Kazakhstan’s Internet Shutdown Offers Lessons for Russia-Ukraine Crisis

“Control of the internet is increasingly part of any modern conflict.

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As Almaty, Kazakhstan’s largest city, spiraled into chaos last month over rising energy costs and anger at the government, the country’s leaders took a drastic step to quell protests: They blocked the internet.

First, they tried to ban access to some news sites, social networks and messaging services. Then, as activists bypassed those curbs with software that masked their locations, the authorities shut down almost all connectivity in the country.

The moves added uncertainty to an already dire situation. After payment apps and point-of-sale machines used to swipe debit cards went down, lengthy lines formed at A.T.M.s as Kazakhs rushed to get cash. Families could not communicate with loved ones. Taxi drivers who relied on ride-hailing apps said they stopped driving because they could not connect with passengers.

“It was impossible to communicate,” said Darkhan Sharipov, 32, an accountant who was part of the protests. “The lack of information multiplied the chaos and disinformation.”

The scenes in Kazakhstan offer a preview of what may unfold in Ukraine, where the internet could be one of the first targets of the Russian military in a potential conflict. Ukrainian and Western officials have warned that cyberassaults could be part of any Russian intrusion.

When Kazakhstan’s internet was mostly shut down

While internet traffic in the country normally ebbs and flow each day, officials brought it to a near halt for many hours between Jan. 5 and 10.

This week, the Ukrainian government said the websites of two banks, its Ministry of Defense and its armed forces had been briefly taken offline by a series of denial-of-service attacks, in which huge amounts of traffic overwhelm a network. The attacks were the largest in the country’s history, Ukrainian officials said, and “bore traces of foreign intelligence services.”

On Thursday, internet service outages were recorded on some mobile networks in eastern Ukraine near the Russian border.

“In the event of a real military conflict, it is the internet infrastructure that will be destroyed in the first place,” said Mikhail Klimarev, a Russia telecommunications expert and the executive director of the Internet Protection Society, a civil society group opposed to internet censorship.

“In Kazakhstan, the internet was turned off by order of the authorities,” he said. “In Ukraine, we fear that the internet will be disabled by shelling.”

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Control of the internet is increasingly part of any modern conflict. Recognizing that the web is vital for communications, economics and propaganda, authorities have used shutdowns more and more to stifle dissent and maintain power, in what is akin to holding energy sources, water or supply lines hostage.

In 2020, there were at least 155 internet shutdowns across 29 countries, according to the latest annual report from Access Now, an international nonprofit group that monitors these events. From January to May 2021, at least 50 shutdowns were documented in 21 countries.

They included in Yemen, where Saudi-led forces targeted the country’s telecom and internet infrastructure in the war there, according to Access Now. In November, Sudan’s leaders turned off the internet for nearly a month in response to protests. And in Burkina Faso, the government ordered telecom companies to turn off mobile internet networks for more than a week in November, citing national security concerns.

“The only way to be absolutely sure that nobody is getting online is to pull the plug on everything,” said Doug Madory, director of internet analysis for Kentik, a telecom services company.

In Ukraine, any internet shutdown would have to be done by an outside force, which is different from the case in Kazakhstan, where the government used national security laws to force companies to cut off connections.

Taking down the Ukrainian internet completely would be cumbersome. The country has more than 2,000 internet service providers, all of which would need to be blocked for a full shutdown.

Max Tulyev, the owner of NetAssist, a small internet service provider in Ukraine, said his company had made preparations. To keep service going during a conflict, NetAssist has established links to other internet network operators and tried to route connections around common locations that could be attractive military targets, he said. It has also set up a backup network center and purchased satellite phones so employees can communicate if networks go down.

“As Ukraine is well integrated into the internet, with a lot of different physical and logical links, it will be very hard to disconnect it completely,” said Mr. Tulyev, who is on the board of the Ukrainian Internet Association.

Still, many expect targeted blackouts, particularly in Russian-Ukrainian border areas, if there is war. Cyberattacks or a military attack could kill connectivity.

On Thursday evening, as fighting flared in eastern Ukraine near the front line with Russia-backed separatists, cellphone service went down in what authorities said was “targeted sabotage.” It was restored by Friday morning.

“Sabotage of communications facilities will continue,” said Anton Herashchenko, an adviser to the Ukrainian minister of internal affairs. “All this is part of Russia’s plan to destabilize the situation in Ukraine.”

In many countries, turning off the internet completely is not technically difficult. Regulators simply issue an order to telecom companies, telling them to shut off access or risk losing their license.

In Kazakhstan, the events last month illustrate how an internet shutdown can exacerbate a chaotic situation. The technical roots of the shutdown go back to at least 2015, when the country tried to emulate its neighbors China and Russia, which have for years practiced internet censorship. Authorities in those countries have developed methods for snooping on communications and built armies of hackers and trolls that can target opponents.

Last year, Russia slowed Twitter traffic during protests related to the opposition leader Alexei Navalny, a delay that has continued. China has built an arm of the police to arrest those who speak out online and commands thousands of volunteers who post positive comments to cheer on government initiatives.

The Kazakh authorities tried developing similar technical tools for surveillance and censorship without severing the key connections necessary for its economy to function, according to civil society groups and activists.

Last month, Kazakhstan plunged into disarray as anger over rising fuel prices grew into broad demonstrations, leading to a Russian-led military intervention. As the government cracked down, the protests turned violent. Dozens of antigovernment demonstrators were killed, and hundreds more were injured.

To prevent protesters from communicating and sharing information, Kassym-Jomart Tokayev, Kazakhstan’s president, turned to a digital scorched-earth policy akin to one in Myanmar last year that took the entire internet offline. In Myanmar, the military staged a coup, and soldiers took over the data centers run by the country’s telecom companies.

In Myanmar and Kazakhstan, the lack of internet heightened the confusion. In the event of a conflict in Ukraine, that added confusion would be a part of the point, Mr. Klimarev said.

“Destroy the internet of your enemy, and it will be disorganized,” he said. “Banks, supply systems and logistics, transport and navigation will stop working.”

In Kazakhstan, the internet shutdowns began around Jan. 2 and lasted until Jan. 10. At first, they were limited to certain communications and targeted at areas where there were protests, said Arsen Aubakirov, a digital rights expert in Kazakhstan.

By Jan. 5, internet monitors said the country had gone almost completely offline, battering the country’s economy, including its sizable cryptocurrency operations.

The Ministry of Digital Development, Innovation and Aerospace Industry ordered telecom operators to block access, citing a law that allowed the government to suspend networks and communication services in the interest of “ensuring antiterrorist and public security.”

While activists found some ways to circumvent the blocks, the lack of internet meant many demonstrators did not know when the government imposed new curfews, leading to violent clashes with the police, said Mr. Sharipov, who was detained by the authorities for protesting. While the internet was down, state-run media labeled the demonstrators “terrorists” and drug users.

“This is another example of a country in turmoil opting to shut the internet down to buy them a few hours of lack of public or international scrutiny,” Mr. Madory said.”

I conclude, that all Lithuanian political waste rushes to Ukraine unnecessarily. They won't show you on TV because there will be no connection. 

Would there be many victims in Ukraine?

Klaipėda University Political Scientist Gabrielė Burbulytė:

 

     "Efforts are being made to rescue civilian casualties, of which there would certainly be plenty if an attack were to occur."

 

How does the lady know about this? If the Ukrainians will meet the Russians with flowers, as was the case at the end of the Smetona era, there will be almost no casualties. Or not? What does the political science say about the end of the Smetona era?

 

Ar daug būtų aukų Ukrainoje?

Klaipėdos universiteto politologė Gabrielė Burbulytė:

"Stengiamasi išgelbėti civilines aukas, kurių tikrai būtų nemažai, jei ataka įvyktų." 

Iš kur panelė apie tai žino? Jei ukrainiečiai rusus pasitiks su gėlėmis, kaip buvo Smetonos eros pabaigoje, tai aukų beveik nebus. Ar ne? Ką sako politologijos mokslas apie Smetonos eros pabaigą?

„Shopify“ paspaudimams reikia daugiau plytų --- Planas statyti sandėlius, kad būtų galima perimti „Amazon“, yra prasmingas, tačiau sumenkina bendrovės turto lengvumo modelį

„Shopify investavimo režimas bus bjaurus. Tai taip pat buvo neišvengiama.

 

    Kanados elektroninės prekybos startuolis susirado sėkmę, atlikdamas iš pažiūros neįmanomą užduotį – konkuruoti su Amazon.com, tačiau savo sąlygomis. 

 

„Shopify“ veikla, padedanti prekybininkams ir prekių ženklams valdyti savo internetines parduotuves, augo gerokai prieš pandemiją ir teigiamai išaugo per protrūkį. 

 

Bendrovė 2021 metus užbaigė su 4,6 mlrd. dolerių pajamomis, 57% daugiau, nei praėjusiais metais ir beveik trigubai daugiau, nei 2019 m. Lengvojo turto modelio bendroji marža nuolat viršijo 50%, o tai yra daugiau, nei dvigubai daugiau, nei „Amazon“ valdė tuos metus, kol debesijos verslas neišaugo pakankamai didelis, kad padėtų kompensuoti mažas mažmeninės prekybos maržas.

 

    Tačiau „Amazon“ vargu ar sėdėjo vietoje. Bendrovė ir toliau skyrė milijardus į savo ir taip didžiulį vykdymo tinklą, kol dabar siūlo pristatymą tą pačią dieną daugiau, nei 90 didmiesčių zonų. Dėl tokio pobūdžio prekybininkai, nusprendę naudoti „Shopify“, atsiduria rimtoje nepalankioje padėtyje – net ir tie, kurie turi įtikinamų ir gerai žinomų prekės ženklų tapatybę. Remiantis „Consumer Intelligence Research Partners“ skaičiavimais, „Amazon's Prime“ paslauga vien JAV vienija 172 milijonus narių, kurių dauguma moka būtent už nemokamo ir greito pristatymo privilegiją.

 

    Tai neabejotinai yra už „Shopify“ plano išplėsti savo pristatymo tinklą, kurį bendrovė išsamiai išdėstė trečiadienio ketvirtojo ketvirčio skambutyje. 

 

Prezidentas Harley Finkelsteinas sakė, kad „Shopify Fulfillment“ tinklas, kurį daugiausia sudaro įmonei priklausantys sandėliai, bus sukurtas taip, kad daugiau, nei 90% JAV gyventojų pristatytų pakuotes per dvi dienas ar mažiau. 

 

Planas apims apie 1 milijardą dolerių kapitalo išlaidų per dvejų metų laikotarpį, prasidėjusį 2023 m. 

 

Tai gali atrodyti kaip menka, atsižvelgiant į žaidimą – Amazon išleidžia maždaug tiek kas penkias dienas. Tačiau tai yra 10 kartų daugiau, palyginti su tuo, ką Shopify vidutiniškai investavo per pastaruosius trejus metus.

 

    Toks verslo modelio pokytis yra nervinantis Shopify investuotojus. Nuo ketvirtadienio pabaigos akcijos atpigo beveik 26%, o tai padidino nuopuolį, kuris nuo metų pradžios jau sumažino daugiau, nei trečdalį jų vertės, nes investuotojai paliko ankstesnius pandemijos laikotarpio numylėtinius. Analitikas Markas Mahaney iš Evercore ISI išlaikė savo „pranašesnį“ akcijų reitingą, tačiau pažymėjo, kad investuotojai „turės pasitikėti, kad vadovybė yra veiksminga kapitalo paskirstytoja“ dėl naujų padidintų investicijų lygių.

 

    Bhavinas Shahas iš „Deutsche Bank“ yra ne toks gudrus. Ketvirtadienio ataskaitoje, kurioje palaikomas jo „neutralus“ reitingas, jis pažymėjo, kad nors yra rizika, kad naujasis Shopify planas „nepagerins ankstesnės prekybininkų priėmimo trajektorijos, matome didesnę riziką, kad vos 1 mlrd. dolerių išlaidų neužteks, konkuruojant su kitais žaidėjais, pavyzdžiui, „Amazon“.

 

    Shopify žengia į labai brangų žaidimą." [1]

 

Shopify tiesiog bijo, kad kas nors ją aplenks iš apačios, t. y. kas nors pakankamai protingas įsitrauks į šį žaidimą pigiai, kaip tai padarė pati Shopify. Taigi „Shopify“ tiesiogine prasme stato brangoką plytų sieną tokiems mažesniems konkurentams. „Shopify“ niekada negalės perimti „Amazon“. Shopify tiesiog išmoko su tuo gyventi.

1.  Shopify's Clicks Need More Bricks --- Plan to build warehouses to take on Amazon makes sense but dents company's asset-light model
Gallagher, Dan. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 18 Feb 2022: B.12.

Plan to build warehouses to take on Amazon makes sense but dents company's asset-light model

"Shopify's investment mode is going to be ugly. It was also inevitable.

The Canadian e-commerce upstart has found fortune by pulling off the seemingly impossible task of competing with Amazon.com, but on its own terms. Shopify's business of helping merchants and brands run their own online stores was growing well before the pandemic and has positively blown up during the outbreak. The company closed 2021 with revenue of $4.6 billion, up 57% from the previous year and nearly triple its 2019 level. And its asset-light model has regularly kept gross margins above 50%, which is more than double what Amazon managed in the years before its cloud business grew large enough to help offset the low margins on its retail side.

But Amazon has hardly been sitting still. The company has continued to pour billions into its already massive fulfillment network, to the point that it now offers same-day delivery in more than 90 metropolitan areas. That sort of muscle puts the merchants who elect to use Shopify at a serious disadvantage -- even those with compelling and well-known brand identities. Amazon's Prime service now has 172 million members in the U.S. alone, according to estimates from Consumer Intelligence Research Partners, most of whom are paying specifically for the privilege of free and fast shipping.

That surely is behind Shopify's plan to expand its own delivery network, which the company spelled out in detail in its fourth-quarter call on Wednesday. President Harley Finkelstein said the Shopify Fulfillment Network -- consisting of mostly company-owned warehouses -- will be designed to deliver packages in two days or less to more than 90% of the U.S. population. The plan will involve about $1 billion in capital expenditures over a two-year period beginning in 2023. That might sound like a pittance considering the game -- Amazon spends about that much every five days. But it is a 10-fold surge compared with what Shopify has invested on average over the past three years.

Such a shift in the business model is concerning to Shopify's investors. The stock is down nearly 26% since the results as of Thursday's close, adding to a loss that already clipped more than one-third of its value since the start of the year as investors have bailed out of previous pandemic darlings. Analyst Mark Mahaney of Evercore ISI kept his "outperform" rating on the shares but noted that investors "will have to trust that management is an efficient allocator of capital" with the new stepped-up investment levels.

Bhavin Shah of Deutsche Bank is less sanguine. In a report Thursday maintaining his "neutral" rating, he noted that while there is risk that Shopify's new plan "does not improve the prior trajectory of merchant adoption, we see greater risk of merely $1 billion in capex being insufficient to compete with industry leaders such as Amazon."

Shopify is stepping into a very expensive game." [1]

Shopify is just afraid that somebody will out- Shopify it, i.e. somebody smart enough will step into this game on cheap, like Shopify did. So Shopify is literally building a brick wall for such smaller competitors. Shopify will never be able to take on Amazon.  Shopify simply learned to live with it.

1.  Shopify's Clicks Need More Bricks --- Plan to build warehouses to take on Amazon makes sense but dents company's asset-light model
Gallagher, Dan. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 18 Feb 2022: B.12.   

 

„DoorDash“ parodo varžovams, ką gali suvalgyti

„Po to, kai praėjusią savaitę Uber Eats pagrindinė įmonė Uber Technologies pateikė nuviliančią ataskaitą, JAV maisto pristatymo rinkos lyderis DoorDash trečiadienio vakarą privertė investuotojus valgyti iš jo rankų.

 

    Bendrovė teigė, kad 2021 m. 70 % padidino bendrąją Marketplace verslo užsakymų vertę, į kurią įeina pristatymas, po to, kai per kiekvienus iš ankstesnių trejų metų ji padidėjo daugiau, nei tris kartus. Ketvirtojo ketvirčio rezultatai rodo, kad ji ir toliau dominuoja pristatymo srityje šalies viduje ir turi didelių ambicijų tęsti savo sėkmę užsienyje.

 

    Nors „Uber Eats“ verslas ketvirtąjį ketvirtį pirmą kartą tapo pelningas, remiantis pakoreguotu pelnu prieš palūkanas, mokesčius, nusidėvėjimą ir amortizaciją, „DoorDash“ šiuo pagrindu dirba pelningai jau septynis ketvirčius iš eilės. Palyginti su plačiu „Uber Eats“ buvimu visame pasaulyje, „DoorDash“ tarptautinis pėdsakas vis dar nedidelis. Tačiau pastarieji „DoorDash“ žingsniai, įskaitant lapkričio mėnesį paskelbtą pranešimą, kad išleis 8,1 mlrd. dolerių Helsinkyje įsikūrusiai pristatymo platformai „Wolt“, buvo sutikti gerai. Iš tiesų, dėl nuolatinio bendrosios užsakymų vertės augimo ir agresyvių investicijų į naujas kategorijas ir tarptautines rinkas investuotojai išalko, todėl „DoorDash“ akcijos pabrango 26 % prekyboje po darbo valandų.

 

    Pasaulinė pristatymo rinka šiandien neabejotinai yra kelis kartus didesnė, nei prieš keletą metų, tačiau ne visos įmonės tokiu pat kiekiu yra kapitalizuotos. Praėjusią savaitę investuotojų dienos pristatyme „Uber“ paminėjo faktą, kad jos pristatymo verslas dabar yra tris kartus didesnis, nei prasidėjus pandemijai, lygindama metinius bruto užsakymus 2019 m. ketvirtąjį ketvirtį su tuo pačiu praėjusių metų laikotarpiu. Tačiau „DoorDash“ bendroji užsakymų vertė „Marketplace“ verslo platformoje praėjusiais metais buvo maždaug 5,2 karto didesnė, nei 2019 m.

 

    Bent jau JAV „DoorDash“ ir toliau lenkia „Uber Eats“ daugeliu rodiklių. „Bloomberg Second Measure“ duomenys rodo, kad nuo sausio mėnesio „DoorDash“ priklausė 58 % maisto pristatymo visoje šalyje, o Uber Eats – 24 %. Duomenys taip pat rodo, kad „DoorDash“ klientai išleido vidutiniškai 9% daugiau, nei jų kolegos „Uber Eats“ per vieną savaitę sausio pabaigoje atitinkamose įmonių platformose.

 

    Atrodo, kad „DoorDash“ lojalumo programa yra didelė jos sėkmės dalis. Bendrovė trečiadienį pranešė, kad ketvirtąjį ketvirtį turėjo daugiau, nei 10 milijonų „DashPass“ narių, palyginti su devyniais milijonais anksčiau. „YipitData“ rodo, kad „DashPass“ abonentai yra atsakingi už daugiau, nei pusę bendrojo „DoorDash“ vietinio maisto pardavimo ir sudaro maždaug 40 proc. jos mėnesio aktyvių vartotojų JAV. Maždaug 90 proc. „DashPass“ narių prisijungia, mokėdami visą kainą kas mėnesį ar metus, arba pradedant nuo nemokamos bandomosios versijos, o tik 10 % prisijungė per kreditinės kortelės lojalumo programą. „DoorDash“ trečiadienį pranešė, kad „DashPass“ nariai turi didesnį lojalumą ir užsakymų dažnį, nei ne nariai.

 

    Duomenys taip pat rodo, kad „DoorDash“ valgė „Uber“ pietus susijusiose JAV rinkose, nes abi platformos įnirtingai stengiasi išplėsti pristatymo galimybes nuo maisto iki bakalėjos, alkoholio ir patogumo prekių. Daugiau, nei 12 % DoorDash mėnesinių vartotojų sausio mėn. buvo pateikę užsakymą ne restoranui, o Uber Eats vartotojų – mažiau, nei 6 %, remiantis YipitData, kuri taip pat rodo, kad DoorDash patogumo verslo dalis yra gerokai didesnė, nei Uber.

 

    „Uber“ pristatymo platformos vadinimas „Eats“, kai jos augimas priklauso nuo jos gebėjimo pristatyti ir tai, ko negalite valgyti, buvo akivaizdi rinkodaros klaida. Sekmadienį „Super Bowl“ reklaminėje uogienėje, kurioje gausu įžymybių, bandančių valgyti sauskelnes, muilą, žvakes ir elektros lemputes, bendrovė sumokėjo milijonus, kad ją ištaisytų. Tačiau Uber poreikis išleisti daug pinigų tokioje didelėje scenoje, kad reklamuotų naujesnes vertikales, nėra tik konkurencinio trūkumo iliustracija; tai taip pat rodo, kad per pastaruosius dvejus metus pramonės augimas lėtėja.

 

    „DoorDash“ visų metų perspektyva rodo, kad bendroji „Marketplace“ užsakymų vertė vidurio taške išaugs mažiau, nei 17%, o tai dar 19 procentinių punktų sulėtėjimas, palyginti su metiniu augimo tempu, kurį segmentui suteikė ketvirtąjį ketvirtį.

 

    Trečiadienio veržlūs investuotojai tikėjosi, kad tai pasiteisins." [1]

1. DoorDash Shows Rivals What It Can Eat
Forman, Laura. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 18 Feb 2022: B.12.