Activists worry about the environmental cost of discarded mobile phones, personal computers, and other technology. Perhaps they should also worry about the swelling graveyard of start-ups and tech titans gone bad.
As Le Monde points out (in French), though businesses fail in all areas of the economy, technology ventures, and especially Web start-ups, prove particularly short-lived.
It's Joseph Schumpeter's creative destruction...in overdrive.
Le Monde suggests three reasons: the speed of innovation/evolution (AOL's walled-garden approach meets Yahoo's open-portal approach), the ability of incumbents to crush nascent competitors (Netscape meets Internet Explorer), and the shortcomings of business models (Skype: only $500 million out of more than 520 million subscribers).
These are good points, but perhaps there's another: technology companies are increasingly disposable because they're so darn cheap to create.
This affects start-ups and incumbents alike. For the latter, perhaps the negligible cost of starting a new company fosters the comparative disposability of such start-ups. As Bernard Dalle, a general partner with Index Ventures in London, notes, start-ups need only rent essential infrastructure like hardware and software, and that rent is dirt cheap.
Ideas that couldn't survive a $5 million to $10 million capital-raising process might well weather a friends-and-family round of $50,000...and expire shortly thereafter when the idea proves barren.
But it's also true of the incumbents: Gulliver-esque Microsofts can fight off most of the Lilliputians, but an increasing array of the pesky imps sprout into adulthood (e.g., Google, Salesforce, Facebook).
Unfortunately (or fortunately, depending on your market position), this process of creative destruction may well be accelerating, and open source is one of the primary fuels.
The Linux Foundation's Jim Zemlin insists that the pace and price of innovation today requires open source, a communal effort that isn't bogged down by the bureaucracy or cash constraints of any one company. He may be right.
That certainly seems to be one lesson to take from the success of Linux, Firefox, and other open-source projects, particularly those that are community-led, as opposed to company-led. It's hard to compete with a group of self-selected, highly focused developers who can focus on good code, not good financial quarters.
Now that virtually every technology company depends upon and contributes to open-source software, we may well be laying the foundation for even more industry innovation...and corporate bankruptcies.
Guess what? There's nothing we can do about it. Nor is there anything we should do about it, except focus on building long-term customer value rather than short-term start-up goofiness. That's the way to thrive in the fast-evolving world of technology, because it's the one thing that never changes:
Customers pay for value, and companies that consistently deliver real value acquire the most customers.
Tim O'Reilly points toward this in his call for developers to "work on stuff that matters." It's a reminder but also a warning.
Microsoft is still with us because it has delivered an amazing amount of customer value in its 30-plus years. The same is true of IBM, Oracle, SAP, and other industry incumbents.
But it's equally true of relatively new companies like Salesforce, Red Hat, and Google, which have eschewed gimmicky software and flimsy business strategies to give customers tangible, ongoing value. None of these companies sought an early exit through acquisition. None of them were content to build for the quick flip.
So, yes, technology may be a veritable boneyard of failed companies, and essential ingredients like open source may accelerate the demise of start-ups and incumbents alike. But those companies that use such ingredients to deliver above-average customer value are going to endure...and thrive.
Follow me on Twitter @mjasay.
Everyone hates patent trolls (except, perhaps, the patent trolls' mothers). But it's easier to despise patent trolls when you either have a lot of patents, or none. What if your company were awarded a significant patent that could be used to shake down Google and the rest of the industry for corporate benefit.
Or buy food for your family?
Is it your fiduciary duty to exercise that patent? Is it a personal duty? And do you have the legal right to do so?
The first two questions are tricky, but the last one is currently being considered by the U.S. Supreme Court. Consider yourself lucky that you don't have to decide it.
Bilski and business method patents
Recently, the U.S. Supreme Court heard oral arguments in the controversial Bilski case where IBM, typically friendly to open source and innovation, backed the wrong horse. According to The Wall Street Journal's coverage of the arguments, the justices were skeptical--if not contemptuous--of the case put forward by Bilski and the proponents of business method patents.
Chief Justice John Roberts quipped that business method patents are akin to patenting the idea that "I buy low and sell high. That's my patent for maximizing wealth."
Silly when presented in this way. But perhaps silly when presented in just about any way.
Business method patents came into being 20 years ago with the Federal Circuit's State Street decision, the case that spawned Bilski. Two of the best-known technology examples of such patents are Amazon's one-click checkout and Priceline's reverse auction.
In a September blog I took IBM to the woodshed for its stance on Bilski. Big Blue filed an amicus brief (PDF) that I argued was disingenuous at best. IBM argued:
Patent protection has promoted the free sharing of source code...which has fueled the explosive growth of open source software development.
Really?!?
IBM was not alone. Novartis, the big pharmaceutical company, also filed a supporting brief.
The industry's moment of (in)decision
I think that the Bilski case is a divider of wheat from chaff, a moment that forces technology companies to take sides on a critical issue that goes to the heart of innovation in our economy.
On one side, companies such as IBM and Novartis maintain that patents should not be tied to "primitive physical technology" but should also embrace a broader range of modern business activities.
But other companies, including Google and Symantec, took the other side and filed briefs (PDF) with the Supreme Court arguing that expanded business method patents would open them up to infringement lawsuits over the "very mental processes and ideas that are the building blocks of innovation."
What would you do? LogLogic and Sponster examples...
I was reminded of this issue by an announcement today from LogLogic, a log management and security company I wrote about last year as an example of the pervasive use of embedded Linux.
LogLogic was granted a patent in October that appears to be rather sweeping in its scope, covering the collection of logs and the management of the data in those logs.
Imagine if LogLogic went "troll" with this patent....
At a minimum it could be a nuisance to its competitors and at a maximum it could possibly shake down any company that sold a product that relied on log collection (describing hundreds, if not thousands, of products on the market today).
Or how about this one? Sponster has a patent on a system for delivering contextual ads against electronic messages like e-mail, SMS, tweets, etc. Google filed for a similar patent, but over a year after Sponster, and while Sponster's patent was recently granted in October, Google's was denied. (Disclosure: I know and am friends with one of the Sponster executives.)
On the one hand, Sponster could go troll and sue just about everyone on the Web. On the other hand, I know from talking with the executives that they have no desire to do so. The fact that the company has not sued anyone in its six-plus years of existence is a clear indication of this. Sponster wants to build its business around the patent, but Google or Microsoft with their heft can squash that desire.
Should Sponster fight or capitulate? It's easy when you think of patent trolls as trolls that create no real value. But what about when they are real people and real companies like Sponster and LogLogic?
LogLogic makes its choice
LogLogic appears to have made its decision. In a company blog on Wednesday, a LogLogic executive points out the potential harm they see in a Bilski decision by the Supreme Court that would allow broader business patent methods.
LogLogic also (correctly, in my view) argues that the anti-business method lobby of Google et al "represent[s] the true innovative spirit of Silicon Valley where entrepreneurs are rewarded for risk taking and embrace the thinking of Austrian economist Joseph Schumpeter and creative destruction."
LogLogic decided to take a defensive posture with this sweeping patent rather than go troll. Who knows what Sponster will do, or should do. Presumably it worked just as hard on its technology as Google: shouldn't it get paid?
More broadly, do you agree with IBM that business methods should be upheld, or with Google that they should be crushed? What would your company decide to do? Where do you stand?
When an open-source project is working optimally, can proprietary-software companies hope to compete?
Eat my dust, proprietary sloths
Greg Kroah-Hartman, a prominent Linux kernel developer and Novell fellow, suggests that the answer is no. Speaking to the How Software Is Built blog, Kroah-Hartman makes the case that the pace of Linux development leaves competition in the dust:
[The Linux kernel development team adds] 11,000 lines, remove[s] 5,500 lines, and modif[ies] 2,200 lines [of code] every single day.
People ask whether we can keep that up, and I have to tell you that every single year, I say there's no way we can go any faster than this. And then we do. We keep growing, and I don't see that slowing down at all anywhere.
I mean, the giant server guys love us, the embedded guys love us, and there are entire processor families that only run Linux, so they rely on us. The fact that we're out there everywhere in the world these days is actually pretty scary, from an engineering standpoint. And even at that rate of change, we maintain a stable kernel.
It's something that no one company can keep up with. It would actually be impossible at this point to create an operating system to compete against us. You can't sustain that rate of change on your own.
Microsoft might beg to differ, as would Apple, but the reality is that neither is updated as often or as extensively as Linux is, which supports a far broader hardware portfolio than any other operating system in existence.
Linux is pretty incredible. But it's not alone. Mozilla Firefox, Eclipse, and other projects produce best-in-class software at an almost frightening pace.
Can anyone compete with an open-source project at the top of its game?
The answer might well be no, as the top open-source projects are collaborative efforts between multiple companies that pool resources and expertise to drive development. And while it might seem reasonable that a single corporation could best open source's seeming "development by committee" approach, the reality is that well-managed open-source projects have none of the inertia that one might expect from a communal approach.
Quite the opposite.
Having said that, very few open-source projects actually meet the criteria that enable Linux's success. Most appeal to a too-narrow and too-small population of developers (i.e., single-company projects) to glean the benefits and scale of Linux-like development.
As such, the proprietary-software companies probably won't have to worry about competing with indomitable open-source competitors. Not most of the time, anyway.
For those that do, however, better stock up on the pumpkin pie. It may be the only thing to be grateful for this Thanksgiving season.
Greg Kroah-Hartman interview discovered via @glynmoody's ComputerWorld blog.
Life has never been better for enterprises and consumers. From free music to free software, the digital economy is an all-you-can-eat free-for-all.
That is, unless you're a vendor.
Traditional vendors are getting shellacked by the digital economy, spurring some, like Rupert Murdoch and his News Corp., to threaten to stick a finger in the dike and demand that users pay for content. (At Murdoch's Wall Street Journal, users already do pay to access some stories online.)
The problem with this approach is that not everyone is willing to follow suit. Why? Well, not everyone needs to. The BBC responded to Murdoch's plans by declaring it won't charge for content. It doesn't need to. U.K. taxpayers already fund it.
Different strokes for different folks. And different business models, too.
Google makes money by making it easy to discover others' content. So does Apple's iTunes. Google can afford to give away lots of free software (and even free hardware) to nudge people into its advertising model.
That's hugely disruptive.
In software, Microsoft doesn't like competing with free Linux. Microsoft spends a lot of money developing Windows. It must seem unfair to have to compete with the rest of the industry, which increasingly coalesces around Linux (or Android, or MySQL, or...).
But that's life in the open-source economy. Your core competence is always going to be someone else's throwaway complement, and ripe for open-source commoditization.
How would you like your software today?
(Credit: Domino's (Screenshot by Matt Asay))Could Domino's have bought an off-the-shelf system from Oracle, SAP, or another vendor and customized it? Probably. But then, this isn't how most IT gets built, anyway.
Most software is written by enterprises to use, not for sale, as Bruce Perens and others point out. So while we credit Microsoft, Oracle, and others as the backbone of the "software industry," the reality is that these companies are really a drop in the software bucket, with companies like Sony, Wal-Mart, and GE the true backbone of a much larger software ecosystem than the vendors comprise.
As open source matures, we're going to see these "software users" develop more software in-house, often building from open-source projects. Gartner calls out intriguing proof of this trend, but it's equally evident in anecdotes like this one, highlighting Virgin America's adoption of open source to reduce costs and improve innovation.
Virgin America is writing few checks to external vendors. That money is paying internal developers instead.
Digitization, then, may not be destroying the software market so much as reshaping it. In this new model, companies like Domino's will need more internal developers as they rely less on outside software vendors.
There will still be a need for companies like SAP, of course, as there are broad industry needs that a company or open-source foundation can satisfy. But for strategic IT projects, we're likely to see more open source plus internal development, and less packaged software purchases.
There was a time when Microsoft could skimp on Internet Explorer innovation. Having trounced its Netscape rival, Microsoft rested on its IE laurels for years, barely updating the browser.
In part this is due to rising competition. The open-source Mozilla Firefox browser, for example, now tops 24 percent market share and it, along with the Google Chrome browser, and Apple's Safari browser, regularly push well beyond IE's comparatively glacial development.
However, the biggest challenge to Microsoft's IE development inertia is Microsoft itself. As Mozilla's Asa Dotzler posits:
That [IE] team has some really strong people and they're not going to let another release go by where they're still seen as badly trailing. Not with Office moving to the Web. Not with Search and other web services becoming huge revenue opportunities.
Falling short with IE 9 would be the last straw for Web developers' little remaining faith in Microsoft and so they won't miss this opportunity.
The browser used to be a sideshow to Microsoft's Windows and Office cash cows. In the future, however, the browser is the gateway to the next generation of Microsoft dominance...or irrelevance.
As the world moves online, how well Microsoft delivers an innovative browser experience will largely determine the future of the company.
At the same time, how well Mozilla delivers a neutral, innovative Firefox is the industry's best defense against Microsoft and Google too tightly coupling their browsers to their Web services.
It's therefore time for Facebook, IBM, Oracle, Salesforce, and others with a vested interest in an open gateway to an open Web to put their development resources where their mouths are. Contribute to Firefox. Microsoft (and Google) has an interest in building a better browser, yes, but to ensure that browser runs others' services as well as Microsoft's, Microsoft must be kept honest.
Firefox is the best way to accomplish this.
Microsoft says "There's plenty of innovation in the pipeline" for Windows Mobile. For those of us who haven't considered a Windows-based phone since the iPAQ's decline, the real question is, "If Microsoft has an innovative Windows Mobile experience, why is the company keeping it such a secret?"
As Mark Sigal highlights, Google is approaching mobile with an open approach; Apple is winning with a closed approach; and Microsoft? Well, Microsoft seems to still think the phone is a PDA, with little innovation (closed or open) that would trouble a consumer to bother buying a Windows-powered mobile device.
Perhaps that is why Microsoft's smartphone market share has now dipped below 10 percent and shows no sign of resurrection.
This isn't about open source versus proprietary software. It's about focus, something that Microsoft seems not to have given mobile in a long, long time. Steve Ballmer was willing to spend roughly $45 billion on Yahoo to compete in search, but has managed only a $500 million acquisition of Danger to compete in mobile.
This despite advertising, computing, and (of course) communications moving to mobile devices. What has Microsoft been thinking? Or not thinking, as the case may be?
Yes, Microsoft is now partnering with Nokia to up its mobile game, but ZDNet's Larry Dignan is spot on calling this a "dog of a deal born from weakness," not strength.
What Microsoft needs is to innovate. Or at least to copy someone else's innovations. But it appears to be doing neither. This is inexcusable for a company with its resources and development talent. Microsoft is a great company, one that occasionally turns an industry on its head, as it has with SharePoint to the stodgy Enterprise Content Management market.
But Windows Mobile? It's lame.
This isn't a demand that Microsoft miraculously achieve mobile perfection. Heck, the iPhone has taught us that, great as it is, "good enough" is more than good enough (e.g., it comes with an underpowered camera...that everyone seems to use).
Microsoft is fond of talking about just how much it spends on research and development. But it's time to stop talking and start shipping. I've heard rumors of an exceptional mobile product on the way from Microsoft, but that's all I ever hear: something "in the cooker" that will "rock the world soon!"
As Morrissey used to croon for The Smiths, "How soon is now?"
Follow me on Twitter @mjasay.
As news broke this week that Microsoft and Nokia would be partnering to (brace yourself!) port Office to Nokia phones, followed by the equally momentous (or not) news that (sit down for this one!) Microsoft will replace Entourage with Outlook for Mac OS X, I couldn't help but agree with Larry Dignan's assessment of the Nokia deal:
Simply put, Nokia and Microsoft are the equivalent of two St. Bernards that are forced to run in 90 degree heat and high humidity. They're big. They're winded. And they could knock you over--if they could only catch you.
I happen to compete with Microsoft in one area that it is growing from strength to strength (SharePoint), but for everyone else, Microsoft is becoming a footnote in the history of computing.
Sure, it's still big. Yes, it still competes vigorously. But with the odd exception (Bing, perhaps), Microsoft just doesn't seem to have the energy to compete anymore. One indication of this is that most of the dirt that Roy Schestowitz digs up on Microsoft is from old court records. It's as if Microsoft struggles even to be nasty anymore.
So Microsoft dresses up tired press releases like the Outlook on Mac announcement "like they've been working in the lab for some time now and have had some technological breakthrough that allows them to bring Outlook to Max OS X," as ZDNet's Sam Diaz puts it. The breakthrough would be putting Outlook in the cloud, Google Apps-style. It would be creating products that wow in the same way that Apple's do.
But Microsoft doesn't wow in its traditional businesses. Surface, yes. Project Natal, yes. But there doesn't seem to be much creative gas left in the enterprise computing tank.
And perhaps that's the point. How much innovation can there be, really, in Office? Or the Windows operating system? These are old paradigms that don't need window dressing: they need the window shattered and shifted to completely new methodologies of computing, similar to what Google (Web) and Apple (entertainment) are doing.
The desktop is a tired metaphor. This is why Google's Chrome OS, while not necessarily manna from heaven, is a welcome change, and just the sort of thing that Microsoft should be investing in, but is structurally, financially incapable of promoting in the same way and to the same degree that Google does. Because Microsoft dies if it innovates its way out of its Office and Windows businesses too quickly.
Google may be resorting to some of Microsoft's most frustrating practices, using its strong products to prop up weak siblings, but at least those siblings promise a different mode of computing.
Apple offers a premium "desktop" experience that makes old feel new. Google replaces the "desktop" with the Web. Open source commoditizes and then innovates enterprise IT, as Accenture's Alex Wied recently wrote. What does this leave Microsoft?
It leaves Microsoft desperately needing to refresh its approach to the market. Immediately. It can live off its billions for a long, long time, but it risks becoming like CA: ever-present but not very relevant.
Follow me on Twitter @mjasay.
Microsoft's Internet Explorer's market share is absolutely falling. The question is, by how much?
I've reported before that Internet Explorer (IE) drops 5 percent market share points each year, while Mozilla Firefox gains 5 percentage points per year. But what is becoming increasingly clear is that IE's market share may be dropping more precipitously than previously reported, falling to 60 percent share in June 2009 instead of the 68 percent share expected.
Or is it?
The answer may depend on the source of the information, and the reliability of its data. Mozilla's Asa Dotzler uses StatCounter data to discern a 60 percent share for IE but, as ZDNet's Larry Dignan points out, this data may not hold up.
For Microsoft's sake, it had better hope not, as this chart compiled by Dotzler shows:
Internet Explorer market share falling faster than reported?
(Credit: Asa Dotzler (Data from StatCounter))That's not the sort of chart with which Microsoft CEO Steve Ballmer likes to sweeten his coffee in the morning.
Net Applications, the other big source of browser market share data, still hasn't posted its results for June 2009, noting that it is trying to make sense of "some significant variations in browser and operating system statistics."
Given that market share data isn't a one-month phenomenon, it's not necessarily helpful to celebrate or fret over the June data, especially since much of the market share share data is going to get skewed in the summer months, anyway. For example, given Firefox's disproportionately large following in Europe, coupled with Europe's disproportionately long holiday season in the summer, I'd expect to see Firefox drop some percentage points against IE through August, only to rebound strongly in September.
Regardless of short-term variations, one thing seems clear: Firefox is gaining on IE. Microsoft spent too long enjoying its browser dominance, and not enough time innovating. It's starting to pump R&D dollars into IE again, but it's not yet clear whether its monolithic approach to browser development can compete in the long term with Mozilla's community-developed Firefox.
Microsoft needs to compete again, or risks seeing even StatCounter's data understate just how quickly it's falling.
Mozilla, for its part, faces a host of new challenges. It can't afford to waste much time with back slaps and high-fives. The browser has become the center of computing. Microsoft isn't going to give up easily, nor will Google or Apple.
Game on.
Follow me on Twitter @mjasay.
Even as CIOs accelerate adoption of open source in an effort to trim costs and improve innovation, the world's top system integrators (SIs) have largely played it safe on the sidelines. Accenture, given its close partnership with Microsoft, has perhaps been one of the most conservative SIs when it comes to open source.
Or so it has appeared. Despite a partnership with SpringSource, an open-source infrastructure leader, Accenture's open-source activities have largely gone unnoticed. Even Accenture's Innovation Center for Open Source, a collaboration with Red Hat and other open-source vendors, was more whispered about than promoted.
I caught up with Alex Wied, senior manager at Accenture and head of its Innovation Center for Open Source, and Tony Roby, partner in Accenture's Global Architecture and Core Technologies group, to find out what, exactly, Accenture has been doing with open source, and how the global consulting firm expects to use open source going forward. They collaborated on the answers to my questions below.
Accenture is not the first company that comes to mind when one thinks of open source. After all, you have a joint venture with Microsoft and have been pretty quiet on open source. Is open source alive and well at Accenture? If so, what are the areas of focus for Accenture?
I'm curious to find out why that is the case! Accenture has strong relationships with many leading technology companies--that is what our clients expect.
Open source is growing within both Accenture and our client base. We continue to be substantial users of open source, particularly in custom Java development, and our focus is expanding beyond this space to cover the gamut of open source portals, content management, business intelligence and data management. We also continue to contribute to open-source projects where we expect the results to benefit our clients.
Is open source client-led or Accenture-led? Meaning, are your customers asking for it or are you embracing open-source solutions for your own reasons? If so, what are those reasons? If clients are asking for it, what reasons do they cite?
It's a mixture. There is a tremendous amount of education still to be done regarding open source. We have clients who still have policies not to use open source at all; others who want to use open source wherever possible. But the majority is in between: they are open to using whatever makes most sense from a technical and commercial perspective.
What is clear is that the current economy is driving many who were ambivalent about open source to explore its potential more closely. Regardless of the economic environment, Accenture is a strong open-source advocate and will continue to work with our clients to help them achieve business benefits with it.
Is "vendor lock-in" a serious concern for your clients? If they had to choose between zero cost and 100 percent lock-in or a hefty cost and no lock-in, which would they choose? Or is that even a fair question?
Yes and no. No one wants to be locked in, particularly if that lock in results in ever-increasing expenditure that is disconnected from the value being realized.
But our clients in general look for a balance. "One throat to choke" is high up in the requirements for making major technology investments and is often prioritized over "lock-in." Also, in the context of very large projects, the cost of the software compared to everything else is frequently a small part of the equation.
Nevertheless, we are seeing a noticeable increase in the use of open source, driven largely by the "free" aspect. Few are fooled by the notion of open source being free (as in no cost): lower cost, flexibility and the ability to be supported at modest cost are key drivers of the increased uptake.
Are there particular open-source projects that are of interest to you/Accenture? Which ones, and why?
We do a lot of work with the Spring Framework, so I would say that has historically had the bulk of our interest. That said, we have people active in a number of community projects and we are making increasing use of Alfresco, Liferay, and Talend, to name a few in the technology area.
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Watching the Google Wave demo last week and reading Tim O'Reilly's enthusiastic review, it struck me how amazingly cool Wave promises to be...and just how paltry most enterprise software remains.
Sure, you think: it's easy for Google to innovate. It has thousands of engineers!
Maybe. But I don't remember Microsoft coming up with Wave, and it has even more engineers. Neither did IBM, Oracle, SAP, etc.
Google did, and it started Wave with a small core team of two brothers, a core team that appears to have done much of the work gestating Wave to its currently demo-able state.
There's a very good reason that Google innovated Wave, and not, for example, IBM. Google has no incumbent enterprise products to which it must pay obeisance. Google doesn't even have a built-in background with the desktop that moors its vision of what is possible. Google, in other words, is creating an "innovator's dilemma" for the incumbent enterprise software vendors, entrapped by their own successful products and the need to appease employees and existing customers.
Google, in effect, starts from a tabula rasa, one heavily influenced by the Web and all that the Web can do. And so Google Wave is born, while Microsoft continues to churn out tired retreads of Exchange/Outlook, IBM gives us Lotus version 10,001, and Oracle works furiously to tie its collaboration products into its existing suite of heavy, "enterprise" software.
More depressingly, the start-up world of enterprise-software companies largely tries to mimic these old paradigms of what enterprise software means. Some do very well, but few break the mold and start again on what computing means, as Google has done with Wave.
The best the incumbents can hope for is that customers will buy heavily into Wave, and will come to expect Wave-like innovation from their existing vendors. This will likely require external acquisitions rather than internal development, and will also mean that executive management at the big software vendors don't allow internal politics to squeeze the life out of the products of incoming acquisitions.
In sum, Google Wave is much bigger than Google. It's a chance to show the enterprise software industry how to innovate again. (Hint: some of the best Wave innovation is yet to come, as significant parts of Wave will be released as open-source code to encourage add-ons, extensions, and other derivative works.)
Follow me on Twitter @mjasay.
