It's the culture.

I was thinking about the relationship between company culture, hiring and promoting practices and company success. Specifically I was thinking about two contrasting examples - Google and Enron. The differences between the two in hiring practices and culture are profoundly different. Let's see how those differences played into each companies successes and failures.

One of the standard practices at Enron was firing the bottom 10% of the people in their annual performance reviews. The "logic" behind this particular practice is that through darwinian evolution you would be producing a better work force. In fact it had the unintended consequence of institutionalizing corruption by making sure that everyone would do ANYTHING not to be in that bottom 10%. This undoubtedly helped foster an environment of institutional corruption as you would do anything to hit your numbers. Indeed the recorded conversations with Enron traders as they shut down power plants (to spike the wholesale price of electricity by dropping supply) or engaged one of the dozens of illegal schemes. Instead of institutionalizing a dedication to excellence, instead it institionalized a sociapathic concern for self above all others.

"But what Brian," you might say, "Greed is good right?" Well yes and no. Unrestrainted greed is gluttony and eating ones self to death is never a good corporate practice. Remarkablly in an effort to keep the stock afloat, that's what happened to Enron - except they hid their debt in a series of structured companies. Yet their is another approach to the hiring and retention and for that I am going to take the example of Google.

A lot has been made of the hiring process at tech companies. For a long time Microsoft was the undisputed leader in annoying questions designed "to reveal how you think." There was "How would you find out how many gas stations there are in America?" A question that once a stumper now can be answered by asking Google or the US government - How Many Gas Stations there are in the United States. Now Google has replaced the stumper question with a series of stumper interviews. The Google interview process is tough and you are interviewed multiple times. One of the important factors is that Google instead of hiring for the project or division is hiring for the company. This is an attempt to move the bell curve of the average google employee just a little bit to the right. So they combine the traditional hard interview questions with the mulitple interviews up and down the food chain in the company. This does several things. With enough people looking at a candidate, that candidate's weaknesses will become apparent. With enough eyes, all bugs are shallow. By eliminating the bugs before they get hired you can help insure a better workforce. Programmers on the far right side of the bell curve are often 10 times more productive than the people just one median to the left. This solves the problem that Enron retention practice was trying to solve but it does so without damaging corporate culture. They seek to eliminate the bugs before they get in the company. There are a whole host of reasons why this is a good idea but in a nut shell once your quality of employee goes down, it's going to spiral downward from there. Additionally the multi interview gauntlet adds to the esprit de corp of the company of the employees.

There you have two solutions to the problem of hiring and retention - Google's and Enron's. It's pretty clear which is the better method.

GPL Win In Germany

One of the most consistent criticisms of the free software movement has been about the license. The license is too vague - the license hasn't been tested in court. This last point seems quite strange to me. Most software license agreements are not "tested in court." In fact if you are going to court to enforce your licensing terms - you on one level have already failed. However in Germany, D-Link has lost a case concerning the use of a GPLed code in a NAS device.

Link Germany GmbH, a subsidiary of D-Link Corporation, Taiwan R.O.C., distributed DSM-G600, a network attached storage (NAS) device which uses linux-based Operating System. However, this distribution was incompliant with the GNU General Public License (GPL) which covers the Linux Kernel and many other software programs used in the product.

Free At Last!

Well it's only taken 12 years for Sun to do but it looks like they are finally open sourcing Java. Recoginizing that open source is pretty much the only way Java is going to survive the next ten years, Java has slowly weeded it's way through the numerous intellectual property minefields contained in Java. Currently they are soliciting developer feedback on type of license to be used. I would prefer LGPL but that's just me.

Sun's site on open sourcing the JDK

Sun' answer to why open source the JDK.

The Greatest of All Time!

This Information Week Story has the greateast software programs of all time as mediated by Charles Babcock. On of the most interesting about the article is his approach to greatness. Simplicity and over impact on the computing world. The list is pretty sold, and one I sorta agree with. I hate to do this but I am gonna sum up his list right here.

1. Unix - Specifically BSD 4.3 which you can find in pretty much every version of Windows and Linux.
   
2. IBM's System R - which which spawned every relational database project in the world including Oracle, PostGRES, MySql etc.
   
3. The gene-sequencing software at the Institute for Genomic Research. An elegantly written program designed to decode the human genome.
   
4. IBM System 360 OS
   
5. Java - Now new and improved with open sourcing power!
   
6. Mosaic - The little browser that could
   
7. Sabre System - Airline reservations made easy.
   
8. Macintosh OS - Perfecting PARC's innovation.
   
9. Excel - Perfecting the spreadsheet
   
10. Apollo Guidance System
    
11. Google's Page Rank System
    
12. Morris Worm - In 1988, reminding everyone what a bitch Sendmail was/is.
    

I like the fact that he zeroed in on a little version of Unix that has descendents in nearly every single operating system on the planet. The DNS and BIND stack in all of Windows was taken from BSD 4.3 and the current Macintosh operating system was taken from BSD. Naturally because of the nature of the BSD license, it found it's way into Linux. Fuddites like to belittle the contribution of open source software but let's be clear here. Without free software, there is no Internet - just a bunch of Compuserves.

Microsoft FUDDITES at it again

Apparently open source software has gotten too complex. At least according to Microsoft. This particular type of FUD has a familar pattern. Microsoft finds someone who used to use Linux, but no longer does as "Linux was (whatever Microsoft wants them to say)." Microsoft then has the partner repeat whatever talking points they want to mention. In this particular market it's the ISV marketplace which has long been Microsoft's bread and butter. To be entirely fair to Microsoft, this practice (of having a business partner spout your talking points in return for marketing support is absurdly common).
In this particular instance, the MS Fuddites have trotted out a couple of partners in Malaysia.

"Lim Han Sheng, general manager of IBS Synergy, a Malaysian software vendor specializing in chain-store management applications, agreed: "We had to learn [how to build on the] different versions of Linux distributions to meet the demands of customers."

IBS Synergy had started developing products for the Linux platform back in 1998 but gave Linux the boot in early 2004, and now builds its software on the Windows platform. Lim said this was because the company's developers were spending more time hunting for Linux technical support on the Web, and had less time to focus on actual development work.

This doesn't make a lot a sense when you actually look at the claims. IBS Synergy sells chain store management applications. Yet typically that application is sold with bundled hardware and software. Here's another problem - what retail stores were demanding different linux distributions in 1998? I can guarantee the retail stores were certainly not making demands on the type of Linux to use. That strikes me as the tail wagging the dog.

Secondly Redhat has been around since 1993 - why didn't they simply join the Redhat reseller program and be done with it? Well because they didn't want to pay money to Redhat for support. Yet they have no qualms about joining the Microsoft developer program and paying for support. The idea that the developers were spending too much tme "hunting for support on the web." Why on earth would you expect your support to be free?

Here's what really happened. Management found out there was this free os called Linux. Instead of seeking out a reputable partner for the os, they decided to "save some money" and just use web based resources for their linux support. They do this for 6 years and then evenutally notice that their development team is spending a lot of time and energy doing a function that should be outsourced. So instead of actually figuring out what the problem is, they decide that the problem is Linux. Imagine if you will if you had decided to build a commercial application on Windows but instead of joining the Microsft developer network, you decided simply to rely on what random information could be found on the web. Could you develop an application? Sure. Would it be far more difficult than it it should be? You bet.

This ZDNet Asia article is a largely a reprint from a Microsoft case study. The real problem is the IBSS undercharged for it's product and didn't properly set consumer expectations. Here you can find the Microsoft IBSS case study. The case study has some straightforward MS Fuddite quotes.

Free Software Dilemma
IBSS initially thought that offering a free solution was to its advantage. However, the company soon realized this was not true, because Linux was keeping the company from charging for services rendered or charging less. “We had customers requesting backup tools, which MySQL doesn’t provide for,” says Lim. “After we had sourced it, customers were often reluctant to pay our service fees because they assumed it was free. They also wanted us to install it at no cost. This created problems for us.” Lim adds that this invariably reduced profit margins.

Because IBSS is focused on customer service, the company often did not make its customers pay the fees. However, this inevitably led to the company having to send a junior staff member to do the job. “This sometimes results in a delay in delivery and the customer would complain,” says Lim. “Unfortunately, the customers’ unrealistic expectations of ‘free’ or ‘cheap’ software and services mean that everybody loses in the end.”

The problem is that IBSS used the zero cost of Linux as a selling point and didn't properly set customer expectations that services cost money. This really isn't a free software problem, this is a business problem. IBSS set itself up for a fall. Support costs money, you need to charge for it.

Lim says that the tools available for MySQL were quite basic and “you also have to know how to use the text-based commands.” Its limited functionalities also hindered the development efforts of IBSS. IBSS could not integrate stored procedures into MySQL as it could with SQL Server 2000, and this slowed the performance of the database. “With SQL Server 2000, this is not an issue,” Lim adds.

Once again IBSS in an effort to save cash, doesn't spring for any of the support options available for MySql or any of the commercial upgrades that are available. (ie stored procedure support). This is less of a Linux problem and more of a business process problem.

The problem with much of MS's case studies is that real problem is a management/business process problem, not a problem with Linux itself. Had you made the same decisions using MS products you would be in similar trouble now. While it's convienant to blame the OS, it's not really the problem. Refusing to pay for support and then blaming the OS is silly.

Common Internet Myth #12 - An IP address represents a single user

The Explainer is a column on Slate that is usually good at explaining annoying minutia or trivia. This latest column fails short of the mark. The column cover how the MPAA finds people who share on p2p networks such as bittorrent, heres' their factual error

"At this point, the security firm will have the screen name and the IP address of the person they suspect of trading copyrighted material. An IP address is a unique identifier that your computer gets whenever you log on to the Internet."

Well yes and no. While in individual has an IP address it may not be a true routable IP. For example my computer has an ip address of 192.168.1.100 because I have a home wireless network (192.168.1 is a no routable IP and commonly used in home setups). My wireless linksys router has internally assigned IP address that my ISP uses but once again is not a true (ie routeable on the Net) IP address of 10.3.241.11 .

The IP address that shows up when I use http://www.showipaddress.com/ is 67.131.78.241. In fact anyone using my local provider (Desertgate is Las Vegas NM) shows this very same IP address. In short an IP address is less a unique identifier and instead it's a machine (in this case Desertgate's outgoing router) on the network.

The post is inaccurate for several reasons. You assume that everyone on the net is assigned a routable IP. This simply isn't feasible anymore. Large networks such as AOL have similar cacheing and routing schemes. True IP addresses are expensive and giving every user a routable IP just isn't feasible.

This the problem with the explanation for certain networks, the IP address of all the users would be the same. Yet the explanation implies that the ip address is unique to each user. While a user indeed has a unique IP address, very often that IP address is not routable and is private to the ISP. Yet the security firm is only able to see the public facing IP (which in all likelyhood is a router). The post leaves the impression this is akin to a fingerprint and a unique identifier.

This highlights the problems with the approach that MPAA has taken. The find out the IP address and then send out blanket lawsuits to the people who could have that IP. Most people lack the financial means to fight them and simply settle for 2-3K . Leaving out the fact that an IP addresse can represent hundreds or even thousands of users means it's less of a smoking gun and more of a smoky haze. Sure there's a fire there but you have no idea may be responsible for it.

MS Open Source Wake Call =-> Your market share is at stake.

After spending a few years dening that alternative office suites and formats even existed, Microsoft has realized they need to get ahead of the issue and actually listen to their customers. If Open Office has done one great thing, it's to force Microsoft off their asses to begin to compete again. Market share like MS Offices' breeds complancy which is why nearly every Office from 97 onwards looks almost incredibly identical. I am not certain what great new features I got in Office2003 (the version I currently use when forced to put documents on paper) but I am sure there are some minor improvements.

So now I will be able to open badly designed presentations from open source engineers just as easily as the badly designed presentations from marketing. Score one for both MS and open source!

Net Neutrality Debate - Terms decide the issue.

I have posted quite a bit about the network neutrality debate. In this post I have decided to handle some of the problems with the terms being thrown around by the telcos and cable companies paid pundits. These individuals often are using deliberately misleading langauge to skew the debate. It's time to control the language of the debate, since many of the opponents of net neutrality often lie during the debate. Here's a great example of a straight faced lie in the editorial section of the Washington Times

"So, for example, Comcast would have to charge Microsoft the same price to send broadband-consuming video content as the individual blogger who uses far less band space.

This is simply false. Microsoft would be charged far more since it consumed far more bandwidth (not fucking band space - band space is the fucking rental garage your band practices in and stores it's gear in). Net neutrality in no way means that prices are the same, it means you don't discriminate on individual packets. With that's example let's dig right into the common false talking points being repeated by these pundits.

1. Google/Yahoo/Microsoft want a free ride.

This of course is completely false. These companies have mammoth isp bills running into the millions of dollars a month. They pay for their bandwidth. No one is getting anything for "free." The end consumer pays for their bandwidth. The telcos want to bill someone twice for the same service, namely access to the someone else's content. It's roughly akin to forcing a telemarketer to pay extra money to "call" AT&T customers. Imagine that if you wanted to telemarket someone, you would be forced to pay additional money to the phone company as they are its customers. Yet that is EXACTLY what the telcos want to do.

2. "Smart networks" are better than "dumb networks"

This recent talking point was highlighted by Tom Giovanetti who said in a recent Mercury news OP/ED piece,

"Smart is always better than stupid. Smart networks are better than stupid networks, and smart public policy is better than stupid public policy."

This is a clever bit of punditry indeed. Since prima facie it would seem reasonable that smart network is better than a dumb network. People like smart. Smart sounds good. Yet the choice of terms is setting the debate. I would suggest when talking about this particular issue, I would always recommend properly framing the debate in the real terms of what is really happening. Let's plug in the accurate terms and see how Tom's quote sounds.

"Discrimination is always better than non discrimination. Discriminatory networks are better than non discriminatory networks."

So when discussing this online or on a television show, make sure to describe the situation accurately. Telcos want the ability to discriminate between services and then charge a fee to those services they want to. The problem is this isn't even good engineering. By trying to examine every packet in the network, you inevitably build a a more brittle failure prone network. The Internet was designed to be a flexible platform different than the switched phone network or a cable. As Farhad Manjoo has pointed out in Salon,

"Unlike other large communications systems -- phone or cable networks -- the Internet was designed without a specific application in mind. The engineers who built the network didn't really know what it would be used for, so they kept it profoundly simple, making sure that the network performed very few functions of its own. Where other networks use a kind of "intelligence" to define what is and what isn't allowed on a system, the various machines that make up the Internet don't usually examine or act upon data; they just push it where it needs to go.

The smallest meaningful bit of information on the Internet is called a "packet"; anything you send or receive on the network, from an e-mail to an iTunes song, is composed of many packets. On the Internet, all packets are equal. Any one packet hurtling over the pipe to my house is treated more or less the same way as any other packet, regardless of where it comes from or what kind of information -- video, voice or just text -- it represents. If I were to download a large Microsoft Word e-mail attachment at the same time that I were to stream a funny clip from Salon's Video Dog, the Internet won't make any effort to give the video clip more space on my line than the document, even if I may want it to. If the connection is too slow to accommodate both files at the same time, my video might slow down and sputter as the Word file hogs up the line -- to the network, bits are bits, and a video is no more important than a Word file.

The notion that the Internet shouldn't perform special functions on network data is known as the "end-to-end principle." The idea, first outlined by computer scientists Jerome Saltzer, David Clark, and David Reed in 1984, is widely seen as a key to the network's success. It is precisely because the Internet doesn't have any intelligence of its own that it's been so useful for so many different kinds of things; the network works consistently and evenly for everyone, and, therefore, everyone is free to add their own brand of intelligence to it."

Let's take a look at Internet Two - the super high speed network that is a test bed for new internet technologies. In the same article "Gary Bachula, vice president for external affairs of Internet2, a nonprofit project by universities and corporations to build an extremely fast and large network, argues that managing online traffic just doesn't work very well. At the February Senate hearing, he testified that when Internet2 began setting up its large network, called Abilene, "our engineers started with the assumption that we should find technical ways of prioritizing certain kinds of bits, such as streaming video, or video conferencing, in order to assure that they arrive without delay. As it developed, though, all of our research and practical experience supported the conclusion that it was far more cost effective to simply provide more bandwidth. With enough bandwidth in the network, there is no congestion and video bits do not need preferential treatment."

Today, Bachula continued, "our Abilene network does not give preferential treatment to anyone's bits, but our users routinely experiment with streaming HDTV, hold thousands of high-quality two-way videoconferences simultaneously, and transfer huge files of scientific data around the globe without loss of packets."

So in other words the telcos attempt to prioritize traffic is less about making it work and more about extracting more money by providing less bandwidth.You can find a full transcript of Bachula's testimony before the Senate here. Let's keep in mind something - I2's bandwidth usage far exceeds anything AT&T is proposing to build for consumers. They are testing thousands of high definition channels simultaneously. As Bachula also points out,

"For example, if a provider simply brought a gigabit Ethernet connection to your home, you could connect that to your home computer with only a $15 card. If the provider insists on dividing up that bandwidth into various separate pipes for telephone and video and internet, the resulting set top box might cost as much as $150. Simple is cheaper. Complex is costly.

A simple design is not only less expensive: it enables and encourages innovation."

How much bandwidth are we talking about at Internet2 installations? More than you can possibly imagine, Bachula goes on;

"At Internet2 universities today, we routinely provide 100 megabits per second to the desktop, and many of our schools offer 1000 megabit (1 gigabit) per second connections to their faculty and students. We have done so using commercially available, open-standards technology and our traffic flows on the very same fiber used by today’s Internet service providers. Today’s typical home broadband connection – which admittedly is a big step up from dial-up – is only about 1 megabit. So the goal of broadband legislation should be to encourage ever-increasing bandwidth.


3. We will not degrade anyone's internet experience or access and if we do, then you can go to the government to fix the problem.

This is the strangest talking point of all. Most of these pundits spend a large part of their post talking about how the government shouldn't regulate the internet. Then any proposed remedy for censoring access to the Internet or services is going to the FTC to complain. Ok and in 10 years after your start-up is bankrupt you might have a favorable decision. Furthermore the random spouting of telco ceos such as AT&T Ceo Ed Whitacre and Verizon CEO Ivan Seidenberg seem to indicate that's precisely what they are planning on doing. See here, here, and here. They then say they won't "affect the Internet". If you aren't going to change anything why say you are? Oh the previous examples where he was actually thinking about what he was going to do and then someone, probably his lobbyist, pointed out that was a bad idea to mention what they were actually going to do. As I pointed our previously, Comcast has cut off access to Craigslist - a text only site that competes with Comcast's newspaper classifieds.

Control the terms of the debate and you control the debate. We need to continue to push hard for a network that has it's intelligence on the edge of the network for continued flexibility and growth. The end to end principle of the net must be maintained.

Stupid Internet? Stupid Lies is more appropriate

The telcos are at it again. This time they have a paid pundit going on how network neutrality is literally going to end life as we know it. Your phones won't work. Emergency services will shut down. Cats and dogs living together! From his article,

"Suddenly, the TV image goes pixilated, and then dark. The phone call drops. You hear yelling from your teenagers' rooms. But that's not all.

Across town, police on the beat suddenly can't reach headquarters on their radios. In an ambulance, the EMTs are trying to call in vital signs for a patient they are transporting to the hospital, but they can't get through.

Is it an alien invasion? A convergence of planets or some other astral phenomenon? No, it's a convergence of a different sort. Turns out that tonight is also the night of the Victoria's Secret Fashion Show, as well as the night Coldplay releases its latest song online. And YouTube has just released embarrassing video of a major Hollywood star having a ``wardrobe malfunction.'' Extremely high demand on the Internet is overwhelming available bandwidth, and regulations passed back in 2006 make it illegal for network operators to differentiate and prioritize content."

That's right folks network neutrality is GOING TO KILL PEOPLE!!!! Google must be stopped. Think of the children!

This scenario of course would never happen. All telco have packet throttling already. Users exceeding their limits often find themselves cut off. His scenario actually highlights the real problem - telcos consistently over sell their bandwdith at a 10 to 1 ratio. They want the government to come and protect this practice as it's actually quite expensive to provide what you actually promise users. Additionally there are already of dealing with his proposed meltdown. Simple content cacheing solutions have been available for over 12 years now. Telcos aren't going to melt under the new traffic load. Phones will continue to work fine. As I noted in a previous post non discrimintory networks are more efficient from an engineering prospectative.

Here is my favorite quote from this article

A world where somebody decided that a stupid network is better than a smart network. Well, how well did that work out?

Well Tom that was a decision decision made 36 years ago about the Internet as dumb networks as he calls them are more flexible and robust than networks that attempt to prioritize traffic. The terms "dumb" and "smart" are inherently biased and more importantly isn't accurate. The Internet isn't "dumb," currently it is non discriminatory. What would you rather have a network that discriminates against or one that doesn't? It's sorta a no brainer. But Tom makes the argument that in a bandwidth starved world, we need to manage these packets.

Maybe someday we'll have the techno-utopian world of infinite bandwidth, but the last time I checked, there isn't an infinite supply of anything. So, in a world with limited bandwidth, should traffic from an Internet-connected toaster have the same network priority handling as the VoIP traffic from police and fire departments?

Network neutrality proponents answer that question ``yes.'' But the correct answer is so obviously ``no'' that there is clearly some other agenda at work.

Notice that Tom betrays what the telcos really want to do. They want to make bandwidth artificially scarce so they can charge more for it. Bandwidth shouldn't be scarce for two reasons. First off there is a massive amount of fiber that is currentl y dark. Roughly 90% of ALL fiber in the US is dark and not in use. Why? Well having this much bandwidth available would case prices in the local telecommunications markets to drop through the floor. Remember almost all telcos have local monopolies on the fiber or in the case of DSL the copper. So after accepting billions from the federal government to bring symmetrical fiber optic cable to the American consumer,the telcos didn't. In the 1996 Telecommunications Reform Act, the major U.S. telcos promised to deliver fiber to 86 million households by 2006. We paid them 200 Billion dollars to do so. They simply pocketed the money. Read more here.

What's really going on is that major content companies like Google, Yahoo, eBay and Amazon.com want to use the strong arm of government to lock in the certainty of their existing business models. And they've enlisted an army of anti-corporate activists to stir up a frenzy in the name of ``saving the Internet.''

But government should be about fostering a dynamic and risk-taking economy, not preserving the certainty of anyone's business models. Net neutrality regulations would severely restrict broadband providers' right to enter into contracts and to try new business models while protecting the business models of Google and Ebay.

Well he's right about one thing. It is about preserving someone's business model but it's not the companies that are incredibly successful internet startups. It's about preserving the telcos' ability to ration bandwidth. Let's keep in mind, according to the 1996 Act, 86 million American homes are supposed to 45Mbit connections. Yet after pocketing $200,000,000,000 from the American consumers we still don't have it.

I find it amazing after calling for the government to protect the poor telco (by staying out of the market and not regulating it) that if the telcos discriminate, why

". . . the FCC, the FTC and the Justice Department, which all have existing authority should a telco or cable company misbehave."

Except of course when in this current regulatory environment you can count on them to do nothing. This has allowed Cox Cable to cut off access to Craigslist for it's users. Cox which also owns a large number of local newspapers (which derive their revenue from classifieds) for which Craigslist is a very large competitor. If telcos act this way during the age of net neutrality what would it be like if the telcos get their way. Far worse where we wouldn't have the Internet net we now have and would be somehting resembling the propriatary online services of the 80s - which consumers have soundly rejected.

Flash 9 Player for Linux

File this under - ok it's about time. Macromedia has confirmed through Emmy Huang's blog that flash player 9 will be released for Linux with an emphasis on performance. Flash has it's place, games and rich web apps that can run effectively on the desktop. One of the lead enigineers on the effort is guy named Mike M. his blog with the latest updates can be found here.

Google Releases Picaso for Linux

While this might seem like a pretty minor announcement, what makes this announcement newsworthy is the approach that Google took to port it to Linux. The Picasa Linux port was made with Wine and generated over 100 patches to Wine itself. So in other words Wine got extended in order to quickly move Picasa to Linux. This seems to be a back ended way to help Linux run Windows applications withou immediately raising the ire (or attention) of Microsoft. With a 100 patches to WINE, it takes a longish step in enabling Linux users to run Windows applications without the hassle of running the OS our Redmond.

South Korea Antitrust Body rejects Microsoft's objection

Microsoft continues to push those rock up the hill only to have them fall back down. In this case it was an objection that Microsoft allow it's media player to be un bundled or competing players to be embedded in the system. At the same time the South Korean Fair Trade Commission fined MS $34 million dollars.

Microsoft appealed and then lost. An appeal is continuing to the South Korean Supreme Court. As I have said before, fines of this sort are completely meaningless to Microsoft. They can look at them as merely the cost of business and a trivial one at that. This 34 million dollar fine was the largest one every levied by the FTC in South Korea, yet it will have ZERO effect on Microsoft's behaviour.

Extensive legal push back on correcting MS's illegal behaviour has meant that enforcement of even the sweet heart deal they got with the Bush Justice department isn't being enforced. Given MS's tremendous bankroll, it will be DECADES before these issues are resolved.

How the media portrays free software - the not so subtle bias.

How free software thinkers are portrayed in the media has been a long standing grip. Part of the problem is that the grandfather of free software, Richard Stallman, is not photogenic. Then again not many geeks are really photogenic - I have met Stallman, Linus, Bruce Perens, Alan Cox so I know of what I speak. I am talking about the continual bias that creeps into the popular media about open source. For example, here's the opening quote from the above CNN article,

Portland, Oregon is the unlikely capital of a global software revolution. The revolution is called Open Source. And its leader? Linus Torvalds, the reclusive founder of Linux.

Please note the date on the article. It's May 19, 2006. Free software has been around in computer terms since the very dawn of time. Linus really isn't reclusive. Yet the use of that term creates the real connotation of a Howard Hughes like figure reclusively writing code but really out of touch with the business world. This characterization is completely silly to anyone that actually know Linus. He's a solid family man with kids. He's also a top flight engineer who does a pretty good job with the linux kernal.

For the longest time the propriatary software vendors called free software thinkers communists. When Richard Stallman started out in the 80s it was very common to call the man a communist and his ideas communistic. Yet Stallman's ideas are rooted in the very essence of freedom and in existing copyright law. Current detractors of the free software movement have taken to calling the movement "commonists" in reference both communists and the shared creative commons of ideas.

Language is important. It frames the terms of the debate. For example the term digital rights management (DRM) for short doesn't really describe the rights the consumer has with his or her purchased media. Instead it really describes the rights of the copyright holder to restrict a consumers usage of the media. The FSF has recognized this has launched several efforts to push back on the language used to describe digital restricts management. They have recently launched Defective By Design a site devoted to the pointing out a simple fact - DRM is indeed defective by design.

Redhat, JBoss and Sun

I wanted to take a little time to digest the recent acquistion of JBoss by Redhat. I find it somewhat amusing that JBoss was acquired by a company that just last year Marc Fleury was calling just a packager of linux. It's amusing as it represent the view of Redhgat which is accurate in about the year 1994 when Fleury was graduate student in comp sci. That ceased to be the case in about 1998, when Redhat made the point of actively hiring kernel developers. They also acqured Cygnus in 1999 which was one of the first true open source professional services company which had numerous contracts with major chipmakers such as Intel and IBM. Marc Fluery has often declared Redhat - a complete piece of crap company. From the always snarky Register UK,

"Today RH *IS* a proprietary vendor," Fleury wrote. "Their whole business is around proprietary wrappers to Open Source Linux to drive the subscription business.

"RH is a packager, it doesn't create JACK, it doesn't create Linux, it wraps it up in proprietary shit. And no the contributions that they make don't really count. Linus Torvalds creates Linux."

Tell us how you really feel, Marc.

"But what really gets me, is this: Our own talks with RH broke down, RH is NOT IN THE BUSINESS OF PAYING OPEN SOURCE DEVELOPERS. We are, that is why we created JBoss inc. RH wanted to keep the services revenues all to themselves. That is the dirty little secret, so for them to come out and claim they are the open source when we know the reality is distasteful."

So why sell to Redhat? Well I think the answer is pretty clear. Marc Fleury is an ass. So much of an ass that the people who provided the one round of VC probably made it apparent that some form of liquidity event was expected from the investment. Since Marc with his propensity to randomly spout off nonsense (such as Redhat not paying open source developers) is unlikely to make it through the complete pain in the ass round show that is an IPO. Fluery is a great entrepreneur and taking his company from 2 people to roughly 100 is an amazing accomplishment. The problem is those skills sets don't often translate into the quarter to quarter discipline you see in a company like Redhat. Of course Marc will take his roughly 70 million (based on my rough guess) and in a year won't be working for Redhat. Despites Fleury's repeated and erroneous claims about Redhat he was more than willing to take their money when it became apparent that Larry Ellison didn't want to pay 8 times revenue for JBoss. (Silly Larry it's mostly stock anyway, what where you thinking).

Of course with this move, the real pressure is on Sun Microsystems to GPL their Java. It's apparent that customers like the JBoss solution and JBoss as a company can certainly execute. With the backing of a company like Redhat, entrance into the Fortune 500 becomes much easier. If Sun doesn't truly open source Java, well I am pretty sure Redhat is gonna eat their lunch and in 5 years the only Java application server will be JBoss.

Monopolies and Disruptive Business Models

I have been spending some time thinking about disruptive business models and how they surpise monopolies and how monopolies then respond to the disruptive threat. We can see this is a wide variety situations but lately I have been seeing it in the telecom sector (naturally), cable television (naturally) and satellite television (wait really how do they have a monopoly? I'll go into that in a moment) how monopolies handles innovation that might be threatening their traditional business model.

Before I get too far in this post a few things need to be defined. Most of the monopolies are not national monopolies but rather regional monopolies. For some reason people seem to think that if a competitor somewhere in the country exists for a product , that it's not really a monopoly. They have the strange idea that a monopoly means a 100% market share. Where they get this idea I don't know but I suspect it's the complete lack economic education in our society (at least judging by the huge pile HELOC funded credit card debt the average American has).

Monopolies are quite often regional. For example cities were giving out monopolies to cable companies as an incentive to wire the city. As a result most cable companies are local monopolies and this has lead to a serious case of monopoly think. One of the basic rules of a monoply is that innovation is to be feared at all costs. It's far too disruptive to your current business model. In VC terms this is often called "knifing the baby." It should be more properly called killing the golden goose, as all the revenue flows from this goose. This leads to a risk aversion that is quite stunning in it's scope. It entirely blinds management, leading them to think "inside the box" as it were. Let's take a look at the recent moves by AT&T with their Project Lightspeed as it highlights this sort of thinking.

A recent Salon article hightlighted AT&T attempts at Lightspeed to turn the Internet into cable TV. (Good luck with that guys). And in traditional monopolist fashion Edward Whitacre, AT&T's CEO declared,"What they would like to do is use my pipes free, but I ain't going to let them do that because we have spent this capital and we have to have a return on it," he said of Google and Microsoft. "Why should they be allowed to use my pipes? The Internet can't be free in that sense, because we and the cable companies have made an investment and for a Google or Yahoo or Vonage or anybody to expect to use these pipes [for] free is nuts!"

Well Edward you built those pipes for your customers and so you can sell them access to someone else's content. I haven't noticed that AT&T has suddenly bought a movie studio's back catalog in the last few years, so you really don't realize that you are the tail on the dog. The Internet isn't free but it is largely paid for on both ends of the connection.

Of course the attempt to add this intelligence layer to the Internet to prioritize traffic isn't new, it's something that a non engineer, management type thinks is a good idea. It actually is a vary bad idea. First off a network with too much overhead like the overhead generated by an traffic manager proposed by AT&T would make for a very brittle network. User network usage is difficult to predict on such a network, but you can be certain that users are going to use more bandwidth than you expect them too and are going to use their connection in new and interesting ways. Let's call the Brian's 1st law of network usage - Users will routinely consume 200% of your available bandwidth.

Additionally the overhead of managing these packets doesn't really get you anywhere - it doesn't improve the user experience and strangely it doesn't improve overall network performance. From the Salon article,

"Gary Bachula, vice president for external affairs of Internet2, a nonprofit project by universities and corporations to build an extremely fast and large network, argues that managing online traffic just doesn't work very well. At the February Senate hearing, he testified that when Internet2 began setting up its large network, called Abilene, "our engineers started with the assumption that we should find technical ways of prioritizing certain kinds of bits, such as streaming video, or video conferencing, in order to assure that they arrive without delay. As it developed, though, all of our research and practical experience supported the conclusion that it was far more cost effective to simply provide more bandwidth. With enough bandwidth in the network, there is no congestion and video bits do not need preferential treatment."

That's the strange thing. People assumed that the priotizing the traffic would result in an performance improvement. It didn't.

AT&T wants Lightspeed to become more like a on demand television with phone traffic. While that's certainly an interesting project goal - I am not certain how much consumers are actually demanding movies on-demand. With the advent of the DVD, most consumers have an on-demand library. I had StarZ On Demand in Pasadena and I used it once. But movies on demand has been a goal of the cable industry for decades now. I just suspect that technology in the DVD fill the market effectively enough that demand for these services will be slack at best.

What AT&T highlights about these monopolies is the immediate tendency to control what you fear. In satellite television, Dish Network charges $5.98 per month for a DVR if you have a DVR connected to the system. Imagine for a second a VCR fee and how silly that sounds. Yet repeatedly I have been told by customer service that the DVR fee "allows me to pause live television and record shows," which of course it doesn't. DVR is a new technology so Dish simply made up a fee to monetize something they really don't have any business charging for since they provide NO services for it. (Incidently this fee recently went from $4.98 to $5.98. It's kinda of funny, I am used to prices dropping over time, not rising. That's another thing that monopolies like to do - rise prices. It's why MS Office is $499.)

For example there is NO mention in the Lightspeed project about P2P networks and BitTorrent which are the largest portion of traffic on the Internet now. AT&T wants to reign in the chaos created by users and replace it with a regular monthly billing schedule they can understand. The reason that AT&T wants Lightspeed to look like a new cable service is that is the business model they understand. It allows them to keep prices artificially high and monetize every single usage of their network and degrade the service of their competitors. It's abad idea for consumers everywhere.

WalMart and Free Software

Walmart and Free Software

Walmart is know for it's "every day low prices." Through ruthless supply chain management and aggressive negotiation with its suppliers (suppliers are supposed to reduce their prices by 10% annually to Walmart). Naturally WalMart has quickly adapted to outsourcing taking advantage of the cheaper labor markets for manufactured goods in China and Indonesia. In fact WalMart's suppliers almost have to go overseas because of the aggressive annual price cuts that WalMart demands. This means that WalMart through shear size is able to drive down prices on retail goods until they are completely commoditized.

What's WalMart have to do with free software? Well they share several things. The free software ecosystem has always taken advantage of the global labor market. Since free software is indeed free in price, it allows someone to simply download and use the software. This means for years now open source software has taken advantage of the Internet and Internet development best practices (mail lists, wikis, distributed version control systems, distributed program management).

Furthermore since free software is free as in price and free as in source it has the effect of commoditizing software. For proprietary software companies this is extremely corrosive on those incredibly high margins. What's interesting is that free software is slowly climbing up the corporate software food chain, taking things that previously had value and reducing them to a commodity and then eventually to a free item.

Let's take TCI/P stacks. Once upon a time this was something that you actually paid money for. Eventually it was incorporated in the Windows operating system (please note that MS used the BSD stack - they didn't actually write their own). Now every os is expected to have one without too much effort.

Recent moves by Oracle indicates that they understand that MySQL is beginning to move into the lower end of their market. So they purchased InnoDB which provided MySQL with a transaction engine. They are still attempting to purchase JBOSS - although it sounds like from my sources that the JBOSS guys want FAR too much for their company (although since they are profitable - it's probably a good negotiating position to stake out).

Since Free Software is a global group of developers, it means that even if free software development is stopped in the United States, it will continue in the global software marketplace. In the end this is a good thing for consumers of software as free software represents a great competitor to the older way of doing things. Commoditization is a good thing. After all does a Office Suite really need to cost $499? The answer Constant Reader is no.


Sorry for the delays when posting early this month. I was doing some landscaping when I dropped a 150 pound rock on my hands which made typing nearly impossible.

Java Clean Room Development

Software Development has an article covering the fact the JVM has nearly been completely reverse engineered and they have a clean room implementation

According to leaders of the Apache Software Foundation project to create an open version of the core Java Standard Edition components, Eclipse is now running in a clean-room JVM developed under the project.

This is a pretty big step forward for Java which while being relatively open still suffers from the fact that it's controlled by Sun Microsystems. This means developers seeking to use Java technology in new ways are dependent on Sun's goodwill and ability to develop a JVM for their environment. With a clean room implementation you can expect to see additional development of the Java platform in new ways. A clean room implementation that is Apache license compatible gives developers more flexibility to do something new.

Having a true free software solution can often act as a magnet for developers, especially if there is a significant amount of work that has already been done. The Harmony is certainly such a project as a reverse engineering of the Java Virtual Machine is well beyond the scope of most single developers even if they are Java developers. Reverse engineering is an art in and of itself that most developers are not familar with. There aren't college courses in it but it's certainly one of the great engines of growth in SIllicon Valley. The creation of the commodity PC market rested largely on the reverse engineering of the bios of the first machines. Without it I imagine that customers would still be locked into the single vendor systems, each with their own proprietary parts with systems regularly costing between $3,000 - $5,000.

Commoditization is a powerful force in driving down prices and driving innovation through increased capacity at a decreased price. It's one of the things that the free software movement does to traditional proprietary software vendors that makes the economics of free software so compelling.

Artificial Scarcity and Web 2.0

I was looking at Joel Krause's new company JotSpot. Jotspot is a company that offers online wikis, project management a blog and more. Jotspot is a fairly typical web start up in a way. Joel is a former founder of Excite who obviously understands the importance of web collaboration. In fact since founding Jotspot his blog posts have dropped down to nearly nothing. I hope that doesn't mean things aren't going well. Most people tend to use their blogs to promote their companies. He's had the same post up since June 2005 and it's highly relevant to my current post and it notes something about the trend in hardware and software that cuts against the expectations of many VC firms.

Here is JotSpot's pricing page (Which as of this posting is down - So much for outsourcing my wiki to them.) In many ways it's fairly typical of a web startup these days. It has four different pricing levels from free (which includes 100 pages) to an corporate edition which runs $199 per user per quarter. One question I always ask myself is "Why such a convoluted pricing structure?" The answer invariably comes back to the VCs attempting to penetrate the Fortune 500 market in order to REALLY make their money. This is a new mistake in the new economy and here's why.

Here's Joel's original post on why it's a great time to be an entreprenuer (Also judging by the number of spam posts to his comments section I can certainly say the blog is dead - or at least not actively monitored.) Joel notes that the decreasing cost of hardware 1/100th the cost, free infrastructure software (LAMP), search engine marketing (SEM) combined with the access to the global labor market means that launching a start-up is easier than ever. However these same trends also mean that the cost of providing these services such as Jotspot are also significantly lower. Furthermore the marginal cost of adding additional pages to a wiki or additional services is so close to zero so as to be not measurable. This is the real problem with Jotspot's pricing. The initial free wiki has been so limited as to be useless. You should simply offer the same set of features to each user. Limiting the feature set for premium users is often a bad idea as people are not drawn into your product. You could offer the free users the same set of features as you corporate users, because the marginal cost is so low as to be zero.

I also realize that in many ways you are letting users self select their own pricing level - but that's not exactly true. What is very common in many of these VC funded companies is that they are trying to create an artificial scarcity of features in order increase revenue. What many of them don't realize is that Moore's law and forces Joel notes in his post are pushing in the other direction, namely to offer the greatest number of features at the lowest possible price (Ah the power of the free market). So the artificial attempt to segment a web service like Jotspot into varying feature sets and varying degrees of functionality is really a bad idea. Instead of users getting addicted to all your features, you are only offering a sub-set of the full functionality.

Since it doesn't actually cost anymore to offer additional service/functionality/features in a web service, offer you intro users the full feature set helps insure that they will be more likely to continue to use and spread the word on your software. Additionally instead of membership fees (always a dubious thing) you should rely on advertising such as Google Adsense. Despite the low click through rate of Google Adsense, you are better off capturing more eyeballs. While this might sound like an early dot-com business plan, it's important to remember, launching a start-up is much less expensive than it was 10 years ago. Everything is much more cheaper and more powerful. Let's also be realistic about start-up costs. If you are worried about covering a $100/month hosting bill on the entry level - I suggest you get some more money before you start.

So if I were in Joel's shoes, I would make sure that I get as many users as possible and then flip the company to Yahoo or Google. Just don't spend too much money advertising and rely on users word of mouth to help sell your web service. After all Google has never bought a television, radio or print ad - yet they are the world leader in search.

The fights are public

One of the differences of open source software is that is frequently ignored or missed is that disagreements, like the code are public.

In a typical company many of the same disagreements occur between principals but it's never seen. The open nature of free software means that every almost always airs their laundry in public.

Let's face it engineers often have strong opinions of certain things. Typically they will express their opinions straightforwardly. This can sometimes lead to conflict.

For example Richard Stallman is a man with a strong set of opinions. While I don't always agree with his approach (I agree with many of his ideas) he is certainly a figure who often finds himself in one spat or another with a another member of the free software movement. For example his current disagreement with Linus Torvalds over licensing the kernal under GPL3 is just another in series of what is relatively small disagreements in the free software movement.

Since these spats occur over publically available mailing lists, they are much more visible than the debates that occur at Sun Microsystems, Microsoft or Oracle. These debates occur at these companies - we just never see them.

As result the free software movement seems more contentious and argumentative. While this seems like a straight forward result of the free software community, peopleoften assume that these same debates don't occur at closed source software companies.

Many of debates occur at closed source companies (direction, engineering approachs, code styles, source management all are debated pretty vociferiously) including one that is noticabily absent from the free software community.

One debate that you will not see is the tension between marketing and engineering. As many free software users are also users of their product - they often have a better understanding of their product. Additionally developers are also often the sales staff. Most free software projects are still small enough that they are intimately connected to their users in ways that developers at private source companies are not.

Microsoft for example has developed procedures for project managers and other customer relation people to be actively soliciting feedback from users. This process developed because it was no longer feasible for developers to do this. Scale has it's problems.

However one point of contact with customers is often the sales/marketing rep. One problem that often arises is the promised feature. Rep A promises Customer B that Feature X is definately going to be in Release C. This leads to marketing making demands on engineering that they may not be able to make. This then often leads Creeping Featuritis which then leads to Security Holeis.

This of course can happen any time you deploy a sales force that doesn't have a sound technical knowledge. Since most free software projects haven't gotten to this size and most will never get to this size so it's not a problem you face in the free software community too often.

Of course the relatively small size of developer teams and their relative closeness to the customer means that you can often work with directly with an engineer on a project.

Chock one up for free software. When I started this post, I noticed a great piece on
project management principles, that not only talks about project management but also some of the strange foibles of corporate software development.

Telcos & Google's Revenue

I haven't written about the recent remarks by telecomm executives about Google "stealing" revenue that is rightfully theirs. It strikes me that this really a case of P/E envy but let's take a look at the comments and what they really reflect about the problems that the RBOCs face.

Despite the billions they raked in during the dot com boom, the problem is that telcos mostly sell (phone service) which is complete commodity. While they also sell leased lines and data centers, their profit margins are almost entirely found in their residential phone service. Consumers are paying too much for far too little service. Let's take my provider Qwest. We have two lines from Qwest - a line for my office and one for the house. Despite various bundling options our phone bill is regularly between $125~$150 per month. We don't have voice mail, or three way calling or a whole host of other features regularly pushed upon us by Qwest's telemarketing reps. I spent a whole lot of time on the phone with Qwest to figure out why my bill was so high. During that conversation one thing really struck me. My expectations of service and Qwest's were completely at odds. When I noted to the rep that my phone situation was hardly complex, her response was "Sir most people don't have two lines. You have more services than most of our customers. You have a pretty complex phone set up."

The strange thing I thought the number of services I derive from the phone company completely at odds with the actual cost. For example my high speed wireless connection is far more valuable to me than my phone and provides far more value. I regularly run Skype for phone calls. In fact I recently called London on Skype, to find out where a check was. When I queried about the call quality, the woman on the other end of the phone was surprised not only I wasn't in London, when she found out it was an internet telephony call she was downright incredulous. I would hesitate to guess the cost of making that phone call with Qwest. Certainly far too much as I found out when making calls to Canada. I have stopped using my phone for all international calling.

The problem of course is that telcos haven't kept up with customer's expectations. They are simply providing a connection to what people find really valuable, namely the Internet and the content contained therein.

Who provides that connection is completely inconseqential to the user. They want the content. The connection is a means to an end. This is why the current telco posturing is in it's own way too funny to believe. They are the tail trying to wag the dog. Their threats to degrade access or (even cut off access) to Google or Yahoo are laughable. Let's say (Telco A)degrades access to Google because they want a slice of Google's revenue. Google's response is simple. They can simple re-direct that telco's customers to page saying, "Telco A has decided to degrade your access to Google. This despite being paid by you for internet access. Please let them know you want full access to the Internet at 1800 Pissed Customers.Or simply try Telco B for internet access."

The problem is that telco's see the revenue generated by Google and Yahoo and figure they deserve a slice. They no more deserve a slice of revenue from Google than they do the revenue from a direct mail company that uses phone lines to take orders.

Telcos seem to think (quite mistakenly) that because they own the connection the customer uses to access the internet, they own the customer. This is false. If they were to provide degraded service to those customers on a per site basis, they would cease being their customers, fleeing to telephony provider who will provide the access that customers want. I cannot imagine what stick (other than regulatory) the RBOCs have to enforce a payment from Google or Yahoo. By hurting their customers (who will certainly view it that way), cannot they expect to have some leverage.

The problem with RBOCs is that they simply lack the ability to quickly innovate. Instead they really prefer to roll out new services slowly and bill them accordingly. For example, Google launched in 1998. Why wasn't there a phone company version of Google already out there? It's because they saw the scope of such endeavors is a far too limited fashion. The RBOC search engines (such as Athand) saw themselves as online Yellow pages and NOTHING more. With this sort of innovative thinking it's no surprise that Athand and telco attempts at seartch were complete flops.

The attempt of a telco to retroactively exert a toll on the internet is doomed in any free market environment. Indeed Google is poised to leap frog all that copper the telco has spent billions stuffing into the ground. I can easily imagine Google with all that dark fiber it has bought, and wireless access to simply start offering free internet telephony, along with internet access. It will be interesting to watch what will happen in San Franicisco's free wireless environment.