Welcome to the Mclowd Community Newsletter.
In 2015 Wired magazine calculated the increased Internet speed from low-orbit satellites and estimated they would cut a 500 millisecond lag to 20 milliseconds: the same speed of delivery as a fibre-optic home Internet connection now…Instantaneous Internet connection from space suddenly eradicates the need for terrestrial infrastructure.
The Edge of Tomorrow, AFR 12-13 August 2017
If you are running a global, digital advertising platform like Google, then the price your customers pay for Internet access matters.
Reduce the cost of that access and you have removed an impediment to growth in your core business.
On 30th March this year a Falcon9 rocket from Elon Musk’s company SpaceX took off from Cape Canaveral to launch a communications satellite.
Of far greater significance is that the used rocket then returned to Earth and landed on a drone barge in the middle of the Atlantic Ocean.
On that day the economics of communications satellites changed forever, with implications for all of us (and particularly Telstra’s 1 million shareholders).
Several years ago Google (via its parent company Alphabet) participated in a $1 billion funding round for SpaceX. Sergey Brin and Larry Page didn’t give Elon $1 billion because of his dreams of colonising Mars. They handed him that money because he intends to use that same rocket to launch a network of low-orbit telecommunications satellites.
And in doing so alter the economics under which all of us access the Internet (and communicate over IP telephony, using tools like WhatsApp).
SMSF Accounting Update
Thanks to our Partner SISS Data Services automated broker data feeds are now available.
As flagged in earlier communications the Mclowd Practitioner Edition is also now live.
Access to this premium version of the software is subject to an annual licence fee of $30 per Fund ex GST. Existing and prospective practitioner users looking to trial this version can manage up to 5 Funds for free through to the end of FY19.
Improved support for pensions is scheduled for release in December, including:
- Point in time calculations of Member balances
- Calculation of minimum amounts for ABP and TRIS
- Reversionary pension arrangements
Implications for Telstra
Telstra’s share price has halved in the last two years (and the dividend was recently slashed by more than 30%), largely because the financial engineering that was being used to prop up free cashflow has run its course.
Moving forward that flow of dividends will be fully exposed to the microeconomic realities of the Third and Fourth Industrial Revolutions.
In particular Sergey Brin and Larry Page – via their investment in SpaceX – have the potential to compromise Telstra’s core business in exactly the same way they destroyed Sensis, and for the same reason.
Because they can.
Implications for Mclowd
If you run a professional services practice focused on SMSF clients, then the price your customer pays for the infrastructure required to run that SMSF matters.
Reduce the cost of accessing said infrastructure and you increase the value proposition / potential demand for your service.
The equity investments that Mclowd has now begun to receive from a number of administration firms is driven by the same economics that drove Google to pump money into SpaceX.
As the above AFR article seeks to points out, we find ourselves standing on the Edge of Tomorrow.
And never has tomorrow looked less like yesterday than it does today.
Mclowd Pty Ltd