All companies, from one-person proprietorship to those employing hundreds of thousands of people, established firms or start-ups, are equally struggling in these trying times. One can surely, and perhaps effectively argue about the impact which may vary on a case to case basis, however generally speaking, the newer a company, the bigger the battle in front of it.

Startups are going through a tough time during this pandemic situation. India has the third highest number of startups next to U.S. and China. Quite obviously, the country is highly affected by the downturn of startups. Especially, during a time when the government has placed more emphasis in the development of startups for economic growth. But the Covid pandemic seem to thwart the plans of Government to nurture more startups for their economic growth. During this pandemic crisis, it is reported that most startups have failed, and only a few seem to be in the curve of progression.

Covid hampers Startups

Covid has had a devastating impact on almost every business in the world. The most affected industries include travel, hospitality and education among others. The social distancing behavior has restricted people from attending offices. These issues have caused the businesses to struggle in running their day to day operations. In many cases it is reported that the work productivity has been highly hit during the pandemic.

Although, many firms are managing through remote work, the effectiveness in terms of productivity, communication and collaborative work is a big question. Apart from it, many businesses are disrupted and new opportunities seem to arise. Experts estimate that the impact of Covid is believed to last for many months, and we can expect a recession hit economy for the next several years.

As per a nationwide survey on the ‘Impact of COVID-19 on Indian Start-ups’ conducted by Federation of Indian Chambers of Commerce and Industry (FICCI), jointly with the Indian Angel Network (IAN) with 250 start-ups, 70% of start-ups stated that their businesses have impacted by Covid-19. About 12% of the start-ups have shut operations and 60% are operating with disruptions.

The survey depicts that only 22% of the start-ups have cash reserves to meet the fixed cost expenses of their companies over the next 3-6 months.

The findings show that 68% of the start-ups are majorly cutting down their operational and administrative expenses.

Close to 30% of the companies stated that they will lay off employees if the lockdown was extended too long.

About 43% of the start-ups have already started salary cuts in the range of 20-40% over the period of April-June 2020.

On the investment front, 33% start-ups said that the investors have put the investment decision on hold and 10% stated that the deals have been called off.

Fragile nature of startups makes things worse

Startups in general are very fragile considering the constraints they operate in. Many startups may have very little funding to bootstrap their process. We understand how hard it takes for a startup to be successful under normal circumstances. Finding the right product fit for the market and acquiring customers are among the factors that determine the success and growth of a startup. The Corona pandemic makes it difficult for startups, since the world undergoes unpredictable changes and business is hard to get. The startups need more incubation and support during their initial years to be more productive in the future. These factors that make startups more fragile in nature make them vulnerable and difficult to survive.

In this Corona pandemic situation, the startup firms are affected badly. It is believed that about 90% of the startups have failed in India. There is another report that the startups have cash reserves to last only for the next 3 months. These are bad news for the startups in our economy. The fragile nature of startups and the inexperience of entrepreneurs can very well be the cause for such failures.

A quarter of India’s startups would be in serious trouble if adverse consequences of the COVID-19 pandemic persist for long, according to information technology industry veteran Senapathy (Kris) Gopalakrishnan.  “There will be more failures, unless they get additional funding from existing investors or support from banks on working capital or support from government for some form of debt or grants. We will see more companies get hurt as this prolongs,” said the Chairman of early stage startup accelerator and venture fund, Axilor Ventures.

A comparison of priority investment sectors pre and during COVID-19 shows that 35% of the investors are now looking at investments in healthcare start-ups, followed by EdTech, AI/Deep Tech, FinTech and Agri. Meanwhile, 44% of the incubators surveyed highlighted that their day-to-day operations have been considerably impacted by the COVID-19.

How should startups respond to the Corona crisis

However, there is a silver-lining amidst all the gloom of Corona pandemic. We will take a look at some of the brave startups who have looked up-to new opportunities for growth. Indian startups have ground-breaking ideas and are hard-working people, and success is just around the corner. A few startups are adapting to the present situation and meeting the needs of current market conditions. These are certain aspects that can help startups to survive during the pandemic.

New Opportunities Arise amidst Corona

It is time for startups to look beyond the ordinary to be successful. Relying on traditional mode of business may not yield good results. That may be the reason for failure of many startups. Successful startups have capitalized on the new opportunities that are presenting itself in the society. To make this understand better, people are looking for safety during this time, and providing ways for safe products and services can help startups to stay afloat. Startups should keep looking for those new opportunities that are opening up, and make plans to meet those opportunities. After all this is not the end of the world and keeping your company alive for the next several months can be crucial for their success in the long run.

Rapid Innovation

Rapid innovation is another startup thing that’s caught the eye of business community. Think of startups like Uber, Airbnb and many others, they all brought an innovative idea to the table. The world is a different place because of these firms. These rapid innovative ideas are the prime reason for the success of these next generation technology firms. They saw a unique need in the society and countered it with smart tech solutions that solved people’s problems. Uber has solved the cab problem in providing a hassle-free cab riding experience in the city. Take Aribnb, they provide an innovative concept in accommodating people in shared spaces, which is a big hit and has grown to become a multi-million dollar company. Likewise, many startups today are coming with rapid innovation ideas to fight the Corona pandemic. It is a noble effort by the startups to endeavor in such activities through their ideas and technology. I personally know of an Artificial Intelligence startup that lends its AI search technology for free to the medical community to find vaccine for Corona. The AI start up firm found their technology suitable for medical research community and tailor made their AI product to be useful for medical research purpose.

Government initiative to sustain Startups

The Government has a huge role to play to support startup firms in this pandemic. The Indian government has come up with many initiatives to support startups in the country. The business community can take advantage of these government initiatives and make the best out of it. The government has announced new plans to mentor startups, regulatory reforms in favor of startups, funding sources and investor engagement facility to name a few. It is indeed difficult for startups to survive without favorable government initiatives. It is imperative that Government looks keenly into the affairs of startup development and does the needful. These initiatives can meet the financial deficit of startups. The mentorship programs provided by the Government can be handy to get business insights for experienced campaigners. They can provide valuable advice to steer the startups in the right direction nullifying the Covid impact.

Stakeholder support is essential for Startup growth

The support of stakeholder can go a long way in sustaining the Startups. During these tough times, sometimes startups may need additional funding or much needed morale boost from the stakeholders. It is vital for Stakeholder to have confidence on the ambitions of startups. These are little things that can fetch a long distance. Encourage and support from the stakeholder can keep the morale of the team to achieve their goals.

Success stories of Startups and coping mechanism

Some startups are doing a great job in adapting to the present circumstance. For instance, Zomato has been hit badly as customers have grown skeptical about buying food online. The firm went ahead to establish measures to comfort its clients about the safety of their food, and found a vast opportunity. Zomato has made good business strategic moves in finding big opportunities opposed to smaller ones to be able to survive. They have founded a new segment called Zomato Market where groceries are delivered to home residents, which adds great value to customers during this pandemic. The success of the Zomato Market has led them to launch their extended service in countries like UAE and Lebanon. In an interesting equation, Zomato is ready to deliver alcohol to home residents.

While the travel industry has taken a heavy beating, firms like MakeMyTrip have to be on the edge to add tremendous value to the present scenario to stay afloat. In a strategic move, MakeMyTrip realized the present travel equation and is offering a platform for short stays for their customers. They have piloted a short stay program for travelers wanting to visit Tirupathi in collaboration with Goibibo and Redbus. MakeMyTrip is keen to provide a great experience for its customers even during this pandemic situation, and their co-branded cards with leading banks like ICICI provide a rewarding travel experience.

A popular gym and fitness joint called Curefit in the country has succumbed to the pressures of Covid. The firm has taken to online classes to keep their gym facility running. They have created a subscription model, so the fitness enthusiasts can still keep the ball rolling and maintain their perfect physique. The virtual classes will help them to stay connected with their instructors, and continue their exercise routine.

What we can perceive from these interesting stories is there are ways to keep a business going. Zomato, Makemytrip and Curefit are good examples on how startups are coping during this pandemic. The entrepreneurs who have put their thinking cap on to assess the situation and do the right thing have found the big advantage.

It is tough, but not impossible

Startups can leverage the government support, policies, stakeholder support, rapid innovation to come successfully out of this Covid crisis. It can be tough, but it is not impossible. We should appreciate the noble efforts of some startups who have geared up in fighting the Corona spread. Seeing the new opportunities and adapting to the disruptive world is key to surviving in this pandemic. Taking the right initiatives at the right time and having the belief to succeed will help startups to see through this massive storm.

“Startups must use their strengths in innovation to re-strategize and re-think their business,” said Ganesh Raju, Co-Chair, FICCI Start-up Committee and Founder, TurboStart.  

Launching satellites in to space has always been a dream endeavor. A source of national pride as well as pinnacle of decades of human engineering, space journeys are nothing short of miracles. Ever since humans took to flying, nations have attempted to conquer the space and been in a race to launch new satellites, both looking inwards towards the Earth and those looking outwards towards the vast and immeasurable expanse of unknown Space. The space race has heated up with each breakthrough in technology and has transformed from monolithic government enterprises to an agile and cutting-edge private domain.

Since the start of the first space race, a cold-war era much celebrated source of national pride, countries have launched nearly 8,400 satellites in to space, of which roughly 2,800 are still in operation (data compiled through various sources, see here and here). According to Statista, of the 2,666 active artificial satellites orbiting the Earth as of March 31, 2020, 1,327 belong to the United States. This is by far the largest number of any single country, with their nearest competitor, China, accounting for only 363. During the last decade however, the space race has largely transformed to a private sector endeavor, with SpaceX transforming the dimensions of everything about launching satellites. The last two decades have been the most promising from the perspective of advancement in technology, as well as the advent of micro usage of satellites. The focus of the satellite launch missions is shifting away from traditional large satellites towards small satellites. Broadly speaking, there are 9 different kinds of satellites launched in to Space, depending on their function and the distance from Earth these satellites operate from. There are nine different types of satellites i.e. Communications Satellite, Remote Sensing Satellite, Navigation Satellite, LEO, MEO, HEO, GPS, GEOs, Drone Satellite, Ground Satellite, Polar Satellite.

During the 1950s and 60s important work like Orbital Radio Relay by American engineers John Pierce of American Telephone and Telegraph Company’s (AT&T’s) Bell Laboratories and spin-stabilization technology that provided stability to satellites orbiting in space by Harold Rosen of Hughes Aircraft Company helped in making commercial communication satellites possible. When the U.S. National Aeronautics and Space Administration (NASA) was established in 1958, it embarked on a program to develop satellite technology. Soon, this work was followed by Telstar1, launched on top of a Thor-Delta rocket on July 10, 1962, which successfully relayed through space the first television pictures, telephone calls, and telegraph images, and provided the first live transatlantic television feed followed by Telstar 2 which was launched May 7, 1963. Telstar1 transmitted the first phone call via satellite—a brief call from AT&T chairman Frederick Kappel transmitted from the ground station in Andover, Maine, to U.S. Pres. Lyndon Johnson in Washington, D.C. Following the success of Telstar, NASA soon started an experimental spacecraft program for active geosynchronous communication satellites, known as Syncom, all of which were developed and manufactured by Hughes Space and Communications. Syncom 2, launched in 1963, was the world’s first geosynchronous communications satellite. Syncom 3, launched in 1964, was the world’s first geostationary satellite.

One of the foremost and earliest uses of Satellites has been to create a blanket around the Earth to establish seamless and fast communication. According to Britannica, the idea of communicating through a satellite first appeared in the short story titled “The Brick Moon,” written by the American clergyman and author Edward Everett Hale and published in The Atlantic Monthly in 1869–70. The story describes the construction and launch into Earth orbit of a satellite 200 feet (60 metres) in diameter and made of bricks. The brick moon aided mariners in navigation, as people sent Morse code signals back to Earth by jumping up and down on the satellite’s surface. The first practical concept of satellite communication was proposed by 27-year-old Royal Air Force officer Arthur C. Clarke in a paper titled “Extra-Terrestrial Relays: Can Rocket Stations Give World-wide Radio Coverage?” published in the October 1945 issue of Wireless World. Clarke, who would later become an accomplished science fiction writer, proposed that a satellite at an altitude of 35,786 km (22,236 miles) above Earth’s surface would be moving at the same speed as Earth’s rotation. At this altitude the satellite would remain in a fixed position relative to a point on Earth. This orbit, now called a “geostationary orbit,” is ideal for satellite communications, since an antenna on the ground can be pointed to a satellite 24 hours a day without having to track its position. Clarke calculated in his paper that three satellites spaced equidistantly in geostationary orbit would be able to provide radio coverage that would be almost worldwide with the sole exception of some of the polar regions.

Telecommunications satellite are Earth-orbiting system capable of receiving a signal (e.g., data, voice, TV) and relaying it back to the ground. Communications satellites have been a significant part of domestic and global communications since the 1970s.  The use of satellite communication in telecommunications pertains essentially to the use of artificial satellites to provide communication links between various points on Earth. Satellite communications play a vital role in the global telecommunications system. Approximately 2,500 artificial satellites orbiting Earth relay analog and digital signals carrying voice, video, and data to and from one or many locations worldwide.

LEO, Low Earth Orbit, and MEO, Medium Earth Orbit, satellites come under the category of non-geostationary-orbit (NGSO) satellites. LEO satellites orbit at an altitude below 1,243 miles above mean sea level, while MEO satellites orbit in the region between LEO and GEO (geostationary) satellites – between 1,243 – 22,245 miles. Geostationary Satellite is an earth-orbiting satellite, placed at an altitude of approximately 22,300 miles (35,800 kilometers) directly over the equator, that revolves in the same direction the earth rotates (west to east). At this altitude, one orbit takes 24 hours, the same length of time as the earth requires to rotate once on its axis. LEOs or Low Earth Orbit satellites are being increasingly used in space since the 1990s. In the last decade, rapid advances in camera technology and computer miniaturization have allowed for reduction in payloads using advanced optical imaging or radar observations which in turn led to smaller and smaller satellites.

Image Source: Wikipedia

Furthermore, advances in technology have introduced many novel concepts that have revolutionized the race to launch satellites. First of these technological advances is that of re-use of hardware, a hitherto unheard of phenomena that has taken the entire satellite industry by storm and has now become the de-facto inspirational standard. While previous space missions did offer some re-usability, Falcon Heavy was the first to offer reusable launch vehicles, i.e. the hardware used to launch the actual space shuttle or satellites or other payload. The rocket boosters used on these missions now have a controlled and breathtakingly simultaneous landing onto the launch pad. This recovery massively reduces the launch cost for both exploration and scientific discovery. The Falcon Heavy has been promoted as providing a cost of roughly US$1,300 per kg of payload, while the space shuttle cost approximately US$60,000 per kg. Secondly, instead of producing a bunch of different engines with a bunch of different horsepower ratings, satellite launch companies are now focused on having just one first-stage engine, the Merlin. The more powerful a rocket has to be, the more first stage rockets, or Merlins in case of SpaceX, are bundled into its first stage. SpaceX’s initial test rockets flew on just one Merlin. The workhorse of the SpaceX fleet, Falcon 9 which used a single cluster comprised of nine engines, as implied by its name. The Falcon Heavy uses three of those clusters, utilizing 27 first stage engines in total. This fades in comparison to the Saturn V’s five, the SLS’s four and the Delta IV’s three. The Atlas V, which can be configured with different numbers of first stage engines, maxes out at six. Of course with the increase of multi-engine use, risk has increased of any one of them breaking down or blowing up and jeopardizing the whole mission, or in the worst case scenario, destroying the whole space ship and its payload and causing loss of human life. However, advances in technology and increased scientific knowledge on aerodynamics concepts and safety measures mean that actual chances of any untoward incident are minimal.

Companies ranging from OneWeb to SpaceX and Planet have been deploying large fleets of satellites (fleets that could eventually include thousands of individual satellites) for applications ranging from telecommunications to Earth observation. One of the reasons why the LEO sector has become a hotbed of investment in recent years is that space has become more commercially accessible. Launch costs which historically were prohibitive, have come down dramatically, particularly since SpaceX started an Uber-pool style service last year that allows small satellites to hitch a ride on its Falcon 9 rocket. The company’s ride-share program launches satellites into orbit for as little as US$1-million for 220 kilograms, according to Space X’s website. More than profit margins however, SpaceX should be identified with the disruption it is leading in the global space industry as we saw previously with SpaceX’s path breaking innovation of reusable hardware and simplistic design concepts.

Image Source: Starlink

Depending on the specific use, amount of latency expected and conditions of operations, LEO, Low Earth Orbit, and MEO, Medium Earth Orbit, and Geostationary satellites are deployed. Owing to their higher operating altitudes, geostationary satellites tend to gravitate towards higher latency with less spatial resolution of data when compared with non-geostationary orbit satellites or NGSO . However, in a maritime context for example, a delay of milliseconds has little impact upon the transmission of certain applications, eg, ship condition reports and live engine data. And for land stations, the main advantage of GEO satellites is that they are always in the same position relative to the earth, meaning that antennas require no reorientation. Coming to non-geostationary orbit satellites or NGSO, one of the main advantages of NGSO satellites over GEO satellites is considerably lower latency. Due to the operating distance over earth, GEO satellites have roughly 550 milliseconds of round-trip latency time, while LEO satellites boast a latency of 240 milliseconds, providing a distinct and significant advantage in the cutting age of real-time applications. For example, the combination of high bandwidth and low latency is a highly-prized aid in the implementation of telecommunications, videoconferencing, and so on.

Image Source: Popular Mechanics

In the recent years since the advent of Tesla’s SpaceX and its path-breaking new generation of rockets which offer re-use capabilities the space race has heated up attracting billions of dollars in investments and interests from the best and biggest organizations. Amazon’s project Kuiper recently got the green light from the U.S. Federal Communications Commission last month for a 3,236-satellite constellation, just as London-based OneWeb has emerged from bankruptcy proceedings with US$1-billion in fresh capital to restart its own project. Ottawa-based Telesat, meanwhile, has locked down spectrum – the radio frequencies used to transmit wireless signals – and secured millions in funding from the federal government as it looks to deploy a smaller, more efficient constellation of nearly 300 LEO satellites. SpaceX’s application for a Basic International Telecommunications Services licence in Canada garnered a number of supportive submissions to the regulator. More than 2,000 parties submitted responses to the Canadian Radio-television and Telecommunications Commission’s website, many of them from rural households and businesses cheering the initiative. Their plan is to offer high-end internet coverage for clients like governments, mining companies and shipping conglomerates, as well as extending internet coverage to regions too remote or too poor to make use of conventional ground based internet. As regards the future of satellite communications, network providers are looking towards the integration of new LEO and MEO solutions with existing, tried-and-tested GEO services so as to provide the most productive and cost-effective amalgamation of coverage and bandwidth usage.

OneWeb, recorded an average latency of 32 milliseconds in July 2019 on transmissions between space and South Korea. Musk, the founder of Space Exploration Technologies Corp., has said that his Starlink satellite system is aiming for a latency of 20 milliseconds initially, which he further hopes to cut in half gradually. By contrast, geostationary orbit systems have a median latency of nearly 600 milliseconds for a round trip.

With the growing digital divide fueled by lagging investment in rural communications infrastructure, which is exacerbated further by the COVID-19 pandemic, the opportunity is ripe for new age solutions providers to move in. Billions of dollars are pouring in to satisfy the world’s insatiable appetite for bandwidth, particularly in far-flung regions where laying fibre-optic cables is prohibitively expensive. The need to stay connected has moved workplaces, schools and even health care services online, further highlighting the digital divide between users who have access to affordable, high-speed internet and those who don’t. For the average user that relies on fast internet speeds for business, education and more, download speeds of 50 Mbps and upload speeds of 10 Mbps are required as the bare minimum to participate in those activities, while most users in rural areas actually get a fraction of that.

In a related development not so long ago, the Federation of Northern Ontario Municipalities (FONOM) and other Northern Ontario stakeholders has turned its attention skyward calling for better access to high-speed internet with the Municipal advocacy group calling on the Canadian government to allow Musk’s Starlink an operating licence. The announcement follows the passing of a resolution at its recent board meeting. FONOM, which represents 100 communities in northeastern Ontario, works to better municipal government in Northern Ontario and improve legislation respecting local government in the North.

Numerous government bodies, at local, state and national or Federal levels have expressed interest in public-private partnerships with the dual aim of providing connectivity to far-flung and difficult to reach areas, while also aiming to use private enterprise to speed up breakthroughs in the field of satellite communications.

The Canadian government has made investments in improving rural and remote broadband internet including funding to Telesat who want to build a satellite constellation in Low Earth Orbit (LEO) and has agreed to spend up to 600 million Canadian dollars ($456.6 million) more on capacity.

If Musk has his way, by 2025 no less than 11,943 of his satellites will circle the Earth, and if permission is granted, the ultimate result would be a staggering 42,000. SpaceX is planning to beam broadband directly to consumers; each home will be outfitted with a half-metre-wide circular antenna resembling a UFO on a stick. Telesat, meanwhile, is focused on enterprise clients such as the aerospace and maritime industries. It also plans to provide “backhaul” connectivity to telecom companies, which will then transmit the signal to customers’ homes via ground-based networks. Amazon is aiming for a mix of residential customers and telecom carriers. For its part, the telecom companies do not view LEO companies as competitors, analysts say, because the new satellite providers are focused on areas where it’s impractical to build networks of fibre-optic cables.

Image Source: Cnet

According to Lluc Palerm, a senior analyst at consultancy firm Northern Sky Research, the LEO industry is projected to expand as global demand for connectivity grows. Today, satellite communications generates about US$10-billion to US$15-billion in revenue annually, comprising about 1 per cent of the telecommunications market. That could grow to as much as 5 per cent of overall telecom industry revenues, Mr. Palerm says. Mr. Musk has said he believes the revenue opportunity for SpaceX’s Starlink constellation is around US$30-billion.

As satellites get smaller, they are getting easier to build and launch. All this may sound music to some ears, but for a section of experts, this is worrisome.

While neither Low Earth Orbit Satellites nor the use of Satellites for communication are new concepts, what is different is the sheer scale of recent proposals, with the big firms planning to launch satellites in the thousands. The new ventures are counting on savings from smaller, cheaper satellites and reusable rockets, along with more powerful software capable of tracking all those hand-offs.

But the costs of building LEO constellations are astronomical and technological hurdles remain. While LEO satellites operating in constellations, or groups of tens or hundreds of satellites, promise to solve the burning issue of latency encountered with the existing fleet of geostationary (GEO) satellites, they also come with a much higher price tag.  According to Telesat, In the world of telecommunications, LEO satellites which orbit the planet in a constellation formation, enable download speeds that are eight times faster than traditional satellite systems and on par with those offered by fibre-optic cable.

The high cost of LEO satellites owes to a mixture of high manufacturing and high operating costs. A typical communications satellite costs as much as US$60,000 a kilogram and with average weight around 300 to 400 kilograms for each satellite, and the need to operate in a group of satellites, the cost quickly climbs up. As Low Earth Orbit LEO and Medium Earth Orbit MEO satellites do not synchronise with the Earth’s rotation and orbit the earth more rapidly than GEO satellites – an orbital period of 128 minutes or less for LEO, and an average of between 2 and 8 hours for MEO – multiple satellites are required in order to achieve seamless coverage.

In addition, the primary difference between Geostationary satellites and LEOs is the need to have antennas which are constantly moving as the LEO satellite constellation moves meaning that ground equipment for LEO systems is much pricier. LEOs require electronically steerable antennas which are capable of tracking multiple satellites passing overhead at the same time across the sky. These antennas are more expensive, posing a challenge to SpaceX’s and other operators’ plans to target the consumer market.

Previous attempts to create these near Earth constellations of satellites operating in Low Earth Orbits have been met with lot of skepticism, fading interest from investors and scaling down of initial plans owing to commercial non-viability. The most notorious example of these is Iridium, a constellation of 66 satellites built by Motorola in the late 1990s that was rescued from the verge of collapse by a group of investors led by a former airline executive. The company had to drastically scale back its plans, restructure and shift gears to providing emergency communications. Iridium’s LEO constellation is one of a small handful of such systems currently in operation, generally focused on the enterprise market. More recently, British-based OneWeb filed for Chapter 11 restructuring in March after its backer, Japan’s SoftBank, declined to put up fresh capital. The company had put 74 of its planned 648 satellites into orbit before seeking bankruptcy protection, but has since found new owners – the British government and Indian telecom company Bharti Enterprises.

Further, on the technical side, many analysts caution that the potential market may not be large or lucrative enough for LEO companies to recoup their sizable investments. The U.S. telecom regulator FCC, said in a report it doubts satellite operators will be able to keep latency under 100 milliseconds, even with low-orbit satellites. That means SpaceX and other LEO companies could have a tough time getting access to an FCC fund aimed at supporting rural broadband projects. Analysts also doubt the commercial viability citing the low incomes in rural areas.

A look at how Regulators, Companies and Individuals are shaping the Broadband map across America

Technology and the needs of businesses and consumers continue to evolve. Over the last 2 decades of mass internet penetration, availability and affordability have become the two key cornerstones of any efforts to shape internet policy, whether its at a regulatory level, like FCC or representatives of state broadband programs or at an internet service provider company level, like AT&T, Verizon.

Broadly speaking, according to FCC definition, Broadband is defined as reliable high-speed internet, having download speeds of at least 25 megabits per second (Mbps) and upload speeds of at least 3 Mbps. Broadband internet may be delivered via multiple technologies, including Fiber broadband, fixed wireless, digital subscriber line (DSL), or Cable broadband. Each technology has varying costs of setup and maintenance, with cable being generally regarded as the most cost-effective though technologically limited solution.

Perhaps more so than any other technological innovation in human history, the Internet has changed our daily lives in significant and permanent ways. Among many other things, the transformation has occurred faster than any other adaption of technological changes. Over the space of 2 decades, home broadband adoption has grown from 3% of all American adults age 18 and older to almost 80%. By comparison, it took telephone to  nearly 8 decades and electricity more than 30 years to reach the same level of penetration, despite deals .

Broadband is increasingly intertwined with the daily functions of modern life. It is transforming education, social services, healthcare, agriculture, supporting economic development initiatives, and is a critical piece of efforts to improve human life and socio-economic factors of human development.

Broadband has become the quintessential communication essential in the digital age and the era of Internet. Literally and figuratively, everything is available on the internet. And being connected, being connected always, has become an objective, an input and a goal statement in and of itself. Everyone, everywhere, has some purpose which requires them to access internet resources, unless of course, people making the active choice of living off the grid. However, with more than 19 million disconnected households across the country at the most conservative level of estimate, it is impossible to capitalize on broadband’s full economic and social impacts. While a presidential platform can incentive policy reform at the federal level, the road to change is still a long one, slowed by political infighting and congressional discord.

Internet Availability and Affordability for everyone

When people refer to broadband, most are referring to interrelated, sometimes overlapping characteristics of the sector. These two characteristics are like two sides of the same coin, and in every facet are tied to each other. The first is the digital telecommunications backbone or the infrastructure, whether wireless like mobile or wired technologies like Cable, DSL, etc, that enables outreach and availability of high-speed transmission of data. This digital backbone and physical infrastructure is both capital-intensive and technology-intensive, as in the front-end infrastructure, the towers, the wire lines, the cables, the physical buildings and exchanges and offices where the telecommunication equipment is assembled requires significant up-front monetary investment as well as time, whereas set-up of back-end technology and processes to enable the operations, billing and provisioning of broadband services requires years of preparation.  The other side of this coin, the federalist and state policy frameworks that govern physical infrastructure and related coverage especially in areas with limited revenue and growth potential, dictate how the implementations are carried out.  Though broadband’s antiquated definition tends to focus strictly on the transfer speeds and the network capabilities of the underlying technology, iin reality, broadband infrastructure can only reach its potential if every individual can use the service, and if policy frameworks are in place to support ubiquitous, near barrier-less adoption.

By pricing the broadband service, especially the entry levels prohibitively high so that its out of reach of certain section of the society, or by excluding the geographical areas or communities altogether, or by not investing or reducing the investment in upgrade and maintenance of the lines, it is certainly true that in certain parts of the country the entry barriers to obtain sufficiently fast broadband connection are too high. And lastly, not having adequate competition at a market level not only forces the customers to settle for low standards of service, but stifles innovation and investment, two most critical factors for market growth.

There are three primary areas within the colloquial term broadband availability that must be broken down for an effective analysis. These are availability of service, affordability of services and the presence or lack of competition, as in, the competition exerted by each internet service provider competing for market share. Lets look at these briefly.

1. Availability of Service -: this is apparently self-explanatory and generally the first step of internet connectivity. This is plan and simple availability of broadband signal in an area. According to the most recent data available, the Federal Communications Commission (FCC) estimates that 21 million Americans still lack broadband access according to the most recent data available. Many researchers have however cast serious aspersions on the veracity of this data, at times placing the number of people without access to reasonable internet as high as 162 million.
2. Availability of speed tiers and plans and Affordability -: FCC voted in January 2020 to approve a $20.4 billion Rural Digital Opportunity Fund that will make grants to broadband providers to build broadband networks where there is currently no or substandard service, however the money will be disbursed without any guarantee that the grant recipients will help to make broadband more affordable for low-income customers. It is strongly believed that to avoid corruption and to prevent this from becoming yet-another-failed scheme, Congress and the FCC should require, as a condition for funding this broadband deployment, true high-speed service at actually affordable prices—for instance, service rated at 50 Mbps for upload and download with unlimited usage for $10 per month to eligible recipients. What is alarming is that home broadband adoption rates aren’t improving. Approximately 73% of U.S adults use broadband service at home, but that figure has remained stable for the past three years. Too many people aren’t subscribing to broadband even when it is available to them. Affordable service is crucial.
3. Lack of more than one service provider -: According to a Fortune Article, laws in 19 states restrict local communities from experimenting to increase broadband deployment. These laws should be revisited and repealed. An indubitable truth – when new competition is introduced in broadband markets, the benefits are demonstrable. Look no further than Kansas City, Kan.; Chattanooga, Tenn.; Wilson, N.C.; and Longmont, Colo. for evidence that competition from private or municipal broadband provider results in incumbent providers dropping prices and increasing speeds — benefits which can not be realized with any amount of coaxing or appeals as seen in nearby areas where old standards still persisted in a market without competition. An estimated 35% of people have only 1 choice of broadband provider; another 37% have just two to choose from. Without competition, people—especially those with lower incomes or those who live in rural areas—are threatened with artificially high prices, lower-quality service, and little innovation. A Wall Street Journal report published last year found that low-income areas and high-income areas pay similar median monthly costs (about $66) for stand-alone internet, but poorer areas get 40% slower speeds for the price.

Image: Figure 4 FCC report

Figure 4 shows deployment of fixed terrestrial services at various speed tiers from year end 2014 through 2018.132 As of December 2018, fixed terrestrial service of 50/5 Mbps service is deployed to 92.7% of the population, up from 91.6% in 2017. Between 2017 and 2018, the deployment
of 100/10 Mbps increased from 88.6% to 90.5% of the population, and the deployment of 250/25 Mbps dramatically increased from 58.3% to 85.6% of the population. While deployment in rural areas and on Tribal lands lags behind deployment in urban areas at all five speed tiers, but the data show year-over year improvements for all speeds in these areas. For example, the deployment of 250/25 Mbps increased from 28.2% to 51.6% of the rural population

While fiber is the fastest home internet option by far, availability is still scattered. Due to the high cost of installing fiber service directly to homes, even major cities are still predominantly served by cable. Chicago, for example, only has 21% fiber availability as of 2020. Dallas has about 61% — and that’s actually high availability compared to other major metros in the US.

Image: CBS News

Challenges and Impact of inequitable distribution of broadband connectivity

Communities without reliable high-speed internet service cite a growing gap between the availability of resources and opportunities to their residents compared to those in communities that have a robust network. Given the ubiquitous nature of internet access, its vastly important to recognize how denial of broadband internet access, whether intentional or unintentional has become a severely debilitating factor for people and communities. Recognizing the importance of broadband and responding to such frustrations, states, communities and even individual people are seeking to close this gap. Most states have established programs to expand broadband access to communities that lack broadband internet connectivity or are undeserved. State efforts to expand broadband access are primarily focused on extending wired and fixed wireless infrastructure to the last mile: homes and small businesses. While Internet service providers, generally private companies licensed to distribute wireless and wired connectivity services have delivered reliable high-speed internet to households in most urban and suburban areas, many rural areas and areas with less population density remain under-served or lack services altogether. The issue of under-serving is particularly complex because people and regulators have used different definitions and standards from time to time. The challenge of closing the last-mile gap is compounded by geography, demographics, and the numbers and types of entities that provide service. In some states and regions, these patterns have led to uneven deployment of broadband infrastructure. While one rural community may have “fiber to the home and to the farm and to the cabin” provided by a local telephone company or cooperative, a neighboring community may lack the same level of broadband access.

While the Federal Government owns or manages key assets that support telecommunications infrastructure, the bulk of America’s telecommunications infrastructure is owned and managed by private-sector companies. This private market is a significant asset to our Nation’s economy and has helped the United States innovate and lead the world in each wave of telecommunications technology. Over the past several decades, Federal partnerships have been especially important for deployment in high-cost rural areas, where the unique challenges of geography, population density, and deployment costs may make it unprofitable to expand or operate networks – creating significant gaps in rural broadband coverage.

There are a unique set of challenges associated with delivering high-speed broadband to rural locations that service providers do not encounter in more urban locations, including geographical variables and high costs. Fortunately, recent fixed wireless solutions are equipped to address these variables as they serve as a cost-effective alternative to drop, distribution and/or feeder fiber, providing a whole new set of deployment models to the traditional Fiber-to-the-x (FTTx) deployment models. Unlike “urban jungles,” rural areas have a varying degree of terrain. Depending on the geography of the region, providers can encounter anything from rock and sand to compacted dirt and mud — making planning and executing a fiber buildout difficult. Many times, technicians are unaware of what type of soil composition they will be digging into until the project has begun. And then, they may find that getting the adequate trenches dug to lay the fiber is near impossible

According to a Fortune Article, Wealthier communities are two to three times more likely to have more than two choices for broadband providers than are communities with lower-than-average household incomes. With limited competition, it is perhaps unsurprising that Americans pay the second-highest broadband prices among OECD countries. Yet when new competition is introduced in broadband markets, the benefits are demonstrable. Look no further than Kansas City, Kan.; Chattanooga, Tenn.; Wilson, N.C.; and Longmont, Colo. for evidence that competition from a private or municipal broadband provider results in incumbent providers dropping prices and increasing speeds—but not in nearby areas the new competition didn’t serve.

Internet Availability and Affordability exacerbated in the Covid-19 era

Families across America, especially in semi-urban and rural areas often have to contend with throttled internet speeds. During Covid-19 as many families were forced to stay at home and do most of their activities at home, the demand for internet bandwidth has cast strains on the internet service providers’ ability as well as the rising data bills for many families.

Most families are hit by both the availability and affordability aspect. Contending with throttled internet speeds, many families often drives miles to find a spot where they can stream videos for work and class, including parking in acquaintances’ driveways to connect to Wi-Fi or a public utility like libraries or near a cellular tower across town.

The public health crisis has exposed New York’s digital divide. Lawmakers representing communities in upstate New York have voiced concerns about the issue for years, fighting to increase access to high-speed internet in rural communities that often struggle to even get a bar of cell service. But despite repeated pledges by state officials to remedy the situation, access to high-speed broadband internet remains elusive in the state’s bucolic areas.

“I would say that this current pandemic has really brought to light the challenges facing rural America when it comes to the lack of broadband,” said U.S. Rep. Anthony Brindisi, a Democrat whose district includes Utica and Binghamton. “These are challenges that many of us have been screaming about for many years, but [now] it seems to be very visible to the public at large.”

According to state Sen. Jen Metzger, a Democrat who represents a largely rural district in the Hudson Valley and Catskills., “There are many households that simply can’t afford it, and so we’re essentially reinforcing cycles of poverty and making it difficult for young people to realize their full potential in school and beyond,”

According to a Politico Article, Gov. Andrew Cuomo committed to providing broadband access to every New Yorker by the end of 2018, but missed the deadline. The percentage of New York residents and businesses served by “wired or wireless broadband” has gone from 70 percent in 2015, when Cuomo announced his program, to 98 percent, according to Department of Public Service spokesperson Jim Denn. According to David Little, executive director of the Rural Schools Association. “There’s vast stretches of land outside of urban areas that don’t have it, and so you have thousands of students sitting outside school buses being used as Wi-Fi hotspots so students could have some access closer to home.”

Teachers throughout the state have come up with creative solutions to help their students, including shipping out paper packets with assignments that students then mail back and calling students on landlines to assist with homework.

But for the most part, the coronavirus pandemic has frustrated families who have been calling for improved access for years.

Joanne Mazzotte, a counselor for the Crown Point Central School District in Essex County, said she hopes broadband is recognized as a basic necessity after the pandemic because of the struggles her family and others have faced. Cellular service in the area is so bad that to upload a file to Google Drive, “We’d have to huddle around one window and it would still take half an hour” despite living on a main road, she said.

How to get the Internet Service Providers to act

According to Industry estimates, based on variables like pole mounted or buried cables, laying fiber infrastructure can cost between $18,000 and $22,000 per mile. It’s all about return on investment (how quickly can the company get its cash investment back in order to reinvest in additional projects), and ability to grow the company.

Let’s look at a simple example with the following assumptions:

• $20,000 per mile for fiber infrastructure cost
• $600 per home to deliver service from the street
• 13 homes per mile (typical service area may have between 10 and 15)
• Average monthly cost for the provider to actually deliver the service after installation is $32 per month
• The subscriber pays on an average $65 per month for the service
• Net revenue per home is $33 per home

For a one mile build with 13 homes, the total project cost would be $20,000 PLUS the $600 for each home that connected to the service, about $2,140 per home – assuming that every home took service.  If only 7 of those homes sign up for service, the cost per home served jumps to $3,460.   By dividing the cost per home by the net revenue per home of $33, its simple to see that it will take nearly nine years for the provider to break even on the investment.

In case of multiple occupancy buildings, on average, fiber optic cable installation costs $1 to $6 per foot depending on the fiber count. It’s very difficult to estimate an exact price for an entire building to be wired, however an example would be $15,000 to $30,000 for a building with 100 to 200 drops. Fiber optic cabling is somewhat more expensive up front than copper cabling, but the greater capacity and reliability of fiber can actually reduce long-term costs.

It has been shown that States and local government bodies can use multiple policy levers to drive Internet Service Providers to expand broadband access, and some of these actions do not have to be dependent on available funding. States often support private enterprise broadband deployment through various means. In addition, where the Internet Service Providers fail to react, the state governments reserve the right to bring in non-profit cooperatives and special focus groups to build the necessary infrastructure.

1. Grants and loans to service providers: States provide support, primarily through grants, to facilitate broadband deployment in un-served and under-served areas. Several states, including Minnesota and Tennessee, have funded their broadband expansion programs through appropriations, while others, including California and Colorado, have re-purposed funds that have traditionally supported universal telephone service.
2. Identifying, setting up and promoting nonprofit utility cooperatives, and local governments to help make projects economically viable. In Minnesota, The Governor’s Task Force on Broadband, formed in 2011, provides a forum for stakeholders to study and discuss issues related to broadband. The Office of Broadband Development, Minnesota aims to connect all homes and businesses at speeds of at least 25 Mbps/3 Mbps by 2022 and 100 Mbps/20 Mbps by 2026 and become a national and international leader. West Virginia has passed several bills to encourage broadband expansion. In 2017, the Legislature passed a measure that established a goal of providing broadband access statewide, allowed the formation of cooperatives to provide the service, created a loan guarantee program to reduce risk for commercial lenders, and allowed Internet Service Providers to use micro-trenching technology to install infrastructure. In Maine, Maine’s ConnectME Authority, established in 2006 through the Advanced Technology Infrastructure Act, provides planning and infrastructure grants to facilitate broadband deployment to un-served and under-served communities. Between 2016 and 2018, ConnectME funded 14 planning grants totaling $451,000. Planning grants also help prepare applicants for ConnectME infrastructure grants. Between 2006 and 2018, ConnectME funded 144 infrastructure projects, providing more than $12 million to bring broadband infrastructure to nearly 40,000 households. In 2015, North Carolina’s Legislature tasked its Broadband Infrastructure Office (BIO), within the North Carolina Department of Information Technology, with developing a state broadband plan.

The universal service Schools and Libraries Program, commonly known as “E-rate,” provides discounts of up to 90 percent to help eligible schools and libraries in the United States obtain affordable telecommunications and internet access. The program is intended to ensure that schools and libraries have access to affordable telecommunications and information services.

There are currently 331 municipal networks in operation today in the U.S. We reviewed every state that has roadblocks preventing the establishment of municipal networks and compared them to states that do not have such restrictions in place. What we found was that states without restrictions enjoyed higher access to low-priced broadband plans on average.

According to a 2019 report on the health of municipal broadband, 22 states now have substantive roadblocks to establishing municipal networks to residents, down from last year’s 25. Three more states, Arkansas, California and Connecticut now permit such municipal broadband networks in full. Residents in states with no roadblocks or restrictions in place against municipal broadband have, on average, 10% greater access to low-price broadband (which we classify as any standalone internet plan $60 per month or less).

Many industry insiders feel that with the Covid-19 crisis, the focus is shifting to correct the systemic imbalances that have existed and that were confabulated or bloated due to decades of mismanagement and allowing private internet service providers to have a free rein. There’s absolutely no reason that people living in rural areas or Indian country and folks living in under-served areas must leave the safety and comfort of their homes and sit in a car outside of school or library in order to do the things that people in more than 90% of United States take for granted, that is, being able to access reasonable broadband internet from home. Further, now with Covid-19, telehealth is being used for primary care visits. The patient can stay at home and connect to their primary care provider via the internet. That way people don’t have to risk the face-to-face interaction. And so if there’s a silver lining to all of this, maybe this crisis, this pandemic, is bringing these issues to the forefront. And saying, look, there is no reason that people living in certain parts of country need to deal with essentially what is third-world connectivity.

In terms of funding to support tele-health implementation, now with Covid-19, the FCC has $200 million available to help hospitals and clinics to provide services to patients in their homes.  Under the program, healthcare entities would have internet service providers bid on service improvements, such as laying fiber to a hospital or clinic, and then the funds would cover up to 65 percent of the costs of the service improvements.

One way to make sure internet gets to everyone is to make the internet a utility. It has to be free and open and available to everyone, everywhere, every time. All of the rural under-served and not served areas and Indian country needs broadband. All of these areas and communities need  additional spectrum to do what they need to do. Everything ranging from tele-health to the new innovations that are taking place is denied to people where there is lack of adequate broadband capabilities.

Much has been written about the digital divide and its impact on those with limited access to broadband Internet service. Broadband Internet service has become a cornerstone to the world economy, as many things including advertising, sales, news, education, job applications, and basic communication move predominantly online. Those with broadband Internet tend to have an advantage over those without, and the people least likely to have broadband access live in rural areas. Unless broadband access is addressed in rural areas, today’s disadvantages resulting from limited broadband access will continue to grow in prominence as bandwidth needs expand and the broadband definition changes in the future. There’s always existed this lack of parity in telecommunications between rural and urban areas and from the beginning of federal communications laws in 1934, the FCC was created precisely to address a lack of access in more rural and remote areas. And so its time for everyone, the FCC, private telecom companies and local and state governments to embrace this principle called universal service, the idea that all Americans would have access to communications services.

This is part II of our blog post on Exposure Notification. Our original blog on Exposure Notification was published August 30^th.

Let’s look at the Background

Public Health Agencies around the world and especially in US have had little success with using mobile phones based technology to monitor the spread of Coronavirus and to warn users proactively.

Some public health agencies in the United States and around the world wanted to build mobile apps that would help them track the spread of the virus, through a process known as “contact tracing.” Due to the slow moving government apparatus, legal and procedural requirements and the logistical challenges, few of such program could take off. The contact-tracing apps that were initially launched did not function properly because of certain limitations, primarily the concerns around privacy and collection of data.

Apple and Google announced a surprise partnership at the start of this pandemic in April. When Apple and Google announced their work together on the COVID-19 Exposure Notification API, the companies put behind years of rivalry to join hands to help people and Public Health Authorities fight this massive battle. Apple and Google announced two phases of the Contact Tracing project. During the first phase, which is what came with iOS 13.5, laid out that that users first download an app from their public health authority and then opt-in to Exposure Notifications. The process of Exposure Notification System works through sharing anonymous Bluetooth beacons with nearby devices running the same software, tagging those that suggest extended and close contact associated with coronavirus spread, and saving the last 14 days of these records.

At the same time, Apple and Google also indicated start of work on the second phase, which would reduce the reliance on contact tracing app from public health authorities while bringing the core functions of the COVID-19 Exposure Notification technology directly into iOS and Android. This is essentially what Apple and Google announced on Tuesday, 1^st September.

So what is new in the second phase of Exposure Notifications

Apple and Google announced on 01^st September that their joint program, contact tracing Exposure Notifications System, can inform people of potential exposure to COVID-19 without a dedicated Exposure Notifications app. The second phase of this program, the companies announced, re-launches the warning software in a new and better Avatar, so that state public health agencies can participate without having to create customized apps. This app-less functionality is called Exposure Notifications Express and is only available when a Public Health Authority (PHA) supports it.

The two partners, Apple and Google are introducing new tools that benefit both the public and public health authorities, making it much easier for public health authorities to implement digital exposure notification, while reducing a step in the process for the general users. For public health authorities, now they do not need to worry about the need for developing and maintaining their own individual contact tracing application. Apple made this breakthrough via the iOS 13.7 system update, released 01^st September to general public, while Google is implementing it with an automatically generated application on Android 6.0, upcoming later in September, taking a little longer because of the very different method through which it manages system services and OS updates.

For public health authorities, the new changes bring significant ease of operation as the process of adopting Exposure Notifications Express by users is significantly streamlined compared to adopting the existing Exposure Notification API where users first had to download the contact tracing application. Public health authorities simply provide a configuration file that includes their name, logo, criteria for triggering an exposure notification, and information and protocol that is displayed to users following an exposure. The existing way of Exposure Notification API demanded that users download the contact tracing application from their public health authority first before proceeding with other steps. This was a major headache for public health organizations who were required to maintain their own infrastructure and software application.  Further it was an additional and often confusing step for users. Now that part is completely eliminated benefiting both public health authorities and users.

Further Apple and Google say that they will use the information provided by the public health authorities to offer a fully operational Exposure Notification Systems on behalf of the public health authority directly integrated into their respective operating systems, in case of Apple this is iOS 13.7.

Crucially, Public health authorities still have full control over the system, though, and there are no additional privacy or data related concerns. The Public Health Authorities still dictate and control the process of triggering notifications, what is the language and structure of the advice, and guidance on the next course of action for exposed individuals.

iOS 13.7 changes

With the new Exposure Notification Express, which forms the second phase of Exposure Notification System, the system removes one of the key barriers to adoption that led to a slow start to the software. Once users update iOS 13.7, users can now enable COVID-19 Exposure Notifications directly in the Settings app on their iPhone. This new process is called Exposure Notifications Express. The process is as simple as enabling user preferences in any other application and just takes a few taps, including agreeing to the public health agency terms and conditions of service. Additionally, users will also be able to opt-in to receive a push notification when their local public health authority adopts Exposure Notifications Express.

Once an user enables exposure notifications in the Settings, their iPhone will begin monitoring with Bluetooth to log possible exposures so the user can be notified of a potential COVID-19 exposure based on the guidelines set by the local public health authority. The process of monitoring and triggering Exposure Notification System works without any changes, through sharing anonymous Bluetooth beacons with nearby devices running the same software, tagging those that suggest extended and close contact associated with coronavirus spread, and saving the last 14 days of these records.

At least in the United States, many people haven’t had the option of participating, as states have been slow to create apps. Now, with “exposure notifications express,” states will have less work to participate. Through this simplification pf approach, Apple and Google hope that adaption rate of the Exposure Notifications Express system will dramatically increase, at both levels, from users and public health authorities. The first public health authorities in the United States to adopt the Exposure Notification Express system will be Maryland, Nevada, Virginia, and Washington, D.C.

Users who live in states that participate in the software may get a pop-up notification, prompting them to opt into the program. By following simple steps, they can share their Bluetooth data and receive notifications if they come in contact with another participant who has tested positive. For states that already have a contact tracing application standalone application using the COVID-19 Exposure Notification API, those apps can still exist and operate on their own. As of right now, Apple and Google say that 25 states and territories, representing more than 55% of the population, are exploring Exposure Notifications System solutions.

Finally, Apple and Google emphasize that all of the original privacy protections of the Exposure Notification API also extend to the Exposure Notifications Express. Users must explicitly enable exposure notifications, nothing is enabled by default. No location data is shared and the system does not share your identity with other users, Apple, or Google. All matching is done on-device and users have full control over whether they want to report a positive test.

“I would say this is an improvement,” said Jeffrey Kahn, director of the Johns Hopkins Berman Institute of Bioethics. Kahn, who has been studying the use of technology to fight the virus, said states have been hamstrung by indecision around which technology vendors they should use to build their apps, among other issues. He said this may help speed up adoption, but shouldn’t be considered a magic bullet.

“Public health agencies are carrying an extraordinary load in managing the novel coronavirus response,” said Scott J. Becker, head of the Association of Public Health Laboratories, in a statement provided by the companies. “The easier we make it for state and territorial public health agencies to develop and deploy, the sooner we can expand COVID-19 exposure notification in our communities and help end the pandemic.”

Image Credit: University of South Florida

Exposure notification and Contact Tracing: Essential tools

As the Novel Coronavirus or COVID-19 pandemic has gripped the world, Governments, Organizations and People all over the World are trying desperately to break the vice like grip of this deadly pandemic. With more than 830,000 people dead and 25 million directly infected, and the disease showing little signs of slowing down, the nature of the crisis is unprecedented and unmitigated.

The software development communities across the World have contributed since the start of the pandemic in 2019 by developing apps, data collection programs and frameworks to assist the medical communities and local, state and national or federal governments in their attempt to fight against this pandemic. The indefatigable spirit of doctors and nurses across the world required a solid backing and the tech community came forward unselfishly.

According to Wikipedia, the Exposure Notifications System, originally known as the Privacy-Preserving Contact Tracing Project, is a framework and specification developed by Apple Inc. and Google to facilitate digital contact tracing during the COVID-19 pandemic. Contact tracing is a technique used by public health authorities to contact and give guidance to anyone who may have been exposed to a person who has contracted COVID-19. The project’s aim was to produce a framework to do a digital trace of COVID-19 cases so if one happens to be near someone or in contact with someone who is later diagnosed with COVID-19, one can get a notification and take the appropriate steps to self isolate and get medical help if necessary. Think of it as an Early Warning System for those who came in contact with known or unknown COVID-19 positive people. The reason behind this close collaboration is evident – just like the Novel Corona-virus doesn’t differentiate between people, any efforts to digitally trace the spread of infection must transcend the very human boundaries of technology, software and hardware.

The announcement of this unprecedented collaboration project, a first of its kind among two arch rivals, immediately stoked fears of unreserved data collection and many people started voicing their concerns and feedback started flowing in. The people at large had genuine cause to worry. Tech companies after all have a less than acceptable track record of masking data collection activities while aggressively repudiating any efforts to control their massive arsenal of data-collecting apps.

Exposure Notification makes it possible to combat the spread of the coronavirus — the pathogen that causes COVID-19 — by alerting participants about possible exposure to someone they have recently been in contact with, who has subsequently been positively diagnosed as having the virus. There are three broad parts to this COVID-19 Exposure Notification system. The first part is defining the users. The second part is the feature of communication standard used to communicate between devices. And the third and final part is the contact tracing app developed by the local or state health agencies.

They process of Exposure Notification System woks through sharing anonymous Bluetooth beacons with nearby devices running the same software, tagging those that suggest extended and close contact associated with coronavirus spread, and saving the last 14 days of these records.

The first contact tracing app, Virginia’s COVIDWISE, debuted Aug. 5. North Dakota and Wyoming shipped their Care19 Alert Aug. 13, Alabama launched its GuideSafe app Aug. 17, and Nevada introduced COVID Trace on Monday. The University of Arizona is testing Covid Watch Arizona, with a statewide release expected soon.

So now lets look at the first part. According to Apple, there are two primary user roles identified within the Exposure Notification framework.

So who are the Users?

Affected user -: When a user has a confirmed or probable diagnosis of COVID-19 (as defined by the Health Authority), the framework identifies them as affected and shares their diagnosis keys to alert other users to potential exposure.

Potentially exposed user -: To assign a user the potentially exposed role, use the framework to determine whether a set of temporary exposure keys indicate proximity to an affected user. If so, the app can retrieve additional information such as date and duration from the framework.

How does the Exposure Notifications System work?

The second part of the project concerns with the actual working of the feature and communication.  The Exposure Notification Service is the vehicle for implementing exposure notification and uses the Bluetooth Low Energy wireless technology for proximity detection of nearby smartphones, and for the data exchange mechanism.

The Exposure Notification system is made up of few components, namely Bluetooth keys, an API to communicate, and an app typically distributed by the local public health authorities.

First up, an API or Application Programming Interface is a software intermediary or bridge that allows two applications to talk to each other. Each time some uses an app like Facebook, or sends an instant message, or check the weather on phone, the application is using an API to fetch and display the data.

Apple and Google developed the underlying APIs and Bluetooth functionality, but they are not developing the apps that use those APIs. Instead, the technology is being incorporated into apps designed by public health authorities worldwide, which can use the tracking information to send notifications on exposure and follow up with recommended next steps.

• Contact tracing app download by users – Users download the contact tracing app provided by local public health authorities that are compatible with ENS (Exposure Notification System)

• User opts in to the ENS (Exposure Notification System)

Image Credit: Macrumors

• ENS (Exposure notification system) generates a random ID for user’s device. To help ensure these random IDs can’t be used to identify the user or user’s location, they change every 10-20 minutes.

  

Image Credit: Nevada Health Response

• The user’s phone and the phones around user work in the background to exchange these privacy-preserving random IDs via Bluetooth. The users do not need to have any app open or opt-in or opt-out for this process to take place.

Image Credit: iunera

• User’s phone periodically checks all the random IDs associated with positive COVID-19 cases against its own list.

• If there’s a match, the app will notify the user with further instructions from their public health authority on how to keep user and the people around them safe.

Image Credit: CGTN

Finally, what about Privacy

The Exposure Notifications System was designed with users’ privacy and security at the center and essentially everything else floating around the need to keep contact’s identity secure. An user’s identity is not shared with other users, Google, or Apple. Even a cursory read of the document produced by Apple and Google detailing the specifications and working details of the program reveal that the concerns around privacy may afford to be relaxed at least in the case of this feature. Here’s a look at the top privacy concerns.

• The APIs have been created with privacy and security in mind, and app usage is opt in rather than mandatory.
• User decides whether they want to use Exposure Notifications—it’s off unless user turns it on.
• ENS doesn’t use location data from your device.
• User’s identity is not shared with Google, Apple or other users.
• Only public health authorities can use this system.

Phase 1 of Exposure Notification System

The first phase, released by Apple through iOS version 13.5 on 20 May, 2020 required that users first download an app from their public health authority to opt-in to Exposure Notifications.

iOS 13.7 lets you opt-in to the COVID-19 Exposure Notifications system without the need to download an app. System availability depends on support from your local public health authority. For more information see covid19.apple.com/contacttracing. This release also includes other bug fixes for your iPhone.

This method makes contact tracing significantly easier for public health authorities who won’t have to waste critical time or spend valuable money on developing an app.

So What’s coming

The Exposure Notification System or ENS allows public health authorities to develop apps that augment manual contact tracing efforts while preserving the privacy of their citizens. As of today, public health authorities have used ENS to launch in 16 countries and regions across Africa, Asia, Europe, North America and South America, with more apps currently under development.

Apple likely made the change to use Exposure Notification service without the need for a contact tracing app to quietly encourage more public health departments to use its service. Only a handful of states in the United States and a few countries worldwide are using Google and Apple’s mobile technology. Most health departments still use an old fashioned contact tracing method that relies on in-person interviews and phone calls to locate those individuals who came in contact with an infected person.

Recently, Nevada Department of Health and Human Services started offering its own contact tracing app to use the ENS (Exposure Notification Service) to keep people safe.

Image Credit: Adweek

All content platforms and social media companies must keep the content flowing because that is the business model: Content captures attention, provides viewership and generates data (users’ statistics). Content is the starting and the end point of consumers’ journeys on social media. A video, an information post, a tweet, blog post, picture, public service advisories, are all types of content. The platforms then sell that attention (read: viewership), enriched by that data (read: customized ads). But how do you deal with the objectionable, disgusting, pornographic, illegal, or otherwise verboten content uploaded alongside legitimate content?

How do Facebook and other tech and social media companies ensure integrity of content on their networks? And how do these companies work to curb misinformation on their platforms about the Coronavirus pandemic or the 2020 elections or any other global or regional event. We have seen state and non-state sponsored actors with nefarious intent take advantage of lax content posting norms.

Dangerous fake news has spread on platforms like Facebook in Myanmar, where the Rohingya ethnic minority are persecuted. United Nations has clearly blamed the role of social media in spreading the persecution and this is not the only example of its kind.

Misinformation campaigns (aka “fake news”) on Facebook have interfered with democratic elections around the world. After a man used Facebook to live stream his attack on two New Zealand mosques in March 2019, the video quickly spread. YouTube Moderators fought back hard taking down the video as newer versions kept popping up seemingly beating the controls that YouTube has in place to immediately flag already removed material. The uploaders were able to sneak past by using a loophole – exact re-uploads of the video are banned by YouTube, however videos that contain clips of the original footage must be sent to human moderators for review, thereby delaying the process. And again this loophole existed for a purely legitimate reason – to ensure that news videos that use a portion of the video for their segments aren’t removed in the process.

In 2017, a live stream on Facebook showed the fatal shooting of a 74 year old retiree in Cleveland, while also showing a man murdering his own child in Thailand. Both videos remained online for hours and racked up hundreds of thousands of views.

In a December 2017 report, ProPublica took a revealing look at content moderation. ProPublica gathered from its users 900 examples of where users believed that Facebook content moderation was incorrectly applied. ProPublica then selected 49 of such posts and asked Facebook to explain. Rather shockingly, yet unsurprisingly, Facebook admitted to an error by its moderators in 22 out of 49 posts. Just imagine, 22 out of 49 means approximately 45% or half of all posts in the sample had moderation applied incorrectly. No amount of explaining can explain that.

Social media is good, right!

Image Credit: Internet

Facebook serves as a platform for its billions of regular users to post, view and offer feedback about the content hosted on its servers. But when that content is more “terrorist propaganda” than “brunch photo,” or when it becomes “porn” than “essential context” to an image, the company has struggled to determine the right approach to removing it in time. The traditional methods of company moderators reviewing user-reported infractions is too time consuming, while the AI powered algorithms are too imprecise.

With the COVID-19 risk content moderators were sent home, and without proper technology, connectivity, and safety requirements met, Facebook’s automated system took full control. That was an unmitigated disaster, leading to widespread blocking or deleting of posts mentioning Coronavirus from reputable sources such as The Independent and the Dallas Morning News, not to mention millions of individual Facebook users. Those automated systems still have problems.

Content from legitimate sources, verified fact-checked sources, and sources with history of posting appropriate and trust worthy content is suddenly being targeted. While there were always instances of some posts getting tagged erroneously, there is an order of magnitude increase in such instances in the post-covid world. Clearly the strategy to have AI and ML based programs call the shots hasn’t worked.

“Facebook is blocking COVID-19 posts from fact based sources,” a Facebook source says. On March 17^th 2020, according to an Yahoo news article, Facebook suffered from a massive bug in its News Feed spam filter, causing URLs to legitimate websites including Medium, Buzzfeed, and USA Today to be blocked from being shared as posts or comments. The issue blocked shares of some but not all coronavirus-related content, while some unrelated links are allowed through and others are not. Facebook has been trying to fight back against misinformation related to the outbreak, but may have gotten overzealous or experienced a technical error.

According to a just released report by NYU Stern, Facebook content moderators review posts, pictures, and videos that have been flagged by AI or reported by users about 3 million times a day. So that is 3 million pieces of content just flagged for review out of possibly billions and billions of content posts. And since CEO Mark Zuckerberg admitted in a white paper that moderators “make the wrong call in more than one out of every 10 cases,” that means 300,000 times a day, mistakes happen.

So, is it all an experiment gone wrong? Did the novel coronavirus catch the social media content moderation framework at the worst time?

Image Credit: Webhelp

The one thing we know for sure is that you can’t control the beast that is Social Media. Generally, the response by firms to incidents and critiques of the social media platforms is primarily ‘We’re going to put more computational power on it,’ or ‘We’re going to put more human eyeballs on it.’” And that is generally fine. For it attempts to resolve the problem, or at least is seen as an attempt to resolve the problem, with or without adequate results. The focus is not on the results, rather on the proclivity to be seen as doing something.

Facebook uses more than 70 external partners and fact-checking firms. According to Facebook, it has over 30,000 people working on safety and security — about half of them are content reviewers working out of 20 offices around the world. Facebook employs almost all of these 15,000 content moderators indirectly, mostly outsourced workers. In similar context, YouTube today employs an expected 10 – 12,000 people to patrol al of Youtube and Google’s content.  Similarly, Twitter employees close to 2,000 people in its content review team.

Generally speaking, content management or content review falls in to two main buckets. The first is content moderation, where content moderators, mostly contractors working on behalf of lets say Facebook or Twitter, check the content for violations like nudity, sexual content, racism, hate speech, acts of violence or promoting violence, violating laws and community standards, child pornography, and like. Moderators are responsible for reviewing flagged content, and removing it in accordance with the policies of the social media platform. The second bucket is third party fact checking, where Facebook employs more than 70 third party organizations, primarily, news outlets and prominent individuals to check a particular content as True or False. Based on the result then, any one of the many actions can be taken. Either the content is either left up or demoted, or additional labels are added, or additional constraints are placed including monetary impacts or all of the foregoing in extreme cases.

According to content management and comprehensive community standards page on Facebook directly, the efforts to moderate and regulate content have three stages. First, is the Policy development process. The content policy team at Facebook is responsible for developing our Community Standards. We have people in 11 offices around the world, including subject matter experts on issues such as hate speech, child safety and terrorism. Many of us have worked on the issues of expression and safety long before coming to Facebook. Second is Enforcement of policies developed previously through its global content moderator workforce. Facebook uses a combination of artificial intelligence and reports from people to identify posts, pictures or other content that likely violates our Community Standards. These reports are reviewed by our Community Operations team, who work 24/7 in over 40 languages. Facebook’s fact-checking rules dictate that pages can have their reach and advertising limited on the platform if they repeatedly spread information deemed inaccurate by its fact-checking partners. The company operates on a “strike” basis, meaning a page can post inaccurate information and receive a one-strike warning before the platform takes action. Two strikes in 90 days places an account into “repeat offender” status, which can lead to a reduction in distribution of the account’s content and a temporary block on advertising on the platform. And finaly, Facebook launched a review process last year. A news organization or politician can appeal the decision to attach a label to one of its posts. Facebook employees who work with content partners then decide if an appeal is a high-priority issue or PR risk, in which case they log it in an internal task management system as a misinformation “escalation.” Marking something as an “escalation” means that senior leadership is notified so they can review the situation and quickly — often within 24 hours — make a decision about how to proceed.

If Facebook’s content moderators have three million posts to moderate each day, that’s 200 per person: 25 each and every hour in an eight-hour shift. That’s under 150 seconds to decide if a post meets or violates community standards.

Image Credit: TELUS International

According the NYU Stern report, and according to some recent investigations by Buzzfeed and news articles by NBC, Forbes and others, the problem of content reviews – whether its content moderation by moderators or third party fact-checking by independent news organizations and individuals is more structural and institutional in nature. The novel coronavirus just exposed a side of it and perhaps aggravated the outcomes.

According to a NBC news article, Facebook has allowed conservative news outlets and personalities to repeatedly spread false information without facing any of the company’s stated penalties, according to leaked materials reviewed by NBC News. According to internal discussions from the last six months, Facebook has relaxed its rules so that conservative pages, including those run by Breitbart, former Fox News personalities Diamond and Silk, the nonprofit media outlet PragerU and the pundit Charlie Kirk, were not penalized for violations of the company’s misinformation policies.

The list and descriptions of the escalations, leaked to NBC News, showed that Facebook employees in the misinformation escalations team, with direct oversight from company leadership, deleted strikes during the review process that were issued to some conservative partners for posting misinformation over the last six months. The discussions of the reviews showed that Facebook employees were worried that complaints about Facebook’s fact-checking could go public and fuel allegations that the social network was biased against conservatives.

“This supposed goal of this process is to prevent embarrassing false positives against respectable content partners, but the data shows that this is instead being used primarily to shield conservative fake news from the consequences,” said one former employee.

In a recent case at Facebook, related to appeals process, a Facebook employee filed a misinformation escalation for PragerU, after a series of fact-checking labels were applied to PragerU posts. A Facebook employee escalated the issue because of “partner sensitivity” and mentioned within that the repeat offender status was “especially worrisome due to PragerU having 500 active ads on our platform,” according to the discussion contained within the task management system and leaked to NBC News. After some back and forth between employees, the fact check label was left on the posts, but the strikes that could have jeopardized the advertising campaign were removed from PragerU’s pages.

In another case, a senior engineer at one of the top social media giants collected internal evidence that showed the company was giving preferential treatment to prominent conservative accounts to help them remove fact-checks from their content, according to Buzzfeed. The company responded by removing his post and restricting internal access to the information he cited. A week later the engineer was fired, according to internal posts seen by BuzzFeed News.

Many employees at top social media companies like Facebook, Twitter and others have expressed deep anguish on their internal inter-company platforms , amid growing internal concerns about the company’s competence in handling misinformation, and the precautions it is taking to ensure its platform isn’t used to disrupt or mislead ahead of the US presidential election.

Third party fact checking also suffers from severe debilitating factors severely limiting its outreach. Scale becomes an issue for the fact checkers as most organizations Facebook contracts work of fact checking to, typically only allocates handful of people to the task of fact-checking. Coupled with an impossible amount of fact-checking requests coming in, that means the people are constantly backlogged.

According to Sarah Roberts, a pioneering scholar of content moderation, and an information studies expert at the UCLA, the social media companies handle the activities of content moderation in a fashion that diminishes its importance and obscures how the activities of content moderation work. The idea is simple: make it obscure and muddy the waters, to achieve plausible deniability. Something straight out of the play book of top politicians and business executives – plausible deniability. Content moderation is a mission critical activity, yet most social media companies fulfill it with their most precarious employees mostly by just outsourcing the entire journey of content moderation.

Just as companies save significant amount of money by outsourcing transport logistics, janitorial and food services, outsourcing content moderation saves these social media giants tons of money. Just as we pointed out earlier, between Facebook, Twitter and Youtube there are close to 40 – 50,000 content moderators. And the number is only growing. Even at conservative estimate of 40,000 people, that is outsourcing work equivalent to 100% of work performed at 4 medium sized outsourcing services providers.

The lack of access and the lack of willingness by social media companies to allow any kind of scrutiny of their moderation practices has made content moderation a kind of black box ops where only few people know what takes place. This is certainly by design and it is no accident that the top social media companies choose the convenience of maintaining plausible deniability and the wait and watch approach while incendiary content burns and lights fire to everything around it.

What about human content moderators?

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According to Guy Rosen, VP of Integrity at Facebook, content moderation is a really arduous job. Numerous people have brought this issue to the fore. Watching countless hours of sadistic, violent, disturbing and purely horrific content day in and day out takes its toll. How do you get those hours of visions and thoughts out of your head when you head home? You cannot. Those sights and sounds stay with you. As a content moderator, its really hard to live a normal life after watching 8 hours of non-stop disturbing content.

In the recent past, a former Facebook moderator sued, accusing the platform of psychological harm. Former Microsoft employees sued Microsoft for similar reasons after the alleged trauma from reviewing child porn. In a more recent report, The Verge carried out a scathing review of the job conditions for content moderators at Facebook and the harrowing conditions surrounding the job in general. As one employee interviewed in the report put it: “We were doing something that was darkening our soul — or whatever you call it,” he says. “What else do you do at that point? The one thing that makes us laugh is actually damaging us. I had to watch myself when I was joking around in public. I would accidentally say [offensive] things all the time — and then be like, Oh shit, I’m at the grocery store. I cannot be talking like this.”

Accenture which performs content moderation for social media companies, has its employees sign a form that directly acknowledges that reviewing such content may be harmful to mental health and could even lead to PTSD.

So, is it purely an evil design at play at Social Media giants when it comes to moderating?

Image Credit: VICE

To be fair to all, Facebook and other Social media giants do face somewhat of an uphill battle in their efforts of moderating the content. The moment any post, video, or content gets tagged or labeled as requiring fact-checking or misleading or inappropriate, the authors or posters are quick to raise hell about dictatorship, suppression of free speech and infringement of people’s inalienable right of expression.

There is always a debate between balancing free speech versus freedom from cruelty and hatred. Or debate between balancing freedom of expression versus right to speak against bullies. A recent attempt by Twitter to mark certain tweets from the President caused a storm and PR crisis. A similar attempt from Facebook recently drew ire of conservatives and put certain ad revenue under threat.

Aside from the morals and ethics, at the heart of the debate is a purely financial question: content attracts viewers. More viewers equals more content and vice versa. Any attempt to reduce content, even the borderline inappropriate content will reduce viewers hence impacts revenue. The business models chosen by Facebook, Twitter and Google favor an unremitting, unrelenting drive to add more users and demonstrate growth to investors. More users and more content means more content to moderate and more nuances, but all of that is secondary, a kind of an afterthought.

The debate on the usage of internet and governing content uploads is not new. The debate has been going on for some time now and is just about reaching peak interest levels around the world, with many governments promising action like EU and UK; few governments, like China, in fact taking strong action; and few just watching how the entire debate pans out and what, if any, changes come out as result.

The big tech players around the world have realized one thing – it’s a tough tight rope walk to control or govern the internet. If a platform puts in too strict controls, through user-reporting mechanism, AI backed algorithms and human monitors flagging and removing content, it will get labeled as ‘dictatorship’ and against free speech. If a platform puts in too few controls, hosting content freely and with little censorship, its going to get run over by activists from all ends of the spectrum, from left to right. It’s quite like an overflowing pot left simmering for long. The only difference is no one can lift the pot and no matter which way its tilted, boiling hot contents are sure to leave scalding marks.

With that, lets take a look at The role of Regulators in the efforts to moderate content.

When Mark Zuckerberg wrote the oped in WAPO in March 2019 asking for government and regulators to step in more aggressively to police the internet, he may have elaborated what many insiders feel regarding governing internet, and specifically what content is uploaded for viewers to view, download and use. Yet, not everything seems above board here as the challenges that Mark Zuckerberg cited so eloquently in his oped are the same challenges that have plagued tech industry for years. What has changed recently that governments are being called in to action, while so far the tech industry has fought tooth and nail for freedom of expression and freedom of speech?

As the efforts to govern the internet continue, many who are fighting the battle daily are coming to realize the magnitude of difficulty this seemingly simple question of ‘what content to be allowed’ poses. Lets face it: Internet was never known to be deferential to peoples’ preferences. The advocates of freedom of expression and free speech, often big tech companies themselves, fought for as little government control as possible, decrying every move made by governments or regulators around the world.

Technology experts, including big tech companies themselves believe that for Zuckerberg and other big tech companies, “regulation” isn’t an uncouth word anymore. As with changing times, the big tech is now embracing regulations, not because of any newfound respect for regulations but purely as a business measure. From early days when big tech companies projected all regulations as reprehensible and fought any and all regulations tooth and nail, to the current day where they are welcoming regulations, the transformation cannot be more melodramatic.

Most of big tech today sees regulations as a set of common rules enforced by governments and regulators that’ll allow them to further cement their dominance of the internet. And if anything goes wrong, they always have the comfort of pointing the finger to the” Regulator” big brother.

So what is the Way forward to moderate content and to maintain integrity of platforms

According the NYU Stern report, the solution is straight-forward, and calls for increased investment, focus and commitment. The solution is a multi-pronged approach. The first step of this approach begins with Ending outsourcing: to ensure all content moderators are official Facebook or Twitter or employees of the Social media company, with adequate salaries. Increasing the number of moderators significantly is another, as well as placing content moderation under the dedicated oversight of a senior executive.

Facebook or Twitter or other Social media companies should also expand oversight in underserved countries, the report suggests.  In addition, the health and well being of content moderators employees should come first. The company should sponsor research into the mental health impacts of moderating the world’s content. And the company should expand fact-checking to curb the spread of misinformation.

Image Credit: Techcrunch

In an industry which is not limited by any conventional restraints, Apple® has once again proven to the thought and market leader in promoting what it’s users want. It is not however what Apple® has promised to do, as its customer and user-centricity is quite legendary, rather it’s the timing of the changes that is quite interesting.

During the Worldwide Developers Conference (WWDC) held remotely for the first time, Apple® announced some new privacy and security features for iOS. Apple®’s 31st Worldwide Developers Conference 2020 was a digital-only event kicked off June 22. WWDC is Apple®’s annual Worldwide Developers Conference where developers can attend sessions and meet with Apple® engineers and this year’s event witnessed Apple®  debut iOS 14, iPadOS 14, macOS Big Sur, tvOS 14, and watchOS 7. The online event typically allows millions of developers worldwide to get close proximity access to future versions of iOS, iPadOS, macOS, watchOS, and tvOS, as well as engage and network with Apple® engineers and community through engineering sessions, one-on-one lab appointments, and the revamped Apple®  Developer Forums. The event for the first time had no physical gathering in California due to the ongoing global health crisis, making everyone sorely miss the Networking and touch and feel of events like this.

During this year’s event, Apple® provided a full digital WWDC experience with online keynote, a Platforms State of the Union for developers, technical and design-focused engineering sessions, Apple® Developer Forums with Apple® engineer participation, and one-on-one developer labs. Apple® also hosted a Swift Student challenge, though winners received a jacket, pins, and virtual one-on-one lab sessions with Apple® engineers rather than free admission to WWDC.

Image Credit: appleinsider

With the new changes Apple® announced, publishers need to quite very much overhaul their entire value offering to stay compliant. As compared to the earlier practice of virtual free for all, publishers will now be required to provide information about their app’s data collection practices while explicitly seeking permission from their users to track the users’ shadow across apps and websites owned by other companies. This is a major change for the industry players, since thus far, users were required to opt-out if they wanted from sharing their data and identifiers with third party networks. To aggravate the matters, the opt-out process itself in most cases was not straightforward, with self-regulation and delayed actions in most cases giving no real out to the users. This gave the publishers of the app a virtual free rein to use the users’ implied consent in any way the publishers deemed fit. That all is set to change as now with the new changes, users will have to explicitly opt-in within their apps to allow tracking or sharing of their data.

The updates mean that you can limit how much location information is shared with apps — only allowing it approximate data rather than your precise whereabouts. Apple® also introduced recording indicators through an orange dot on your status bar that will tell you when your camera or microphone is activated. Apple® also introduced labels for app permissions to inform people how much data an app requests before they download them. The feature will show people those labels in two categories, on “Data Linked To You” and “Data Used to Track You.”

The last few years have seen an entire new industry segment open up which specializes in driving users to download an app, accessing user information, sometimes with consent, sometimes without, then tracking users across apps, collecting data and then selling the data, a process leading to shortcut of app monetization. Instead of charging user to use the app, the app pays itself through tracking, collecting and selling user data. While users complained, and while the more privacy minded users combed through the fine print of legal agreements and terms of conditions or terms of services for each app they installed, most users even those who were concerned, just shrugged and moved on. Most users just took it as the cost of using apps.

An important point to note here is that apps don’t exist in isolation or in silos. There is almost a complete app ecosystem, and as with any ecosystem, the app ecosystem requires continuous sustenance. From App development to app launch and promotion, to making the app stick with target audience, then capturing and tracking of data, and finally utilizing the data, are key parts of the ecosystem. On the technical side, or for the more technically minded, Apple® uses something called an IDFA, the Identifier for Advertisers (IDFA), which is a random device identifier assigned by Apple® to a user’s device. Advertisers use this to track data so they can deliver customized advertising. Each IDFA contains no personal identifying information, or PII, instead serving to measure and identify user interactions with ad campaigns, installs, and in-app activity. Some industry insiders put the value of app driven advertisements in iOS in excess of $45 billion dollars.

Just looking at the app development itself, unarguably the first step towards launching an app, there can be no mistake in gauging the potential of the industry. Skipping all the factors in cost breakdown, a median price to create an app by specialist agencies was found to be $171,450, while many online app cost calculators provide a price tag between $200,000 and $350,000 for an app with dozens of features. Small apps generally cost much less – apps with few basic features could cost between $10,000 and $50,000, indicating there’s an opportunity for any type of business to make a decent ROI. Needless to say, this potential saw anyone and everyone jump headfirst in to the fray.

Aided with technological advancements like microservices and APIs, it is no surprise that making, launching and monetizing apps has become big business. For a while, it really seemed to be the Wild, Wild West, with no real control, oversight or accountability.

Image Credit: cnet

The above is however set to change in a big, yet unprecedented way in near future. The upcoming changes will make it harder for app publishers, advertisers and marketers to track and target users across apps, creating a level of uncertainty on how that industry will work from now on. The changes are expected to improve transparency on users’ privacy, but they will also have an impact on the current app’s economy and how apps monetize. Some of the most important players in that space such as ad networks and attribution networks will be immediately affected.

According to a recent survey of iOS and Android users, 68.3% of iOS and 67.5% of Android users will likely deny tracking permissions if they are requested in-app to opt-in. With Android sure to follow, this is definitely good news for privacy minded and not-so-privacy-minded users alike as the move spearheaded by Apple^® will strengthen the privacy laws in the entire marketplace.

Some critics do feel that it’s not big tech or app developers pushing back, it’s the GDPR in Europe that is forcing companies like Apple^® to announce such measures. Coupled with an increasing awareness of the privacy violations that have been suffered by average consumer over the last decade or more, firms are bound to act sooner than later. While this may be partially true, there is no denying that the end result is what privacy advocates have always wanted.

To summarize, the upcoming privacy changes in iOS as announced in WWDC are forecasted to have a significant impact not only on how apps monetize their audience and how advertising and attribution networks work, but also the entire app ecosystem. The study showed that a large proportion of the users will not allow themselves to be tracked, a crucial step in effectively running and attributing ad campaigns in the apps space at the moment. Similar findings were also revealed with Android users. Privacy seems to be a key concern among users in the mobile space and providing them with more transparency and choices seems to change the current app landscape dramatically.

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The Blitzkrieg

Major JFC Fuller, then 37 years of age, was posted at the Somme battlefield in France at the time of WWI in 1916. On that battlefield, Major Fuller observed for the first time the awesome power of the newest savagery in the war technology, known simply as the armored tank. Major Fuller seized immediately that this new machine, the tank, holds the answer to most perplexing tactical question in modern day warfare – how to cross an open muddy field, littered with trenches and barbed wire against a haze of blazing guns? No approach had worked so far, and even hundreds of thousands of brave men laying down their lives only had as much effect as millions of raindrops washing against stone façade. But the tank held the most promise. For, it seemed indestructible, carried more firepower and could march on undeterred in all kinds of weather and most all ground conditions. Major Fuller enthusiastically sent reports of the success of this new weapon to the English war leadership. To Major Fuller, the evidence of tank’s superiority was undeniable and hence there exists every reason for tanks to replace the archaic ways of horse mounted cavalry warfare.

All the major countries in World War I (1914–1918) entered in to the conflict with cavalry forces. German forces continued the use of horses on the Eastern Front well into the war while on the Allied side, the United Kingdom used mounted infantry and cavalry charges throughout the war.

The British war leadership was steeped thoroughly in tradition and failed to see the alternate methods, regardless of the pragmatism or inevitable tide of changing times. One British General compared the faces of soldiers riding horses to those riding tanks and quipped about the lack of intelligence on the faces of tank mounted soldiers. Not just the Leadership, many soldiers on the front lines who had never seen tanks in action were at best skeptical of the new beast.

Major Fuller sought transfer to the Tank division and went on to produce brilliant papers of how to break the German lines, destroy vital rail and road links, invade deep in to the territory and strike at the German war offices. A tactical approach aided by airstrikes and resting squarely on unarguably superior technology available to the British Army in form of tank will surely make quick work of the Germans, Major Fuller conceived. By striking suddenly at the German command, the Blitzkrieg will cause the German army to disintegrate and fall. Major Fuller didn’t give up hope and continued in his efforts undeterred. In late 1917, during the battle of Cambrie, the British war leadership finally gave in to Fuller’s persistent demands and decided to use 400 tanks to attack German front lines. Unsurprisingly the British tanks decimated German defense system and made quick work of the barbed wires and shrugged off lines of soldiers firing guns at the armored plating of the tanks. A measly top speed of 4 miles per hour was enough for the tanks to run through German war lines and trenches. The Germans were caught off-guard and outmaneuvered tactically and strategically. The soldiers who saw the power of tanks for the first time were awe-stuck. In what can only be dubbed as an irony, the British Army decided to send in horses to take advantage of the gaps created by the tanks. This non-sensical move allowed German forces to regroup and drive the British back. The momentum was lost. And so was the tactical and strategic opportunity. Major Fuller once again undeterred carefully documented the events, recording what worked well and what may be improved. His ideas were reluctantly adapted and dubbed Plan 1919, to be used in the year 1919.

Major Fuller’s work did not go completely unrewarded though. For his pioneering papers in strategy work, Major Fuller received many accolades and won the Gold Medal from a prestigious think tank of the day. The most important possible beneficiary of his careful and well documented work however remained cold. The British Army continued to give Major Fuller a cold shoulder. The most brilliant and accurate strategic work in modern warfare was seen more as a threat than an opportunity.

The beliefs of British war leadership were so deep rooted that the newly formed Tank core and rapid advances in tank technology throughout the war years amounted to exactly nothing. Before Major Fuller’s plan saw the light of the day, the war ended in 1918. However, that was not the end of tank warfare or for that matter the strategy of sudden, lightning paced attacks backed by airstrikes destroying vital road and rail links that Major Fuller had conceived. Exactly twenty years later, at the start of World War II, Germany used the same Blitzkrieg approach to effectively lap up entire Europe within a matter of weeks, almost unchallenged and nearly unstoppable. Despite possessing clear technological superiority and strategical advantage of having a brilliant war strategist in Fuller, the British squabbled away the technical and strategic momentum to German forces by late 1930s.  Major Fuller’s strategy proved right, not just right, in fact it was proven to be arguably the biggest breakthrough in war technology since the invention of guns.

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How enterprises react to Innovation?

Major Fuller though is not alone, nor is the blissful ignorance of ground realities a trait reserved for British War Leadership. In 1970, the photocopying giant Xerox developed a state of the art research center in Palo Alto, California, called PARC, short for Palo Alto Research Center. PARC scientists quickly paid back Xerox by doing innovative work in laser printing that would establish Xerox as leader in printing technology for decades. Shortly thereafter Xerox scientists developed the first computer, truly ahead of its time. Steve Jobs during one of his visits to PARC was stunned by what he saw, the mouse and computer interface was truly revolutionary he felt. Xerox however had other ideas.  The same Xerox leadership team that led its PARC scientists to produce breakthrough in laser printing technology in 1971 and many other innovations, seemed equally capable of squandering away the strategic advantage held by true game-changer, the personal computer. Xerox was then dubbed as the company that fumbled the future.

In 1975, Steven Sasson invented the first self-contained digital camera at Eastman Kodak. Sasson’s patent claimed an arrangement that allowed the CCD to be read out quickly (“in real time”) into a temporary buffer of random-access memory, and then written to storage at the lower speed of the storage device; essentially all modern digital cameras still use such an arrangement. His was not the first camera that produced digital images, but was the first hand-held digital camera. 37 years later, in 2012, the digital camera technology became the prime reason for Kodak’s demise. Though Kodak did eventually market both professional and consumer cameras, it did not fully embrace digital photography until it was too late.

Image Source: NY Times

In 1999, Sony launched world’s first digital music player. Sony possessed the iconic and generation-defining brand Walkman and had endorsements of virtually every heavyweight in the music entertainment industry. Yet, within few years, Apple’s ipod defined the music industry, virtually destroying the Walkman promise. Sony worried about cannibalization and was slow to react, thoughtful and diligent at every turn. If it built a music player and service that made it easy for people to share digital songs, that might hurt sales of its own music records division, which had its own profit and loss statement. Apple on the other hand had one single profit and loss statement for the entire company. Steve Jobs’s business were simple and radical. Never be afraid of cannibalizing yourself. ‘If you don’t cannibalize yourself, someone else will,’ Steve Jobs said. Result is a bed of roses for Apple, while becoming thorns under the skin for Sony.

By 2013, Nokia had lost 4/5^th of its peak market capitalization in 2007. Customers were driving away in troves to competition. Nokia had ignored the glitz and glamor of Android, while it severely underestimated the new ecosystem. Microsoft lapped up Nokia’s handset business for a fraction of its value. However, unbeknownst to Microsoft, things had become so bad for Nokia that no amount of effort would be able to revive the brand. Microsoft’s own windows phone OS was in no way a challenger to Android – iOS domination. When Satya Nadella took over Microsoft from Balmer in 2014, he wrote off the entire $7.2 billion Microsoft investment in to Nokia, gave up efforts to review Microsoft’s 7 year old foray in to mobile phones and put the entire Microsoft mobile phone business on the chopping block, marking the end of a rather painful journey for Microsoft’s handheld devices business unit. This is a particularly hard pill to swallow as windows OS had won over many critics with its arguably superior interface when it launched in 2010. The initial success was short-lived and couldn’t be replicated to subsequent versions of both software and hardware.

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Could it all be a coincidence? The tank powered blitzkrieg, the underrated digital camera, the before-it’s-era personal computer and carry-in-your-pocket digital music player? Why do well-established, pioneering organizations lose out to maverick, new-comers? What powers the engine of growth in unconventional yet strategically sound products and technologies? Why does organizations get complacent and let upstarts overtake them? Why do leadership of these organizations fail to grasp the potential of emerging products and technologies in front of them? Isn’t guiding the organization through unknown times the primary purpose of bringing together individuals, otherwise known as leadership team? If the top organizations fail so miserably and so often, there must be some reason, some logical, rational explanation.

Answers to these questions are often hidden underneath layers of organization culture. Many modern business people, strategists and industry watchers coined the term ‘Disruptive’ and attached it to any new product, service or technology that sought to bring something new to the consumers. Disruption, in pure business terms is defined as an innovation that changes the business and industry dynamics in such a way that incumbent organizations must adapt to the change or fall by the wayside. In the face of disruptive technology or product, the incumbent organization needs to maintain its leadership status by embracing it as quickly as possible. If the organizations keep doing what worked for them in the past, they are more likely to fail as such disruptive forces demand disruption to the way of thinking and ethos of working.  “Disruption” in classic business parlance describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses. That sadly is not true of how market leaders work.

Disruptive Innovation and Architectural Innovation

The question is: why don’t organizations adapt? Its certainly not for lack of innovation. For kodak, Sony and Xerox were all highly innovative companies with zealous management teams. Then what made them lag behind and eventually lose the fight? This is where the theory of Disruptive Innovation pioneered by Clayton M. Christensen comes in. Briefly the theory of Disruptive Innovation suggests this: Specifically, as incumbents focus on improving their products and services for their most demanding (and usually most profitable) customers, they exceed the needs of some segments and ignore the needs of others. Entrants that prove disruptive begin by successfully targeting those overlooked segments, gaining a foothold by delivering more-suitable functionality—frequently at a lower price. Incumbents, chasing higher profitability in more-demanding segments, tend not to respond vigorously. Entrants then move upmarket, delivering the performance that incumbents’ mainstream customers require, while preserving the advantages that drove their early success. When mainstream customers start adopting the entrants’ offerings in volume, disruption has occurred.

While the incumbent leader organizations are looking elsewhere, the newcomers arrive, unburdened by legacy, take a half-baked product or technology and make rapid progress carving a niche market and gaining foothold in the industry to displace the incumbent.

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The theory of Disruptive Innovation explains as much as it leaves out. The theory is certainly valid, and elegant for the most part. Christensen has a single clear idea of how disruption happens — and recommends a solution, too: disrupt yourself before you are disrupted by someone else. However, stretching it to fit all scenarios is at best a naïve attempt at explaining the why and how of how people work.

Kodak, Sony and Xerox were all highly innovative companies, each possessing an enviable track record. The technical teams at these organizations boasted of some of the sharpest minds, while the business leaders were equally brilliant. The leadership teams at these organizations could see what lay ahead.  As with innovation, the lack of vision could not be a factor. They could articulate the challenges of the times ahead and the promises of untested technologies. Yet, they were unable to put together a cohesive response strategy. It seemed no one at the helm could do the right thing. Where does this inability to lead the tanks in place of horses stem from?

The theory of Disruptive Innovation was not new in 1995 when it was first proposed, or over two decades when it was further developed. Perhaps the ideas were old, only the changing global nature of businesses made the traits ever so apparent. Or that disruption has been happening forever, we are just starting to recognize it now. Or perhaps, disruption is the normal.

When a company discovers or arrives at a successful business model often following years of painstaking work, management are given the explicit mandate to exploit that advantage to its fullest extent. This invariably means that most companies are structurally geared to manage, protect and nurture their currently successful business model. All the company’s assets – structures, operations, human resources, processes, tools and culture are geared towards doing what they have always done – protect, grow and nurture its current strengths.

It is no surprise then that swords are pulled out when there is even a shadow cast on the company’s current affairs. Any harbingers of change, which bring a radical suggestion or new idea, no matter how sound, or logically accurate, tend to be at odds with almost the entire company. This is not necessarily bad – companies do need to exploit their current positions as this is where their revenues and profits are coming from. The mistake organizations and leaders make is to focus exclusively on exploitation while ignoring most other ideas.

In the quest to understand the behavior of leaders better, theory of Disruptive Innovation does seem to fall short. Its true that Disruptive innovation changes the marketplace, however it doesn’t speak to why the incumbent organizations fail to take action? Or why the same organization with brilliant track record at innovation suddenly stops innovating?

Rebecca Henderson and Kim Clark postulated that unlike what is suggested in the theory of disruptive innovation, there are multiple points of failure where an organization fails to seize the opportunity. These points may exist all along, up and down the organization in no order. For example, in JFC Fuller’s case, almost every branch, company and division of the armed forces had little faith, mainly because many had not seen the tank in action. Questions on its size, slow pace, cramped insides, and unsightly presence were all valid, yet short-lived.

Then there are challenges about the financial viability of a product, or about its perceived value to the company, or about its future.  An architectural innovation challenges an old organization because it demands that the organization remake itself. The simple explanation is that a market leader in producing printers is much likely to accept breakthrough innovations in printer ink technology as there is no real organizational stress in pursuing that product line, and highly unlikely to accept the idea for a personal computer as there is little organizational mechanism for paying attention to the innovation and nurturing it along.

Within the camera business — Canon and Nikon made the transition to digital technology successfully while Kodak could not. Was that because Kodak was hidebound and clueless about digital technology? Not remotely as Kodak entered the digital market very early and with some early successes. What killed Kodak, though, was that it hadn’t really been a photography company for a long time, rather it was a film, photo paper, and chemical company.

The message of Henderson’s work with Kim Clark and others is that when companies or institutions are faced with an organizationally disruptive innovation, there is no simple solution. There may be no solution at all. “I’m sorry it’s not more management guru-ish,” she says. “But anybody who’s really any good at this will tell you that this is hard.”

Tesla’s solar powered vehicles, Tesla’s SpaceX, Tesla’s home solar program are all examples of what happens when organizations shun perfectly valid ideas or technologies for lack of viability, and lesser known players enter in to the market to fill that small gap of that niche product. Tesla started off as a ‘niche’ EV manufacturer, in a market segment which itself was considered a joke by several top automobile manufacturers, and in little more than 1 decade, managed to claim the spot of most valued US Automobile brand ever. And this feat is even more enviable considering that Tesla manufactures all of 3 vehicles today. That is 3 vehicle models competing against 100’s of competitors’ models, using technology which is barely two decades old against almost 120 years of development in conventional gas powered automobiles.

Oil Industry has dominated the game for almost a hundred years now. Yet, the implications for the Big Oil are really very straightforward. Adapt and invest in clean fuel or simply rollover. And that is not an exaggeration by any means. The writing has been on the wall for some time now and the Oil Industry is cognizant of the same.

Image Source: Forbes

Conclusion

The thing with new, game-changing technologies, products or ideas, is that to thrive it needs to find an organization that will accept it. Adaption of any new technology has severe implications; it not only changes the organization but often times creates a new industry or segment altogether. The tank changed the modern warfare forever; Netflix ushered in an era of online streaming; personal computers took computing out of huge air-conditioned rooms to homes; iPods created an entirely new marketplace for music; and the digital cameras brought photography to 3 year old and 80 years old alike. These are all game-changers, whose potential was not unknown to their parent organizations, yet it took alien organizations to realize their full potential.

Only those organizations which are truly willing to change themselves, reorganize and adapt, re-skin and lose its earlier identity, and let that idea, or technology or product guide it to the future, those organizations mature enough to understand that immaturity is a gift, those are the organizations that create unparalleled wealth and unimaginable success stories.

Introduction

Any IT product, application or software development effort is made up of stakeholders who are invested in the success of the product. These stakeholders typical comprise customers or users, executives, development team comprising architects, product owners, analysts, Ux/ UI developers, software developers, testers, etc.

In conventional waterfall projects, the teams above form strict structures and protocols for delivery of the desired work. Waterfall stresses on strict Finish to Start approach where end of a stage is prerequisite for subsequent stages to start. In Agile approach, the same structures are loosely defined and followed, while protocols are generally flexible and come with only ‘recommended’ status. Further, Agile is typically defined by iterative, small pieces of functionality delivered rapidly and in close collaboration with the customers and / or end users. Agile doesn’t follow Finish to start approach rather stressing on parallel tracks of work which can be finished separately or together.

In Agile projects, Product owner or product manager is responsible for maintaining the details of what is being built. The amount of work to be done in a project is recorded in what’s knows as a product backlog. Product backlog is a list of features and user stories required to complete the work in a typical Agile development. It is the product owner’s responsibility to work with Development team to organize the product backlog in to a list of prioritized features and user stories which dev teams then use to pull sprint backlog and deliver useful, working increments iteratively. Product backlogs features and user stories are continually revised, updated and modified as project proceeds along and as more clarity is achieved through a collaborative approach.

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Scrum vs Kanban

Scrum and Kanban are two of the most popular approaches. Both the approaches have lot in common, yet both have points of divergence as well. Many experts consider Kanban as the methodology closest to the spirit of Agile principles. It is often contended that while Scrum does contain vital benefits, like continuous feedback loop and the ability for teams to self-organize independently, these benefits are effectively absorbed by the self-arrangement features of Kanban.

In Scrum and Kanban both, the focus is on efficiencies and transparency. Both the approaches are Agile and Lean, and favor using clear, most obstruction free path. Scrum and Kanban both target to deliver usable software early, efficiently and as seamlessly as possible, through breaking features into easily manageable pieces of work. Further, both Scrum and Kanban feature self-organizing, learning teams which evolve with time.

Scrum teams work in a series of sprints. Each Sprint is characterized by certain ceremonies and artifacts. Scrum team typically means the product owner, development team and scrum master. In many cases, depending upon the composition of the team, testers, Business Analysts and in few cases, devops personnel, are considered part of development team. Before each sprint, there is a sprint kickoff meeting, which is attended by scrum master, product owner and the development team. The development teams consult with the product owner to discuss the items on the backlog to identify and prioritize the work they can deliver at the end of the sprint. The selected items become the sprint backlog. And the sprint backlog becomes the sole focus of the development team for the next two weeks. This sprint backlog is held sacrosanct and as far as possible no new items are allowed unless under exigent circumstances. There are occasions when dev team is not able to complete all the prioritized work in the sprint. In such cases the incomplete items are transferred back to the product backlog at the end of the sprint to be taken up during subsequent sprint or re-prioritized for future. During the sprint, which is typically 2 – 4 weeks in duration, daily stand up call is organized by the Scrum Master where each development team member is invited to cover three things – what was done yesterday, what will be done today and any blockers / risks / issues. It is the Scrum Master’s responsibility to record all blockers / risks / issues and seek resolution to clear development team’s path. Scrum Master is also responsible to maintain the decorum by ensuring daily stand up meeting takes place daily, that most members participate and speak up and the duration of meeting doesn’t exceed 15 minutes.

At the end of the Sprint, Sprint Review (or Sprint demo or showcase of new functionality) meeting and Sprint Retrospective are held to present what the team has delivered and what are the lessons learnt respectively to ensure that next sprint is more efficient than the last. It is generally a good practice to document these sessions, especially where customer sign-offs need to be obtained.

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In Kanban, there are no defined Sprints and there is no defined ‘prioritized backlog’ required to build an increment of working software at the end of iteration. The development team works in a continuous manner, as per its capacity. As the dev team works on the prioritized product backlog directly, there is no separate sprint backlog. Dev team keeps pulling items from the prioritized backlog as soon as one item is finished or any capacity becomes available. The capacity of dev team in each phase determines the number of user stories or features it can pull to work upon. During each phase of development, i.e. build (coding), testing, and marking items as done, movement of backlog items frees up capacity in the preceding phase. As capacity is freed up in one phase, pressure is on the preceding phase to move work up. This ‘pull mechanism’ exerted by each subsequent phase on the previous phase results in movement of work through phases.

Kanban has no time-boxed iterations or sprints, and as such doesn’t place a hard limit for each iterative delivery or increment of working software or any improvements that are being targeted as goal. Kanban teams generally work as per the workflow, which are defined as goals. The team expects to make continual improvements in an evolutionary manner as the teams get more mature.

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In each Kanban board, there are specified columns. Under each column is a limited set of colored notes that signify the tasks assigned to the given column as per the workflow. As studies have noted, 80% of information is gathered visually, which makes the Kanban board a powerful tool for noticing and remembering the things that must be done.

Further, under Kanban, no set roles are defined. Practically speaking, it makes sense for someone to serve as a product owner, project manager or supervisor, especially for medium to large projects which are more complex, but the roles may also theoretically evolve with the needs of the project and the environment. A Kanban team is not required to be cross-functional since Kanban workflow is intended to be used by any and all teams involved in the project. Therefore, a team of specialists and a separate team of generalists may be working on different aspects of the same Kanban project from the same board at the same time, all in order to pursue the defined goals.

Unlike Scrum, where the focus is to produce an increment of working software, in Kanban, teams strive to achieve goals (complete workflow states) and reduce the amount of time to complete the entire process. A reduction in the average timecycle may be one of the indicators of success.

Under Scrum, work in progress is limited in each iteration. The team has committed to the number of tasks or user stories and has adapted that scope as sprint backlog. This is the scope that the team is ready to accomplish during the Sprint. All the items can theoretically move to the Work-in-progress section simultaneously. In Kanban however, the limit for each stage of the workflow is defined and noted on the Kanban board clearly. Kanban limits work in progress per workflow state to this number, which is nothing but the capacity of the project teams working on the Kanban board. For example, if there are 5 developers, and each developer has committed to 1 user story or task, then number 5 is denoted on the Kanban board to indicate the maximum capacity available in that phase. Consequentially, there shouldn’t be more than 5 items in the particular phase.

Under Scrum, only the development team can edit the sprint backlog once it has been committed. In Kanban, the Kanban board may be edited by a Product Owner. According to Essential Kanban Condensed Guide, Kanban has evolutionary defined two “hats” that the team members can wear: Service Request Manager and Service Delivery Manager. The “hat” of Service Request Manager is an alternative to the Product Owner. In Kanban, there is also a culture of slack resources, or free flowing resources who can don generalized or specialized hat to help resolve bottlenecks, as and when needed. For example if a resource has completed his / her tasks, s/he is free to move to help another team member on a task which is in blocked state or on critical path. Equally well, the free resource can choose to take up a fresh task or user story from the backlog queue.

In some Kanban teams, there is an additional section on the Kanban board, an Urgency section, which is typically represented as a swim lane. This section may be used for an unpredicted urgent task from the Backlog or a bottleneck task from the board. In such an event, the urgent or bottleneck task is moved to Urgency swim lane where it becomes the first priority for the team.

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Conclusion

Scrum and Kanban are often used interchangeably or thought to be two sides of the same coin. As both approaches are used to drive efficiency and utilize product backlog and common terms, the different nature doesn’t become apparent to a layman. In reality however, there are significant differences between these two methodologies. An often raised complaint about Scrum is the length of its time-boxed sprints and the rigidity through which time-boxed iterations are imposed, which are considered too long when employed with startups. The main criticism stems from the fact that lengthy, rigid sprints lead to infrequent releases, which can cause work teams to drag their feet or become accustomed to slow pace when responding to the needs of customers. Similarly, in case of undersized sprints, where the scope of work for each release is large, the larger features need to be broken in to smaller iterations, which are unlikely to deliver full value to a customer and might end up confusing the customers and end users. The set time-boxed lengths of Scrum were designed to offer consistency, and may not always be useful in a world where technological innovations move at a faster rate than before. Kanban tackles problems raised in Scrum with a different scheduling protocol where instead of operating with time-boxed sprints, Kanban restricts the number of things that a collective can focus on during any particular time span. Hence, the benefits of Kanban are twofold: Organizations can get more response from the marketplace, and they’re able to adjust to the demands of that input with greater agility. In that sense, Kanban is often considered the most close to Agile spirit.

Understanding these differences is key to choosing the path that will work best in a given environment.

Microsoft has mostly been recognized as the industry leader in technology and innovation. Having cornered 90% of world personal computer market and having massively popular enterprise services as a cash cow meant that Microsoft always carried significant advantage over its competitors and peers. It could literally burn few billions in cash and not break sweat over it. Or acquire couple of companies for few billions and choose to write the investment off as an unsuccessful bet. Microsoft had been the favorite of most of its critics at some point, and has been at loggerheads with various governments, domestically and overseas, and yet survived without breaking the bank. Employing more than 100,000 people since forever and leading the way in consumer and enterprise computing, Microsoft was easily considered too big to fail.

Yet during the late 2000s, trouble was brewing at Microsoft. The years leading up to 2014 were very difficult as Microsoft was seen struggling on various fronts. Part of the reason was internal while a big part of it lay outside Microsoft. Externally, technology itself was shifting along with user preferences and increasing complexity was no longer feared by most IT organizations. The focus was to move away from large, one vendor solution to having multi-vendor stack of products which gave the organization flexibility to choose the best providers. All these changes meant that Microsoft’s model was coming under increasing pressure.

Mobile platform was considered Microsoft’s biggest, most glaring shortcoming. At the start of 2014, Microsoft’s mobile market share amounted to just 3.5 percent. That was a dismal number, compared with Apple’s 15% and Android’s 80% market share. Additionally, its Surface tablet was struggling with less than 3% of the tablet market. This made Microsoft’s Windows the only major operating system that didn’t have a viable mobile component. The personal computer sales were declining at the same time, as shipments slowed down by more than 10% for the first time.

Apart from the above hardware troubles, Microsoft was coming under intense heat on the software and ecosystem side as well. Customers were growingly seeking a seamless, integrated user experience across devices and Microsoft was nowhere close to providing that. Bing remained a distant second to Google Search (18.7 percent versus 67.6 percent, respectively), and Microsoft had just released a free online version of Office — Microsoft Office Online — in response to Google Drive. Apps available on windows store numbered 1/5th of those available in App store and Google Play.

Further in the years leading to 2014, Microsoft was increasingly coming across as an organization happy to rest on its past laurels. Pace of innovation was slowing down, confidence in the organization was at an all time low, its products were seen as out of touch from market realities while the product pricing model was considered by many as greedy or obscene, or at best, overpriced. Microsoft was late to launch its smartphone, Windows phone, and the market was already in love with iPhones by the time first Windows phone came out – more than 3.5 years after the launch of first iPhone. Its new operating system, Windows 8, touted to provide seamless experience across devices was considered a market dud, while offerings such as Xbox gaming system lost out purely due to poor pricing strategy.

Dawn of an Era

When Nadella took over as Microsoft’s CEO in Feb 2014, his challenges were immediate and spotlight was always on, as is expected in case of world’s 4th largest corporation.

When Nadella came on to take the charge at Microsoft, both analysts and Wall Street agreed that the organization was fading to irrelevance. Over the next 6 years, Nadella set out on an inspiring journey, one that would see Microsoft make radical changes, charting out its course amidst uncertainty. This journey would see Microsoft change its business structure, breaking new frontiers and boundaries, launch new products and repackage old products and forge new partnerships on the road to regain its lost charm. Nadella began this journey humbly and quietly, two attributes which have become his hallmark and an unmistakable part of his legacy. Looking back, his first decisions during his first year were the hardest any CEO can be expected to make anytime during their stint as CEO, yet the finesse and calmness displayed by Nadella is worthy of unparalleled praise.

In the almost 6 years since Nadella has taken over, Microsoft’s market cap has risen from $315 billion to $830 billion. Considering that Nadella came in when Microsoft was under pressure from all fronts, and then managing to turn around the ship completely is just incredible.

2014 and Beyond: Grand Strategy, the Nadella way!

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Nadella’s grand strategy for Microsoft covered 4 essential elements. First, to make any long lasting changes, he needed to fix the culture and maintain the improvements made in the short run. Second, products and services, across the domains of hardware and software need to reflect the changing customer outlook. Third, Microsoft needed to re-launch itself with unparalleled cooperation and collaboration, forging previously unthinkable partnerships. And fourth, in all its products and service offerings Microsoft needed to make a ruthless self-evaluation of Make vs Buy and proceed to acquire firms and businesses where it sees value.

Image Credit: Microsoft

Image Credit: Microsoft

Fixing Culture

Nadella immediately started working to create an outward focused, critique-hungry organization where formal power structures fade away to make way for productive partnerships; where direct communications are more important than showmanship; where tradition and hierarchy do not stand in way of pragmatism; and where ‘getting things done’ is more important than who does them. From his very first public appearance where he gave the impression of being directly approachable and responsible, to his first actions where he took decision to ramp down windows phone product line, Nadella meant change.

He fixed the culture through direct communication and leadership. He focused the company on cloud, winding down Windows Phone, de-emphasizing Windows as a whole, and turning Office and XBox into cloud-centric products. Back in the day, partners, vendors and developers alike talked about a much hostile environment, where it was difficult to get things done, or to get the needed resources, and the whole attitude was not geared towards cooperation. This attitude changed a great deal under Nadella and its clear that this change has a lot to do with ‘the buck stops here’ culture Nadella introduced. Not all of this worked perfectly every time, but by maintaining a growth mindset, they learned and improved. As a result, the company is the clear #2 cloud provider and occasionally the most valuable company in the US.

Windows run with everything, not just Windows run everywhere!

Nadella quickly made an impression and emphasized on Microsoft being a cloud-first and mobile-first company, moving away from a Windows-first company. The aim was to have Windows run with everything, not just having Windows run everywhere. Nadella knew that the latter goal was self-limiting and almost non-achievable whereas the former goal can lead to Microsoft becoming the number 1 and the most relevant technology company for decades to come. The world was increasingly becoming a cloud and mobile-first environment and for Microsoft to grown and remain relevant, they would need to adapt rather than resist. He laid down the entire roadmap of moving from a Windows-first company to a Cloud-first company. They underwent a huge engineering reorganization where he asked then Windows chief Terry Myerson (Microsoft Executive Vice President, former head of Windows) to step down. To speed up matters, he focused on inorganic growth, by acquiring Minecraft, LinkedIn, and Github in quick succession enabling the focus to shift towards the cloud.

Moving Office and Windows to a SAS model, dimming the gap between platforms by not only releasing popular products cross-platform but also allowing developers to use proprietary tools to build product across any platform, open sourcing .Net, making Visual Studio Community free, releasing products like Visual Studio Code for OSX and Linux, HoloLens, round the clock feature addition to Azure cloud services, are all great examples that indicate Microsoft’s shift towards openness and rapid development/innovation.

Shortly after taking over, Nadella wrote off Ballmer’s $7 billion acquisition of Nokia’s mobile phone business as a loss, eliminating more than 20,000 jobs in rather muted acknowledgment that Windows was not going to catch the iPhone and Android anytime. Microsoft was better off placing its bets elsewhere and that’s exactly what Nadella did, without remorse. Microsoft then went on to extend its collaborative approach to release more than 100 iOS apps and even embraced Linux (described later), the open-source Windows rival.

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With Microsoft revolutionizing its flagship MS-office suite and Windows OS through launch of Microsoft 365 Enterprise, which combines Office 365 Enterprise, Windows 10 Enterprise, and Microsoft’s Enterprise Mobility and Security features into a single subscription Office365.

Nadella is not just content with taking down barriers. He is equally keen to invest greatly in research around Mixed Reality, Artificial Intelligence and Quantum computing. Nadella reportedly believes these three to be the next key growth areas for them.

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Cooperation and collaboration to keep customer first

Nadella seemed to be happy working on multiple fronts at the same time. From trying to shift culture at Microsoft to working with partners and collaborating across competitors, he made a point to keep customers first. Under Nadella, Microsoft went from a company trying to make customers buy Windows all the time to a company that recognized customers want solutions that Nadella laid out his new vision of cooperation through a quote which has been quoted multiple time, “It is incumbent upon us, especially those of us who are platform vendors to partner broadly to solve real pain points our customers have.”

To show his seriousness, Nadella attended Dreamforce in 2015, setting aside his personal differences with Salesforce management. In the backdrop of lawsuits both companies had filed, Nadella extended a hand of cooperation and collaboration. In the year prior, launching MS Office for iPad was Nadellas first major announcement immediately after his becoming CEO.

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Nadella’s acute business acumen and willingness to break traditional structures led to a truly path-breaking partnership with Linux. Azure was at a crossroads when Nadella took over. It was built to challenge Amazon’s market-leading AWS cloud service, launched several years earlier. Azure was also supposed to entice customers into meeting the bulk of their computing needs with other Microsoft products. If a client wanted Azure to run a Windows operating system, Microsoft was proud to take their business. Yet, if the client preferred the rival Linux approach (which Ballmer once dubbed a “cancer”), it was out of luck as Microsoft couldn’t offer a matching product. During a visit to a small start up called Okta Inc., based in San Francisco, to see how small start ups are using cloud, Nadella came up with Microsoft’s path-breaking move. Todd McKinnon, CEO and co-founder of Okta Inc., remembers telling Nadella, “We’re not using Azure, we use AWS.” Nadella shrugged. This wasn’t a sales call. It was somewhere between fact-finding and espionage. At the end of the hour-long visit Nadella had drawn out a detailed map of what startups like Okta wanted from the cloud. Over the next few months he met with at least seven other startups in similar settings. Those talks inspired Nadella to offer Linux at a special, lower price on Azure–forgoing Windows licensing fees to keep customers happy. The decision was so at odds with Microsoft’s usual lockstep methods that it later became the subject of a Harvard Business Review case study. Azure now is the fastest-growing of the five major cloud infrastructure services.

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AWS started in 2006 while Microsoft launched Azure in 2010. Despite getting a significant early start and cornering substantial market share, AWS has been steadily losing ground to Azure. And for good reason. Microsoft has been very successful in signing on enterprise customers to Azure. Most large enterprises, especially those in financial services and those with any kind of sensitive data find better value proposition in Azure due to Azure’s substantial support for hybrid cloud applications. Azure helps companies protect the information that they deem particularly delicate or sensitive. Microsoft developed this hybrid approach by tapping in to its considerable background and experience with enterprise-level solutions and that has paid huge dividends.

Some of Azure’s products offer a sliding scale of hybrid cloud platform functionality, with one of their newest products providing almost all of the functionality of Azure on client’s own on-site data centers, with the payment and maintenance equal to the public cloud equivalent.

Azure supports the broadest selection of operating systems, programming languages, frameworks, tools, databases and devices. Run Linux containers with Docker integration; build apps with JavaScript, Python, .NET, PHP, Java and Node.js; build back-ends for iOS, Android and Windows devices. Azure supports the same technologies millions of developers and IT professionals already rely on and trust. Any developer or IT professional can be productive with Azure. The integrated tools, pre-built templates and managed services make it easier to build and manage enterprise, mobile, Web and Internet of Things (IoT) apps.

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Amazon Web Services is the most popular public cloud infrastructure platform, comprising 41.5% of application workloads in the public cloud. While Amazon has long been viewed as the dominant provider of public cloud infrastructure, Microsoft Azure is gaining ground quickly in application workload. Azure currently holds 29.4% of the installed base, measured by application workloads. Google Cloud Platform trails with 3.0% of application workloads

Announced just last week, Microsoft Azure has been partnering with retail industry through its tie-ups with grocery store chain, Kroger and Walgreen Boots Alliance, the parent company of Walgreens. According to analysts, the partnership with Walgreens, which aims to develop new healthcare delivery models, technology and retail innovations to advance and improve the future of healthcare, is akin to the model Amazon has launched with Whole Foods. With Kroger, Microsoft offers retail-as-a-service, allowing Kroger to use Azure’s artificial intelligence and cloud infrastructure.

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On the digital side, Microsoft recently announced an exclusive partnership deal with TomTom, Dutch mapping company. According to the agreement the companies reached, TomTom will become Microsoft’s leading location data provider for Microsoft Azure, putting TomTom’s maps and traffic data onto Microsoft’s cloud. Meanwhile, TomTom is picking Microsoft Azure as its preferred cloud provider.

AWS on the other hand mostly targets product makers and start ups who continue to be its main target segment. If an organization wants to build a new product on cloud, AWS is the way to go. If an organization runs an enterprise and / or has any kind of sensitive data, then Azure is your natural choice because chances are they have already made some investment in Microsoft as part of their IT strategy.

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Make vs Buy

In his first year as CEO, Nadella hired Peggy Johnson from Qualcomm in 2014 as executive VP of business development, giving her specific mandate to strengthen Microsoft’s ties with Silicon Valley and pursue deals with companies it once solely considered rivals, such as Box and Dropbox.

In order to give the entire grand strategy push even more impetus, Nadella ordered his team to go on a buying spree. Over the last 2 years, Microsoft’s most prolific buys include scooping up LinkedIn in 2016 for $26 billion and GitHub in 2018 for $7.5 billion. Beyond the much hyped take-over of LinkedIn and GitHub, Nadella’s Microsoft has been on a quiet spree of acquiring niche firms which have added tremendous value. The below table represents how many companies has Microsoft acquired since 2014.

In 2017, Microsoft acquired Cloudyn, an innovative company that helped organizations track their cloud investments. Cloudyn gives enterprise customers tools to identify, measure and analyze consumption, enable accountability and forecast future cloud spending.

Most of Microsoft’s buys are centered around AI, Mixed Reality, Networked communities and cloud assets. “For the past five years, we’ve been incredibly consistent — buy communities, look for networked assets, look for growing markets, and look for where we’re a better owner,” Microsoft CFO Amy Hood said during a conversation with Fortune senior writer Michal Lev-Ram at the 2018 Fortune Most Powerful Women Summit in Laguna Niguel, California.

Microsoft’s most recently released quarterly statement displays stronger than before performance. Currently, Xbox Live is used by 400 million gaming devices and it has the potential to multiply its success to reach many more users across the base of 2 billion users on Nintendo Switch, Android and iOS screens. This means cross-platform play can become a big segment and that users cannot be just limited by just community features like achievements and clubs. LinkedIn now has 610 million users. And LinkedIn sessions grew 30% year-over-year driven by higher levels of engagement in the feed. And Xbox Live now has 64 million monthly active users, up from 59 million a year ago.

If one graph could say it all about Microsoft’s resurgence under Satya Nadella, the one below would be top contender. The Wall Street has rewarded Nadella’s vision and breathtaking finesse the only way it knows – through an increase in the share price, thereby increasing market capitalization.

Image Source: 500ish

The Push Forward!

Nadella’s unrelenting focus was to Identify channels to ensure sustainable growth. Nadella is a firm believer that the key to Microsoft’s future is presence across entire ecosystem, offering an entire assortment consisting of hardware and software combined with cloud computing.

In the words of one analyst, “Microsoft was a very monolithic and slow moving beast. However, four or five years ago, Microsoft completely changed. Now, it doesn’t look so much like one giant company as a weird conglomerate of thousands of little startups. They’re moving fast and nimble, trying things out and iterating very quickly.” Powered by this change in atmosphere, many of Microsoft’s erstwhile talent who left for greener pastures have been returning home. According to one report, more than 2,200 employees have returned to Microsoft after exiting once.

During the last season of Super Bowl, Microsoft aired a commercial with focus on accessibility. Specifically, the ad features the Xbox Adaptive Controller, designed primarily to meet the needs of gamers with limited mobility. In the ad, it shows several young kids sharing stories about using the Xbox Adaptive Controller. “When everybody plays, we all win,” says the tagline of the ad.