisition of Nokia.
But it's not really the layoffs per se dragging employees down.
"Constant change is not healthy when have an organization of over 100,000 people," our source explained.
"There's a whole set of people that can't deal with that constant change and at Microsoft there has definitely been a lot to deal with. Remember right before Ballmer left, he announced a bunch of stuff, the One Microsoft strategy, the Nokia acquisition. He had a plan that was to take us through the next few years," the source added.
This employee describes Nadella as "awesome" but said that he's now "putting his own plan in place and when you have these transitions and they keep continuing, that sort of thing wears on a lot of people."
And this isn't just about if they will keep their job or not. It's also about if the projects they care most about will continue or be cancelled and if their teams and co-workers will change. Most importantly, it's about if they feel their work will be important both to the company and the world.
On the other hand, other employees, particularly long-term folks are kind of happy with all this change. Some people feel that "change is good, particularly change that takes you in the right direction," this source said.
And right now, it does look like there is a "new" Microsoft going in a better direction. Nadella is striking up partnerships with its former rivals, changing the way products are built, and trying to overhaul the corporate culture.
Competitor-turned-new-partner Salesforce.com CEO Marc Benioff says he's delighted and shocked by the changes.
Although CEO Satya Nadella still has to prove he can make a new direction work, he is starting to better articulate it.
He says Microsoft's goal is to "reinvent productivity." That means creating new software and cloud services that work across any mobile device, as well the PC and in the living room.
He's defining "productivity" loosely as stuff we accomplish at home and at work. So it's a little hazy as to what our lives will look like once Microsoft reinvents it for us.
Some new products in this theme are starting to trickle out.
One example is a new tool for Office 365 called "Delve" which sifts through our inboxes and documents hoping to showcase the stuff we really need to see.
But the bottom line is that the company is changing, and for many people change is scary.
Microsoft had no comment.
All of Facebook’s Revenue Growth Is Coming From Mobile Ads
Facebook reported earnings for its fiscal third quarter of 2014 on Tuesday. Revenue and earnings per share were slightly above Wall Street's expectations—it reported $3.2 billion in total revenue and $2.96 billion in ad revenue, a 64 percent increase from the year-ago quarter—but other metrics like monthly active users fell right in line.
Based on company data charted for us by BI Intelligence, most of Facebook's revenue growth is coming from mobile advertising and payments. Non-mobile revenue and revenue from payments and fees like in-app purchases through Facebook continue to remain consistent, but mobile revenue has exploded since 2012, as it now makes up roughly 66 percent of Facebook's total revenue.
See also: Why People Are Leaving Facebook for Ello
Can You Really Assemble Ikea’s New Furniture in Five Minutes?
This video originally appeared on Business Insider.
Ikea recently unveiled a new line of furniture called Regissör. The company claims it takes less than five minutes to assemble, and they even released a video showing someone putting together a bookcase in 3½ minutes.
Additional camera by Justin Gmoser.