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.
The infamous U.S. District Court for the Eastern District of Texas has slapped Microsoft with a permanent injunction that "prohibits Microsoft from selling or importing to the United States any Microsoft Word products that have the capability of opening .XML, .DOCX or DOCM files (XML files) containing custom XML," according to CNET. This likely won't stop Microsoft Office from shipping, as CNET's Ina Fried writes, but the bigger question may be whether the lawsuit will reach beyond Redmond to also threaten the Open Document Format (ODF).
The lawsuit doesn't affect all of Microsoft Office, but only Word, and only the "Custom XML" functionality, as ZDNet's Mary Jo Foley highlights. Even so, you can almost hear the cries of jubilation from the open-source community, happy to see Microsoft get a taste of its own patent saber-rattling.
However, Gartner analyst Brian Prentice raises a troubling question: does the patent also affect the ODF standard?
The more I read through the patent claim the less confident I was with my initial reaction. In fact, I think this one might actually have some legs. Keep in mind is that this claim was filed back in 1994. The claim considers the existing state of the art at that time....
One thing seems clear to me - this is not a typical rubbish software patent that earns its filer a 20 year monopoly on the dead obvious. Fifteen years ago this would seem to me to have been an innovative idea....
But, if the validity of the patent is upheld then the immediate question is whether this will also impact ODF. If so, then this turns out to be a significantly more important issue and one which will crystallize the fury of the anti-patentistas. No longer will this be the source of some Schadenfreude at Microsoft's expense. This will be seen as yet another attack on open standards and open software.
It's an interesting question, one to which I don't know the answer, not having reviewed the patent in any detailed form. But it's at least a poignant reminder that the collateral damage in any patent infringement lawsuit could well extend beyond the initial target, in this case hitting the open-source world even as Microsoft is smacked around.
The current version of ODF doesn't include Custom XML-type code, as Redmond Magazine writes, but the next version will. Could this patent suit make momentary friends of Microsoft and the open-source community?
Anyone that can offer color commentary on the patent and ODF in particular?
Update: See Sean Michael Kerner's post, suggesting that two particulars (i4i is not a patent troll and i4i and Microsoft had a business relationship) suggest that the open-source world has little to fear from this suit.
Follow me on Twitter @mjasay.
Facebook on Tuesday announced that it has made the Facebook Markup Language extensible, enabling developers outside of Facebook to create custom tags.
For example, the iLike application developers have provided an iLike tag that shows favorite songs and playlists.
Initially, FBML included only tags that Facebook created. Today, we're excited to announce a new feature called custom tags. With custom tags, any developer can create new FBML tags. Developers can use these tags in their own applications, or they can share their custom tags with the entire Facebook developer community as prebuilt FBML components.
This is a great step forward, but it's also a highly limited one, as ReadWriteWeb points out. To be highly reusable and, hence, more useful, Facebook should consider exposing its markup code to developers so it can be "more easily altered for reuse in different ways by different apps."
Exactly. This is one of the cardinal virtues of open source: code reuse. By allowing development of custom tags, Facebook has taken a step toward openness, but not the one that developers require to be efficient with their code.
Mike Vernal, a member of Facebook's Platform Engineering Team, tells Web 2.0 Journal that "our goal with Platform has been to allow applications anywhere to become more social by leveraging the power of Facebook," but this becomes doubly difficult if the platform is closed.
Sure, some companies can pull off a widely used, mostly closed platform. Microsoft certainly has. But in the age of the Internet, it's much easier to accomplish platform adoption through transparency and open code, making it harder to justify keeping the Facebook platform closed.
Over the weekend two new open-source startups caught my eye (and my inbox): OrecX and Transverse. The first is notable for its demonstration that open source is ready for niche applications. The second? Well, the second is notable because after reading through its website I still have no idea what it does.
OrecX is a Chicago-based company that has created the first open-source call recording software company, targeting small businesses. According to the company, "Voice recording is high in demand to create an element of professionalism and quality customer service but because of its cost, it's been out of reach for many businesses."
Fair enough. So, OrecX aims to use open source to lower the cost of tailored voice recording solutions, which are normally priced at $1,000 to $4,000. I doubt many companies will actually customize OrecX's solution, preferring instead to tap into the cost savings, but that is one valid way to leverage open-source software.
Another way is that which Transverse, an Austin-based company, has chosen. Transverse is focused on expanding revenue opportunities for telecom providers with its Customer Asset Management solution and blee(p) platform
Hmm...what does that mean? From the company's website:
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(Credit:
Matt Asay)
Next week I'm headed to Argentina to work and to ski. (Mark Shuttleworth will be joining me so I'll post pictures once I have them.) In preparation, yesterday morning (6:30 AM, to be precise) I headed over to the Sport Loft to have my Tecnica Dragon boots custom fitted.
Sport Loft does an amazing job with boots. Having gone there, I'll never go anywhere else. It wasn't cheap, but it was worth it. As Jeremy, who spent two hours fitting my boots, and I talked, he said something that resonated with me on a number of different levels, not the least of which being software:
In the US, everything is mass produced. We understand volume businesses. But in Europe, they really focus on a customized product.
He was talking about how most people never get their boots custom-fitted in the US, but that it's quite common in Europe. As open-source software adoption in Europe compared to the US shows, ski boots and software may have a lot in common.
Open source adoption in the US is quite strong, but it is Europe that leads the way, as Forrester recently noted. Europe recognized the economic benefits of open source well before the US did, and Europeans (or those of recent European origin) are responsible for many of the industry's most important open-source projects.
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(Credit:
Novell)
Invitrogen is a billion-dollar supplier to pharmaceutical and biotechnology companies, with 4,700 employees worldwide and a history of supplying many of the world's leading laboratories in groundbreaking research like the discovery of the AIDS virus.
To help promote its innovative work, Invitrogen announced this week that it is standardizing on Novell's SUSEŽ Linux Enterprise for its servers. From the press release:
SUSE Linux Enterprise will allow Invitrogen to more easily manage its complex IT environment, consisting of a mix of different platforms and applications including HP servers, Oracle databases and Web servers, as well as PeopleSoft ERP applications comprised of e-commerce, human resources, payroll and customer relationship management. SUSE Linux Enterprise gives the company the flexibility to run its applications on any platform and better utilize hardware through cost-effective virtualization.
Indeed, the press release calls out Invitrogen's adoption of Novell's new PlateSpin technology, which helps companies manage data center virtualization. I'd be interested to know if Invitrogen was initially interested in PlateSpin, and became interested in SUSE by extension, or the other way around. If anyone from Novell cares to comment below, it would be intriguing to know if PlateSpin is helping to drive SUSE sales, or whether it's facilitating existing interest (i.e, a deal closer rather than a deal opener).
Regardless, it's an impressive win and a further demonstration that Novell is finding its Linux feet without needing the Microsoft crutch. That's good news for all.
Update: Charlotte Betterley from Novell PR responded to my question withthe following:
Invitrogen had already been using PlateSpin and the relationship with Novell may have been a factor in them selecting SUSE Linux Enterprise. However, they primarily chose SUSE Linux Enterprise because of the merits of the solution, as it helped them to virtualize their environment, reduce operating system costs and simplify IT management.
John Powell, CEO of Alfresco, has declared that the open-source industry is worth $60 billion, not necessarily because of its vendors' collective revenue, but rather because of the value of the cost savings for customers.
That's the right way to think about software: From the customer's perspective.
Open source is now the world's largest software industry....You measure it in the savings people are making in licence fees....Licence fees don't add any value to the product and are purely a transfer of wealth from consumers to software vendors.
Subscription-based business models are ideal for customers because they focus the vendor on delivering constant, consistent value. License-based businesses? Not so much.
As a case in point, Alfresco (Disclosure: I work for Alfresco) just closed a deal with a large US federal agency. The project is worth over $50 million, with Alfresco at the core. But if all of that $50 million were going into my pocket it would be a success for Alfresco and a failure for the customer. Why?
... Read moreWith all the talk about interoperability rumbling around, I thought a quick sanity check would be in order. Vendors are fond of talking about interoperability, but myopia-challenged as we are, we tend to forget that most software is not developed by vendors. It's developed by so-called "customers."
Bravo to Microsoft for making much of its interoperability with Novell! Unfortunately, this hardly resolves even a rounding error's worth of the industry's need to interoperate with enterprise-developed software.
For that, open source is a critical requirement. Open source, unencumbered by silly patents, closed APIs, and such. Open source because, quite frankly, the enterprise is often not going to want to be bothered by or with a vendor during the integration process. A real-life case study may help to convince those incapable of seeing past their proprietary noses.
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(Credit:
NBC)
In a major coup for Linux and for Novell, Office Depot has decided to consolidate its wide-ranging server architecture on Novell's SUSE Linux Enterprise Server 10. Office Depot is the second-largest office supplies retailer in the US (right behind Dunder Mifflin).
While this won't make Dwight happy (word on the street is that he's taken out a contract on Justin Steinman and is currently stalking Novell's Waltham headquarters looking for "weak defenses"), it's a solid demonstration of Linux's continued strength.
Well done, Novell. This is the kind of news I look forward to hearing from you. Whatever Dwight may think.
I read with interest about Lowes (DIY/home improvement store in the US) and its attempts to silence a critical customer with a trademark infringement suit. Give me a break. Yes, Lowes (and everyone else) should protect its trademarks, but when you look into the facts of the case, it's fairly clear that trademarks aren't at issue.
Shoddy customer service is. Perhaps Lowes should care more about what this customer is saying rather than how the customer is saying it. I suspect doing the first item will take care of the second.
From the article:
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