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Congrats, winces, as InternetNZ's Kumar named new Mega CEO

PICTURED RIGHT: Kim Dotcom and Vikram Kumar in Napier today, where Tony Lentino's Instra has a support office. Instra is providing billing and technical support services for Mega. Scroll down for Kumar's blog on his "Mega Step" move.

Kim Dotcom's Mega just got a credibility boost.

This evening Dotcom revealed recently-resigned InternetNZ boss Vikram Kumar is Mega's new CEO (replacing acting CEO Tony Lentino).

InternetNZ administers the .nz domain on behalf of global Internet body ICANN, and uses the $3.5 million or so it raises from wholesaling internet addresses to fund activities advocating on behalf of internet users on issues such as privacy, the TPP and what it sees as the heavy-handed three-strikes file sharing law. Kumar was in charge for three years until his surprise resignation in January.

The former manager of strategy and innovation at the State Services Commission is well-connected in government, and the NZ tech scene as a whole, and well regarded as a thinker about tech ethics, and a doer (witness the runaway success of the Nethui series). 

Congrats, winces
Crown Fibre Holdings strategy director Rohan MacMahon was one of the first to tweet about the appointment, offering (from his personal account) "Congrats @vikram_nz ! Looking forward to seeing how Mega develops." It's not everyday you see Mega get a nod from an establishment figure.

Not everyone was so impressed.

"InternetNZ does great work to advocate for the rights of all internet users in this country. It has always been seen as beyond question and neutral," commentator Ben Kepes told NBR ONLINE. 

"While an ex-employee is within his rights to do whatever he pleases, this move has many in the internet community wincing."

InternetNZ councilor and entrepreneur Lance Wigss told NBR ONLINE, "It's fantastic for both Vikram and for Mega. Vikram lands a role which is mind bogglingly high profile and challenging, and has a chance of expanding Mega into a huge global business. 

"Kim Dotcom and team get someone who knows well the system that Mega is challenging, who brings a new level of credibility and can make sure that Mega stays on the right side of the line."

An unexpected turn
Industry chatter said Kumar had been offered a privacy commissioner role in Singapore. I put that to him. He said it never got to formal discussions (his family wanted to stay in NZ), but I imagined he would take a role in that vein.

I did not see this one coming. It'll be interesting to see how he goes with life on the surreal Planet Kim Dotcom (and I have to confess when Dotcom first posted a photo of himself and Kumar, I was genuinely unsure if it was a record of a meeting, with a playful caption by the giant German, or a serious announcement).

"You're kidding right?"
On paper, Dotcom has only passing influence over Mega. He is one of three directors, but not a manager, and not a shareholder (the company is 10% owned by acting CEO Tony Lentino, who will stay on the board, and 90% by Dotcom's wife Mona). 

In practice, of course, it's all Kim's plus-size personality dominates.

How do you manage Dotcom?, NBR ONLINE asked Kumar.

"Manage Kim? You're kidding, right?," the new CEO replied. "My focus is on Mega as a company."

Family concerned
Kumar told NBR ONLINE he will stay in Wellington, working as Mega CEO from his home office.

Is his family worried that he's off to work for a man facing copyright infringement, racketeering, money laundering and other charges related to his previous venture, Megaupload, which the US Department of Justice says generated $US175 million in illegal profits? (His extradition case is due to begin in August, barring more delays.)

"The family is concerned about coming under a microscope by the authorities but accept my assessment of Mega's entirely legal intentions," Kumar told NBR.

Below is a cross-post of his blog explaining his decision, posted this evening:

Kumar may find the Mega lifestyle - or at least transportation - a little different from InternetNZ. Above: Dotcom traveled from his Auckland mansion to Napier via helicopter. BELOW: Mega's Finn Batato, Mathias Ortmann and Bram van der Kolk next to their airport connection - a Hummer limo. Lunch was at the Mission vineyard. Kumar will keep the Madding Crowd at arm's length. He told NBR he will work out of his Wellington home office.


Mega step

As a self-styled Internet Ganesha- the ‘Lord of Beginnings’ being one attribute of the god Ganesha- it has been hard to keep quiet about the biggest ‘Internet beginning’ in New Zealand so far this year, the launch of Mega. No blog posts, tweets or response to media questions as I was conflicted.

Kim emailed me to take on the role of CEO of Mega on hearing that I was leaving InternetNZ. My immediate response was “great opportunity but risky”.

I hadn’t met Kim before and so went to “the mansion” to meet the Mega team (Kim, Mathias, Finn, and Bram) in mid-Jan. The next week Mega launched with extensive media coverage. All of this provided the opportunity to look at Mega from every angle. Many, many hours of thinking later, I decided to take on this challenging role. In summary, it was based on:

1. The opportunity to join a New Zealand company with a predominantly global customer base.

2. Joining an Internet start-up comes with a whole new set of challenges (exponential growth while cash is heavily constrained) but has the terrific atmosphere of constant energy, urgency and innovation.

3. The values that Mega promotes align with my own- openness, innovation, privacy, and security.

4. Mega’s clearly interested in pushing the cloud computing and Internet services industry forward, what I call 10x thinking. For example, giving people a massive 50 GB free cloud storage is reminiscent of what Google did to email when it launched Gmail. Other examples include security usability (automatic encryption/decryption in the browser); built-in acceleration of file transfers (overcoming the tyranny of latency); and a unique trust mechanism that allows any global storage provider (outside the US) to participate in the ‘Mega ecosystem’.

5. I found the Mega team to be really nice people, straight up, and clearly capable. The tech skills of Mathias and Bram are evident in building Mega while Finn is the marketing man. In addition to funding, the partnership with Instra brings in interim CEO/Director Tony and COO Brian Clarkson.

The possibility of growing a significant Internet services company out of New Zealand is alluring

Mega’s services
From meeting with the Mega team, I have absolutely no doubt whatsoever that they intend to run the company in a manner that is well within both the letter and spirit of the law. In my assessment, the case against Kim and the rest of the guys will be seen as ‘prosecutorial overreach’ in time. A symbol of governments trying to extend and twist copyright law into new, novel areas to protect legacy business models in an Internet age.

Good start
Mega is off to a good start, despite the initial overload at launch. There has been a lot of scrutiny of the services offered. Overall, it has been generally positive and many of the start-up risks have been managed well. This should provide the company with much-needed cash flow to break even and then create a solid platform for growth.

I’ve read lots of tweets on the #Mega hashtag (only some of which were in English!) of people using the service for so many useful things that emphasises the value the company is delivering globally. There has also been praise for its speed and ease of use.

The possibility of building a significant Internet services company out of New Zealand is undoubtedly attractive. And so, I take the Mega step on 11th February 2013 to try and help make that happen.

If nothing else, it’s going to be a fascinating journey. When I left InternetNZ, I said I was looking for new opportunities, new challenges. That’s one box I can surely tick.

- Vikram Kumar, Internet Ganesha

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Comments and questions


Rick Shera ex VP of InternetNZ and current Chair of NetSafe joins as legal hired help and now the former President.

Guess everything InternetNZ has said regarding Kim Dotcom needs to be questioned and/reviewed.

Goodness that,s a long bow to try to draw given that it is over a decade since I retired as VP of internetNZ although I'm still proud to be a member and a great supporter of its role in advancing the Internet in New Zealand.

Vikram Kumar has always been a sane, rational and articulate protector of the internet.

The Mega service is an important development in internet security and privacy. Without this, cloud services for business will never really take off, because you don't actually know for sure who has access to your data.

As a New Zealand-based initiative we should be supporting the added credibility Vikram brings to this venture.

[Malcolm Dick is chairman of CallPlus - CK]

Malcolm - Mega is awesome and all but you do realize there are other cloud providers that offer the same functionality right. All credit to the team but they didn't invent filesharing FFS

Which other cloud storage provider does in-browser encryption without the need to install anything?

Bitcasa. FileLocker. MagFS. Or any of the other cloud services using a TrueCrypt folder...

Truecrypt is not in-browser, requires installation and is more for the advanced users. Which other cloud storage service does client side encryption in-browser without the need to install anything?

FileLocker and Bitcasa

FileLocker does a plain upload without any encryption in the browser. Bitcasa does not do browser uploads, you need to install their tool first.

Correction: Bitcasa does have a hidden upload button in their browser interface. However the upload itself is again plain without any encryption on the client side (just like FileLocker). Both sites are actually quite misleading, as the user is made to believe he gets client side encryption, but doesn't.

Both Vikram and Rick are great guys and unquestionably ethical. My comments relate not to the Mega service itself, nor to the individuals involved. Rather it is a matter of perception.

Ben - you have a lot of good followers who like what you say and I'm pleased you have clarified. The earlier exchange came across as a bit petulant arguing over apples and pears which I'm pleased was not the intent. I think that Mega has the ability to put NZ on the international IT map and more good will result than anything negative.

Thanks, I try not to be petulant ;)

But seriously, I have oodles of respect for Vikram (who I know only vaguely) and Rick (who, despite being a lawyer and hence tainted from the get-go, is a bloody good guy)


I guess it was a waste of breath suggesting Mega shouldnt have been allowed to launch. Mr Kumar had already resigned.
Perhaps Mr Kumar would elaborate here on his perception of Mega as being 'open' when its latest innovation is encryption and a champion of 'privacy'.
If a storage facility of real property knew and was publicly comfortable that well over 50% of its customers/goods were (trading in) stolen property the police would be speaking with its owners. Well I would have hoped so, unless perhaps they had a job lined up?

I don't see any conflict between an open Internet and encryption. An open Internet allows anyone to innovate, without permission, but of course within boundaries set by the law.

Encryption gives people control over their data online. It is, after all, their data in the first place. In fact, encryption was the missing bit, left for too late by the inventors of the Internet protocols.

The ripples of Mega are starting to impact.
Sugarsync has just announced unlimited storage for business accounts.
Change is in the wind...what did dotcom say about those who will be left on the side of the road of history? I think he was alluding to those who misuse law, but the point is equally relevant to those who fail to change and adapt to the desire for an internet free from political and monopolistic business manipulation.

When will KDC make his bid for InternetNZ presidency? It wouldn't be hard to do.

The one thing that excites me most about this article is that NZ is at last offering globally targeted internet services. The closest we've had to this before is the hugely successful Xero. However, that was always going to be a (large) niche market. Say what you like, but Mega is a NZ business and is showing that we can participate in a very lucrative new industry sector. I suspect that more than anything is what has tempted Vikram.

ummm hello, free speaking and thinking world to people of New Zealand. How about we spin this around;

"Well done Rick Shera, Vikram Kumar, and particularly the Mega team. Thankyou for taking some initiative and getting a new export focused business going in NZ. Thanks also for setting an example of what people can achieve even when under what must be incredible personal and financial pressure. Thanks for not listening to people looking for conspiracy, whine and moan about our economy and those that are actually trying to make it better for the others that can't, or won't. Thanks; Go well and Go Hard! "

Thief steals Mega company car and crashes after a high speed joyride.
Car gets towed and Mr Dotcom and Mr Kumar turn up to the wreckers to collect.
"Have you got our car" they demand
"Who would know", says the wrecker, "Its encrypted".

Pretending something that is not easily copied a automobile is the same as a digital movie is absurd, Intellectual Property deserves no more police protection than honor bars, most people are honest and pay but a few don't and we the tax payers should not be on the dime for a business model that tosses its product so readily out into the world.