tag:blogger.com,1999:blog-4815867514277794362.post4721020082647827417..comments2024-03-08T06:18:28.125+11:00Comments on Bronte Capital: Longtop and the remarkable capital efficiency of the Chinese cloudJohn Hemptonhttp://www.blogger.com/profile/03766274392122783128noreply@blogger.comBlogger32125tag:blogger.com,1999:blog-4815867514277794362.post-65920819851879346082011-05-08T12:14:39.668+10:002011-05-08T12:14:39.668+10:00Lim Kin San
Do the honorable thing and tell us yo...Lim Kin San<br /><br />Do the honorable thing and tell us you have no involvement with this company.....and you're not as shonky as the rest of Asian business.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-39040953703687428502011-05-04T11:02:44.665+10:002011-05-04T11:02:44.665+10:00I do not retract the comments. The accounts are m...I do not retract the comments. The accounts are miraculous. They increased revenue by more than 40 percent on almost no incremental capital.<br /><br />There is a miracle going on. What miracle that is you can explain.<br /><br />Something is very - well - puzzling here.<br /><br />JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-48364728692725541972011-05-04T10:42:00.951+10:002011-05-04T10:42:00.951+10:00John,
Do the honorable thing and retract your sta...John,<br /><br />Do the honorable thing and retract your statments questioning Longtop's data archiving solutions.<br /><br />---Lim Kim SanAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-20911584846305757702011-05-04T06:46:53.303+10:002011-05-04T06:46:53.303+10:00John --
I think you're off on this article.
...John --<br /><br />I think you're off on this article. <br /><br />I'm an entrepreneur in the Hadoop/IaaS space, and from my perspective the press release is just standard fluff.<br /><br />First off, a Petabyte is not that much for a national size bank in the US (or China). To give you a sense of scale, if a transaction is a 100 bytes block, then a data warehouse containing 10B transactions would be a petabyte. A customer base of 100M would easily generate a couple petabytes of transaction data a year. <br /><br />In terms of the press release, if I didn't know better I'd just say that it sounds like they set up a Hadoop cluster for a bank to store their data. In this case, there are no licensing fees (hadoop is open source) and they would have booked most of their revenue as Professional Services/Consulting. It's entirely possible they just charged an installation fee/maintainence for installing their "solution" on top of bank purchased hardware. That's the standard arrangement for the industry. The bank in question wouldn't have been the first to drastically overpay for a storage/data warehousing solution.<br /><br />-A.S.<br />P.S.<br />I've been reading your blog for years and have learned a lot. Just think you're a bit off on the details on this one.ASnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-44739289564819424322011-05-04T06:06:33.362+10:002011-05-04T06:06:33.362+10:00I have to agree that the release does not say they...I have to agree that the release does not say they built a petabyte cloud. They said they sold a solution that has the ability to manage a petabyte cloud. <br /><br />That's pretty easy to do, I just have to sell something that can use an EMC SAN effectively, or an AWS account LOL.<br /><br />FWIW, you can get to a petabyte with historical tick data on a few active stock exchanges pretty quick.<br /><br />There might be some other reasons the financials look suspicious, but this marketing puffery seems pretty typical and is not one of them.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-49429146353983442242011-05-04T02:27:05.998+10:002011-05-04T02:27:05.998+10:00I don't see what you're harping on here. ...I don't see what you're harping on here. They signed up a bank as a customer. They also claim to have PB-scalable RDBMS (which is bullshit, nobody has cracked that nut yet except for very flat databases). I don't see where they claim the bank has a PB worth of data (although an investment bank might, if they have enough tentacles). There's no claim or implication that they've bult a massive infrastructure.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-10896047298069189152011-05-04T02:05:56.901+10:002011-05-04T02:05:56.901+10:00Seriously Mr San.
If they are buying equipment an...Seriously Mr San.<br /><br />If they are buying equipment and on-selling it to the bank - something they say they are doing in the 20F - then the margin is unbelieveably high.<br /><br />I have a choice of miracles here. I am not however going to dismiss the possibility that the company is miraculous.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-72913683719183416072011-05-04T02:05:56.575+10:002011-05-04T02:05:56.575+10:00Seriously Mr San.
If they are buying equipment an...Seriously Mr San.<br /><br />If they are buying equipment and on-selling it to the bank - something they say they are doing in the 20F - then the margin is unbelieveably high.<br /><br />I have a choice of miracles here. I am not however going to dismiss the possibility that the company is miraculous.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-72435800231600465902011-05-04T02:05:55.752+10:002011-05-04T02:05:55.752+10:00Seriously Mr San.
If they are buying equipment an...Seriously Mr San.<br /><br />If they are buying equipment and on-selling it to the bank - something they say they are doing in the 20F - then the margin is unbelieveably high.<br /><br />I have a choice of miracles here. I am not however going to dismiss the possibility that the company is miraculous.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-76766946765248682011-05-04T02:05:08.232+10:002011-05-04T02:05:08.232+10:00Who is Lim Kim San? And why so keen for John to re...Who is Lim Kim San? And why so keen for John to retract? Are you speaking on behalf of Longtop?Adrienhttps://www.blogger.com/profile/05172309107700268678noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-51485100943318079022011-05-04T02:04:08.998+10:002011-05-04T02:04:08.998+10:00I am one of those people who thinks one Petabyte i...I am one of those people who thinks one Petabyte is not all that much. And again, the bean counters like spinning facts in their releases.IFnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-66947379668974332682011-05-04T02:03:36.962+10:002011-05-04T02:03:36.962+10:00If they are doing what they say they are doing in ...If they are doing what they say they are doing in the accounts and buying the equipment for other people (read the last 20F which is what they say) then the margin will be lower.<br /><br />We have either (a) too high a margin or (b) too little capex or (c) a miracle.<br /><br />I do not need to retract my statements - its just that the nature of the miracle performed has changed....<br /><br />JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-7479339862021107012011-05-04T01:51:34.956+10:002011-05-04T01:51:34.956+10:00John,
Do the honorable thing and retract your sta...John,<br /><br />Do the honorable thing and retract your statements<br /><br />---Lim Kin SanAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-66499402831905428132011-05-04T01:41:40.394+10:002011-05-04T01:41:40.394+10:00I've been building systems that store data sin...I've been building systems that store data since the 80s, and I understand the issues involved. It is important to understand just how much cheaper data storage is getting. Yes, there are software issues, but the release makes the point: this isn't a relational database.<br /><br />There are big archiving requirements for surveillance these days; it is not unusual to have networks of 100s of cameras, and they all need to be recorded. Think monitoring on infrastructure, roads, trains, bank branches. The requirement isn't the photo taken at an ATM.<br /><br />Just a single train might have 30 cameras and an onboard system for storing 14 days worth of surveillance. Then consider a network of trains, stations, and you can see the need for a lot of storage. This stuff is practical now; it wasn't practical that long ago.<br /><br />Something like bank transaction data is much, much smaller.janmhttps://www.blogger.com/profile/13361560903657668505noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-73561763615772955242011-05-04T01:35:20.979+10:002011-05-04T01:35:20.979+10:00John,
Re: "But there is NOT a PB of data at ...John,<br /><br />Re: "But there is NOT a PB of data at any financial institution in China. Its just not there..."<br /><br />I don't think Archive.org is a good comparison. For example, Yahoo claimed in 2008 that it then had the largest data warehouse in the world at 2 petabytes. There is an article that says Facebook currently has a 21 petabyte database. So point being that PB databases are not that special or uncommon in these days. So I don't think it is a stretch to think that there are many PRC banks with PB databases at this time. <br /><br />Also I read the press release as saying they have the theoretical capabilities of having PB storage. It is likely that this is more of a sales pitch and they will go on to actually spend capital to build up the infrastructure once they get the business from client. Or as others have suggested, that they will simply help companies build PB databases. <br /><br />But one odd thing to me is that while I can understand startups relying on cloud storage, but I find it strange that any financial institution would be looking towards having a third-party manage their storage. It is simply too sensitive of a data to rely on someone else.<br /><br />In any case, I think the press release is really more of a sales pitch/marketing fluff piece than anything else. And from my experience, this type of fluff press releases are fairly common in the technology industry (US, PRC, etc).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-60236418512078033562011-05-04T01:27:25.204+10:002011-05-04T01:27:25.204+10:00You don't get to a petabyte with transaction a...You don't get to a petabyte with transaction and account data.<br /><br />You can get to a PB with videocams.<br /><br />I guess it is possible they store forever and for access photos of people at ATM machines.<br /><br />I remember a decade ago talking to McData and they had huge systems a small fraction of this size which would do all of a major Western bank...<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-47930377173615960202011-05-04T01:26:29.174+10:002011-05-04T01:26:29.174+10:00This is a completely facile analysis and you shoul...This is a completely facile analysis and you should be ashamed of yourself for publishing it. The LFT cloud solution is simple and takes unique advantage of certain labor efficiencies available in China.<br /><br />Much like another extraordinarily efficient company, China Agritech, Longtop employs a number of Chinese superhumans who simply memorize terabytes of data (which is then recited to banking clients whenever they come calling).<br /><br />And that is why labor costs are rising at this company and capex remains minimal.<br /><br />I expect a retraction any day Mr. Hempton.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-90437385155837328422011-05-04T01:22:36.276+10:002011-05-04T01:22:36.276+10:00One more thing ...
The place where data really gr...One more thing ...<br /><br />The place where data really grows is recording CCTV surveillance video. An reasonable quality MPEG-4 stream might be ~150kB/s. A network with 100 cameras generates 15MB/s, or over 1TB/day.<br /><br />Your quote from the press release doesn't describe the data being stored. But the data coming out of banks isn't just transaction data, some of it is quite big ...janmhttps://www.blogger.com/profile/13361560903657668505noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-85800146242927504272011-05-04T01:21:50.830+10:002011-05-04T01:21:50.830+10:00If cloud storage were as simple as buying TB hard ...If cloud storage were as simple as buying TB hard drives and linking them then there would have been no battle for 3Par.<br /><br />This is complicated stuff - and you need the box to understand WHERE everything is.<br /><br />Amazon charge more like 100 dollars a month per terrabyte connected to a server...<br /><br />http://alestic.com/2009/06/ec2-ebs-raid<br /><br />These numbers are a bit old - but the costs have probably halved since then... but no my order of magnitude is not off.<br /><br />This company would have had to be truly miraculous to increase fixed assets by only 1.6 million whilst increasing revenue by 40-50 percent.<br /><br />I dont think they could have offered any cloud services at all (no fixed assets). But they must be doing something really special.<br /><br />Just wish I understood what.<br /><br />---<br /><br />I mean these are really truly special numbers.<br /><br />JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-49037551805121390902011-05-04T01:21:50.650+10:002011-05-04T01:21:50.650+10:00If cloud storage were as simple as buying TB hard ...If cloud storage were as simple as buying TB hard drives and linking them then there would have been no battle for 3Par.<br /><br />This is complicated stuff - and you need the box to understand WHERE everything is.<br /><br />Amazon charge more like 100 dollars a month per terrabyte connected to a server...<br /><br />http://alestic.com/2009/06/ec2-ebs-raid<br /><br />These numbers are a bit old - but the costs have probably halved since then... but no my order of magnitude is not off.<br /><br />This company would have had to be truly miraculous to increase fixed assets by only 1.6 million whilst increasing revenue by 40-50 percent.<br /><br />I dont think they could have offered any cloud services at all (no fixed assets). But they must be doing something really special.<br /><br />Just wish I understood what.<br /><br />---<br /><br />I mean these are really truly special numbers.<br /><br />JohnJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-70162212707914159282011-05-04T01:11:58.096+10:002011-05-04T01:11:58.096+10:00I think you're off by at least two orders of m...I think you're off by at least two orders of magnitude when looking at the storage involved and comparing against Amazon.<br /><br />One petabyte is 1000 terabytes. A one terabyte drive costs on the order of AUD$100 retail for a single drive in Sydney. To scale up, of course you need power, rack space, controllers, cabling, etc, but we're not talking about hundreds of millions of dollars any more.<br /><br />Let's say the capital costs are two times the cost of the drive for raw storage, and then double that for redundancy (drives fail), giving $600/TB in capital cost. Let's round up a bit more and have $1MM/PB. <br /><br />http://en.wikipedia.org/wiki/Petabyte<br /><br />http://en.wikipedia.org/wiki/Orders_of_magnitude_(data)<br /><br />The Amazon elastic block store lets you walk up and create a 1TB storage volume, and they will charge $100/month, plus access fees. Once 1000 customers do that, they are managing 1PB of data.<br /><br />The discussion at:<br /><br />http://andirog.blogspot.com/2008/03/how-much-data-is-in-amazon-s3.html<br /><br />Puts the S3 storage at 22PB in 2008. There has been growth since then, and I'd be surprised if they're not managing more than 100PB of data. (No real information of course, and I haven't even looked at their financial results to reverse engineer the figures.)<br /><br />So, I agree that many Chinese companies seem to be able to do magic stuff with almost nothing, but on the face of it, $1MM for 1PB doesn't seem off too much.janmhttps://www.blogger.com/profile/13361560903657668505noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-39713083428689031162011-05-04T01:09:57.615+10:002011-05-04T01:09:57.615+10:00Just ask S1 (SONE) about how capital intensive it ...Just ask <b>S1</b> (<b>SONE</b>) about how capital intensive it is to provide "cloud" (back in Internet Bubble 1.0 it was called "outsourced") software and storage to the banking industry.<br /><br />The business was (and is) far more capital intensive than anyone had anticipated in Internet Bubble 1.0<br /><br />The segregation of client data is of great importance to the banking industry. Even the use of co-location on a single physical machine may be forbidden, further reducing the "efficiencies" of going to the "cloud"...or as it was called way back before Internet Bubble 1.0, Client/Server.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-66802065643415092011-05-04T01:07:42.694+10:002011-05-04T01:07:42.694+10:00How do you know they are actually doing anything w...How do you know they are actually doing anything with the Cloud stuff? It could just be a fluffy PR piece to pump up the stock price without anything of substance behind it. The revenues come from the "core" business lines.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-90494734463233403542011-05-04T00:58:33.104+10:002011-05-04T00:58:33.104+10:00The Petabyte of data not being cool is the nicest ...The Petabyte of data not being cool is the nicest thing I have heard said about this.<br /><br />--<br /><br />Archive.Org - which copies the entire internet every few weeks - is 2.9 PB of data. Guess that is not cool either.<br /><br />But there is NOT a PB of data at any financial institution in China. Its just not there...<br /><br />And given there is not a PB of data - why the hell did they talk about PB in their press release...<br /><br />I guess they made up the press release for stock marketing purposes... like cloud computing releases before them...<br /><br />You could be right - the business is real but the press release made up. <br /><br />I guess that is a way the short could be wrong... <br /><br />But I am not sure I would want to be long companies that made up press releases in China... I might be wrong being short... but it would be a strange (but possible) outcome.<br /><br />JJohn Hemptonhttps://www.blogger.com/profile/03766274392122783128noreply@blogger.comtag:blogger.com,1999:blog-4815867514277794362.post-55126810948243716942011-05-04T00:51:55.756+10:002011-05-04T00:51:55.756+10:00A petabyte of data? That's not cool. You kn...A petabyte of data? That's not cool. You know what's cool? etc<br /><br />Writing as a techie who works vaguely in that space, that PR reads like typical PR BS, they have some new software and have added the words "built on cloud storage techniques" to make it sound impressive.<br /><br />People have been adding "cloud" into their product descriptions since it became the New Thing. I hope nobody goes short on these guys merely because media hacks write BS into PRs.<br /><br />From their web site they look like a pure-play services company so lack of capex seems entirely expected.Anonymousnoreply@blogger.com