Craig Keefner homepage: Technology Archives

July 16, 2010

How to Make an American Job Before It's Too Late: Andy Grove

Andy Grove in lengthy opinion piece talks about how American jobs can be made (before it is too late). At the end he willingly wears the "protectionist" label.

By Andy Grove - Jul 1, 2010
Bloomberg Opinion

Recently an acquaintance at the next table in a Palo Alto, California, restaurant introduced me to his companions: three young venture capitalists from China. They explained, with visible excitement, that they were touring promising companies in Silicon Valley. I’ve lived in the Valley a long time, and usually when I see how the region has become such a draw for global investments, I feel a little proud.

Not this time. I left the restaurant unsettled. Something didn’t add up. Bay Area unemployment is even higher than the 9.7 percent national average. Clearly, the great Silicon Valley innovation machine hasn’t been creating many jobs of late -- unless you are counting Asia, where American technology companies have been adding jobs like mad for years.

The underlying problem isn’t simply lower Asian costs. It’s our own misplaced faith in the power of startups to create U.S. jobs. Americans love the idea of the guys in the garage inventing something that changes the world. New York Times columnist Thomas L. Friedman recently encapsulated this view in a piece called “Start-Ups, Not Bailouts.” His argument: Let tired old companies that do commodity manufacturing die if they have to. If Washington really wants to create jobs, he wrote, it should back startups.

Mythical Moment

Friedman is wrong. Startups are a wonderful thing, but they cannot by themselves increase tech employment. Equally important is what comes after that mythical moment of creation in the garage, as technology goes from prototype to mass production. This is the phase where companies scale up. They work out design details, figure out how to make things affordably, build factories, and hire people by the thousands. Scaling is hard work but necessary to make innovation matter.

The scaling process is no longer happening in the U.S. And as long as that’s the case, plowing capital into young companies that build their factories elsewhere will continue to yield a bad return in terms of American jobs.

Scaling used to work well in Silicon Valley. Entrepreneurs came up with an invention. Investors gave them money to build their business. If the founders and their investors were lucky, the company grew and had an initial public offering, which brought in money that financed further growth.

Intel Startup

I am fortunate to have lived through one such example. In 1968, two well-known technologists and their investor friends anted up $3 million to start Intel Corp., making memory chips for the computer industry. From the beginning, we had to figure out how to make our chips in volume. We had to build factories; hire, train and retain employees; establish relationships with suppliers; and sort out a million other things before Intel could become a billion-dollar company. Three years later, it went public and grew to be one of the biggest technology companies in the world. By 1980, which was 10 years after our IPO, about 13,000 people worked for Intel in the U.S.

Not far from Intel’s headquarters in Santa Clara, California, other companies developed. Tandem Computers Inc. went through a similar process, then Sun Microsystems Inc., Cisco Systems Inc., Netscape Communications Corp., and on and on. Some companies died along the way or were absorbed by others, but each survivor added to the complex technological ecosystem that came to be called Silicon Valley.

As time passed, wages and health-care costs rose in the U.S., and China opened up. American companies discovered they could have their manufacturing and even their engineering done cheaper overseas. When they did so, margins improved. Management was happy, and so were stockholders. Growth continued, even more profitably. But the job machine began sputtering.

U.S. Versus China

Today, manufacturing employment in the U.S. computer industry is about 166,000 -- lower than it was before the first personal computer, the MITS Altair 2800, was assembled in 1975. Meanwhile, a very effective computer-manufacturing industry has emerged in Asia, employing about 1.5 million workers -- factory employees, engineers and managers.

The largest of these companies is Hon Hai Precision Industry Co., also known as Foxconn. The company has grown at an astounding rate, first in Taiwan and later in China. Its revenue last year was $62 billion, larger than Apple Inc., Microsoft Corp., Dell Inc. or Intel. Foxconn employs more than 800,000 people, more than the combined worldwide head count of Apple, Dell, Microsoft, Hewlett-Packard Co., Intel and Sony Corp.

10-to-1 Ratio

Until a recent spate of suicides at Foxconn’s giant factory complex in Shenzhen, China, few Americans had heard of the company. But most know the products it makes: computers for Dell and HP, Nokia Oyj cell phones, Microsoft Xbox 360 consoles, Intel motherboards, and countless other familiar gadgets. Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. -- that means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology, and other U.S. tech companies.

You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?

Since the early days of Silicon Valley, the money invested in companies has increased dramatically, only to produce fewer jobs. Simply put, the U.S. has become wildly inefficient at creating American tech jobs. We may be less aware of this growing inefficiency, however, because our history of creating jobs over the past few decades has been spectacular -- masking our greater and greater spending to create each position.

Tragic Mistake

Should we wait and not act on the basis of early indicators? I think that would be a tragic mistake because the only chance we have to reverse the deterioration is if we act early and decisively.

Already the decline has been marked. It may be measured by way of a simple calculation: an estimate of the employment cost- effectiveness of a company. First, take the initial investment plus the investment during a company’s IPO. Then divide that by the number of employees working in that company 10 years later. For Intel, this worked out to be about $650 per job -- $3,600 adjusted for inflation. National Semiconductor Corp., another chip company, was even more efficient at $2,000 per job.

Making the same calculations for a number of Silicon Valley companies shows that the cost of creating U.S. jobs grew from a few thousand dollars per position in the early years to $100,000 today. The obvious reason: Companies simply hire fewer employees as more work is done by outside contractors, usually in Asia.

Alternative Energy

The job-machine breakdown isn’t just in computers. Consider alternative energy, an emerging industry where there is plenty of innovation. Photovoltaics, for example, are a U.S. invention. Their use in home-energy applications was also pioneered by the U.S.

Last year, I decided to do my bit for energy conservation and set out to equip my house with solar power. My wife and I talked with four local solar firms. As part of our due diligence, I checked where they get their photovoltaic panels -- the key part of the system. All the panels they use come from China. A Silicon Valley company sells equipment used to manufacture photo-active films. They ship close to 10 times more machines to China than to manufacturers in the U.S., and this gap is growing. Not surprisingly, U.S. employment in the making of photovoltaic films and panels is perhaps 10,000 -- just a few percent of estimated worldwide employment.

Advanced Batteries

There’s more at stake than exported jobs. With some technologies, both scaling and innovation take place overseas. Such is the case with advanced batteries. It has taken years and many false starts, but finally we are about to witness mass- produced electric cars and trucks. They all rely on lithium-ion batteries. What microprocessors are to computing, batteries are to electric vehicles. Unlike with microprocessors, the U.S. share of lithium-ion battery production is tiny.

That’s a problem. A new industry needs an effective ecosystem in which technology knowhow accumulates, experience builds on experience, and close relationships develop between supplier and customer. The U.S. lost its lead in batteries 30 years ago when it stopped making consumer-electronics devices. Whoever made batteries then gained the exposure and relationships needed to learn to supply batteries for the more demanding laptop PC market, and after that, for the even more demanding automobile market. U.S. companies didn’t participate in the first phase and consequently weren’t in the running for all that followed. I doubt they will ever catch up.

Job Creation

Scaling isn’t easy. The investments required are much higher than in the invention phase. And funds need to be committed early, when not much is known about the potential market. Another example from Intel: The investment to build a silicon manufacturing plant in the 1970s was a few million dollars. By the early 1990s, the cost of the factories that would be able to produce the new Pentium chips in volume rose to several billion dollars. The decision to build these plants needed to be made years before we knew whether the Pentium chip would work or whether the market would be interested in it.

Lessons we learned from previous missteps helped us. Years earlier, when Intel’s business consisted of making memory chips, we hesitated to add manufacturing capacity, not being sure about the market demand in years to come. Our Japanese competitors didn’t hesitate: They built the plants. When the demand for memory chips exploded, the Japanese roared into the U.S. market and Intel began its descent as a memory-chip supplier.

Intel Experience

Though steeled by that experience, I remember how afraid I was as I asked the Intel directors for authorization to spend billions of dollars for factories to make a product that didn’t exist at the time for a market we couldn’t size. Fortunately, they gave their OK even as they gulped. The bet paid off.

My point isn’t that Intel was brilliant. The company was founded at a time when it was easier to scale domestically. For one thing, China wasn’t yet open for business. More importantly, the U.S. hadn’t yet forgotten that scaling was crucial to its economic future.

How could the U.S. have forgotten? I believe the answer has to do with a general undervaluing of manufacturing -- the idea that as long as “knowledge work” stays in the U.S., it doesn’t matter what happens to factory jobs. It’s not just newspaper commentators who spread this idea.

Offshore Production

Consider this passage by Princeton University economist Alan S. Blinder: “The TV manufacturing industry really started here, and at one point employed many workers. But as TV sets became ‘just a commodity,’ their production moved offshore to locations with much lower wages. And nowadays the number of television sets manufactured in the U.S. is zero. A failure? No, a success.”

I disagree. Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution. As happened with batteries, abandoning today’s “commodity” manufacturing can lock you out of tomorrow’s emerging industry.

Our fundamental economic beliefs, which we have elevated from a conviction based on observation to an unquestioned truism, is that the free market is the best economic system -- the freer, the better. Our generation has seen the decisive victory of free-market principles over planned economies. So we stick with this belief, largely oblivious to emerging evidence that while free markets beat planned economies, there may be room for a modification that is even better.

No. 1 Objective

Such evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.

The rapid development of the Asian economies provides numerous illustrations. In a thorough study of the industrial development of East Asia, Robert Wade of the London School of Economics found that these economies turned in precedent- shattering economic performances over the 1970s and 1980s in large part because of the effective involvement of the government in targeting the growth of manufacturing industries.

Consider the “Golden Projects,” a series of digital initiatives driven by the Chinese government in the late 1980s and 1990s. Beijing was convinced of the importance of electronic networks -- used for transactions, communications and coordination -- in enabling job creation, particularly in the less developed parts of the country. Consequently, the Golden Projects enjoyed priority funding. In time, they contributed to the rapid development of China’s information infrastructure and the country’s economic growth.

Job-Centric Economy

How do we turn such Asian experience into intelligent action here and now? Long term, we need a job-centric economic theory -- and job-centric political leadership -- to guide our plans and actions. In the meantime, consider some basic thoughts from a onetime factory guy.

Silicon Valley is a community with a strong tradition of engineering, and engineers are a peculiar breed. They are eager to solve whatever problems they encounter. If profit margins are the problem, we go to work on margins, with exquisite focus. Each company, ruggedly individualistic, does its best to expand efficiently and improve its own profitability. However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs -- we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.

Blade Didn’t Drop

The story comes to mind of an engineer who was to be executed by guillotine. The guillotine was stuck, and custom required that if the blade didn’t drop, the condemned man was set free. Before this could happen, the engineer pointed with excitement to a rusty pulley, and told the executioner to apply some oil there. Off went his head.

We got to our current state as a consequence of many of us taking actions focused on our own companies’ next milestones. An example: Five years ago, a friend joined a large VC firm as a partner. His responsibility was to make sure that all the startups they funded had a “China strategy,” meaning a plan to move what jobs they could to China. He was going around with an oil can, applying drops to the guillotine in case it was stuck. We should put away our oil cans. VCs should have a partner in charge of every startup’s “U.S. strategy.”

Financial Incentives

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars -- fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability -- and stability -- we may have taken for granted.

I fled Hungary as a young man in 1956 to come to the U.S. Growing up in the Soviet bloc, I witnessed first-hand the perils of both government overreach and a stratified population. Most Americans probably aren’t aware that there was a time in this country when tanks and cavalry were massed on Pennsylvania Avenue to chase away the unemployed. It was 1932; thousands of jobless veterans were demonstrating outside the White House. Soldiers with fixed bayonets and live ammunition moved in on them, and herded them away from the White House. In America! Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.

Choice Is Simple

Every day, that Palo Alto restaurant where I met the Chinese venture capitalists is full of technology executives and entrepreneurs. Many of them are my friends. I understand the technological challenges they face, along with the financial pressure they are under from directors and shareholders. Can we expect them to take on yet another assignment, to work on behalf of a loosely defined community of companies, employees, and employees yet to be hired? To do so is undoubtedly naive. Yet the imperative for change is real and the choice is simple. If we want to remain a leading economy, we change on our own, or change will continue to be forced upon us.

(Andy Grove, senior adviser to Intel, was the company’s chief executive officer or chairman from 1987 until 2005. The opinions expressed, featured in the July 5 issue of Bloomberg Businessweek, are his own.)

Posted by keefner at 10:29 PM | Comments (0)

July 13, 2010

Apple Censors Threads

Just when you think your idol just might really be perfect, they go and do something to highlight how easy it is to do something so highly imperfect.

Source link

Apple drops Consumer Reports/iPhone 4 discussion threads down memory hole

by TJ Luoma (RSS feed) on Jul 12th 2010 at 7:00PM
If you were looking for a message thread on Apple's support forums pointing to Consumer Reports' article 'not recommending' the iPhone 4, it's not there any more. Apple's support forum moderators deleted the thread. Bing cached it.

If it happened once, maybe you'd say it was a glitch. But what if it happened twice? Three times? Four times, five, six?

I'm not prone to hysterics or a subscriber to conspiracy theories, but it's fairly hard to imagine any good way to interpret this. Every post that I saw listed in a Google search of Apple's discussion boards lead to the same result: "Error: you do not have permission to view the requested forum or category."

Sadly, this isn't the first time we've heard about Apple deleting discussion board threads on topics which are unflattering to Apple's products. It's closer to the fiftieth time. In fact, we've heard so many reports about this happening that it seems safe to call this standard operating procedure for Apple's discussion boards. That's not to say that there are no negative threads on the discussion boards, but the ones that are there are the ones that Apple's moderators have decided to leave active.

It's hard to imagine what Apple hopes to gain by doing this. Instead of having one negative news story, now we have two: not only did Consumer Reports come out and say they don't recommend the iPhone 4, but now Apple seems to be trying to prevent people from talking about it on their support board.

Want some overwrought comparisons to Orwell's 1984? Apple seems to be begging for it.

Posted by keefner at 04:21 PM | Comments (0)

July 06, 2009

When you succeed with Free, you are going to die by Free

Mark Cuban thoughts on the better path that internet companies living by the free should follow. In case of MySpace, why fight it? You're going down, you may as well optimize that path revenue-wise.

Jul 5th 2009 1:40PM
link

The problem with companies who have built their business around free is that it is far from free to remain successful.

The more success you have in delivering free, the more expensive it is to stay at the top. The more success you have, the more important it is to management to remain successful. The more important remaining successful is to management, the more money they will spend, the more chances they will take, the more infrastructure they will build, the more people they will hire. All of the things that will prevent them from staying lean , mean and flexible. All of the things that distract them from innovating within their core competency.

Lets look at the rule that eventually KILLS all freemium based content plays:

There will always be a company that replaces you. At some point your BlackSwan competitor will appear and they will kick your ass. Their product will be better or more interesting or just better marketed than yours, and it also will be free. They will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo. You get the point. Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience. Or will be differentiated enough, and important enough to the audience to maybe even charge more. Who knows. But they will kick your ass and you will be in trouble.

For Google, who lives and dies by free, we dont know who their BlackSwan company will be. But we all know it will happen don’t we ? The only question is when. Of course Google knows it as well. Which is exactly why they invest in everything and anything they possibly can that they believe can create another business they can depend on in the future. They are spending incredible amounts of money in search of the “next big Google thing”. When their BlackSwan competitor appears, they won’t be in a position to compete with the newly presented model, particularly if its free based because their ecosystem has bloated to the point where they can no longer create anything for free.

Google is not unique. The same happens to all companies based on free.

The same will happen to Facebook, Twitter, pick any company who lives off of free.

Its not that they can’t make money offering free. They can , have and will. The problem is that they know that its literally impossible to be the king of the mountain forever. But that won’t stop them from trying. And that is exactly what will kill them.

Their better choice would be to run the company as profitably as possible, focusing only on those things that generate revenue and put cash in the bank. More importantly, when you see your BlackSwan company appear and you know they will kick your ass, rather than ramping up to try to compete, get out. Sell. Or maximize cash and pay your shareholders every penny you have.

Like every company in the free space, your lifecycle has come to its conclusion. Don’t fight it. Admit it. Profit from it.

Which is exactly what MySpace should do. Rather than trying to reinvent itself to compete better with Facebook, they should do the exact opposite. They should try to optimize whatever monetization opportunities it has. Cut costs to the bone. Maximize revenue per user. Think purely in terms of business. Squeeze every nickel out of it that they possibly can, knowing its going to die a long, slow death. Meanwhile, they have the opportunity to take that money and invest it where they think some young company is preparing to become Google/Facebook/Whoever’s black swan. They can invest alone, or along side others. It doesnt matter. What does matter is recognizing that they have a better chance of beating Facebook by investing in a company they think can pre empt Facebook than by trying to reconfigure MySpace to be that company.

When you succeed with Free, you are going to die by Free. Your best bet is to recognize where you are in your company’s lifecycle and maximize your profits rather than try to extend your stay at the top.

Posted by keefner at 06:52 PM | Comments (0)

July 13, 2006

Internet King for a Year, A Month, or just a Day...

Yahoo reacts to the "Myspace ranked #1 now...". I guess it is fun being number one but it seems impossible to stay there once you get there.

MySpace was recently crowned as the top internet destination by traffic monitoring firm Hitwise, a ranking that has drawn heavy attention. Some pointed to the results as evidence of a rapidly-shifting digital landscape, while others questioned the Hitwise methodology, including Yahoo. The leading portal noted that the comparison actually divided Yahoo into several different properties, instead of treating it as one entity. For example, Yahoo Mail and search were separate groups within the ranking, though Hitwise actually separates "MySpace Mail" from the larger "MySpace" destination. Regardless, Yahoo declared that it "clearly remains the number one property in terms of audience share, duration share, pageview share and days visited per month". Meanwhile, one top digital executive scoffed at the report, noting that a different counting process would allow Yahoo, MSN, AOL, and eBay to "blow MySpace away...far away." MySpace triumphed in the ranking by grabbing 4.46 percent of all internet traffic.

Posted by keefner at 02:47 PM | Comments (0)

June 30, 2006

Blast from the Past: Stardock

Out net-cruising and blast from the past with Brad Wardell, Stardock, CDS and Back Again/2. That's my old Back In A Flash days with Brad Benson and what was his name...

link

Stardock’s OS/2 history

By
Brad Wardell

This weekend my wife and I were going through boxes of “stuff” as we transferred items from what had been my upstairs study to the new “lab” in the basement. I was amazed at some of the stuff I found because I had long forgotten I had them. Various gifts from IBM such as watches, wallets, executive pens, clocks, etc. It made me think about how much had happened since those days.

Every company has its own unique story of how it was founded and for what purpose. Most technology companies these days seem to be founded via venture capital to jump into a market they whole will make big money. The founders usually see something they think will make it big, get some capital and pursue it. Stardock’s history could really be divided into two parts – The OS/2 Stardock and the Windows Stardock. Because much changed between the two and this brief article will talk about the OS/2 Stardock.

Stardock Product Time line

1993-1994: In the beginning…

The OS/2 Stardock came into being in 1993. I was in college then trying to get my Electrical Engineering degree. I came from a very modest background so paying for school was very difficult for me. To do so, I had 3 jobs at the time. My first job was as a lab instructor and occasionally professor substitute in Electrical Engineering classes. My second job was as an assistant to a professor in the Geography department which essentially had me managing the department’s Mac lab. The last job was building personal computers from their component parts. This job came under “Stardock Systems” (that’s why it’s been called Stardock SYSTEMS). These PC’s came with OS/2 preinstalled (I would run out to Baggages, purchase OS/2 2.1 and install it onto their machine for them).

When people talk about OS/2 fanatics, I was the biggest OS/2 fanatic around in many respects. Most zealots merely talked big, but my zealotry went way beyond that. I believed in my naïve 21 old way that one person could make a different in the “OS Wars”. In June of 1993, after arguing on Usenet’s comp.os.os2.advocacy that OS/2 could be a good game platform and having talked to my friends on comp.sys.ibm.pc.games.strategic, I decided I would write a game. How hard could that be? Nothing is impossible for the person who has never tried and I quickly discovered it was a lot of work. I bought a book “Teach Yourself C in 21 days” and “OS/2 2.0 PM programming” Because I couldn’t afford anything more, everything in the game I created, Galactic Civilizations, could be found in those 2 books.

Let me give you an example – in GalCiv on OS/2, each star ship is actually a full blown window that is of style SS_ICON. So when you move a ship in the game, I’m just using WinSetWindowPos to move the ship X,Y coordinates. There’s no “graphics” in the game per se, just all icons being moved around. That’s because I couldn’t afford any more books than those two and they didn’t cover graphics programming, just icons and window movement.

Over the next year, between classes and teaching, and my other jobs, I wrote up Galactic Civilizations. I came to the attention of an IBMer named Gabriel Vizzard who, like me, dreamt of OS/2 as supplanting DOS\Windows as the primary OS. He got me in contact with lots of people at IBM who could help me. They got me “Real” programming tools (GC 1.0 was mostly done in GNU since it was free) like C/set++, and introduced me to a lot of different people. Some of these people would be instrumental in our company’s history. People like Bob St. John who would eventually leave IBM to start up his own company called Serenity were very important in teaching me how “the real world” worked. Some of the lessons learned were very expensive as not all of the contacts made were good ones.

For example, the company suggested to “publish” Galactic Civilizations turned out to be just some guy out of his house with no real experience at these things and was not really capable of professional publishing and it showed on GalCiv. Of course, I can’t really condemn so much him pretending to be a “real company”. In one conversation with an IBM executive, I was sitting in my dorm room and I asked “Is GalCiv the only OS/2 game being made?” The IBMer responded “Well, there is another game but it’s being made by some college kid, haha, so we don’t have too much faith in that..” to which I responded “Hahah, yea, those college kids, can’t trust them..”

(Though that college game, a flight simulator for OS/2, never was completed so in that case they were right).

At CeBIT in early ’95 showing off OS/2 for the PowerPC. Most current OS/2 users have no idea how much time and energy OS/2 ISVs invested in OS/2 products that never saw the light of day.

1995: OS/2 reaches its height…

The GalCiv/2 1.0 debacle taught me some valuable lessons and created the incentive to publish OS/2 software instead of just develop them. I believed that if there was just enough quality OS/2 software, professionally published and marketed that it could make the difference for the OS/2 “Cause”. Though our “publisher” never did pay us royalties (long story, suffice to say that my wife and I don’t have very kind words to say towards the person who "published" GalCiv 1.0), what saved us were two things. The first thing was an add-on to GalCiv called Shipyards which we sold for $15 apiece and sold many thousands of copies of. That made enough money to fund OS/2 Essentials, our second product. The second thing that happened was that IBM licensed our GalCiv derivative Star Emperor for their IBM FunPak which generated a considerable amount of capital to invest.

This all happened at just the right time. I had become friends with a fellow OS/2 fanatic, Kurt Westerfeld who had recently released a powerful Fidonet news reader called KWQ/2. He had become an expert at WPS development. We both considered OS/2’s object oriented shell its “killer app”. If we could harness the power of OS/2’s shell with the right program, more people might migrate to OS/2. In the Fall of 1995, we used the capital we gained via Star Emperor to launch Object Desktop. This turned out to be one of the most popular OS/2 products of all time. For many people, using OS/2 without Object Desktop was unbearable. It filled in all those little pieces that OS/2 was missing and made a clear demonstration of what OS/2 could do.

Later that year, we got the rights back on Galactic Civilizations and published it ourselves as a sequel called Galactic Civilizations 2. Those two programs would represent the vast majority of Stardock’s overall OS/2 revenue.

With the success of these products, we began our quest to get more good OS/2 software into shrink wrap. We published third party software such as Avarice, Trials of Battle, Process Commander, PMINews, and several other programs. We also continued to develop more OS/2 software internally such as OD Professional, PlusPak, Entrepreneur, and more. In all, over a dozen OS/2 products were created.

1996: The beginning of the end – the limits of advocacy…

As 1996 began, Stardock, still a very young company, flush with cash and cockiness thought that OS/2 was in pretty good shape. What we didn’t know was what had occurred at IBM at around this time. IBM had been working on a project called Workplace OS (later called OS/2 for the PowerPC). This project had gone on for years and had returned little in results. A call from the highest executives at IBM stated that if OS/2 for the PowerPC didn’t get completed by Fall Comdex of ’95, PSP was doomed. They didn’t make it and OS/2’s fate was sealed. But it would take awhile for us to know that this had occurred (even as I type this, there are still plenty of users in denial, my own denial went on until 1998).

In early 1996, myself and our friends at CDS and Indelible Blue, 3 of the more vocal and successful OS/2 ISVs got together and formed the “32bit Alliance”. We organized several OS/2 ISVs together and pooled marketing dollars to take out full page ads for OS/2. On the retail/distribution side, we organized something called “Warpware” via a new company called Blue Orchards to help get OS/2 software into retail. Unfortunately, by mid 1996, the OS/2 SOHO market had already shrunk by quite a bit and most of the OS/2 products at retail died. Only a few thrived (Partition Magic, GalCiv, Object Desktop, Back Again/2, Performance Plus, and System Commander) while the rest sold very few copies which amongst other factors led to Blueware going bankrupt (owing several OS/2 ISVs, primarily Stardock, large amounts of money).

32bit Alliance Announcement

(trying to find a scanned version of the ads, they were quite good)

Another Announcement

This taught me a painful lesson – the limits of advocacy. Don’t let fanaticism get in the way of sound business judgment. A company founded by a fanatic, employing fanatics, was slow to recognize the market realities of OS/2. But this episode really brought home that things were not quite as rosy as we thought. We still went through the usual denials “Oh, the products that failed were too expensive” or “They just weren’t good enough” or whatever. But ultimately we were discovering that there weren’t nearly as many OS/2 users as we had been led to believe. For instance, OS/2 Magazine by 1996 had fewer than 30,000 subscribers (including give aways). Obviously that isn’t the type of statistic one would expect in a market that had allegedly 14 million users.

The lesson was just in time as it helped cement the decision to make our next major game, Entrepreneur, be on both Windows and OS/2 instead of exclusively on OS/2.

By the end of 1996, it was pretty clear to people “in the know” that it was pretty much over for OS/2 as far as IBM was concerned. Warp 4 was not much of a release as much as a “here it is, we want to get the heck out of here, so make everything JAVA and then we’ll figure out where to put you later.”

1997-1998: The fall of the OS/2 market

1997 was a terrible year for us as our OS/2 software sales dropped to very low levels as OS/2 users switched to Windows NT 4.0 which had arrived the previous fall.

When Entrepreneur came out in 1998 as things were at their darkest, everything changed. Entrepreneur, the Windows version of it, did quite well and bought us enough time to get Object Desktop for Windows completed. In mid 1998, the unthinkable happened for me, I switched from OS/2 Warp 4 to Windows NT.

Switching OSes (not version numbers but to an entirely new OS) is pretty dramatic. The first thing I realized is how far behind OS/2 had become by 1998. Most OS/2 users have no idea just how much harm they’re taking today using OS/2 if they use computers largely in their careers. The typical response is “we don’t need that” or “that feature doesn’t work on Windows anyway” but the reality is quite different. For instance, I am typing this on my laptop on the living room couch without any wires. I’m still on the Internet thanks to Intel Anypoint. You can’t do this kind of thing on OS/2 (unless you get a very expensive wireless LAN setup) nor will you likely ever be able to do it. Many other things ranging from plug and play to basic software support are things users give up now when they use OS/2. It took me many months to “Catch up” to where many professionals had already been. I also learned Windows NT wasn’t a “bloated pig” or “buggy” as we had thought it was (Win9x certainly is crap though still).

After Warpstock ’98, I really got re-energized about OS/2. There was still a vibrant community using OS/2. Though more and more “normal” people had moved to other OSes, leaving the outcasts to increasingly make OS/2 users look like a bunch of disgruntled bitter users who just want to complain about how unfair the world is but not willing to do anything constructive about it. But I still thought there was a shot. Enough people were still using OS/2 to serve as a base and enough people had only recently switched to Windows that they could be brought back if there was renewed hope that OS/2 might catch up and then be the best.

If IBM could just produce another shrink wrapped version of OS/2 that one could find at the store then OS/2 could survive as a reasonable alternative. But time was running out. Each day OS/2 users were giving up on and moving on. We approached IBM with a radical plan – if they weren’t going to do another shrink-wrapped retail OS/2 client, let us do it. Let us take the next sever version of OS/2, take out the server components, and we would put the Stardock Development Network to work on updating the client features to be more competitive. Advocacy was part of the reason, good business sense was another. While the client wouldn’t be terrible profitable to do, if we could bring enough users back to OS/2, we had over a dozen OS/2 products that were still state of the art technologically that we could sell to these new users. Break even on a client, generate profit from selling additional software. It was the perfect blend of advocacy and business sense – IF we could get it out the door before the end of 1999.

Things we had planned included:

1) A new installer

2) Stardock.net Instant Messaging (OS/2 users could opt in to find any on-line OS/2 user that had also opted in)

3) Stardock.net Instant web (Bundling of Apache integrated into Stardock.net so that users could set up their own JAVA based virtual desktops and have it listed on Stardock.net so that the OS/2 community could more easily coordinate things)

4) SCUA ’98 UI enhancements (navigation bar as part of the folder UI, enhanced properties dialogs, flexible UI skinning, integration of WinOS2 and OS/2 to have the same look)

5) Warp 2000 integration in which users would go to warp2000.com to find out what hardware and software was available at an instant and put in requests for software. This would also coordinate with the SmartCredits concept Tim Sipples came up with (a form of currency in which OS/2 users who contributed software, help, or whatever else would in turn gain credits which could be used to get discounts on OS/2 software, services, and web space. This was designed to help create an incentive for OS/2 users to help themselves instead of relying on IBM or Stardock or some other entity).

Feature wise, the default install was going to be a lot thinner than Warp 4. The idea being to create a really fast, small OS that was very scaleable. So things like OpenDoc and some of the extraneous OS/2 multimedia extensions not used but using up space and ram would be off by default.

1999-2000: The market becomes a community

With the OS plan in place, things with IBM moved well but slowly. The problem was that there was no part number for an OS/2 V5 client to license. The suggested route was to take OS/2 Warp 4, license that, and do our “Stuff” to that. If we had agreed to that, we would have had a client in 1999 but it was and still is our belief that someone doing this would have met with considerable resistance in the OS/2 community (“What?! You’re charging us $150 for Warp 4 + FP6 integrated?!)

It was our requirement that it be a OS/2 Warp Server for eBusiness (Aurora) based client that ultimately killed the deal. By Spring of 1999, users were becoming increasingly impatient and the market declining by the day. Worse, our development team needed to be doing something and so we were beginning to focus increasingly on Object Desktop for Windows. We finally set a deadline, by the end of 3Q1999 (September 30, 1999) we had to have a contract or we were going to have to end negotiations.

Things progressed during the summer but the same problem continued to arise, a lack of political will at IBM HQ to create a “Warp 5” client part number to license. After a September 1999 meeting word came back to us that IBM wasn’t going to be able to create such a part number any time soon and that IBM had no plans to create a new (v5) shrink-wrapped OS/2 client or part number. That was the point I gave up any hope of OS/2 ever coming back. At that point, a lot of remaining OS/2 users who had been hanging on to OS/2 by a thread gave up as well.

Within a few months, it was clear that a large portion of the vocal OS/2 community were people often out of touch or using OS/2 out of hatred of Microsoft or simple inertia (like people who still use Apple IIs today). My feeling was that there was and is nothing wrong with using OS/2. If it gets the job done, then why switch?

Unfortunately, as the more reasonable people left, the extremists of the community became more and more noticeable. In many dying or fringe communities, the hateful and discontent tend to be the most vocal and things became that was on OS/2 as well. Suddenly Stardock was a “Traitor” because we weren’t willing to basically go down with the ship. Never mind that the accusers weren’t willing to make any such sacrifice themselves. They also had unrealistic support expectations. It wasn’t enough to release new updates to OS/2 software every few quarters, it had to be as often as the Windows version or else you weren’t a “Real” OS/2 ISV. For instance, if a company or software author released only one update for their OS/2 program per year, they were okay as long as they weren't releasing anything for Windows. But if the same company or author released 2 things for OS/2 in a single year but 4 things for Windows, they were suddenly accused of "abandoning" OS/2. As early as 1998, Stardock had already been accused of "abandoning" OS/2 because Win32 software was starting to appear.

megashot.jpg (282126 bytes)

Object Desktop 2.0 for OS/2

What constitutes "abandoning"?

By summer of 2000, the consensus of the OS/2 community was so solid that Stardock had abandoned OS/2 that when Warpstock approached us about having a booth at WS 2000, the conversation began, "We realize you've left the OS/2 market but..." This was despite Stardock having released Object Desktop 2.02 for OS/2 in 1Q2000 and Stellar Frontier for OS/2 in active development. The perception was because so much of our emphasis was on Windows. Some users took it to an extreme by considering me specifically and Stardock in general to be "traitors" to the cause and that we should be punished for this.

This really hit home at E3. In the game industry, I’m reasonably well known for making “indie” games. I like to hang out on the news groups and talk to people. I’ve never been flamed in any of these news groups. I’m generally known as that “game developer who used to make a lot of OS/2 games”. Yet they would be shocked to find out that nearly every time I post on an OS/2 news group I get flamed and reviled loudly and publicly for not doing “enough”. I've been accused being a "criminal" to having "no soul" to things that are unprintable here. My primary crime is that I tend to try to defend and explain our position. In any OS/2 news group, any mention of me or Stardock will almost certainly bring some sort of anti-Stardock comment from an OS/2 user. The perceived sin isn't that we didn't do anything for OS/2, but that we're not doing enough now. "What have you done lately?"

And so things came full circle. I had started out as one of those OS/2 fanatics. OS/2 to me was a cause, a holy mission. And so I learned another valuable lesson that I hope others learn. Fanaticism can quickly turn on you. There is little loyalty in the hearts of many fanatics and that becomes very true the minute you prove yourself to no longer be a fanatic. To the fanatic, you’re either totally with them or you’re the “enemy”. There is no in-between.

Our OS/2 history was a fun growing up part for the company. The Windows Stardock grew out of the ashes of the OS/2 market and has a very different environment for employees and customers. I learned that it isn’t OS/2 itself that I was a fanatic about, it was the concept of being able to make cool stuff that might in some way transform the way computers could be used. That’s what I think made me such an OS/2 fanatic. OS/2 represented a fundamentally better way of doing things.

I’m still a fanatic but not an OS fanatic. Now it’s in fanaticism in empowering users to have control over the machine. To not let anyone dictate to them how they have to use a machine but to let them decide what best suits them. It’s a more personal fanaticism in that it’s more specific in some ways and it’s just as exciting.

I don’t regret my OS/2 days at all, it was a great time, a lot of friends were made and a lot of lessons learned. I miss the promise and dreams OS/2 represented but each day demonstrates how many new opportunities there are to “Change the world” in some small way. Just remember though, no matter what OS or machine or whatever, don’t get too attached to what is ultimately an inanimate object. Software is there to serve you, not vice versa. ;)

Feel free to email me at bwardell@stardock.com or better yet to visit our news groups news://news.stardock.com/stardock.os2 to discuss.

Also, on the bright side, Bob St. John at Serenity has managed to get IBM to let him publish a Warp 4 based client called eComStation (www.ecomstation.com). This will be quite helpful for OS/2 users who are planning to stay on OS/2 in the long term because the latest OS/2 Fixpacks include many components of Aurora. If you're interested, check out the website and it'll tell you more.

Posted by keefner at 08:41 PM | Comments (0)

June 23, 2006

Backside of Vista

Whatever the reason, a Microsoft employee really unloaded on his employer, and not in an anonymous blog, but on the company's own public developers site.

The World As Best As I Remember It
Broken Windows Theory
Vista. The term stirs the imagination to conceive of beautiful possibilities just around the corner. And “just around the corner” is what Windows Vista has been, and has remained, for the past two years. In this time, Vista has suffered a series of high-profile delays, including most recently the announcement that it would be delayed until 2007. The largest software project in mankind’s history now threatens to also be the longest.

[I originally deleted the rest of this post of my own volition, without any pressure whatsoever from people within the company, because the discussion around it wasn't constructive. I've now restored the original content unedited. More discussion on this topic here. - Ed.]

Admittedly, this essay would be easier written for Slashdot, where taut lines divide the world crisply into black and white. "Vista is a bloated piece of crap," my furry little penguin would opine, "written by the bumbling serfs of an evil capitalistic megalomaniac." But that'd be dead wrong. The truth is far more nuanced than that. Deeper than that. More subtle than that.

I managed developer teams in Windows for five years, and have only begun to reflect on the experience now that I have recently switched teams. Through a series of conversations with other leaders that have similarly left The Collective, several root causes have emerged as lasting characterizations of what's really wrong in The Empire.

Useless Trivia Sidebar: Broken Windows Theory

The original broken windows theory, first coined by Wilson and Kelling, describes the purported phenomenon whereby an abandoned warehouse with no broken windows is mostly left alone, but as soon as one window is broken, it acts as an open invitation to passers-by that it's open-season for rock-throwing.

This was generally accepted for many years as being true, but is recently coming under fire from different angles. We won't delve into those here, since we mostly commandeered the phrase because it sounded good, not because it actually has anything at all to do with our subject matter.

The Usual Suspects

Ask any developer in Windows why Vista is plagued by delays, and they'll say that the code is way too complicated, and that the pace of coding has been tremendously slowed down by overbearing process. These claims have already been covered in other popular literature. A quick recap for those of you just joining the broadcast:

* Windows code is too complicated. It's not the components themselves, it's their interdependencies. An architectural diagram of Windows would suggest there are more than 50 dependency layers (never mind that there also exist circular dependencies). After working in Windows for five years, you understand only, say, two of them. Add to this the fact that building Windows on a dual-proc dev box takes nearly 24 hours, and you'll be slow enough to drive Miss Daisy.
* Windows process has gone thermonuclear. Imagine each little email you send asking someone else to fill out a spreadsheet, comment on a report, sign off on a decision -- is a little neutron shooting about in space. Your innocent-seeming little neutron now causes your heretofore mostly-harmless neighbors to release neutrons of their own. Now imagine there are 9000 of you, all jammed into a tight little space called Redmond. It's Windows Gone Thermonuclear, a phenomenon by which process engenders further process, eventually becoming a self-sustaining buzz of fervent destructive activity.

Let's see if, quantitatively, there's any truth to the perception that the code velocity (net lines shipped per developer-year) of Windows has slowed, or is slow relative to the industry. Vista is said to have over 50 million lines of code, whereas XP was said to have around 40 million. There are about two thousand software developers in Windows today. Assuming there are 5 years between when XP shipped and when Vista ships, those quick on the draw with calculators will discover that, on average, the typical Windows developer has produced one thousand new lines of shipped code per year during Vista. Only a thousand lines a year. (Yes, developers don't just write new code, they also fix old code. Yes, some of those Windows developers were partly busy shipping 64-bit XP. Yes, many of them also worked on hotfixes. Work with me here.)

Lest those of you who wrote 5,000 lines of code last weekend pass a kidney stone at the thought of Windows developers writing only a thousand lines of code a year, realize that the average software developer in the US only produces around (brace yourself) 6200 lines a year. So Windows is in bad shape -- but only by a constant, not by an order of magnitude. And if it makes you feel any better, realize that the average US developer has fallen in KLOC productivity since 1999, when they produced about 9000 lines a year. So Windows isn't alone in this.

The oft-cited, oft-watercooler-discussed dual phenomenon of Windows code complexity and Windows process burden seem to have dramatically affected its overall code velocity. But code can be simplified and re-architected (and is indeed being done so by a collection of veteran architects in Windows, none of whom, incidentally, look anything like Colonel Sanders). Process can be streamlined where inefficient, eliminated where unnecessary.

But that's not where it ends. There are deeper causes of Windows' propensity to slippage.

Cultured to Slip

Deep in the bowels of Windows, there remains the whiff of a bygone culture of belittlement and aggression. Windows can be a scary place to tell the truth.

When a vice president in Windows asks you whether your team will ship on time, they might well have asked you whether they look fat in their new Armani suit. The answer to the question is deeply meaningful to them. It's certainly true in some sense that they genuinely want to know. But in a very important other sense, in a sense that you'll come to regret night after night if you get it wrong, there's really only one answer you can give.

After months of hearing of how a certain influential team in Windows was going to cause the Vista release to slip, I, full of abstract self-righteous misgivings as a stockholder, had at last the chance to speak with two of the team's key managers, asking them how they could be so, please-excuse-the-term, I-don't-mean-its-value-laden-connotation, ignorant as to proper estimation of software schedules. Turns out they're actually great project managers. They knew months in advance that the schedule would never work. So they told their VP. And he, possibly influenced by one too many instances where engineering re-routes power to the warp core, thus completing the heretofore impossible six-hour task in a mere three, summarily sent the managers back to "figure out how to make it work." The managers re-estimated, nipped and tucked, liposuctioned, did everything short of a lobotomy -- and still did not have a schedule that fit. The VP was not pleased. "You're smart people. Find a way!" This went back and forth for weeks, whereupon the intrepid managers finally understood how to get past the dilemma. They simply stopped telling the truth. "Sure, everything fits. We cut and cut, and here we are. Vista by August or bust. You got it, boss."

Every once in a while, Truth still pipes up in meetings. When this happens, more often than not, Truth is simply bent over an authoritative knee and soundly spanked into silence.

The Joy of Cooking

Bundled with a tendency towards truth-intolerance, Windows also sometimes struggles with poor organizational decision-making. Good news is that the senior leaders already know this and have been taking active steps to change the situation.

There are too many cooks in the kitchen. Too many vice presidents, in reporting structures too narrow. When I was in Windows, I reported to Alec, who reported to Peter, to Bill, Rick, Will, Jim, Steve, and Bill. Remember that there were two layers of people under me as well, making a total path depth of 11 people from Bill Gates down to any developer on my team.

This isn't necessarily bad, except sometimes the cooks flash-mob one corner of the kitchen. I once sat in a schedule review meeting with at least six VPs and ten general managers. When that many people have a say, things get confusing. Not to mention, since so many bosses are in the room, there are often negotiations between project managers prior to such meetings to make sure that no one ends up looking bad. "Bob, I'm giving you a heads-up that I'm going to say that your team's component, which we depend on, was late." "That's fine, Sandy, but please be clear that the unforeseen delays were caused by a third party, not my team."

Micromanagement, though not pervasive, is nevertheless evident. Senior vice presidents sometimes review UI designs of individual features, a nod to Steve Jobs that would in better days have betokened a true honor but for its randomizing effects. Give me a cathedral, give me a bazaar -- really, either would be great. Just not this middle world in which some decisions are made freely while others are made by edict, with no apparent logic separating each from the other but the seeming curiosity of someone in charge.

In general, Windows suffers from a proclivity for action control, not results control. Instead of clearly stating desired outcomes, there's a penchant for telling people exactly what steps they must take. By doing so, we risk creating a generation of McDevs. (For more on action control vs. results control, read Kenneth Merchant's seminal work on the subject -- all $150 of it, apparently).

Uncontrolled? Or Uncontrollable?

We shouldn't forget despite all this that Windows Vista remains the largest concerted software project in human history. The types of software management issues being dealt with by Windows leaders are hard problems, problems that no other company has solved successfully. The solutions to these challenges are certainly not trivial.

An interesting question, however, is whether or not Windows Vista ever had a chance to ship on time to begin with. Is Vista merely uncontrolled? Or is it fundamentally uncontrollable? There is a critical difference.

It's rumored that VPs in Windows were offered big bonuses contingent on shipping Vista by the much-publicized August 2006 date. Chris Jones even declared in writing that he wouldn't take a bonus if Vista slips past August. If this is true, if folks like Brian Valentine held division-wide meetings where August 2006 was declared as the drop-dead ship date, if general managers were consistently told of the fiscal importance of hitting August, if everyone down to individual developers was told to sign on the dotted line to commit to the date, and to speak up if they had any doubts of hitting it -- mind you, every last one of those things happened -- and yet, and yet, the August date was slipped, one has to wonder whether it was merely illusory, given the collective failure of such unified human will, that Vista was ever controllable in the first place.

Are Vista-scale software projects essentially uncontrollable by nature? Or has Microsoft been beset by one too many broken windows? Talk amongst yourselves.

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Posted by keefner at 06:08 PM | Comments (0)

June 19, 2006

Gates Departure Changes Nothing for Microsoft

Another look at Gates and his leaving Microsoft and how much it hurts, and how much it helps.

A Web Exclusive from WinInfo
Paul Thurrott

There's little doubt that Microsoft Chairman Bill Gates is an incredible businessman and borderline genius. However, his qualifications as technical visionary are quite suspect: He hasn't coded since the days of Microsoft BASIC, and his 1995 book "The Road Ahead" barely even noted the existence of the Internet. As he moves to a life of philanthropy, Gates will establish a reputation as one of history's greatest benefactors, a title that would far outshine any contributions to big business. But let's face the facts: Gates is also the reason that Microsoft has gotten into horrible legal and antitrust troubles around the world, and the culture he established at Microsoft will only slowly be eradicated from the company. It might never be completely exorcised.

I'm not trying to be vindictive. It's just that it's surprising so few people understand that Gates's greatest accomplishments--and failures--at Microsoft are business-related, not technical. For example, he wasn't the first to push GUIs, but he saw how exciting the Macintosh was, stole its interface, and spent the next two decades establishing Windows as a global standard by using occasionally illegal business practices. Responding to the natural environment of sharing that evolved in the early days of personal computing, Gates complained that users were stealing from him and put up what should now be seen as the first offensive against open-source software, a movement that was probably inevitable.

And don't get me started on the Internet. Imagine where Microsoft--and more importantly its customers--would be if the company had started Windows Live services in 1995 instead of 2005. If Brad Silverberg (ex-Microsoft senior vice president) had his way that's what would have happened, essentially, but Gates wanted to keep pushing his monolithic cash cow and instead bundled Internet Explorer (IE) into Windows to shut out a new generation of competitors. Silverberg ultimately left the company because of that decision. And let's just put this one out for discussion: Microsoft's hiring of Ray Ozzie--and Ozzie's subsequent promotion to chief software architect--is an implicit admission that Gates's mid-1990s decisions about IE were dead wrong. Ten years later, Microsoft is finally decoupling IE from Windows and attacking the Internet separately.

Microsoft often makes much of its need for the freedom to innovate and contends that various countries around the world shouldn't be able to prevent it from creating great products for its customers. But over the past ten years, the company has found itself in two major antitrust battles, one of which is still unresolved; has been sued by a large number of customers for product bundling, with an even larger number unable to sue because of legal technicalities; and has released an increasingly delayed series of Windows versions that have left both consumers and businesses in the lurch. Where's all this innovation everyone keeps talking about?

Meanwhile, the company does make more than $1 billion per month, so it must be doing something right. Of course, all of that money is coming from Microsoft's traditional cash cows, not from innovative new products. There's no doubt that Gates is a successful businessman, but his move to part-time control of Microsoft will have little effect on the day-to-day operations of the company. My guess is that this move is purely psychological, designed to help Microsoft employees, partners, and customers deal with his permanent retirement. That way, when Gates leaves for good, it won't be a huge blow to the company. Honestly, how many times have you heard of a businessman announcing a retirement--let alone a partial retirement--two years in advance?

Frankly, Microsoft needs a more dramatic overhaul. Many of the company's top lieutenants, including CEO Steve Ballmer, are Gates's cronies and have been in positions of power for years thanks to their relationship with Gates. The company's stock price hasn't moved in years, the company is unable to ship major new product versions, and its new business opportunities are all pretty much floundering. Microsoft makes virtually all of its profits on Windows, Office, and its server products. That's almost exactly the product mix the company made most of its money on a decade ago, although server sales have risen dramatically. But why wouldn't they? PC-based servers are a natural extension of the PC market. Microsoft has failed to make major inroads in any business market where it can't leverage its existing monopolies with a chain of partners that includes PC makers and application developers.

And you know what? Gates's departure changes none of this. The company will continue to struggle in new markets against companies such as Google, Nokia, and Sony, just as it has done over the last couple of years. It will continue to sell many of copies of Windows, Office, and Windows Server, as always. If Gates were a true visionary, he would admit to the company's problems and shake its very foundations, giving its employees, shareholders, and customers a real future. But the truth is, Microsoft is just shuffling executives around. And that won't cure any of the company's real problems.

Source

Posted by keefner at 10:14 PM | Comments (0)

June 09, 2006

Impending Death of Internet?

I gotta stop this thread but for goodness sakes now its possible that the Internet as we have known is now ontrack to be "monetized" and principally controlled by the Telecoms?

Net Neut nixed in Congress
On to the Senate
By Andrew Orlowski
Published Friday 9th June 2006 16:40 GMT

Congress has declined an opportunity to shackle US telecoms companies with restrictions on the services they offer. The Communications Opportunity, Promotion and Enhancement Act (COPE) act passed in the House yesterday by without the non-discrimination provisions campaigners wanted.

An amendment sponsored by Rep.Edward Markey (Mass,D) to ensure that broadband providers "do not block, impair, degrade, discriminate against, or interfere with the ability of any person to use a broadband connection to access, use, send, receive or offer lawful content, applications or services of the Internet" was defeated by 269 votes to 151, the split falling down party lines.

Telecoms giants AT&T and Verizon want to deliver video services over IP alongside broadband down their fibre connections, and say they need to be able to discriminate high priority video on an IP infrastructure that's technically inappropriate for delivering multimedia. Campaigners say that if there's a fast lane, there must be a slow lane. Verizon responds that there's enough bandwidth in the 20Mbit/s connections to keep everyone happy, and that they'd be foolish to try descrimination.

So, depending on who you choose to believe, the vote marks either the beginning of the end for the internet as we know it, or the defeat of a Phantom Menace.

"Unless the Senate steps in, today's vote marks the beginning of the end of the Internet as an engine of new competition, entrepreneurship and innovation," Consumers Union Senior Policy Analyst Jeannine Kenney said in a canned statement.

The telcos' own Internet Freedom Coalition called "Net Neutrality" a solution in search of a problem.

"Despite the spin from pro-net neutrality advocates, it is highly unlikely in this free market environment that any provider would dare discriminate, or would benefit from the discrimination pro-regulation forces fear. Net Neutrality remains a solution in search of a problem, and until such problems manifest themselves, regulations are simply an illusion based on fear."

The debate shifts to the senate, where the net neutrality proposal the "Internet Freedom Preservation Act of 2006" lies awaiting Senators' consideration. ®

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SGI's particular dilemma was finding new revenue to replace its high margin systems that were being commoditized by cheap PCs running Windows NT or Linux, relentless increases in the of power of commodity 3D graphics cards, and ever faster interconnects. At its peak SGI turned over $4bn a year, and employed around 10,000 people.

The company was additionally blessed by having customers across the economy. Two thirds of SGI's business was split evenly across two cyclical sectors - defense and manufacturing - but as manufacturing spending along came another splurge in defense-related spending. (Contrary to popular belief, SGI's Hollywood business never accounted for more than a fifth of its revenue - but it got most of the headlines).

When in their prime, companies have several options to prepare for the day when their cash cow dries up - including putting the company up for sale. SGI tried them all, some several times over, but was unable to find a revenue stream that kept pace with its expenses.

SGI bought into new businesses, such as RISC pioneer MIPS - SGI at the time was one of its biggest customers - and Cray Research, in a bid to widen its product range. Neither was successful. MIPS customer base fled as the vendors doubted they could gain access to the SGI was getting preferential treatment. MIPS was later spun out, finding a successful application of its technology in low power embedded devices such as phones. Cray's core business was also in decline, which SGI's mounting problems didn't help. SGI decided to spin off Cray after only three years, and it now trades as a public company. Notwithstanding recent financial troubles, the size of the supercomputer company's revenue last year indicates that Cray was never likely to be SGI's savior: $201m, up from $148.9m in 2004, but down from $237m in 2003.

After years of being dismissive about a rival computer platform with no serious graphics, SGI eventually tried to meet the challenge of the PC head-on. At first it produced a Visual Workstation PC, with custom ASICs providing a new proprietary interconnect and graphics chip, and running a tailored version of Windows NT. But SGI found it hard to market the costly new kit, which also ran into manufacturing delays. The Visual Workstations failed to win over SGI's core customers, who were using 64bit IRIX, and were too expensive to find lure customers. The effort was canned almost as soon as the workstations - and a complementary Windows server - were launched.

Thirdly, SGI's rich patent portfolio may have allowed it to create a lucrative licensing business. But patents need to be aggressively defended. In spring 1998 SGI announced it was suing NVidia for infringement of its texture mapping patent. However, the case never reached trial, and SGI's lawyers were left fuming as the company caved in only 15 months later, agreeing to license Nvidia's patents.

All three decisions - to spin out Cray, axe the Windows workstations, and abandon the NVidia lawsuit - were taken by former HP executive Rick Belluzzo. Who then promptly jumped ship to join Microsoft. The move raised eyebrows across the industry, as Belluzzo was leaving the chief executive's role at a prestigious Silicon Valley name to head up what we described at the time as "pretty much a suicide mission" - MSN, the small and ailing internet division at Microsoft. It isn't much bigger, and continues to make a loss today.

After the Nvidia climbdown, it was never likely that SGI could enter the IP licensing business. The plot thickens, however. In early 2002 we broke the news that SGI was transferring many valuable graphics patents to Microsoft, for the sum of $62.5m. SGI denied the deal at the time, but it wasn't long before it was proved to be correct.

Other factors didn't help SGI, such as its decision to end of life its own MIPS processor in favor of Itanium, but in large part the woes of recent years were settled by these decisions taken in summer 1999. After that, with each fresh quarter bringing news of losses and layoffs, SGI was on the back foot.

Belluzzo's spell at Redmond was brief: in spring 2002 he announced he was leaving to start his own company. Today, he's CEO of storage vendor Quantum. ®

February 25, 2006

New MMO model being developed

New startup with big backing puts whole new spin on MMO games and the AI platform itself (in all ways).

Hollywood producers are taking notice of Multiverse, a startup that makes a massively multiplayer online (MMO) video game possible for a tiny fraction of what they typically cost.

Filmmakers James Cameron and Jon Landau have proven their interest by joining the company's board of advisers. Multiverse co-founder, president and CEO Bill Turpin said that Cameron intends to introduce one of his upcoming movies by launching a related MMO game before the film comes out.

MMO games are virtual worlds in which players interact with one another and engage in adventures in real time, for which they typically pay a subscription fee of about $15 a month. Multiverse, which gives away its technology free, lets developers eliminate the fee if they want but takes a share if any revenue is generated.

Turpin said he is in talks with a TV network to introduce an MMO game that would allow viewers to remain engaged with the show's characters even between seasons.

The genre is dominated by Sony Online Entertainment, NCSoft and Blizzard and is not for fainthearted businesses. Turpin cited industry guidelines that the games cost $20 million-$55 million to create and can take three or four years to launch. And many of them fail. But success can be staggering: Turpin said Blizzard's "World of Warcraft," for example, has 5.5 million global subscribers paying about $16 a month, which calculates to about $50 million in monthly revenue that will bring in about $1 billion in a year.

Multiverse offers the alternative of enabling any IP owner to create an MMO game for as little as $10,000 and in about half of the time to market. It does so by using common technology with open standards that are expandable. Developers also may host their own games and use Multiverse's tools to handle subscriptions and billing.

January 04, 2006

The Battle Lines Are Getting Clearer in "Open Source"

Busy week as Microsoft releases/supports Python. That's unheard of. IBM seems to be pushing PHP now and Google has new developer repository (with first tools targeting Python).

The software giant has unveiled the first beta of IronPython, a .NET implementation of Python. Seen on UK.Builder.

IronPython 1.0 Beta 1, which was released at the end of last week, is "well integrated" with the rest of .NET programming framework and allows all .NET libraries to be "easily" accessed by Python programmers, according to Microsoft.

Microsoft's support for Python could help the software giant attract Unix developers to the Windows platform, as it is a commonly used scripting language on the Unix platform, according to Salim Fadhley, who develops Python programs for Unix.

"If Microsoft embraces Python it could be a big draw for Unix hackers — if our favourite language was supported as a first tier language by a major software vendor it would be a major draw to Windows. At the moment most Python developers hack on Mac and Linux," said Fadhley. "IronPython could be a massive land-grab by Microsoft into the domain of traditional Unix scripting."

On Friday, the tech giant is expected to announce a partnership with Zend Technologies to create a bundle called ZendCore, which includes IBM's Cloudscape-embedded database and Zend's PHP development tools. Zend sells tools built on the open source edition of PHP and offers related services.

IBM also plans to establish an area dedicated to PHP on its developer Web site, which will include technical resources such as white papers.

Scripting languages such as PHP, Perl and Python have been around for several years and their use appears to be growing, according to analysts. IBM's participation in the open source PHP community will help make development more professional, said Anne Thomas Manes, an analyst at the Burton Group.

One industry executive who requested not to be named said that IBM's push into PHP and scripting reflects IBM's disillusionment with the Java standardisation process and the industry's inability to make Java very easy to use.

"IBM's been so fed up with Java that they've been looking for alternatives for years," the executive said. "They want people to build applications quickly that tap into IBM back-ends... and with Java, it just isn't happening."

For his part, Smith said that Java and PHP can be used for different tasks and said that IBM remains committed to Java.

Google has launched a new site intended to serve as a central resource for developers working on applications related to the popular search engine.

The new Google Code will be a repository for source code, APIs, and other tools to assist developers working on Google-related projects, according to a welcome note on Thursday from Chris DiBona, Google's open-source program manager and former editor of Slashdot.

The site also will profile current and ongoing projects, DiBona said, to give developers a better sense of what's happening in the Google universe. "One thing we really wanted to put up on Google Code was a way of bringing recognition to those people and groups who have created programs that use our APIs or the code we have released," he said.

The initial tool releases include Perftools and Sparsehashtable, for developers working in C++, and Goopy/functional, for Python developers. Tools will be distributed through SourceForge.net open-source programming site, and releases targeting other languages and development toolsets will be made as the program matures, DiBona said.

October 27, 2005

Search Engine Wars

Office Depot has filed suit against rival Staples for a series of search-engine ads that used as their keyword the name of Office Depot subsidiary Viking Office Products, "The Wall Street Journal" reported Friday. Search engines are quickly becoming the battlefield.

n the suit, filed this month in U.S. District Court in West Palm Beach, FL, Office Depot charges Staples with trademark infringement, unfair competition, false advertising, and deceptive trade practices.

Search engines place paid ads on their results pages that are linked to keywords, the terms searchers type in, and award those slots to the highest-bidding advertisers at auction. The Office Depot suit alleges that Staples and its Quill subsidiary bought the keyword “Viking” to run ads that would lure searchers looking for Viking Office Products. Office Depot is planning to close Viking’s U.S. operations while maintaining its European arm. The complaint contends that Staples and Quill timed their search-ad campaign to take advantage of this transitional phase and acquire some U.S. Viking customers.

Marketers have long objected to the sale of their brand names and trademarks as keywords by the major search engines, and some have gone so far as to sue the engines. For their part, Google and Yahoo! maintain that their policy is not to allow the use of trademarked terms in the titles or creative content of search ads. But they insist they have a right to sell those terms as keywords and to place ads against them, even when those ads might be from a company’s competitors.

July 15, 2005

OS/2 Dead Again

On Tuesday, IBM formally announced that it would cease marketing OS/2 at the end of next year.

This might cause wry amusement among the operating system's remaining enthusiasts, who maintain that IBM really never started marketing OS/2 in the first place.
Click Here

These death notices are almost an annual occurrence now. IBM ceased serious development on OS/2 in 1996, told regular users to shove off five years ago, and we've already run our valedictory, which leaves little more to add.

source: The Register

April 06, 2005

Search Engines Gets Embroiled

Google, Yahoo! and other players in the search business have become embroiled in a lawsuit which involves overcharging for pay-per-click online advertising.

Google and Yahoo! accused of click fraud collusion
By ElectricNews.Net
Published Tuesday 5th April 2005 17:03 GMT

Google, Yahoo! and other players in the search business have become embroiled in a lawsuit which involves overcharging for pay-per-click online advertising.

The Wall Street Journal says that plaintiffs in the US filed a lawsuit in February alleging that Google and Yahoo overcharge advertisers, and also that they collude with each other, to continue overchargin.

In the pay-per-click model used by Google, Yahoo! and Ask Jeeves , advertisers pay each time a user "clicks through" on an ad listed alongside search engine results. Each click costs on average between €0.30 and €0.50 with more popular keywords costing as much as €10 per click.

Led by an Arkansas company called Lane's Gifts and Collectibles, the plaintiffs want the lawsuit certified as a class action. They allege that the defendants, which include Google, Yahoo!, FindWhat, Ask Jeeves, America Online and Look Smart, improperly charged advertisers for incidents "click fraud".

Click fraud is a growing problem in the search industry. The practice has seen people - such as competitors or unhappy employees - click repeatedly on an ads to run up a bill for the advertiser. This can cost advertisers a lot of money and is difficult to track down.

Google and Yahoo! and other search engines say they have anti-fraud systems in place and that they regularly give advertisers refunds for fraudulent clicks. However, they have been sketchy with details, causing some advertisers to worry that the problem is bigger than they are being told.

Click fraud statistics from Sempo, a non-profit association that works to increase awareness and promote the value of search engine marketing, indicate that advertisers are concerned about click fraud but haven't been able to seriously track it. Between 36 per cent and 58 per cent of advertisers are worried about click fraud but been unable to track its full extent, according to a report by Sempo published in December 2004.

While the majority of the named defendants of the lawsuit have so far declined to comment, Ask Jeeves said in a March regulatory filing that "we intend to defend this lawsuit vigorously".

March 25, 2005

Ann All Leaves Networld Alliance

One of the ATM industry best observer/analysts is moving on from ATMmarketplace.com. I have a lot of respect for Ann and will most definitely miss her intelligent analysis of things. Albeit we did argue a lot (that's actually a good thing in this case).

February 21, 2005

Memeflow and Long Tail

On the Trail of the Long Tail. Yahoo makes comment on Long Tail and Memes in their blogger.

Ideas come and ideas go. Sometimes they blaze hot and move fast through media spaces like print, television, movies, and pop music. Or they burst onto the Internet and travel the gossip hotline of the blogosphere. When they acquire an effortless momentum of their own, keen observers talk about memeflow. Look, look, it's the next big thing: portals, page rank, peer-to-peer, blogs, RSS, social software, tags. The beat goes on.

But a meme is more than a passing fancy; it's a self-replicating, widely adopted idea, an idea with legs. Memes are of the moment, but their mission is to evolve and endure.

The notion of memes borrows from the study of genes and genetic evolution. Genes replicate, evolve, and spread biologically, while memes are transmitted by human communication.

Over the last few months, you may have noticed the emergence of a new meme: The Long Tail.

Image by Chris Anderson
Released under a Creative Commons license Attribution-NonCommercial-NoDerivs 2.0
Source: http://longtail.typepad.com/the_long_tail/

The long tail is a familiar statistical truth: Small, everyday events are extremely common, and big, momentous events (from huge blockbusters to great catastrophes) are rarities that attract attention. This phenomenon occurs in the natural world (there are many seismic blips and few major earthquakes) and in the human realm. You can see it in the distribution of wealth (there are very few billionaires) or population (there are very few mega-cities) or popular search queries. Or, you can see it in WordCount, Jonathan Harris's interactive widget that displays the frequencies of word use on the long tail of our language.

Back in October, Wired editor Chris Anderson authored a thought-provoking and influential article titled The Long Tail, and created a companion Long Tail blog, which he describes as "a public diary on the way to a book." In recent years, scientists and statisticians have applied Zipf’s law, power laws, and Pareto distributions (the old 80/20) to analyze and explore long-tail statistical phenomena on the Internet and elsewhere. But Anderson's riff takes it one step further.

Anderson explores how the Internet has changed the laws of distribution and the rules of the market. The barriers of time and geography are down, so is the cost of storage. The limitless shelf space of online commerce and the availability of powerful search engines and free or cheap publishing and communication tools (email, groups, message boards, instant messenger, groups, and weblogs) create new economic, social, and cultural opportunities and new freedom of choice.

Suddenly, the mainstream is not the only stream. There's room now for babbling brooks, crooked creeks, and tributaries where trends pick up momentum before they flow downstream. There's an audience for many voices --for the eclectic and the unpopular: little blogs and the micro-communities that cluster round them, small-press books on oddball topics, indie music, and arcane genre movies for niche audiences. Wikipedians edit thousands of articles on hundreds of thousands of topics. Breadth of content thrives in environments that are collaborative, distributed, bottom-up, and driven as much by passion as by profit.

In a comment to one of Anderson's blog posts soliciting definitions for the Long Tail, an Amazon employee described the marketplace sea change this way, "We sold more books today that didn't sell at all yesterday than we sold today of all the books that did sell yesterday."

It's no longer necessary to focus myopically on bestsellers and mass appeal, that's the message. Devoted enthusiasts, professional amateurs (pro-ams), and like-minded people find each other to create communities of interest, spread influence, and share recommendations. Thousands of RSS feeds bloom, and anyone, anywhere can find them, mix them, and add them to My Yahoo!. On Yahoo! Shopping (or Amazon or eBay), merchants add their goods to a global catalog connecting consumers to any title, any product, any brand. On Overture, merchants buy keywords that drive business to an "abundance of niches."

There are plenty of pilgrims on the long tail trail. To travel this road wisely and well, we all need long-tail tools that support self-expression, personalized search, recommendations, and trust. Anderson's vision shows us a horizon as vast and limitless and rich with possibility as the long tail itself.

What aspect of the Long Tail makes your tail wag? As always, we'd love to hear your thoughts.

February 11, 2005

New media capture and distribution

It is getting complicated out there folks. We started with websites and this year the RSS/XML has come to the forefront. Now we have open source Podcasts and BitTorrent doing offline digital media capture (audio/video/etc). It is finally getting REALLY interesting out there.

February 03, 2005

Old Patent List

Adding old patent list for reference and search. This covers 1997 thru 2002 I think.

Here we note interesting patent information. For reference the United States Patent and Trademark Office
website is located here.

Craig Keefner homepage

Craig Keefner homepage site

July 16, 2010

How to Make an American Job Before It's Too Late: Andy Grove

July 13, 2010

Apple Censors Threads

July 06, 2009

When you succeed with Free, you are going to die by Free

July 13, 2006

Internet King for a Year, A Month, or just a Day...

June 30, 2006

Blast from the Past: Stardock

June 23, 2006

Backside of Vista

June 19, 2006

Gates Departure Changes Nothing for Microsoft

June 09, 2006

Impending Death of Internet?

Related stories

May 09, 2006

Final death for Silicon Graphics

February 25, 2006

New MMO model being developed

January 04, 2006

The Battle Lines Are Getting Clearer in "Open Source"

October 27, 2005

Search Engine Wars

July 15, 2005

OS/2 Dead Again

April 06, 2005

Search Engines Gets Embroiled

March 25, 2005

Ann All Leaves Networld Alliance

February 21, 2005

Memeflow and Long Tail

February 11, 2005

New media capture and distribution

February 03, 2005

Old Patent List

Other Valuable Links:

The most comprehensive site is: Nolo's http://www.nolo.com/monthly2.html

Google adwords get hacked

December 20, 2004

NY Times and Browser

November 15, 2004

PDAs

October 29, 2004

35th Anniversary

October 14, 2004

Desktop Search

September 21, 2004

Google Picks Microsoft Brains

August 13, 2004

High Capacity BD-Roms

Taking a Bite out of iTunes

July 30, 2004

Hackers harness Google to hunt for weaknesses

June 24, 2004

Computer pioneer Goldstine dies at 90

May 28, 2004

Voting Code

May 07, 2004

Good Once, Still Good

April 30, 2004

Googler Culture

April 13, 2004

BMI Calculator

March 03, 2004

Spotting Fake Smiles

Illusion of Knowledge

March 01, 2004

Search engine nonsense