In 2005, Atlanta-based Cox Communications began using BlackLine Systems’ hosted services to replace its manual financial close process based on spreadsheets. Now, the $9 billion cable operator is moving to a cloud-based version of the same system, BlackLine’s OnDemand offering.

Read full article at Treasury & Risk.

Not the price it costs to produce products — but the price it takes to produce one more product.

Say, for example, you have two newspapers in the same town producing almost indistinguishable products.

And it costs, say, $1 dollar to print and distribute one additional newspaper.

The newspapers charge $2 for the papers — $1 goes to cover the marginal costs, and the rest is divided between fixed costs and profit. By fixed costs, in this context, I mean the money it costs to produce the first copy of the newspaper — the salaries of the editors and reporters, the rent of the newspaper building, the capital costs of the printing presses.

At some point, one of the two newspapers will decide to try to grab market share from the other one and lower its prices. Say it drops its price to $1.50 while the other newspaper doesn’t. If the two have equivalent content — and readers don’t have any particular loyalty to one over the other — everyone will switch over and the $2 paper will go out of business. To keep that from happening, the $2 paper will also lower its price to $1.50.

In a free market, the two newspapers will continue to lower their prices until they can’t go any further without losing money or making the profits so low that it’s not worth the effort.

In practice, of course, one newspaper will buy out the other and enjoy monopoly pricing — it can decide how much to charge so as to maximize revenues from its geographical area of coverage.

So what happens when there is no additional cost to produce a new copy of an item?

One example of this that we’re all familiar with is television and radio broadcast.

If you’re living within the coverage area of a television station, it doesn’t cost the station anything extra to beam the program to you. Cable television companies have to lay new cable. But not broadcast stations. They put up the antenna, and everyone within range can listen in.

Radio and television stations could, if they wanted, charge their audience members. They could encrypt their broadcasts and sell decryption boxes to individual subscribers.

Say one station charged its viewers $10. Another station, with equivalent content, charges only $5. After all, it’s already paid for the antennas and the journalists. Either the other station matches the price cut or it goes out of business as everyone switches over to the cheaper one.

The two stations will continue to lower their prices until they’re just above the marginal cost of each new subscriber — but that marginal cost is zero.

And, in practice, terrestrial radio and television stations give away their programming for free, and use advertising to offset their fixed costs of production.

So what about online media?

The incremental cost of each new website visitor is pretty close to zero. There are fixed overhead costs — servers, content, staff.

If two websites offer equivalent content, then traffic will inevitably flow to the one that charges less money, since customers aren’t total idiots. Eventually one of these websites will figure out how to bring in enough advertising revenues to cover its fixed costs, and give away content for free, as radio and television stations have done for decades. The for-pay websites will have to do the same or go out of business.

The main exception to this, of course, is monopoly content. If, for example, mine is the only website to offer Dilbert cartoons, and the public really wants Dilbert cartoons, then I can charge whatever people can afford to pay. But this is only as long as I maintain the monopoly. The minute I start allowing other sites to reprint Dilbert cartoons for, say, a fixed licensing fee, then those other sites can lower their prices and we’re back in a competitive landscape.

Apple is able to charge more than its marginal costs for its products because it controls the distribution network for a very popular product with unique content. As soon as that content is available elsewhere — say, through Android-based alternatives to the iPad — it will quickly start losing market share to lower-priced alternatives.

Music, software, books, and movies are three types of content that used to have marginal costs. It cost money to print DVDs and books. It cost money to get them into stores. It cost money to hire clerks to sell them. With electronic distribution, the marginal costs of these goods are zero.

We’re already seeing out-of-copyright works available legally, for free, on electronic distribution networks.

Movies and music are already available for free on television and radio and to a limited extent on the Web. This will only grow as licensing deals spread and companies figure how to how to use advertising revenues to offset fixed licensing costs so that they can get the content to the biggest audience.

I predict that we will soon see free, ad-supported electronic books, starting with the publishers’ back catalogs and out-of-print titles.

Software is already moving to a free model, with enterprise products like Google Apps, and free-to-play games that make money from selling in-world virtual goods.

Any company in the business of producing virtual goods has to think about either offering hot, in-demand monopoly content, or finding out a way to distribute it free.

In practice, however, users may find themselves trapped in a relationship with a particular cloud vendor, unable to move applications to internal servers or other clouds without rewriting them from scratch.

“Many of the customers we have spoken to simply assume that the cloud is open,” said Brian Goodman, IBM’s manager for cloud engineering and experience. “This is a common misconception because of all of the hype circulating around cloud computing.”

And, while it might seem that vendors are the one who want to lock the customers in, in many cases it’s the customer turning the key, especially as they ask their cloud computing vendor to provide them with customized applications or as they start to integrate cloud applications with some of their own proprietary applications.

“If you’re writing very simple things that are very boring-looking–Web screens that just have a lot of drop down boxes, no Flash or Ajax–then those things can be moved from place to place,” said David Miller, chief security officer at Covisint, which runs a cloud-based human resources application for General Motors Acceptance Corp. (GMAC). However, Miller notes, “the minute you start making them so that they have really good interaction capability, they become more focused on that deployment platform. And when you pick a platform that has ease of movement, you limit yourself in functionality.”

Wall Street firms have been moving operations into the cloud for the past few years. Whether it’s Merrill Lynch and research services firm Cowen and Company moving customer relationship management to Salesforce.com or companies like Wachovia setting up internal cloud operations. A cloud allows a company to get computing when they need it, able to scale up or down at will, using external computing providers, internal server grids, or a combination of the two.

Independence from cloud vendors requires a different approach to application management, said Tony Bishop, founder and CEO of cloud consulting firm Adaptivity in Charlotte, N.C., and the discipline to create layers of abstraction.

Abstraction is what enables a cloud to be composed of different types of computers, by isolating applications from the hardware required to run them. But a further layer of abstraction can help isolate the application from the cloud itself, making the application more portable.

In fact, the same techniques used for service oriented architectures are useful in the new cloud environment, he said. This means writing applications in small pieces, each piece only loosely connected to all others–making it possibly to quickly swap out or reuse parts of the application.

Financial services firms that already run internal grids–networked groups of servers able to work as one to handle difficult problems–an easily adapt those applications to run on external clouds as well, said Ivan Casanova, SVP and Chief Marketing Officer at DataSynapse, a grid computing vendor that has now expanded into clouds.

Looking in the middle

A number of cloud management providers, including middleware vendors Tibco Software and GigaSpaces Technologies, offer products and services that can help. Middleware has traditionally been used inside Wall Street firms to enable hardware from different vendors–BM and Sun, for example–o play well together. Today, middleware may play the same function for cloud computing providers.

“We are abstracting the application from the platform,” said New York-based GigaSpaces’ CTO Nati Shalom. The way this works is that a company writes the application in .Net or Java or C++, then GigaSpaces virtualizes it so that it can run in a cloud environment by isolating the parts of the application that would connect to a cloud’s computers so that they can be replaced with hooks that connect into other clouds. Currently, the vendor supports Amazon’s Elastic Compute Cloud (or Amazon EC2) and Vmware’s vCloud.

Both Amazon and VMware allow firms to use as much computing power as they need it, when they need it and only as long as they need it-without the need of buying or deploying new hardware.

GigaSpaces has been offering cloud integration for a year now, Shalom said. The GigaSpaces XAP Cloud Application Server allows a company to easily switch between the Amazon and the VMware clouds–or their own in-house cloud.

But switching away from Giga-Spaces itself is not as easy, he admits. “On the abstraction layer, just to make things clear, there is no zero lock-in,” he said. “I don’t think anyone provides zero lock-in or zero footprint. But we do as much work as possible to make it as abstract as possible. We use a standard application programming interface.”

As a result, a company can move an existing application over to the GigaSpaces platform in “a matter of days,” he said. The one area that is not fully standardized is data access: “This is still an area where we provide 60 percent abstraction, not 100 percent abstraction. We’re planning to also provide a standard API [application programming interface] to that layer. Once we do that, we’ll also be able to be close to 100 percent compatible. That will happen in the next release [of the product], probably toward the end of the year.”

The newest entrant into this space is Palo Alto, Calif.-based Tibco Software, which released its cloud middleware platform June 3 as invite-only beta, with a final release due out in early 2010.

Currently, the platform only supports the Amazon cloud service, said Rourke McNamara, the company’s head of product marketing. But the idea is to eventually create a middleware platform that will allow customers to switch applications from one cloud to another with a push of a button.

“Things that used to take months take minutes using Tibco server,” he said. “Push a button and all the provisions, all the mechanics, all the plumbing takes place automatically.”

The platform currently supports standard development languages and platforms such as Eclipse, Java and Ruby on Rails. The company is considering adding support for Python, Perl, C++ and .Net, if there’s customer demand. However, the platform is not specifically designed to move existing applications to the cloud, said McNamara, but to build new applications from scratch. “The majority of customers looking to the cloud are looking to build new applications, not move old applications over,” he said.

There are two kinds of grammarians: the prescriptivists and the descriptivists. The prescriptivists lay down the rules, then want other people to follow them. When someone splits an infinitive, for example, or ends a sentence with a preposition, the prescriptivists get very upset.

I fall into this category most of the time. As an editor, I spend a lot of time putting commas in their correct places and mediating subject-verb disagreements.

Descriptivists, by comparison, say that language is whatever it is that people talk and write. That language changes, and it changes all the time. And different groups speak slightly different languages, and as they move between groups, people will change their speaking and writing patterns — just as they would, say, change their workout clothes for a business suit.

If you were to pick any two language points on the planet, it is possible to move from sub-group to sub-group until you’re no longer speaking one language, and speaking another. (Before mass media, this was even more pronounced — every village would have its own language, an amalgamation of the languages spoken by surrounding villages, plus their own unique take. Now some of the border languages are dying out. Sad.)

When I’m not an editor, I’m a language relativist. Obviously, at work, I think that AP Style is the be-all and end-all of existence. But, off duty, I don’t believe it has any intrinsic superiority over, say, the slang spoken by rap artists or the various creole languages created by immigrant groups.

I believe the purpose of language — as the purpose of fashion — is not just communication but also group affiliation. This is why words that communicate perfectly well — like “ain’t” — are so soundly condemned (by, say, rich people): they signify affiliation with an enemy tribe (for instance, poor people).

Now, plenty of educated, rich people split infinitives and end sentences with prepositions. So I’m siding with the descriptivists here, and saying, “Let them split!”

But there is one line over which I will not step — I mean, there’s one line that I won’t step over — “between you and I” will never replace “between you and me” to me.

In politics and leadership there are prescriptivists and descriptivists as well.

The former group lays out the theories and the rules, and sticks to the theories even as things go to pot. And when they go to pot — as they are wont to do — they blame not the theories but the people.

Descriptivists, by comparison, are natural populists. They can tell what the people want, what the people need, and get out ahead of the crowd. They are often derided for not having the courage of their convictions. But they do have courage, of a different sort: the courage to say that they are wrong, that times call for different measures.

The collapse of the Soviet Union and today’s current financial meltdowns are both examples of what happens when leaders follow their convictions, their ideals, their political and market theories even as they depart further and further from reality. And, at some point, all theories start to depart from reality.

Then Ottawa-based web guy Gesman pointed me to a WordPress design site specifically for magazines and news organizations.

This is EXACTLY what I was looking for – thanks, Gesman!

The designs are gorgeous and don’t look like blogs at all. I particularly love the way the categories are organized on the front page.

J. was perfect. Young, ambitious, had the languages we needed — plus, with journalism experience.

She wrote ten articles for us. Sure, her work needed work. She needed to improve her reporting, story organization, and grammar and style. But she was well on her way to becoming a solid international business journalism. Plus, we were getting in assignments on the movie industry — just up her alley.

On Wednesday, I took her to a meeting with a local media executive who liked her background and was interested in helping us put her on TV.

On Thursday, I offered her a part-time assignment editing gig for one of our publications, on top of the other work she was doing, and started up the process for getting her a key to the office and a pass to the building, and a new set of business card with her name on them. Later on, if everything went right, we would have gotten her accredited, and she’d become an international correspondent.

And by “international correspondent” I mean someone who works for the top tier of publications. These are the publications that pay enough so that you can travel, buy a house, have children anywhere in the world.

This is a small group of publications, mostly based in the US and Europe, with a few in Asia, and they’re shrinking. Moreover, the budget these publications allocate to international reporting isn’t getting any bigger, either.

It’s a hard market to break into. You have to have the experience they need. You have to demonstrate ability and connections. And you have to be able to gain their trust. After all, it’s hard for an editor to manage a reporter who’s based on the other side of the planet.

If the reporter is still one desk over, you can easily see whether he’s on the job, how many phone calls he makes. When he goes out on assignment and brings back into, you know whether he did a good job covering the event because you’ve been working in this area for a long time, and may have, perhaps, covered it yourself in the past. Sure, frauds still slip through — like the New York Times’ Jason Blair — but then your readers will usually let you know.

With foreign reporters, you don’t know the beats that they’re covering. You don’t know the topics that they’re covering. And your readers usually can’t act as a fail-safe fact-checking mechanism because they don’t have first-hand experience of what the reporter is covering, either.

As a result, publications typically send trusted, senior writers to overseas assignments. These guys are expensive — but they know what they’re doing, and they don’t need constant supervision.

These are hard-to-get, high-profile, glamorous assignments. You don’t just walk into them. You spend years working your way up.

There are short cuts, however, and our bureau is one of them.

We hire young, inexperienced writers. We train them, and we supervise them. We help them find people to talk to. We help them figure out which questions to ask. We help them organize their stories and improve their English grammar. We help them decide which stories ideas are interesting — and which ones are the same old, same old.

Finally, J. had learned enough about our databases and processes to work on her own. Her task was to find someone to comment about a particular news development. She had a number of people she could try to reach — and she only needed one quote for this particular story, a 250-word brief.

She had everything she needed to make the calls.

But instead of calling, she pulled a quote from an old article from another publication, translated it into English, and put it into the story. More than that, she didn’t just plagiarize the quote — she added in the story that the source talked to her, personally.

We caught the problem immediately — before the story even went out for copy editing.

There was no reason to do this. It would have only taken a few minutes to actually call the source and get the quote. Maybe a little longer if the first guy wasn’t available. Maybe a couple of hours if she had to call several different companies.

Why did she do this? Not just “accidentally” copying something and “forgetting” to attribute it properly — that happens, we catch it, issue warnings, help the writer avoid such mistakes in the future. (If they keep making these “mistakes,” though, they’re out.)

This was an out-and-out lie.

I would guess that the lie saved her, most likely, 30 minutes of reporting time.

And, most likely, it killed her career.

I may have given her a second chance, but my business manager and Shanghai bureau manager forcefully overruled me. The risk to the company’s reputation was too great – and the risks of setting a precedent too severe — to allow her to remain in the office at any capacity.

We also pulled her previous ten articles and re-checked the sourcing of all stories. For two stories, we opened her company email account and checked for email confirmations of the quotes.

Then we notified all the clients whose stories she worked on — all US-based business publications — and explained what happened.

It is possible that J.’s career will recover from this. There are other news organizations in China, and she might also be able to report for smaller news organizations overseas, especially ones who require her language skills.

She’s very lucky that her fraudulent story wasn’t printed. If it had been, we would have had to run her name along with the correction — and any future editor who Googled her would have known what she did.

In Shanghai,

- Maria

I don’t know if this is the case just in China or everywhere, but a great number of journalists I interview lately have remarkably poor job hunting skills.

It seems that I’m spending this week – like most weeks — up to my eyeballs in recruitment ads and job applications. This time, we’re hiring for a bookkeeper/office manager and freelance writers and copyeditors for a new online magazine about central and western China.

I’ve been seeing resumes from people with nice academic backgrounds and truly horrible work histories. Sure, there’s always the chance that they’re evil people who can’t keep a steady job because of their hobby of murdering drifters. But I tend to assume the simplest explanation — they don’t know how to job hunt.

This is sad because there are so many books and other resources for job hunters, and it all really boils down to research and networking — two things that reporters should be excellent at.

I understand that the market is saturated and it’s hard to get started, but there are a few things that I look for on a resume and from an applicant that I hardly ever see — and the bad job market can’t possibly be to blame. Among them are:

* Commitment to journalism. Even during stints as a waitress, does the applicant continue to write freelance articles, contribute to professional organizations, take courses, even volunteer as editor of the local library newsletter? Something? Anything? Or do they just give up? I don’t want to hire people who give up easily.
* Basic professionalism. Is everything spelled right? Are parallel grammatical structures actually parallel? This is a no-brainer. Why would anyone turn in a journalism resume to an editor before it’s been proof-read?
* Pushyness. If I don’t have a job available or at the right salary, does the applicant negotiate? Maybe there’s something else they can do to prove themselves, or while the right job comes along? I want a reporter who can’t take “no” for an answer. If the reporter is really, really pushy I might even create a job just for her. It’s a tough profession. I want tough people.
* Volunteerism. How willing is the applicant to do something that’s not in the job descriptio? I want to see evidence of participation in professional organizations, or taking on extra assignments. If it’s not in the resume, it’s easy enough to demonstrate — offer to help me out with a project. There’s always things I’m working on that I need help with. Even if it doesn’t directly lead to a job, it will certainly lead to good recommendation or referral.

On the other hand — and I hate to admit this — I have a soft spot for applicants with no job-hunting skills. I see someone with a decent educational history and job record but an misprinted resume and ugly shirt and an inability to look me in the eye, and I think, “If I hire this guy, he’ll stick around for a while, because he doesn’t know how to job hunt.”

I’m not proud of this. And I feel guilty, and compensate by helping writers out when I can. I’ve been known to copyedit applicants’ resumes. (Okay, that’s not from guilt — I just can’t stop myself. I even copyedit restaurant menus.)

Freelance writers are even worse. Which is funny, given that they, in effect, are constantly job hunting.

Here’s what I often see from freelancers:

* No website. In this day and age, how can you not have a website? The quickest, cheapest way to do it: get a free blog from Google (Blogger) or Terapad, which are the two services I recommend most often. Blogger, however, is blocked in China – which could either be a good, or a bad thing. Post your bio and your resume in the “about” section, and your clips as blog entries. You can back-date your blog entries, so you can post your clips by when they appeared. Depending on the kind of permission you have from your old editors, you can either post the whole article, or just the first couple of paragraphs and then the link to your original story. You can add a couple of articles a day until you’ve got a nice selection of clips to look at – which brings me to the next point:
* Just one clip per pub. Writers often provide a list of publications they write for, plus one clip each from a handful of them, presumably their best clip. I wonder: did the magazine drop them after one story? Were they so hard to work with that the editors never wanted to see them again? More than a nice clip, I want to see evidence that the writer had a long-term, successful relationship with an editor. In the past, when clips had to be copied, editors probably didn’t want to spend their time wading through stories and just wanted to look at a handful of the best ones. Now, I want to see all the clips. Yes, the all the hundreds — or thousands — of stories. Maybe the best ones can be featured in a special section somewhere, but I want to be able to browse. Is the writer consistent? Able to learn new subjects? Have a broad background — or have depth of knowledge in a particular field? These are all good things to know.
* Goofy email address. It costs $10 (or less) per year to register a URL. Gmail will cost your email for you, for free, at that URL. So you don’t need to have a hot_john@spam_host.com account. You can use john@johnsmith.com, and still have Gmail’s great interface. Many small businesses are using it these days to host their corporate email. Freelance writers should, too, or invest in an email hosting service.
* No testimonials. Many editors would be happy to give writers a quote testifying to their ability to meet deadlines or to produce usable copy. For some reason, however, most writers never ask. It’s okay to ask. The worst that could happen is that the editor woud say no, and blame corporate policies. I want to help my best freelance writers stay in business, which means that they need a steady flow of work. And if they get too busy to write for me — well, I’m sorry to see them go, but I’m also happy for their success. I bet other editors feel the same way.

Meanwhile, if you’re looking for either freelance or staff work – or a summer intership — look me up. I’m always checking my email.

Signing off in Shanghai,

Maria

At lunch today I had a nice chat with a lawyer friend about paying bribes. Now, I’m not about to comment on this issue in China (except to say that, for me at least, it hasn’t come up).

But I’ll share a bit of my experience in Russia and the former Soviet republics.

Again, I’m not often asked for bribes. When I am, I don’t pay them. End of story.

But I’ve known colleagues who had to pay through the nose for everything. Every single stamp, ticket, piece of paper, or anything else they needed — the bureaucrat’s hand would come out. Even for simple things like hiring drivers or translators, they were forced to pay way above the going rate.

Some dealt with this problem by bargaining hard, others by sending local assistants to negotiate on their behalf. Others just resigned themselves to pulling out their wallets.

And I have other colleagues who are never asked for bribes. Instead, they get favors from bureaucrats — favors that the bribe-paying guys wouldn’t even dream of getting.

What’s the difference? In my exprience, the difference comes down to how much they like the people they’re dealing with.

Let’s talk about Alex, for example. Alex was a freelance television journalist of European origin. Short, balding, funny-looking.

But he genuinely liked the people he met in the war zones. He liked the bureaucrats, he liked the mass murderers, he seemed to like everybody. Occasionally, we would get together socially with the people we were writing about and he would always participate in all the toasts, tell funny stories — and basically act like he treated everyone like an equal.

Everybody we met wanted to do him favors.

You don’t have to be a born salesman to do this, though.

Another colleague, shy and self-effacing, had a “shucks, golly gee, can you help me out here?” vibe coming off of him. And people did help him out. He wouldn’t rush up and hug people and pat them on the back, he would hang back shyly, but you could still tell that he liked the people he met.

Imagine you’re a big black man on an elevator and you’re covered in tattoos and carrying a gun and a tiny white guy in a nice suit gets on. (Those of you who’ve been there know exactly what I mean.)

If the little white guy cowers and hides in a corner, or puffs himself up, or otherwise acts like he’s scared of you and doesn’t like you, you’re going to be pissed off. If you’re nice, you won’t show it, but it would be pretty tempting to say “boo!”

But if the little white guy is relaxed, smiles, maybe compliments you on your guy, you’ll feel warm and fuzzy towards him.

When American journalists go out and cover wars in third world countries, we’re all the little white guy in the elevator. Including those of us who are big and black and covered with tattoos. We can’t help it. We’ve got money, and little notepads, and they’ve got resentment and lots of guns.

It can be hard to like mass-murderers. And it can be hard to like bureaucrats.

But if you get past the murdering and the paper-shuffling, we’re all just human.

Here are some tricks to help bring down those barriers:

* Do something purely social with the bureaucrats.
* Find a personal connection: does one of their kids go to school in the States? Do you know anybody there? Do you have any friends in common? Do you have common interests? Do you like the same movie or music?
* Do you have the same things? Do you hate the weather? Do you hate George Bush? Do you hate athlete’s foot? Do you hate your boss?
* If you’re single — maybe they know someone they can introduce you to. If they’re single, maybe you can introduce them to someone.

You don’t have to do all of these things with every bureaucrat you meet. In fact, you don’t have to do any of these things, with any bureaucrat. All you have to do is know that you could, if you wanted to. Making friends — even once — will help you change your attitude. You will know that if you made an effor to reach out, that you would see them as human. They will pick up on your attitude.

If your attitude is “I will never think of you as a human being — you are nothing more to me than a lousy functionary/mass murderer/racial or ethnic stereotype” then you don’t get very far.

So when you first arrive in a new country, do your best to get rid of that attitude. Make friends with locals. Make friends with local bureaucrats — even if not the same ones you’ll be dealing with.

Your attitudes will change. You will give off those little, unconscious signals that you see the other guy as an equal, that you think he’s okay, that if you got together you might wind up friends.

And that makes all the difference.

Signing off in Shanghai,

Maria