Walmart reads the signs of the times

I was initially puzzled to read about a tie-up between Walmart, the nation's largest retailer, and thredUP, a San Francisco-based used clothing reseller.  However, Barron's put it in perspective.

Walmart is taking a new tack in its effort to expand in e-commerce.

The company said this week that it formed a partnership with the clothing reseller ThredUp in a move that will see Walmart’s website offer secondhand clothing. The giant retailer will take a cut of the revenue.

Barron’s has written before about how ThredUp hopes to capitalize on a number of trends in the industry, from the treasure-hunt mentality that has fueled off-price retailers to millennials’ desire to shop more sustainably. We’ve also noted how Walmart has been willing to spend to boost its online presence in clothing, buying up brands like Modcloth and Jet.com to experiment with new ways to reach consumers.

. . .

The latest deal with ThredUp isn’t an acquisition. It will allow ThredUp products to appear on Walmart’s website, with Walmart providing free shipping for purchases over $35 and receiving a share of the sales.

Paying Walmart a commission seems like a reasonable trade-off for ThredUp, given that the partnership will give it access to a huge new audience.

Yet Walmart could also benefit from the deal, as it will have a large number of brands added to its site and get a piece of the preowned clothing market. Instead of making a risky acquisition, Walmart is mimicking Amazon.com, offering access to its site to a third-party seller.

There's more at the link.

What we're seeing is the emergence of online shopping malls.  In a physical shopping mall, people go "to the mall" to shop at an anchor tenant - a big store.  As they go to and from it, or relax with a snack in the food court, they see and are attracted to other stores in the same location.  The big stores attract customers to the small ones.  Online, customers go to Amazon.com or Walmart.com because they know they can get most of what they need there.  If, in the process, they can also be exposed to other businesses, and find interesting products there, they'll do their shopping through the main site, which gets a cut of the revenues from such transactions.  Ergo:  an online shopping mall.

I think we'll see more and more of this in future.  The big e-commerce sites basically have a lock on the market right now.  Smaller businesses would have a torrid time of it trying to break such a stranglehold from outside.  Therefore, as the old saying goes, "If you can't beat them, join them".

This may have an impact on independent authors and their books, too.  Right now, that market is owned by Amazon.com, which has made itself all but indispensable to most indie authors and publishers.  If another retailer such as Walmart can offer an alternative online home for them, with terms and conditions at least as good (if not better) than Amazon's and comparable market penetration, perhaps with better advertising and publicity opportunities, that might open up the market to more competition.  That'll be good for writers - and it can't be a bad thing for readers, either.

Peter

The pandemic, free speech, and censorship

Famed journalist Matt Taibbi speaks out about the danger of silencing dissenting or contradictory voices in the current crisis.

Earlier this week, Atlantic magazine – fast becoming the favored media outlet for self-styled intellectual elites of the Aspen Institute type – ran an in-depth article of the problems free speech pose to American society in the coronavirus era. The headline:

Internet Speech Will Never Go Back to Normal

In the debate over freedom versus control of the global network, China was largely correct, and the U.S. was wrong.

Authored by a pair of law professors from Harvard and the University of Arizona, Jack Goldsmith and Andrew Keane Woods, the piece argued that the American and Chinese approaches to monitoring the Internet were already not that dissimilar:

Constitutional and cultural differences mean that the private sector, rather than the federal and state governments, currently takes the lead in these practices… But the trend toward greater surveillance and speech control here, and toward the growing involvement of government, is undeniable and likely inexorable.

They went on to list all the reasons that, given that we’re already on an “inexorable” path to censorship, a Chinese-style system of speech control may not be such a bad thing. In fact, they argued, a benefit of the coronavirus was that it was waking us up to “how technical wizardry, data centralization, and private-public collaboration can do enormous public good.”

Perhaps, they posited, Americans could be moved to reconsider their “understanding” of the First and Fourth Amendments, as “the harms from digital speech” continue to grow, and “the social costs of a relatively open Internet multiply.”

This interesting take on the First Amendment was the latest in a line of “Let’s rethink that whole democracy thing” pieces that began sprouting up in earnest four years ago. Articles with headlines like “Democracies end when they become too democratic” and “Too much of a good thing: why we need less democracy” became common after two events in particular: Donald Trump’s victory in the the Republican primary race, and the decision by British voters to opt out of the EU, i.e. “Brexit.”

A consistent lament in these pieces was the widespread decline in respect for “experts” among the ignorant masses, better known as the people Trump was talking about when he gushed in February 2016, “I love the poorly educated!”

The Atlantic was at the forefront of the argument that The People is a Great Beast, one that cannot be trusted to play responsibly with the toys of freedom. A 2016 piece called “American politics has gone insane” pushed a return of the “smoke-filled room” to help save voters from themselves. Author Jonathan Rauch employed a metaphor that is striking in retrospect, describing America’s oft-vilified intellectual and political elite as society’s immune system:

Americans have been busy demonizing and disempowering political professionals and parties, which is like spending decades abusing and attacking your own immune system. Eventually, you will get sick.

The new piece by Goldsmith and Woods says we’re there, made literally sick by our refusal to accept the wisdom of experts. The time for asking the (again, literally) unwashed to listen harder to their betters is over. The Chinese system offers a way out. When it comes to speech, don’t ask: tell.

. . .

We do actually have to talk about this. We can’t not talk about it out of fear of being censored, or because we’re confusing real harm with political harm.

Turning ourselves into China for any reason is the definition of a cure being worse than the disease. The scolders who are being seduced by such thinking have to wake up, before we end up adding another disaster on top of the terrible one we’re already facing.

There's more at the link.

I couldn't agree more.  I, too, have noticed the Atlantic becoming more and more dictatorial in its approach, more prescriptive to society, less willing to tolerate independent thought, dissent, and contrary opinions.  I don't know why, but I suspect there's more than a little outside money involved.  "Follow the money" is usually a pretty accurate indicator of why something is happening.

When you silence dissent and conflicting opinions, you take away freedom.  It's as simple as that.  Without free speech, you are no longer free as an individual, and the society in which you live is no longer a free society.  Two quotes attributed (falsely) to Voltaire, but which do accurately express his philosophy, sum it up:

I may disapprove of what you say, but I will defend to the death your right to say it.

To learn who rules over you, simply find out who you are not allowed to criticize.

They say a mouthful!

Peter

Five Key Factors Drive the Internet Growth Trajectory

Cisco issued results of their annual Visual Networking Index (VNI) Forecast (2011-2016). It's the company's ongoing initiative to forecast and analyze Internet Protocol (IP) networking growth and trends worldwide. The VNI Forecast update projects the significant amount of IP traffic expected to travel public and private networks -- including Internet, managed IP, and mobile data traffic generated by all users.

This year, Cisco has also developed a new complementary study -- the Cisco VNI Service Adoption Forecast, which includes global and regional residential, consumer mobile, and business services growth rates.

By 2016, annual global IP traffic is forecast to be 1.3 zettabytes -- (a zettabyte is equal to a sextillion bytes, or a trillion gigabytes). The projected increase of global IP traffic between 2015 and 2016 alone is more than 330 exabytes, which is almost equal to the total amount of global IP traffic generated in 2011 (369 exabytes).

This significant level of traffic growth is driven by five key factors:

1. An increasing number of devices: The proliferation of tablets, mobile phones, and other smart devices as well as machine-to-machine (M2M) connections are driving up the demand for connectivity. By 2016, the forecast projects there will be nearly 18.9 billion network connections -- almost 2.5 connections for each person on earth -- compared with 10.3 billion in 2011.
2. More Internet users: By 2016, there are expected to be 3.4 billion Internet users -- about 45 percent of the world's projected population according to United Nations estimates.
3. Faster broadband speeds: The average fixed broadband speed is expected to increase nearly fourfold, from 9 megabits per second (Mbps) in 2011 to 34 Mbps in 2016.
4. More video: By 2016, 1.2 million video minutes -- the equivalent of 833 days (or over two years) -- would travel the Internet every second.
5. Wi-Fi growth: By 2016, over half of the world's Internet traffic is expected to come from Wi-Fi connections.

The Cisco VNI Forecast Methodology

The annual Cisco VNI Forecast was developed to estimate global Internet Protocol traffic growth and trends. Widely used by service providers, regulators, and industry influencers alike, the Cisco VNI Forecast is based on in-depth analysis and modeling of traffic, usage and device data from independent analyst forecasts.

Cisco validates its forecast, inputs and methodology with actual traffic data provided voluntarily by global service providers and more than one million consumers worldwide. The following Cisco VNI Forecast resources and tools are available online:

• The updated Cisco VNI Forecast Highlights Tool provides key forecast predictions in short sound bites that can be chosen on a global, regional or country level (these include device, traffic and network speed projections).
• The Cisco VNI Forecast and Methodology, 2011 – 2016 White Paper provides the full detailed findings of the study.
• The Cisco VNI Forecast widget provides customized views of the growth of various network traffic types around the globe (revised for this 2011 - 2016 forecast period).
• The Cisco VNI Service Adoption Forecast White Paper provides a unique view into global and regional trends of next-generation residential, consumer mobile, and business end-user services and applications, underlying addressable markets and relevant devices and connections.
• The Cisco VNI Service Adoption Forecast Highlights Tool provides primary global and regional takeaways on user and subscriber, device and connection, and service adoption penetration rates.
• The New Cisco Data Meter application (beta version 1.0) for Android smartphones provides users with the following valuable network-related data: estimated and projected bandwidth consumption, individual app usage, Wi-Fi and cell connection speeds, and the location of nearby Wi-Fi networks.

Historically, Cisco VNI projections have generally been viewed as conservative; however, the forecast has proven to be quite accurate throughout its six-year history.

• In the initial 2007 VNI Forecast, Cisco projected an overall IP traffic volume of 28.4 exabytes per month by 2011. The actual volume in 2011 was 30.7 exabytes per month. The actual volume was about 7 percent higher than what Cisco projected five years ago.
• In the 2008 VNI Forecast, Cisco predicted that in 2010 Internet video would surpass P2P in traffic volume. In 2010, Internet video surpassed P2P in traffic volume -- confirming the Cisco VNI Forecast.

Global Cloud Index: the Evolution of Data Center Traffic

As 2011 comes to a close, many busy executives and IT managers will be pondering the continued adoption of cloud applications within their organizations. How can a business be adequately prepared for the anticipated increase in demand for managed cloud services? Moreover, what are the key related market indicators that are shaping the future of emerging business technology deployments?

The Cisco Global Cloud Index is an ongoing effort to forecast the growth of global data center and cloud-based IP traffic. The forecast includes trends associated with data center virtualization and cloud computing.

From 2000 to 2008, peer-to-peer file sharing dominated Internet traffic. As a result, the majority of Internet traffic did not touch a data center, but was communicated directly between Internet users. Since 2008, most Internet traffic has originated or terminated in a data center.

Data center traffic will continue to dominate Internet traffic for the foreseeable future, but the nature of data center traffic will undergo a fundamental transformation brought about by cloud applications, services, and infrastructure.

By 2015, one-third of data center traffic will be cloud traffic.

Global Data Center IP Traffic: Already in the Zettabyte Era

The Internet may not reach the zettabyte era until 2015, but the data center has already entered the zettabyte era. While the amount of traffic crossing the Internet and IP WAN networks is projected to reach nearly 1 zettabyte per year in 2015, the amount of data center traffic is already over 1 zettabyte per year -- and by 2015 will quadruple to reach 4.8 zettabytes per year.

This represents a 33 percent CAGR. The higher volume of data center traffic is due to the inclusion of traffic inside the data center (Typically, definitions of Internet and WAN stop at the boundary of the data center).

The global data center traffic forecast, a major component of the Global Cloud Index, covers network data centers worldwide operated by service providers as well as private enterprises.

Traffic Destinations: Most Traffic Stays Within the Data Center

In 2010, 77 percent of traffic remains within the data center, and this will decline only slightly to 76 percent by 2015. The fact that the majority of traffic remains within the data center can be attributed to several factors:

• Functional separation of application servers and storage, which requires all replication and backup traffic to traverse the data center.
• Functional separation of database and application servers, such that traffic is generated whenever an application reads from or writes to a central database.
• Parallel processing, which divides tasks into multiple smaller tasks and sends them to multiple servers, contributing to internal data center traffic.

The ratio of traffic exiting the data center to traffic remaining within the data center might be expected to increase over time, because video files are bandwidth-heavy and do not require database or processing traffic commensurate with their file size.

However, the ongoing virtualization of data centers offsets this trend. Virtualization of storage, for example, increases traffic within the data center because virtualized storage is no longer local to a rack or server.

How does the transition of workloads from traditional data centers to cloud data centers effect the typical IT environment? Find the answer to this question, and learn more about the implications, by browsing the Cisco Global Cloud Index forecast data.