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When will the traditional model of software licensing die?

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When will the traditional model of software licensing die? Surely it is only a matter of time.

This week alone, we've seen Oracle accused of costing customers millions of pounds through its "non-transparent and complicated licensing policy". Legal experts say that firms are being forced to pay huge penalties when using Oracle software in a virtualised environment - a set-up that is increasingly common.

Meanwhile, SAP users in the UK have called for more transparency and better value for money in the supplier's licensing policies. Here too, a user group survey suggests that 95% of SAP customers believe the firm's software licensing is too complicated.

Licensing has always been a point of contention for IT leaders. Computer Weekly was writing about how big software firms would rip off customers through opaque terms and conditions as long ago as the 1990s.

But now, with the growth of the cloud and software as a service, those old models of upfront licence fees with annual maintenance payments look increasingly outdated and inappropriate for a modern IT environment.

One of the biggest culprits is Microsoft, but even the world's biggest software provider is showing early hints of realising the world has changed. CEO Steve Ballmer told shareholders this week that the firm is undergoing a "fundamental shift", and now sees itself as "devices and services company".

The implication between the lines, surely, must be that you don't sell devices and services on the same basis as a conventional software licence. It would be a huge change, with enormous financial implications, were Microsoft to move to a subscription-based model more in tune with the pay-as-you-go ethos of the cloud. It clearly won't happen overnight - but if that is the direction of travel, then perhaps even Microsoft is starting to get it right.

Of course, supporters of open source will be smiling smugly at the travails of licence-encumbered users. It is no coincidence that most of the new cloud services - Amazon, Google, Facebook etc - are built on open-source principles. Imagine the cost of an Oracle database licence for Facebook's server infrastructure.  

There's a bright future for software companies - their products will power the world and our lives. But there are gloomy prospects for any firms that insist on hanging on to outdated software licensing practices from a different age.Enhanced by Zemanta

IT exams are a waste of time - let's scrap them

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Let's save us all some time. After this year's A-level results, please read what we wrote about at the same time last year, and the year before - and, frankly, probably every year for at least the last five years.

We can easily regurgitate the same headlines: "Number of students taking IT-related exams falls again." We could almost use the same words in every story, just change the numbers slightly.

It's beyond a joke really, but the truth is that ICT and computing GCSE and A-levels are little more than a joke these days. Just 297 girls sat the computing A-level, for example. What's the point?

The curriculum for ICT and computing is so poorly perceived that IT employers pay it no attention. Hardly any companies look for new recruits with those qualifications - maths, sciences, even languages are more likely to get you a job in IT.

The government has at least finally recognised that the GCSE curriculum is a waste of time, and education secretary Michael Gove duly scrapped it earlier this year - but hasn't replaced it, leaving a vacuum in its place that will likely see students numbers drop even further.

So should we bother at all with IT education in schools? Why not just look for students who have done well in the basic science, maths or engineering topics and leave the IT training to employers?

Well, if IT employers still funded sufficient training, maybe we could. But lack of training remains one of the biggest skills issues facing the IT profession.

We are genuinely fed up of having to write the same story every year. Each time, the same commentators and experts bemoan the lack of progress, but nothing changes. We all know what needs to be done - IT employers need more outreach into schools; the IT profession needs to promote better role models to attract kids to study with the aim of a career in IT; the curriculum needs to reflect the digital skills we will need in 10 years, not those we had 10 years ago.

But it's hard to have any confidence whatsoever that it's going to happen soon. Perhaps this demographic timebomb will need to explode before anything happens - but by then it may be too late.

At the very least, let's do one thing now - recognise that the current exams at all levels are a waste of time, and scrap them. Perhaps that, at least, will spur employers, academics and politicians to make the radical changes that IT education needs.

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Banks need to tackle IT complexity to avoid further regulation

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Complexity is the common enemy of every IT leader. Ask any group of IT managers what is their biggest day-to-day challenge, and the answer you will most often receive points at the complexity of legacy infrastructure.

For too long, IT departments and their suppliers have used that complexity as a protective suit - when asked, "Can you do this?" the response has been, "Ooh, that's complicated."
For many years, it's been easy to get away with it, as the business users or IT buyers were at a disadvantage in their technology knowledge.

But things have changed. Now, everyone's expectations of technology simplicity are set by Google, Facebook and eBay. We as IT experts might understand the incredible complexity behind the ability to "Like" the Team GB Olympics page, but for the users all they see is the simplicity of clicking a button.

Those expectations are what IT departments now have to live up to.

Nowhere is this becoming more apparent than in financial services. There are growing calls for IT to be regulated across the banking sector after the Royal Bank of Scotland and NatWest fiasco that prevented customers accessing their accounts.

A report this week by IT trade body intellect estimates that banks spend 90% of their IT budget on managing legacy infrastructure - that is simply unsustainable.

Banking systems are among the most complex around - developed over years, often reliant on ageing mainframes and applications that are well past their best-before date, but which do their job day in, day out. Add to that the number of mergers in the sector, with overlapping systems having to be integrated - and add too the customer-facing systems that have been bolted on top to deliver online and mobile banking.

It all works, mostly. And the cost of updating a mostly functioning but ageing system is difficult to justify when the replacement will effectively do the same job, just with newer hardware and software. It's even harder to justify in the middle of an ongoing banking crisis.

But if IT now represents the arteries of the financial world, then those arteries are increasingly sclerotic and one day the blockage will become terminal.

Banks are in an impossible position - needing to spend money to remove complexity with little return on investment. But if they want to avoid regulated IT systems, and have an IT infrastructure with the flexibility to cope with rapidly changing customer requirements, that cash is going to have to be spent.

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IT professionals must counter fear and ignorance of technology

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We all know the good that technology can do, and the benefits it brings for the way we work, live and play. The future growth of the UK economy will be built on IT. Consumers are embracing technology in their everyday lives like never before.

Yet residual fear and ignorance is still driving much of government policy when it comes to the impact of technology.

That can be the only explanation for the continuous desire of government after government to want to store and monitor the daily electronic interactions of its citizens. The Data Communications Bill - the government's "snooper's charter" to store all our web, telephone and social media activity - is based entirely on fear - and its justification tries little more than to instil that same fear in us.

Yes, the threats we face have changed. Of course bad people are going to look to exploit the internet, every bit as much as good people do. But casually throwing around the "terrorists and paedophiles" line to convince us that an institutionalised attack on our individual privacy is in any way warranted by the new Bill is nothing more than ignorance and technophobia in action.

David Cameron promised to "roll back the surveillance state" when he was Leader of the Opposition. To now resurrect the Labour snooping plans in all but name is an act of gross hypocrisy.

The government will tell us that the Data Communications Bill is different - that Labour wanted a giant database with all our interactions stored within, and the Tories still don't want that. It's nothing more than a technicality. The same information will be stored, just in distributed databases managed by the private sector - the telecoms and internet providers who want nothing to do with it but have no choice to comply.

In the coming years, we face perhaps the most important turning point in the development of the digital revolution. Governments and other institutions will try to control and monitor the internet, to hang on to 20th century thinking and practices as citizens embrace the possibilities of 21st century technologies. IT professionals will find themselves in the centre of a storm.

As a profession and a community, it will be increasingly incumbent on all of us in IT to champion the benefits of technology, to overcome fear and distil ignorance. There will be few more crucial times to do what we do, than now.

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Microsoft's price hike could hardly be worse timing

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Timing, they say, is everything. Microsoft's could not be worse.

There is huge scrutiny and discussion going on about the effects of supplier lock-in and the relative merits of proprietary and open software standards - a debate prompted by the government's increasingly heated open standards consultation.

Microsoft, in particular, is often quoted as an example of the perils of lock-in. Look, for example, at the European Commission, an organisation that has purchased Microsoft software for 20 years without an open competition because of its reliance on the firm's products.

Look also at the experiences of Bristol City Council, which found that it had little choice but to stick with Windows and Office instead of its preferred open source strategy.

Microsoft's aggressive lobbying of the Cabinet Office over its plan for open standards is taken by critics as an example of trying to maintain a monopolistic grip established by proprietary products at its largest UK customer.

So what does the supplier go and do? Raise its volume licensing fees by up to 33%.

That's right - a unilateral corporate decision that will mean well above inflation increases in the price of the most popular forms of licensing agreement for organisations buying Microsoft software. It's happening under the auspices of introducing a harmonised pricing structure across Europe, and because of the weakness of the euro relative to the pound, UK customers are taking the biggest hit.

But it's OK, because if you don't like it, you can easily swap out your Microsoft products for something else, can't you?

Can't you? Oh...

The days of technical lock-in to suppliers and their products are surely nearing an end. "Ah, but there will always be some form of lock-in, even in the cloud," say big suppliers. If so, it's interesting to listen to CIOs, who advise each other that the first question to ask of a potential cloud provider is, what is the exit clause?

If Microsoft wants to convince IT leaders it is no longer a company stuck in the past and hanging on to old business models, huge price rises are neither the way, nor is now the time, to go about it.

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Dear open standards lobby: SHOUT LOUDER!!

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There is a hugely important debate taking place in the UK IT community at the moment, one that will have equally huge significance for almost everyone who buys IT in this country.

It's about open standards - and in particular, what definition the UK government will use for the open standards policy that will determine much of the future of public sector IT procurement. But this isn't just an issue for IT chiefs in government - the longer term implications will affect every IT leader in every sector. With government being such a major influence on IT suppliers, the policy it adopts will have a big input into the product development of any vendor that wants to sell to the public sector, and hence to the products they sell to the private sector too.

It's a complex and often emotional debate.

For the layman, when software types start talking about patents and intellectual property and throwing around jargon and acronyms such as RF (royalty free) and FRAND (fair, reasonable and non-discriminatory), there's a natural tendency to switch off.

Don't worry - I'm not going to get into that sort of detail here, although if you read on I will point you to other articles on Computer Weekly and elsewhere that will help to explain some of those finer points.

Instead, I want to point a finger at the supporters of open standards and open source - simply because they need to make their opinions heard more widely and loudly in this critical debate.

Let me explain.

There is a consultation underway, led by the Cabinet Office, to invite views on the proposed definition of open standards that the government wants to embed into its IT strategy.

Senior IT people in government want to free themselves from the perceived lock-in associated with proprietary software - to cut costs, increase choice, and open up the public sector market to a wider range of products and suppliers; to ensure a "level playing field" between large and small, proprietary and open source; to allow taxpayers' money to be spent on the best outcomes, not the only product that is compatible. Few could argue that is not a good thing.

It's no secret either that there are people in senior government IT positions who have long been proponents of open source and open standards - not least the new deputy government CIO, Liam Maxwell.

It's equally no secret that there are those in government IT who feel the big suppliers that dominate Whitehall IT spending have not delivered value for money and their stranglehold needs to be reduced.

Understandably, open standards is seen as a way to achieve that.

That consultation process includes a number of public meetings, open to anyone with an interest in the topic to air and share their opinions and feed into the debate. There is also an online questionnaire inviting anyone to give their views. The Cabinet Office is being rigorous in ensuring it is open to, and seen to be open to, every side of the issue.

Earlier this week, Computer Weekly contributor Mark Ballard, who writes for our Public Sector IT blog, wrote a report based on his sources, which suggested that the first of these public meetings was dominated by the proprietary software lobby.

Mark has previously written about the extent to which major software firms such as Microsoft are lobbying government to ensure the open standards policy does not go down a path that might make it less likely or more difficult for buyers in its biggest UK customer to procure their proprietary products. You would expect them to do little else.

I leave it to you to decide whether this is "vested interests" or simply standard commercial practice.

Mark's blog post has stirred up something of a hornet's nest, with some participants refuting his reported version of events - and we have offered those participants a platform to air their views in response. We will be publishing their articles on ComputerWeekly.com very soon.

Nonetheless, there is a polarisation forming around what you might simplistically call the "open" lobby and the "proprietary" lobby. And there is a feeling that the proprietary lobby, with its greater resources, lobbying experience, and its business models at stake, is dominating the argument.

This has been the case for many years. I hate to say it, but in 12 years of reporting on IT, and many years before that working in the industry, I've seen the open lobby - open source developers, open standards proponents, free software fans, etc - spend too much time in the corner, huddled together saying to each other, "This is awful, dreadful, don't they understand?"

That's a personal observation - which I expect many in that lobby will disagree with, some quite strongly.

But the open lobby is facing something of an Agincourt here, its Waterloo, or Custer's last stand, depending on your preferred historical analogy.

There are some great people in the open lobby, with relevant and important opinions, whom I have a lot of respect for.

But too many - not all, but a lot - are simply not vocal enough in this debate. They can say they are right until they are blue in the face, but "right" does not mean they will win. They have to play the game the way their opponents have set the rules - unless and until they start winning some battles, they will never get the chance to set the rules themselves.

Mark's blog post reported that many in the open lobby felt the consultation meeting had not been publicised widely enough; there are some taking to Twitter to complain that they were not told about it or invited. Sorry, but that's no excuse. You can't complain you weren't invited next time Microsoft (or whoever) signs a multimillion-pound deal with the government for "proprietary" software.

Get used to the fact that the game is not being played by your rules. You don't win a hand of poker by betting with a five-card trick; you learn how to play a Royal Flush.

Now I'm not trying to say that one side is wrong or one side is right. It is a complex and highly nuanced topic. I have strong sympathies with many of the arguments of the open lobby, I'll admit. But I can see the perspective of the proprietary suppliers too.

I will, however, urge the open lobby to mobilise itself, to organise itself as well as its perceived opponents. Don't moan about not being at the meeting - go to the next one, and the next. Respond to the online consultation now. Comment on this blog post. Comment on Mark Ballard's blog post. Comment on articles from people on both sides of the debate when they're published here and elsewhere. Comment on any of the blogs or articles I've listed below.

Shout louder, walk taller, talk to your opponents and not just your supporters. Engage in the debate - actively, loudly, and with all the passion you have for the subject. Do it now. Whoever comes out on top of this critical debate, we need every voice on every side to participate.

There is only one community I want to win - and that's IT buyers (and ultimately taxpayers, that means you and I). But we need every part of the supply-side to be equally involved if that is going to happen.

Further reading:

If you want an easy-to-read explanation of the jargon of FRAND and RF and so forth, I recommend this article: Ignore the extremists in the software standards wars - by Leading Edge Forum researcher Simon Wardley published on Forbes.com

Cabinet Office open standards consultation

Report from the first public meeting by its host, Cabinet Office policy lead on open standards, Linda Humphries

Details of future public meetings

Blog post by Peter Brown, a participant at the first public meeting

Blog post by IT architect Dr Jeni Tennison on her response to the consultation

Report on the first public meeting of the open standards consultation by its chairman Andy Hopkirk

By Mark Ballard on Computer Weekly's Public Sector IT blog:

Proprietary lobby triumphs in first open standards showdown

Microsoft redeploys OOXML in open standards battle

Questions over open standards lobbyists

Microsoft hustled UK retreat on open standards, says leaked report

Open standards rift tears UK policy to shreds

Open standards: UK dithers over royalty question

Hope shines through crack in lid of open standards coffin

 

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Budget 2012: Promising, but not yet enough for UK IT

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Every year we assess what the Budget means for the UK IT community. Most years we conclude: Nothing much. This year, we'd have to acknowledge progress, by concluding: Well, a bit, probably.

The headline statement was George Osborne's promise to make Britain "the technology hub of Europe". Sadly there seemed little concrete policy or action to reveal how he intends to make that happen. If you use the broadest possible definition of "technology", which the chancellor seems to have done, and include creative industries such as film and TV, plus scientific research such as pharmaceuticals, then you can start to build a case.

But for what we know as technology - information technology and communications - not so much.

There are some positive moves to improve tax breaks on research and development and for start-ups. There was the re-announcement of £100m promised in last year's Autumn statement to fund 10 "super-connected" cities, plus £50m extra for 10 smaller cities. And there were some minor promises to improve rural mobile coverage and to boost signals around key roads and on the railways.

But there was nothing that you could hold up and show as proof of a clear action plan and commitment to that ambitious "technology hub" objective.

If anything, the Budget just goes to prove business secretary Vince Cable's leaked comments to David Cameron, that the strategy is "piecemeal", and there is an urgent need for "more leadership in identifying and supporting key technologies".

Clearly it is better that Osborne said what he said than if he had said nothing, but we need more visible action and a more co-ordinated plan. Research last week from Boston Consulting Group showed that the internet plays a bigger role in the UK economy than in any G20 country - worth 8.3% of GDP - so we urgently need a vision and policies that build on that lead and use technology to pull us out of the downturn.

If ministers need educating about the role that technology can play, then at least they can expect some IT training - the most entertaining announcement in the Budget being that, "From 2014 new online services will only go live if the responsible minister can demonstrate that they themselves can use the service successfully."

So there is hope. By 2014, every minister will at least have to know how to use the web.

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"Technology leadership must drive economic activity" - the other bit of Vince Cable's letter to the PM

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There was plenty of national coverage of business secretary Vince Cable's leaked letter to the prime minister, in which he lamented the lack of a "compelling vision" for UK economic growth, and called for the break-up Royal Bank of Scotland.

Lost among those headline-friendly soundbites was one of the major points in Cable's letter - the first of his five suggestions for a "strategic vision" for the UK's industrial future, namely the urgent need for "more leadership in identifying and supporting key technologies" - the letter even underlined "key technologies" for emphasis.

Cable used a phrase that Computer Weekly readers may be familiar with - it's something we've called for many times through many governments: "...technology leadership must drive economic activity in the future."

Technology is the future of the UK's economy, and Cable is spot on to say this, and equally to say that the government of which he is a part continues to fail on this - "our actions are rather piecemeal", as Cable says.

He calls for greater focus and more resources to co-ordinate the government's technology priorities. He's absolutely right.

Cable goes on: "Despite fantastic SMEs, we have produced no Amazon, no Google and no Intel. Key issues are in finance and skills, including how our equity markets function that leave too few potential giants to expand organically rather than sell up."

There's a couple of obvious comments to be made on Cable's observations. First, that the technology shortfall was such a strong theme of his letter, yet it received zero coverage at a national level. Second, that Cable is of course responsible for our technology and IT skills base as the minister for business, innovation and skills, so he's not exactly without his share of the blame.

It is refreshing on one level to see this issue being raised in such a senior political environment, but depressing that it still has to be said. I know I'm biased as a technology writer, but surely it is patently obvious to anyone that technology innovation is the future for any major developed Western economy, and that the UK has a unique opportunity - and a very limited window for that opportunity - to put a strategic policy emphasis on all things digital to make us a real world leader.

We are sadly not privy to David Cameron's response, and we will have to wait for the Budget later this month to see any evidence of a policy shift or new funding available.

But it will prove to be a devastating legacy for this, and any other government, that fails to see the opportunity of technology innovation as a core economic cornerstone. Let's hope we are not to look back in 10 years' time and read another leaked ministerial letter lamenting how we missed our chance back in 2012.

 

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IPv6: opportunity, or a pain in the network?

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If you haven't been asked about your plans for IPv6 yet - it's only a matter of time.

There's a general level of awareness among IT leaders that the internet is running out of addresses. You may have read, and noted away in the back of your mind, that the existing IPv4 standard has run out of new addresses, but it probably hasn't hit you because your ISP has a stockpile to keep you happy.

You will have to migrate your network infrastructure to support IPv6 before long - but as with so many technical transitions, this could be seen as an administrative and operational pain, or an opportunity.

If you're among the latter group, you'll know that IPv6 is likely to be the catalyst for the next phase of growth for the internet. Its near-limitless address space is going to enable all sorts of new services. Research from Cisco predicts a 22-fold increase in machine-to-machine traffic on the internet over the next five years, as the so-called "internet of things" becomes an everyday reality. That's going to happen because of IPv6.

Sensor networks, smart meters, surveillance systems, and services we've yet to think of will all gain new levels of capability and functionality, as almost every electronic "thing" has an IP address and simple communications.

Of course, this is all going to present huge new challenges for IT professionals. Think about all the data being generated - much of it provided in open formats, freely available to all to use as you choose. Think of the vast quantities of real-time information that will become available to decision-makers. How is your infrastructure going to make use of that, and enable your boardroom to make the decisions that will determine success or failure? If you don't, your competitors will.

Think too of the security implications. We've already seen reports of the first IPv6 denial of service attacks, which tells us that the cybercriminal community is ahead of you in testing what IPv6 is going to mean. Have you planned for how IPv6 will affect your IT security?

IT managers face two choices with IPv6: try to convince your board that you need the cash for a costly transition, simply because it has to be done, Y2K-style. Or understand the opportunities and innovations that could deliver competitive advantage for your organisation. Take your pick.

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Big IT casts a shadow over cloud adoption

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I have a theory about cloud adoption, that I have tested entirely unscientifically and so far been given 100% approval in response.

Let me explain.

It is pretty much impossible to put a bunch of IT leaders in a room these days without the conversation naturally coming round to cloud computing at some point - who's doing what, what's your experience, what works, what doesn't.

Those conversations reflect the (proper, scientific) research conducted by Computer Weekly and our parent company TechTarget into technology purchasing intentions for this year. Our survey of 2,500 IT decision-makers worldwide confirmed that cloud was the number two item on the list of initiatives to look at this year, but was a high priority for only 30%. When asked which initiatives are actually being adopted this year, cloud didn't make the top 10.

So, cloud is of great interest, but only a minority are actually planning to do anything this year. With this quantitative study in mind, I thought I'd do some personal qualitative research, and talked to a few IT leaders. In an entirely unscientific way, I posed them a question, and every one of them agreed with the proposition - that the biggest single hurdle preventing them from adopting cloud is the Microsoft Windows software licensing model.

OK, of course it's not just Microsoft, it's the whole up-front licence fee and annual maintenance charge structure - but Microsoft is the one supplier that pretty much every IT department buys from. Until Microsoft offers true cloud pricing structures, there's always going to be a barrier to progress. (As an aside, surely the release this year of Windows 8 offers just such an opportunity - but I can't see it happening).

I've written before about the fact that cloud is now a commercial and risk discussion for IT leaders, not a technology issue. And without wanting to sound like a broken record (search "vinyl, LP" on Google if you don't get the reference...) it is the conventional software suppliers who are the biggest blocker to their customers adopting the technology they have marketed and hyped for the last three years.

I put this to a roundtable full of IT leaders earlier this week - that they get the technology, but they want answers to the commercial and risk ownership questions before they strategically commit to the cloud - and received a table full of nodding heads.

It's been instructive to notice how vendor marketing and the analyst / research firms who depend on vendor funding are lately changing their tune to say, "Cloud isn't about cutting costs." That's quite a change from the messages being pushed out in previous years.

Of course, this is an opportunity for new entrants into the market - the big players might just be disrupting themselves out of existence if they don't wise up fast - but even the best SME cloud supplier isn't going take over a big corporate IT service any time soon.

So we reach an impasse. Big IT says go cloud, but Big IT won't change its safe, low-risk, proven licencing models because it can't - its business models just wouldn't work. IT leaders want cloud, but their Big IT suppliers won't offer the flexible, pay-as-you-go, risk-transferred service those same suppliers told them would be the big benefit of cloud.

There's a pun about silver linings somewhere, but I'm not sure I can see it yet.

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