Wednesday, June 29, 2005

Microsoft - All problems will be solved in the future

Sometimes it's quite refreshing to read and article about Microsoft. Most of the time it is quite painful, as pure FUD seems to pour from their mouths. This article from ZDNet Australia is quite refreshing because other than a single piece of FUD from Ballmer, he spends most of the article actually telling the truth.
Here's the FUD

"We will catch Google in six months in relevancy"


No Steve, you won't even catch up to what Google was in 2002 in six months. Why make a statement like that? Previously when MS when spread doubt about a product or a competitor's offering it was to prevent acceptance in the marketplace. Well Google is already widely accepted in the marketplace. No one is going to hold their breath or stop using Google because they are already #1 in the marketplace. Can making a statement like do anything but prove Ballmer wrong and MS silly? The simple fact is this sort of FUD approach is simply not going to work with someone is the proven market leader. My advice to Ballmer is this; Make a better search than Google first. Then announce and advertise it. Stop pre-announcing you are going to be where Google was a year ago. It makes you look silly and when you cannot even match Google it looks horrible. For example MS is currently advertising MSN search. This is a mistake because MSN search is a qualitatively poorer product. People try it, note "Boy that sucked" and go back Google. You are just damaging your brand by advertising a shoddy product. Remember that the change cost of moving to a search engine is zero. Your current approash is simply going to drive users to your site for test drive and then they will leave because your product is inferior. More importantly they users will say,"I tried MSN search, it sucked." Here's something to remember, there has never been a Google ad on television. Your #1 competitor has never had to advertise as their product was clearly superior and word of mouth was sufficient.

The rest of the article has some great quotes - Here's the selected ones I like.

Ballmer admitted the platform "had stalled in the last 12 months"...

..."We can't support open source, but we can support interoperability,"...

...may be addressed in the next release [of SQL Server] in 18 months, Ballmer said, but conceded he "really didn't know"...

...when a participant asked why MapPoint had not expanded to South East Asia so such services could be built, Ballmer was stumped...

..."I didn't know we weren't doing well there,"...

..."In the next six months, we'll catch Google in terms of relevancy,"...

...I've never used that interface...

"Give up the fight? No, never," he said.


A large part of Microsoft's success has been it's ability to control the platform and the standards on the platform. For the longest time Windows has been the platform of choice. Microsoft recognized part of the strategic shift of the Internet and thus the necessary fight to destroy Netscape. The problem was that MS after crushing Netscape by means legal and illegal, they promptly forgot about the true strategic threat which was the rise of open standards. While one competitor was eliminated, they neglected to realize the real problem of open standards that didn't run on a platform they could control. As results, Gates disbanded the IE team after Netscapes and demise and conceded development to the world at large. The growth of standards not based on the Microsoft platform has meant that developers, instead of being tied to the MS platform (where the success of third party applications drives sales of MS licenses), are tied to the open standards and help drive adaption of open standards such as the net.

These creates several problems for Microsoft. First the "embrace and extend" approach won't necessarily work. As the platform is no longer the Windows platform, "extending" the standard simply ignores the software ecosystem outside the Microsoft "extended" standard. The existence of a substantial software ecosystem outside the Microsoft platform means that developers can succeed without having to drive sales of licenses for Microsoft. Web applications by their very nature have been developed to be browser independent.

Furthermore in an open standards environment, it's important to lead in standards development. MS is currently almost always following. MS for example just announced their AJAX framework, well after Google has lead in the area. By not leading, MS cedes the territory to Google. Developers have not interest in being tied only to the MS platform only as with a small additional expense they can assure their applications are browser independent.

MS has gotten too large and is in too many markets. Integration along product lines was simpler 10 years ago. Now MS has too many product lines and is competing in too many markets. Their future platform .NET is stalled and judging by Ballmer's responses he simply doesn't know what's going on at his own company. This may not be his fault. The company may be simply too large for any one person to know what's going on.

Finally Google understands the importance of open standards. Their Summer of Code is a brilliant example of supporting and seeding the software ecosystem outside the MS platform. Notice that MS had NO response to this program. I guess they just want to give up on the next generation of developers.

Monday, June 27, 2005

P2P& The Supremes

The Supreme Court ruled today against Grokster and Streamcast. The ruling is actually a relatively limited one and not nearly such a big deal. The court effectively said that the intent and marketing of a software or hardware device that it's primary function is to infringe on cupyright that's a problem. Here's the key quote from the brief.

One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of infringement by third parties using the device, regardless of the deviceĆ­s lawful uses.

The original case in Sony vs. Betamax is fundamentally different. The Betamax had a clear non-infringing use, it played Betamax tapes. The infringing uses only came about as consumers found out about taping TV shows to watch later. Quite frankly Grokster had no other use but copyright infringement and was marketed quite explicitly as such. Grokster's business model also relies on the exchange of copyrighted material as the display of ads was tied to the material. Clearly intent and marketing of services are what seperate the two decisions.

I think that pure protocal based approaches to P2P such as Bittorrent may pass the intent/inducement test. Bit Torrent is a very useful way to pass around large files, and has many substantial non infringing uses. (Updates are one example, ISOs are another.) For a complete history and player breakdown in this whole debate, News.com P2P coverage has pretty much every thing you want to know

Thursday, June 23, 2005

Outsourcing Customer Upselling

One the serious problems of outsourcing is hardly touched one by mainstream media nor the traditional business press. While many of the stories focus on the loas of jobs, they don't often address the real problem, the higher hidden costs of outsourcing. I will give one recent example. I was recently called by my credit card company Providian about a program that would allow me to in the words of the telemarketer, "Save 50% at selected stores such as Wal Mart."

While listening to the spiel, several things struck me. One his accent while Indian, was very slight. Kudos to the training the telemarketer recieved. The other however was the broad cultural gap between the myself and the telemarketer. When he repeated again the claim that I would save 50% at Wal Mart, I asked,"Are you sure? That doesn't seem possible given Wal Mart's low margins." He stated yes I would save 50% at Wal Mart. At this point it became clear that the original telemarketing script stated that you can "save up to 50% at leading retailers like Wal Mart, Target and Fields." However in his eagerness to cut down on the length of his introduction, he simply reduced it to the one he had heard of, but clearly lacked any cultural references for understanding. So his repeated claim that I would save 50% at Wal Mart sounded silly.

I have shopped at WalMart and know they do not have a 50% margin in their products. (Indeed I would be hard pressed to find a retailer that had a margin that size outside of Tiffanys.) My telemarketer on the other hand has probably never been within a 1,000 miles of a Wal Mart. This meant he completely lacked the cultural references for understanding that his claim of saving 50% at Walmart were nonsense.

Modern outsourced call centers have cultural training programs and know where their callers are calling from so they can ask about simple things such as the weather. Lacking deep cultural knowledge means mistakes like this will continue to happen. Needless to say, I did not upgrade the service.

Sunday, June 12, 2005

Living on the Trailing Edge of Technology.

I recently helped my neighbor install a Nintendo 64 for their grandson. They are decidely non technical and needed a small amount of help. After setting up the system, this got me thinking about living on the trailing edge of technology. The Nintendo64 is the predessor to the Game Cube. The next Nintendo console is going to be called Revolution. I played a few games which were mostly the puzzle sort and geared for kids. Nintendo's design philosophy has always been such that they focus on playable games. As a result their games have a longevity that you don't often see in other platforms. I was playing a puzzle based game and realized that well designed games like this would be enjoyable for decades. While the current FPS games such as Halo, Doom 3 etc won't retain much playability in the long term, a well designed game always retains it's playability.

So I went to www.ebay.com and picked up a Nintendo 64 and 20 or so games. As I wanted to stay away from game that wouldn't age well I stayed mostly in the puzzle area. One benefit of the trailing edge of technology, is that your dollar goes a lot further. The N64 was released in June 1996. Remarkably the games have aged well (or rather the technical had progressed far enough that further marginal improvements don't add much to the game experience). I believe as technology continues to improve, that living on the trailing edge will be enough for most people. Clearly, new products like the Sony Playstation Portable or PSP will continue to drive innovation. But with good game design there's still fun to be had at the trailing edge of technology.

Thursday, June 09, 2005

Patent Violations Masquerading as Patent Reform

Today Zdnet posted an article about the current patent reform bill making it's way through Congress. It's largely sponsored by Microsoft who spends roughly 100 million a year defending itself against patents. The major reform is the addition of opposition requests that can be filed up to nine months after a patent is awarded or six months after a legal notice alleging infringement is sent out. It also makes it harder to get an injunction and it recalculates the way that jury awards are calculated so that it's much harder to win an award when you are damaged.

While the general opposition to software patents in general ia applauding this bill, it's a really really bad idea. It looks as though it was tailor made for MS. The problem is that MS is a very bad patent violator. That's right Microsoft regularly steals ideas that other companies have patented and then refuses to pay the owners of those inventions. They did this to Burst Technologies. Burst was an early pioneer in audio and video streaming on the web. They developed a whole series of technologies that most everyone including Quicktime and Real now use. They attempted to license the technology to Microsoft, shared trade secret information with MS (after signing an NDA. MS then stole their technology and incorporated it into Windows Media Player.

Burst eventually was forced to lay off most of their employees. MS stole Burst's technology and was forced to pay nothing except their in house counsel to bleed Burst to death. If this new bill passes you can beat that small innovators and inventors will simnply be forced out of the system. Large corporations will simply crush them with legal paperwork with the challenge process.

I would have more sympathy for MS if they didn't prove themselves to be liars time and time again in court. This bill should be entitled "MS Patent Approval Process."