Showing posts with label Antitrust. Show all posts
Showing posts with label Antitrust. Show all posts

May 26, 2018

Amazon's Dangerous Genius

I am marveling at the Genius of Amazon and Jeff Bezos but also concerned about their future direction. 

Traditionally, they have invested for the long-haul!

For years, Amazon never made a dime, actually operating at a loss.

But all the time making long-term investments in infrastructure (warehouses, supply chain, logistics, etc.) and in customer acquisition. 

Their great selection, reasonable pricing, free shipping, and easy return policy lured hundreds of millions of people to drop the brick-and-mortar stores and even other online retailers to go Amazon all the way. 

Most people I know get virtually everything and anything on Amazon these days. 

Of course, the fear always was that Amazon would become such a dominant player and monopoly that no one else could compete. 

For a long time, they didn't even charge sales tax!

It seems people can't even imagine not having Amazon--where in the world would they shop and get all their stuff in 2-days or less (Prime Customers) and still be able to return all the crap they don't even want. 

So here is the rub.

Now that Amazon is so dominant, guess what?  They are raising the Prime Rates and cutting back on returns--with customers actually being banned for returning too much. 

Ah, the lure, bait and switch. 

Amazon got us all as their slave customers--and we let them and love them for it. 

And after they snared us with all the convenience and security of being able to return stuff, they pull the rug and what can you do, but cry foul?

I love Amazon for their genius and what they have done for eCommerce, but I don't like that they've built in a sense a dark empire to prey on their loyal customer base. 

Mr. Bezos, here is my message to you...

Please stay true to your ideals of customer-centricity and long-term investment in the company that has been the foundation for what you have built into such a retail juggernaut.  

Keep valuing your customers and serving them well and not trading them in for short-term profit gain.

In the end, that is a winning strategy that won't land you in either regulatory hell and/or antitrust action to then force you to bend your knee or your ultimate breakup. 

Remember, you have one chance to make the right decision for Amazon or I fear that it's not product returns that you'll be for long worrying about. ;-)

(Source Photo: Andy Blumenthal)
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April 27, 2012

Securing The Internet: A Historical Perspective

This week, I had the opportunity take a great class in Cyber Security / Information Assurance.

As part of the class, we had to do a team project and my part was to present a brief history of the Internet and how this best positions the Federal Government to take the lead in securing the Internet.

Here is my part of the presentation:

Good morning. I am Andy Blumenthal, and I am here to talk with you today about the wealth of historical experience that the U.S. Federal Government has with managing the Internet and why we are best positioned to govern the security of it in partnership with the private sector and international community.

As you’ll see on the timeline, the U.S. Government has played a major role in virtually every development with the Internet from inventing it, to building it, and to governing it, and it is therefore, best prepared to lead in securing it.

It all started with the invention of the Internet by the government.

Starting in 1957 with the Sputnik Crisis, where the Soviets leaped ahead of us in putting the first satellite in Earth’s orbit—this caused great fear in this country and ultimately led to a space and technology race between us and the Soviet Union.

As a result of this, in 1958, the U.S. Government established the Advanced Research Projects Agency (or ARPA) to advance our technology superiority and prevent any future technology surprises.

In 1962, ARPA created the Information Process Techniques Office (IPTO) for enhancing telecommunications for sharing ideas and computing resources.

Finally in 1964, the concept of the Internet was founded with the publication by RAND (on contract with the Air Force) of “On Distributed Communications,” which essentially invented the idea of a distributed computing network (i.e. the Internet) with packet switching and no single point of failure.  This was seen as critical in order to strengthen the U.S. telecomm infrastructure for survivability in the event of nuclear attack by the Soviets.

The Internet era was born!

The U.S. government then set out to build this great Internet.

In 1968, ARPA contracted for first 4 nodes of this network (for $563,000).

Then in 1982, after 8 years of antitrust litigation, the U.S. government oversaw the breakup of AT&T into the Baby Bells in order to ensure competition, value, and innovation for the consumer.

In 1983, ARPANET split off MILNET, but continued to be linked to it through TCP/IP.

In 1987, the National Science Foundation (NSF) built a T1 “Internet Backbone” for NSFNET hooking up the nation’s five supercomputers for high-speed and high capacity transmission.

And in 1991, the National Research and Education Network (NREN, a specialized ISP) was funded for a five-year contract with $2 billion by Congress to upgrade the Internet backbone.

At this point, the Internet was well on its way!

But the U.S. government’s involvement did not end there, after inventing it and building it, we went on to effectively govern it. 

In 2005, the Federal Communication Commission (FCC) issued the Internet Policy Statement (related to Net Neutrality) with principles to govern an open Internet—where consumers are entitled to choice of content, apps, devices, and service providers.

And now, most recently, in 2012, we have a proposed bill for the Cybersecurity Act to ensure that companies share cyber security information through government exchanges and that they meet critical infrastructure protection standards.

You see, the government understands the Internet, it’s architecture, it’s vulnerabilities, and has a long history with the Internet from its invention, to its building, and its governance.

It only makes sense for the government to take the lead in the security of the Internet and to balance this effectively with the principles for an open Internet.   

Only the government can ensure that the private sector and our international partners have the incentives and disincentives to do what needs to be done to secure the Internet and thereby our critical infrastructure protection.

Thank you for your undivided attention, and now I will now turn it over to my colleague who will talk to you about the legal precedents for this. 

(Source Graphic: Andy Blumenthal)

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May 18, 2008

Competitive Sourcing and Enterprise Architecture

Our economy is heavily based on ensuring a competitive environment to drive innovation, cost-competition, and consumer value.
One of the reasons why mergers and acquisitions are reviewed so carefully is to ensure that they are not anti-competitive, which would result in antitrust action.
Competition law, known in the United States as "antitrust law," has three main elements:
  • Prohibiting agreements or practices that restrict free trading and competition between business entities. This includes in particular the repression of cartels.
  • Banning abusive behavior by a firm dominating a market, or anti-competitive practices that tend to lead to such a dominant position.…
  • Supervising the mergers and acquisitions of large corporations, including some joint ventures. Transactions that are considered to threaten the competitive process can be prohibited altogether, or approved subject to "remedies" such as an obligation to divest part of the merged business or to offer licenses or access to facilities to enable other businesses to continue competing. (Wikipedia)
Competition law has been extended to the federal workforce as follows:
The Office of Management and Budget Circular A-76 mandates that “To ensure that the American people receive maximum value for their tax dollars, commercial activities should be subject to the forces of competition.” This includes the following activities:
“a. Identify all activities performed by government personnel as either commercial or inherently governmental.
b. Perform inherently governmental activities with government personnel.
c. Use a streamlined or standard competition to determine if government personnel should perform a commercial activity.”
The concept of A-76 is that without federal workers having to compete for their positions against for example, the private sector, then there is no way to ensure value for the American taxpayer. Where is the incentive for the federal workforce to perform if when they aren’t performing competitively, and they are not threatened with replacement by a better, more effective and efficient provider?
Federal Times, 12 May 2008 reports that “all indications are that as the Bush administration winds down, so too has its most controversial government reform: competitive sourcing.”
“Many in Congress have aggressively challenged the practice as being unfair and demoralizing to federal employees and last year they passed myriad reforms and restrictions that are already being felt.”
While I agree that competitions drive efficiency in the marketplace, I think A-76 has missed the mark in terms of reforming federal human capital.
Why?
Competing federal workforce against private sector contractors on a cost basis does not necessarily ensure best value. From an enterprise architecture perspective, we are missing something crucial in A-76 and that is the human capital perspective.
The human capital perspective on EA is one that was initially proposed by John Zachman, the founder of EA, and I am a strong proponent of it. Essentially, it says that just like the other business and technology perspectives of the EA, human capital is a filter through which you must make organizational decisions.
The human capital perspective of the architecture provides us an opportunity to optimize federal workforce performance in the first place, before getting to an outsourcing decision point. Additionally, if you can’t effectively manage your own workforce, what makes you think you can better manage a contracted-out function? (In the same issue of Federal Times, there was an article about how the federal procurement officials are resigning in droves!)
What can we do to first improve performance results from the federal workforce (and I’m not saying that there is any problem to begin with)? The same as with any organization—provide strong leadership to them. Provide them with a bold vision. Hire the best and the brightest. Accelerate the hiring and clearance processes. Make clear their roles. Inspire them as President Kennedy did when he stated “Ask not what your country can do for you, ask what you can do for your country.” Challenge the workforce and empower them. Provide training, career growth, and financial and other incentives. With these, the federal workforce can truly be competitive and best value—if not all the time, then certainly much of the time.
The enterprise architecture way to do this is to first, baseline your current workforce. Then, look at best practices, benchmark, and set the targets for your people. And finally, develop a transition plan to move your workforce from the baseline to the target.
There is much more work to be done in this area, and obviously this is just a cursory overview or sketch of what the human capital perspective of EA would do. On a personal note, this is an area of great interest to me and I look forward to exploring it further.
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