How will ARM-based Windows 8 tablets mitigate the heavy payloads of traditional desktop apps? A new report suggests desktop application support will be limited but still present, contradicting an earlier statement by Windows lead Steven Sinofsky.

Wired Top Stories

After a tumultuous year for Netflix, long-time Chief Marketing Officer Leslie Kilgore will be stepping down from her role with the company. In her place, Netflix has named Jessie Becker as its interim Chief Marketing Officer and appointed Jonathan Friedland as the company’s Chief Communications Officer.

Kilgore had been Netflix’s marketing chief for 12 years, but the company suffered a number of setbacks in 2011. They began with an announced price hike that angered many customers as the company raised prices for joint DVD-and-streaming subscribers by as much as 60 percent. But the bad news kept coming, as Netflix came forward with plans to separate those services and spin out its DVD-by-mail business as a standalone service called Qwikster that never actually launched. Along with the news that Netflix would not be re-upping its Starz streaming deal in 2012, caused many subscribers to reconsider whether they wanted to stick with the company.

While Netflix might have moved too quickly to separate streaming from its DVD business, the real issue is that the company mismanaged communications with its customer base, which up until recently had been pretty loyal to the company. For years, Netflix was named among the top companies in terms of consumer satisfaction, but a number of stumbles in a short period of time caused the company to lose subscriber and investor support.

Netflix lost 800,000 subscribers in the third quarter, and its stock has fallen from more than 0 a share to as low as over the past six months. While it’s been trading up recently — and has stabilized around 0 a share — it’s still a long way back to where things stood in the early part of last summer.

As a result, a shakeup in marketing and communications shouldn’t be too surprising: After all, Netflix doesn’t just depend on advertising to get people on board. It depends on positive word of mouth from its subscribers to start growing its domestic membership again.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Q4 Wrap-up: SOPA and the future of digital content
• Connected Consumer 2012: A year of consolidation and integration
• Connected Consumer Q3: Netflix fumbles; Kindle Fire shines

alt=''
border='0'
/>

GigaOM

If you are looking to cloud computing to simplify your IT environment, I’m afraid I have bad news for you.

Yeah, you might find yourself having to worry less about infrastructure, less about how storage systems work or what networking to use to connect a virtualized resource pool, or even what middleware settings are optimal for your applications. However, for every problem eliminated by choosing cloud, you’ll find it just creates more of the problems you remain accountable for—and may even create some new problems that you never had to face before.

Which is as it should be. Let me explain.

When I describe cloud computing as an application-centric operations model, one of the first questions that should come to mind is “operations of what, exactly?” Just because the cloud is focused on the application, it by no means implies that the application is all that is being operated. In fact, just as in any computing technology since the earliest electronic computers, the application can’t exist without myriad things supporting it.

And the world doesn’t consist of a single applications, but, in fact, millions of applications. Most of these are interconnected in some way, and the matrix of code, data, infrastructure, people, policies, requirements and so on that makes up modern IT is ultimately a very interconnected, complex system. Cloud computing is just one (very effective) way of dealing with that complexity.

Cloud as a complex system

What’s interesting is that it turns out science has a whole body of work around complex systems. A complex system, according to Wikipedia, is “a system composed of interconnected parts that as a whole exhibit one or more properties (behavior among the possible properties) not obvious from the properties of the individual parts.”

That’s certainly true of the modern interconnected IT environment. Just look at automated trading systems and the famous “flash crash” for an example—systems designed for increasing market returns reacted to each other in a way that temporarily crashed that very market. Other examples abound, and I’m sure your own IT environment often behaves in ways that no single application or other element was designed to do explicitly.

What science teaches us about complex systems is that they are made up of many individual agents, each of which effect and are affected by agents around them. The feedback loops of events created by agents affecting each other both directly and indirectly, combined with the mechanisms that choose behaviors to in response to those events, combine to create the systemic behavior that is so unpredictable.

Cloud as an adaptive system

The thing is, however, a certain class of complex systems, complex adaptive systems, have the additional trait that they can change their behavior in response to the success or failure of previous behaviors when a given event occurs—or when a certain series of events occurs. This ability to “learn” and adapt to the surrounding system environment creates amazing outcomes, including many of the most rich, enduring and powerful systems in our universe.

Think biology. Think economics. Think ecosystems.

IT is adaptive, in that winning functionality survives and thrives, while losing functionality dies out and disappears. Thus, those investing in building IT technologies are constantly seeking ways for their technology to survive in a changing, often hostile environment.

If an application, or function or even just a line of code fails to add value to the environment—or worse, negatively disrupts the value of the environment—it will be removed or changed, one way or another. Those that rely on IT are constantly seeking ways to optimize applications, data and technologies to take the most advantage of their systems environments.

The result is constant innovation, and constant adjustment to our needs as businesses and individuals. It ain’t always pretty, as they say, but so far it has been quite effective. (I should note that this even applies to infrequently modified “legacy” applications; there is an ongoing decision to not modify such an application, and thus it continues to survive.)

The developer as DNA

I want to leave you with one last thought, however. One of the things about complex adaptive systems is the learning or adapting traits of the agents in the system. In the world of evolution, the main agent of learning or change is DNA. In the world of IT, the agent of learning or change is the engineer or software developer.

If something goes wrong with an application, developers are on the hook to fix it, change it or kill it. If existing hardware fails to create new opportunities to innovate, engineers find new approaches to introduce into the ecosystem to shake things up.

However, developers and engineers can only make those changes one, or a few, components at a time. Nobody can configure the “system” to work an expected way. All you can do is constantly monitor the success and effectiveness of the technologies you deploy into the cloud, and constantly tweak them to make them as useful as they can be in that environment.

It’s up to people to make technologies that survive cloud as a complex system—one component at a time. That’s, well, how you deal with it.

Image courtesy of Flickr user gruntzooki.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Will cloud computing push the BRIC market to the front?
• A clouded view of Google Music
• NewNet Q2: Google closes the quarter with a bang

alt=''
border='0'
/>

GigaOM

Netflix agreed to sell 0 million in stock and convertible bonds Monday in an effort to stockpile some cash. The filings were seen as the latest in a series of bad news for the company by investors, with shares down about five percent. But the raising of short-term funds raises the question of how well Netflix has been managing its cash, particularly as the company has seen customer additions stall at home, while investing heavily to expand internationally.

Netflix has already committed billions of dollars for new streaming deals over the next few years — which would be fine if the company had ample cash in the bank, or was still on an outstanding growth trajectory. Netflix finished the third quarter with just 6 million in cash and short-term investments, however, and with 0 million in long-term debt.

The company is hoping to bolster its international business with a planned launch of services in the UK and Ireland in the early part of 2012. So far,  Lionsgate, MGM and Miramax are on board for launch in the new market. This move follows Netflix’s international expansion in Canada and Latin America. Those deals are necessary to keep international growth going, but they come at a cost: For each new market Netflix has to pay upfront licensing fees for the right to stream titles before it actually launches there.

Meanwhile, the company embarked on a series of costly agreements for exclusive content — like two seasons of the upcoming David Fincher-Kevin Spacey project House of Cards and the return of Arrested Development, which will appear only on Netflix. Even when it’s signed up catalog titles from content owners like Disney or CBS, Netflix has been rumored to pay in the range of hundreds of millions of dollars for each of those deals. But few have asked how Netflix will actually fund those additions to its library.

It looks now like Netflix was betting on future domestic growth to help pay for its streaming library. But growth in its home market has stalled, thanks to a series of missteps that included a price hike and the announcement of a new DVD service called Qwikster, which Netflix later backed away from. That’s an unfortunate turn of events that senior management likely didn’t anticipate, and one that might have left Netflix in a bit of a cash crunch.

The problem is exacerbated by the fact that Netflix squandered cash through a series of stock buybacks over the last nine months, when it could have been hoarding cash for expansion. Instead, Netflix spent nearly 0 million on buybacks, at an average price of 2 a share — about three times the stock’s current share price.

This could be a temporary bump in the road, but Netflix will have to show some returned growth and financial stability in the fourth quarter, if it’s going to get investors back on board. It’ll also have to show that it can afford to pay the license agreements it signed over the past year, as it’s planned aggressive expansion both in new international markets and in its catalog at home.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Connected Consumer Q3: Netflix fumbles; Kindle Fire shines
• What Amazon’s new Kindle line means for Apple, Netflix and online media
• Connected Consumer Q2: Digital music meets the cloud; e-book growth explodes

alt=''
border='0'
/>

GigaOM