Ray continues -- How has the formula changed?

90s formula -- ROI = I x M / C

invention times momentum divided by the cost

NOW -- ROI - P(I) x U / TCO

Proof of innovation times useability divided by total cost of ownership

Software industry at the start of this decade is a $200 billion industry, 70% in the US, representing 1% of the US GDP, and employing 325,000 people

Today, (2004), Open Source Software and Web Services changes the marketplace. Apache is 2x Microsoft. Microsoft is only 3x Linux. India and China are becoming enormous. And the enterprise is adopting OSS

Here is what enterprise CIOs are saying about Open Source:

Positives -- Lower TCO, Equivalent Functionality, Equivalent Quality, Bi-directional scalability, Faster bug response fixes

Some challenges -- Informal support, velocity of change, no roadmaps, functional gaps, licensing caveats, ISV endorsements

What does the software industry look like in 2010?

OSS destruction > Growth -- the industry will be the SAME SIZE at the end of the decade because Open Source will destroy as much revenue growth as occurs in other parts of the industry

US Share < 60% -- more and more is going to move off shore

<1% of US GDP -- GDP will grow faster than revenue in the software industry

< 325,000 people -- the US is not supplying the engineers for this industry

Ray continues -- what the software industry needs to do

More predictability -- not necessarily perfect software, but better predictability about when software will work

Ubiquitous Access -- this is a worldwide marketplace

Continuous Updates

Service-Oriendted Architecture (network/federated data)

Flawless Service

Ray Continued -- Compare to the automobile industry...

Ray's comments

Progress on auto industry:

• Replace Horse
  
• Build for masses
  
• Make better, faster, cheaper
  
• Mass customization
  
• Differentiate on service

The software industry has done this --

• we replace Labor
  
• PCs were built for the masses
  
• progress on Moore's Law drove better, faster, cheaper
  
• the Internet drove mass customization
  
• Now it is about service

Ray Continued -- "New" Enterprise

Ray's comments:

The Software industry's technological progress is our vulnerability

Innovation-- emphasis on "how" vs. "what"

Scarcity -- focus on management vs. engineering

Entrepreneurs -- focus on Renovation vs. Invention

Investment -- "OP Ex." vs. "Cap. Ex."

Technology -- "Service-centric" vs. "Component-Centric"

Ray continues -- What does the next decade look like?

Constraints:

Volatility -- we can resolve for some time the assymetric threats in a conclusive manner. It was much easier to deal with the Soviet Union in the cold war. Now how do we operate? How do we plan our business and invest in the stock markets with the invisible threats?

Transparency -- if you are the CEO of a public company your shareholders should thank you every day -- why would anyone want this job? You run your company in a fish bowl and get no appreciation for this.

Low Growth -- focus on profitability instead of growth

Enablers:

Knoweldge Work Globalization -- it doesn't matter what your politics are, you have to decide where you stand on globalization of work and free trade economied. I just came back from India and I learned a whole lot about what is going on over there. India is not a black box that you shove work into. There is a lot of innovation goin on there and it is driven by an outstanding educational system over there. Either we use this advantage or someone else will.

Network Based Service Providers -- ASPs are NOT a flawed business model created by the Internet bubble. They are a capital intensive investment because you have to invest a lot to get the service level up by the time you have a first customer. End users are going to, more and more, say "I get it now" Instead of talking to my commercial software vendor and putting software on the shelf I can buy what I use.

Rationalize IT Infrastructure -- there is a modern IT infrastructure sitting out there now. CEOs say all that money I spent in the 90s I didn't get a return on so there is a negative attitude about IT. But what you have to convince them of is that they have to invest more now -- because the next set of technologies will leverage the infrastructure that was installed in the 90s and really deliver on that investment

Portable Computing -- Mobility is finally here -- we don't even need laptops as mobile devices, anywhere, any place, can provide communications and computing in a handheld platform.

Ray continues -- A New Economy?

Ray's comments:

A few years ago everyone was saying that the aggressive investment in IT technology was supposed to create an unending improvement in worker productivity that would allow economies to grow at a faster rate than at any other time in history.

Now people are asking, does IT matter? Quotes Nick Carr in the Harvard Business Review as saying "no"

The mistake -- it is not the IT that matters, it is the USE of IT that matters. How do you change the prospects of leadership in your industry because of the IT possibilities?

Nineties Optimism makes today look like a recession but if you look at the past 30 years, today looks like normalcy.

Based on a perspective from the bubble, it looks like we crashed the "new economy" -- wars, terrorism, market crash, job loss... but I contend that the new economy survived all of this.

Look at Amazon, EBay, knowledge workers at work anywhere in the world. Yes we destroyed it temporarily but it is being recreated.

I contend that by the end of this decade most of the predictions made during the Internet bubble will have come true

Ray continues... 2004: Things Are Looking Up, but...

Ray's comments:

The economy is recovering... so why the paranoia in the software industry?

This stuff is still not easy to sell, the buying activity is still back-end loaded at the end of the quarter, prices are at an all time low -- you are plagued with the thought "how long can I manage my cash flow burn rate to get out of the recession or is this the shape of things to come -- it isn't getting better? What is the next big thing to get us out of this rut?"

We all hope that this big new thing is going to solve all of our problems. But the wait for the next big thing is probably a decade away.

Examples of "big things" -- Transistor, Microprocessor, operating system, personal computer, Internet

Is open source a "big thing"? No, it is a shift in the existing set of paradigms that will effect incremental change in the way the computer industry operates.

Ray Lane's introduction...

Ray's comments:

This industry is at a watershed.

A sum up of all of our successes and problems.

The computer industry has become one of the largest in the world -- 3rd or 4th in the world

Yet we still operate with a lot of proprietary baggage that forces the end user to integrate and make it work

One of the significant events that is not often recognized is Andy Grove's horizontal stack chart which was designed to attack IBM's dominance of the computing marketplace.

This chart was one of the first attacks on the set of assumptions about proprietary advantage - that proprietary products will work better, have a lower cost of ownership, and give the company's that make them lasting profitability.

This is the subject that we will address today

Open Source Business Conference

I'll be blogging the conference today here in San Francisco -- the Open Source Business Conference or just OSBC...

This morning's keynote is by Raymond Lane, former president of Oracle and currently General Partner at venture fund Kleiner Perkins Caufield & Byers. His speech is entitled The Macro-Economic Impact of Open Source Software and should start momentarily...

Here is the abstract:

The bubble and subsequent crash in Information Technology will be recorded in history as a normal growth phase all industries inevitably go through. Our industry is maturing, moving from the "installation" phase to the "deployment" phase where mass adoption occurs. The next ten years will be the "golden age" of technology where the focus will be on applications and services, rather than the technology differentiators themselves. Profits will be attained by those that drive low prices and achieve volume adoption, rather than pure specialization. We will see widespread adoption of standards. This keynote will cover the economic impact of Open Source Software (OSS) and its benefits of no vendor lock-ins, significant cost savings, shift of IT spend from infrastructure to applications, and open standards based architecture. We will also discuss about where OSS has impacted today, where it will reach in the next 5 years, steps to accelerate its adoption and to exploit it to the fullest extent.

By the way, kudos to the show organizers. It is great to be able to get power connections and wireless Internet access from the main conference ballroom and thus to be able to blog the conference in realtime. It would be nice if there were more power outlets though... despite all attendees having laptops we live in perpetual fear of running out of juice so whenever possible, we plug in... thus the hall is filled early with people strategically sitting at the edges of the room so that they can reach the wall plugs.

Anonymous office buildings...

It used to be that companies would fight for the opportunity to have their names on the outside of office buildings -- every little bit of advertising helps, the reasoning would go.

I was just on the phone with a friend at a large company (which shall go nameless...) who told me why this practice may be waning -- due to international terrorism...

Why advertise your presence if this could make you a target for terrorism? The friend cited a number of examples where his company and others had been removing signs from properties they inhabit in order to be (or at least appear) proactive in protecting their employees.

Will the future bring vast anonymous office parks where it is hard to tell who the tenants are in any of the buildings?

Open Source Capitalism

Very interesting conference this week in San Francisco, the Open Source Business Conference or OSBC is being held March 16-17 at the Westin St. Francis in San Francisco, CA.

A great set of speakers: Clayton Christensen, Ray Lane, Larry Lessig, Chris Stone, Tim O'Reilly, Mike Evans, Bud Tribble...

Their self description:

Open Source Software (OSS) is rapidly coming to dominate certain areas of IT. Despite this advance, few beyond hardware vendors have developed solid models for leveraging OSS to boost margins or revenues. This inability to monetize OSS is perhaps its greatest inhibitor to thriving beyond the commodity server.

The Open Source Business Conference (OSBC) is the first forum to bring together established technology vendors, startups, open source community members and enterprise IT users/customers to jointly explore new oppotunities for OSS deployment and how to capitalize on them.

Who should attend? Senior technology executives (both vendors and users of OSS); venture capitalists; in-house and outside counsel for IT vendors or buyers; analysts; strategy consultants; and members of the media.

Databases are the next to fall to open source...

Anyone wondering why Oracle's Larry Ellison is spending so much time pursuing an acquisition of Peoplesoft need look no further than open source database company mySQL and today's news (care of CNET) that mySQL will soon offer database clustering technology previously only found in high end commercial databases (like Oracle). Clustering is one of the few remaining reasons to buy a commercial database product.

Open source is an unstoppable market phenomenon. We will see open source projects that provide as good or better software to commercial competitors in every software category over time. Infrastructure elements such as operating systems (and now databases) are the first because the characteristics of these products are broadly understood in the marketplace and technical innovation in these categories tends to be incremental and not transformative.

Larry is right to try to move Oracle away from its dependence upon that core database revenue but wrong in trying to replace one software revenue stream with another. IBM is the only one of the tech giants that seems to clearly understand the future -- software is something you give away in order to lock customers into your other revenue streams.

Maybe Oracle should be trying to buy Accenture...

VoIP and the Telecom Giants

I happened to sit next to an AT&T exec on the plane last night. He commented that "...two years ago I would tell customers that while VoIP is coming, it is still a long way off..." And what do you tell them now, I asked? "VoIP came."

It was interesting to speak with him about their VoIP experiments though. AT&T is still spending a lot of time worrying about priority packet routing and trying to focus on the highest quality possible on the voice connection. I observed that 8.5 million people find Skype acceptable (he had never heard of Skype) and that the wireless providers have trained us all to expect a little fuzziness on our voice connections... so won't businesses choose "good enough?"

He admitted that this scenario worried him...

Interesting VoIP statistics

These statistics were provided by Federal Communications Commission Chairman Michael Powell in a speech that he gave today at the National Association of Regulatory Commissioners. You can download the entire speech from here.

• 2 percent of US firms currently use some form of IP telephony, and this number is expected to grow to 19 percent by 2007
  
• 73 percent of wire line service providers and 31 percent of wireless operators either have implemented, or are testing packet telephony in their networks
  
• 50% of Internet households are interested in Internet Voice as a way of reducing monthly long-distance charges
  
• Starbucks offers its customers 19,000 ways to have coffee (ok, not about VoIP but interesting nonetheless...)
  
• The US is 11th in the world in broadband development
  

More on Skype

Great post on Skype from Lance Tracey. I love the quote from Federal Communications Commission Chairman Michael Powell:

"I knew it was over when I downloaded Skype. When the inventors of KaZaA are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it’s free—it’s over. The world will change now inevitably.”

Still don't know what Skype is all about? Find out....

Skype

North American Bandwidth News has some really interesting comments on Skype. If you aren't familiar with Skype you should be. As you'll read in NA Bandwidth News -- "Skype is a large bulldozer for destroying and rebuilding the telecoms industrial complex..."

The perfect fractalized enterprise

I encountered a terrific example of a fractalized enterprise a few days ago. A friend has started a business that takes professional photos of children's sports events and then sells prints or other items (coffee mugs, mouse pads...) back to the parents. It combines his interest in photography with his daughter's passion for sports and parents seem to love the opportunity to purchase professional quality photos of their children.

What is really amazing to me about this business is how Bob uses technology to create a business that appears significantly bigger than the one person shop he really is. The Internet provides a mechanism for Bob to outsource every part of his business that isn't core. Here is the formula:

Web site hosting company: YahooDomains
E-Commerce Storefront: PhotoReflect (specializes in photography e-commerce)
3-4 photo processors, all available on the web (some are better at posters and prints, some are better at mugs and mouse pads...)
Accounting and CRM: Intuit
Receptionist and personal assistant: CallTrex (my own company)

Add in a few friends who enjoy being weekend photographers and are willing to work for $10 an hour and a local camera shop that rents high-end photography equipment (REALLY big lenses for those close up shots from across the field) and you have a complete business set up for almost nothing.

This is the kind of entreprenuerial engine that the Internet can enable. Bob focuses on his "Core" -- marketing and sales -- and he uses technology to martial a set of organizational fractals that come together to serve his "Context" and present a unified face to the end customer.

An interesting idea -- what about creating a set of "recipes" for people that would like to start their own businesses -- essentially a list of the organizational fractals needed to construct a given type of business?

Greenspan on Intellectual Property Rights

As usual, Federal Reserve Board Chairman Alan Greenspan is eloquent, his position is well thought out, and his timeliness is perfect. But in this instance Greenspan is commenting on Intellectual Property, not interest rates.

At the Stanford Institute for Economic Policy this past Friday, Greenspan delivered an address on the importance of protecting Intellectual Property Rights. The full text of his speech can be found here.

He does not offer a specific remedy (as he did in the case of Social Security earlier in the week) but instead sensibly asks a set of questions:

If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system--developed for a world in which physical assets predominated--for an economy in which value increasingly is embodied in ideas rather than tangible capital?

One thing that both sides in this debate are likely to agree on (at least privately) -- currently Congress, with the Digital Millenium Act for example, is primarily taking into account the interests of lobbyists, and not thoughtfully addressing the economic issues that Mr. Greenspan articulated. Hopefully his speech will spark a broader debate on these issues.

Revolutionize the PTO

Just about anyone who has had to deal with the US Patent & Trademark Office will readily agree that a major overhaul of this part of our government is needed, preferably as soon as possible. A significant portion of our economy is dependent on the principals of intellectual property protection and the PTO owns all of the passageways into these strange lands. With a wave of a pen fortunes are made and lost when a patent office action grants an idea the status of property, or takes it away.

The debate continues to rage (not least within this blog) regarding the merits of different types of patents, and the merits in particular of software patents. But both sides of this argument can probably see that the PTO as currently configured is in no condition to render intelligent judgements on a consistent basis as to the patentability of various software innovations.

At dinner with a friend last night, I heard the (not uncommon) story of receiving an official PTO office action memorandum, rejecting all claims for a filed patent due to the existence of "prior art" -- which is to say, someone else patented the idea first. However, upon review of the cited prior patent, the only conclusion a reasonably trained computer scientist could come to was that the rejected patent application and the prior patent both used the word "meta data" a few too many times and otherwise were not at all similar.

A Revolutionary Suggestion
In thinking about how he had arrived at this state, and whether the Patent office personnel were merely using a word search on prior patents to reject claims, my friend made an interesting observation: the business community as a whole has a vested interest in blocking the issuance of bad patents (that is, patents for ideas that are not, in fact, innovative), the business community has the resources and the knowledge to properly investigate a patent claim and uncover prior art -- why not have an open review process for patent claims?

This would radically change the role of the patent office from one of research to one of adjudication. Patent officers would have to determine whether or not the counter claims that competing businesses raise against a patent's issuance were accurate. But this role of adjudication would at least remove the patent official from the now almost impossible job of coming up with the potential prior art themselves.

The Fractalized Enterprise

Paul Kapustka notes in his most recent networking pipeline blog that small business is where we should be looking for growth in IT purchasing. As Paul points out, it is much more difficult for journalists and market analysts to pay attention to the behavior of small businesses -- but we all need to become better at understanding small business as a key underlying economic trend.

If Geoffrey Moore is right, the Internet is accelerating a movement toward what you could call the Fractalized Enterprise. Geoffrey explains his "core vs. context" concept as follows:

Activities that support ... differentiation are core to our businesses. Everything else we do, by contrast, is context -- that is, work that has to get done but cannot improve our valuation.

The interesting thing about the Internet is that it creates the opportunity to outsource context seamlessly. Every business can appear to be a big business, can have endless resources to handle customer support, sales, product development, marketing -- all by weaving together a team of disparate entities (organizational fractals) that cooperate together to create an enterprise.

That is the future -- small businesses, often sole proprietors, working together, mediated by IT, creating, marketing, distrubuting the brands, products, and ideas that we all consume. Much more powerful than corporations.

Of course our technology, government regulations, and personal dispositions must all continue to evolve for this to fully fractalize.

I love this product...

We purchased the squeezebox from Slim Devices and absolutely love it! This is exactly the kind of innovative product that WiFi is screaming for...

Within minutes I was able to connect this tiny box to my stereo and to my home wireless network. The box finds a computer on my network running server software provided by Slim Devices and I am immediately able to play any MP3 in my collection, over my home network and on the stereo in the living room.

Oh, and any device connected to the network with a web browser can control the jukebox...

Who wants a computer in the living room? Who needs extra wires around the stereo? One little box, using WiFi to connect my stereo to my home network and I am done. Can it get better than this?

Why hasn't anyone produced a WiFi baby monitor? WiFi walkie talkies for kids? And I am not talking about analog over unregulated bandwidth -- I am talking VoIP over WiFi. The technology is all there... Let me know if you have heard of other innovative products using WiFi.

The VoIP debate on interconnecting

A recent C Net Article reports on the FCC judgement that "pure VoIP" is no different from email or any other IP based application and thus should not be subject to federal regulation regarding telephone services.

However the FCC has left open the question of what happens when VoIP services interface with the PSTN (public switched telephone network). Perhaps then they should be regulated?

This issue is a red herring. Anyone who connects a VoIP service to the PSTN pays an interconnect charge -- in California at least $10 a month for a single phone line or a lot more for a T1 PRI bringing 23 lines in on one circuit. So the regulation is available at the interchange point... how do you make the argument that the regulation should then extend to other parts of the VoIP network if a "pure VoIP" network has no such regulation?

And how do you keep the "pure VoIP" networks from interconnecting to the blended networks?

This is a meager attempt by the phone companies to at least create some FUD for operators like Vonage while they line up legal arguments and lobbying dollars to slow down VoIP, which, left unchecked, will destroy their current business models.

Amazon Honor System

I really enjoy writing this blog, and I believe there are folks out there that enjoy reading... So I have decided to try out the "Amazon Honor System" -- a way of making voluntary donations to web publishers you'd like to support. My commitment to you is that the more donations I receive, the more time I will spend on my blog - bringing you ideas, information, analysis, and ponderings on life, technology and philosophy.

I'd love your comments -- positive or negative -- on this voluntary support system, since I am just trying it out for the first time.

The economics of VoIP

I spoke with two companies last week that are in the long distance VoIP telephony business and it made me start thinking about the economics of VoIP telephony. My conclusion -- it really doesn't take that much money or work! We should all build our own long distance companies.

Here is some back of the envelope economics:

Variable Costs

There are three kinds of variable costs -- bandwidth, co-location facilities, and the cost of the T1 PRI from the phone company, allowing you to interconnect with the PSTN (public switched telephone network -- the analog stuff).

Bandwidth will cost you about .0001 cents per minute.

Co-location space works out to be about .00004 a minute

Finally the monthly fee for the local T1/PRI is about .00035 per minute

Total cost at maximum efficiency for your VoIP telephone network -- approximately .0005 per minute

No one can reach maximum efficiency -- but if you assume a bell curve for utilization against the capacity you need to build the variable cost is still less than .001 per minute of talk time. There is a minimum scale you have to be at to get to this rate... about 7 million minutes a month.

Now that is a lot of time on the phone, and one person isn't going to talk that much. A good comparison point -- common nationwide long distance deals are available for about $0.05 a minute.

To get to that price you'd need to use your VoIP circuit at least 70,000 minutes a month... 2333 per day... 97 minutes per hour... If you think about the average customer as having 2 hours of long distance calls a week, this is less than 150 customers for your phone service... of course they all have to want to call the same single destination if you only install one circuit...

Equipment and software

You will need a little bit of hardware for this exercise

First you need to get Linux based Intel machines. You can get solid machines for $2,000.

Then you need to download and install Asterisk -- an open source hybrid TDM/VoIP PBX.

You'll also need a card for each PCs to manage the T1 PRIs -- A company called Digium sells cards for Asterisk at $1500 each.

And you'll need at least one of these machines on each end of your connection.

$8,000 in capital investment to be a phone company.

Of course there is your time, or the time of a technician that you hire.

Still, if you could build a clientele between two points -- say India and the US -- you could probably offer them $0.02 a minute phone service and make a solid profit. And save your customers an enormous amount.

The traditional phone companies have to be worried.

Mac vs. PC (but no viruses...)

I find myself under constant pressure to return to Windows. I love my Mac. But Microsoft's monopoly power really has a way of making a guy sweat. First it was that Siebel CRM OnDemand application that only works on MS Windows. Then it was WebEx that I was unable to use from my Mac. And everyday I visit web sites that have Javascript errors from my Mac. Even though I am using the latest, greatest version of MS Internet Explorer from Microsoft on my Mac! I would switch to Safari as my web browser, but other sites simply say they don't even recognize the Safari browser...

But no viruses...

One of the things that has made me happy I am on the Mac is that I am not subject to the regular waves of viruses afflicting my colleagues on Windows. Think about it -- a Mac virus simply wouldn't work! There just aren't enough Macs out there to enable a virus to spread. It would get out maybe 2, maybe 3 generations from the origination point, and would find that all of the machines it was connected to were PCs... Now I suppose someone could go to the trouble to write a virus that worked on both PCs and Macs... But why bother when 95% of the time your virus will spread based just on running on PCs.

And isn't this an argument for not having a single operating system in the world? Just like with mono-agriculture, we suffer more damage, more quickly, when a pest infests our mono-operating system world.

Keiretsu Forum...

So if you were an ex-CEO of Levi's... or an heir to the Schwab fortune... or have found your way into a few million dollars in the dot com boom... where would you go to find some interesting private investments? Today I spent my morning at the Keiretsu Forum -- self described as being about Great Association with Quality Deal Flow and watched the moneyed of Silicon Valley give the thumbs up or thumbs down on 5 early stage companies.

By their own admission, the section most members visit on their website is the "event calendar" -- including ski trips, golf outings, and trips to Hawaii... but the presentations today were all business with both self-made millionares and inheritors weighing in on the pros and cons of businesses that ran the gamut -- life sciences, software, financial services, even a new packaging concept.

It was a refreshing reminder of the dynamic form of capitalism alive in our country. A "swarm" of investors that self-organize and fund companies. The "K-Forum," as everyone calls it there, just creates a venue for the investors to see qualified deals. Investors make their own individual decisions to jump in.

Joining is easy -- have $1 million in liquid assets (that makes you an accredited investor) and give Randy Williams, K-Forum Founder, $1,000 a year. Oh, and there is a 2-3 month waiting list...

Lest you think that the $1 million rule is a way of keeping the club exclusive -- this is actually an SEC rule intended to protect less sophisticated investors from bad investments.

Reed Hundt on VoIP

An excellent interview by Paul Kapustka for Networking Pipeline -- Reed Hundt former chairman of the FCC...

Here is one thoughtful quote from Reed on regulation of VoIP:

So that's a huge regulatory issue. If the regulators say, "well, we sort of want to regulate VoIP," my view is: Be suspicious, be wary, be alarmed, be worried. Because what they should say is, we have no more business interfering with the flow of bits that are voice than we do with the bits that are the picture you sent to somebody to see if you can persuade her to go have a drink with you because you were connected by Match.com. That's personal, and the voice call also ought to be personal.

So many people saying such sensible things about VoIP regulation (or non-regulation)... Where are the big, bad phone companies to insure that their investments are protected?

I am a VoIP believer

I have to admit that I have been hanging back from the VoIP banquet table because of my misplaced concern about voice quality. Well this week I set up phone numbers for myself through VoicePulse in both New Haven and in New York City... and they work great!! I am now a Believer and am jumping in with both feet.

One other lurking concern was about the possibility of government regulation. I was heartened by these comments by FCC head Michael Powell:

"It is not a telephone service; it is a voice application, completely indistinguishable from any other kind of application that can run on an IP network. If you're going to say to me that voice over IP is something that needs regulation, then you're going to have to explain to me why e-mail isn't also, or streaming video or instant messaging is not also..."

Remarkably intelligent comments coming from a government official!

The full article is available on News.com

All this euphoria makes me want to become a VoIP long distance telephone company. Heck, I think we should ALL become long distance telephone companies! I was tired of doing business with SBC anyway...

Microsoft wins again...

Why use a platform independent technology to deliver your application to customers and then tie your implementation exclusively to a single platform? This is exactly what Siebel has done with their CRM OnDemand product.

Despite having built the application to run in a web browser, the technology that should allow vendors to break their dependence on Microsoft, the Siebel folks have tied their implementation to an MS Windows specific implementation of Internet Explorer. That's right, even using Microsoft's version of Internet Explorer for Mac OS X you cannot run Siebel's CRM OnDemand application.

And forget about any non-IE browsers.

Understandably, 95% of the world uses Microsoft, so vendors should support their Windows customers. But it isn't that hard to make a browser based application work on non-Windows platforms. And if you don't care about supporting non-Windows customers, why use a browser based application anyway? A much better user experience is available by building a native Windows application.

Siebel is not alone. I have found that more and more web sites that I visit are Mac unfriendly. Recently I upgraded to IE 5.2.3 (the most recent release for Mac) and discovered that Macromedia's Flash Player has stopped working. Whether deliberate or not, Microsoft is succeeding in balkanizing the Internet -- diverging their browser (even on their OS) from the marketplace. Given the economics, most companies will chose to invest in Windows specific solutions. The Microsoft monopoly wins again.

Fair Disclosure -- Prior relationship to Salesforce.com

I have received some questions regarding my relationships to either Salesforce or Siebel and in the interest of pursuing a blogger code of ethics, let me be clear -- I have known Marc Benioff for some time, while at Borland I was the principal contact between Borland and Salesforce.com, and I did attend a 49ers game in the Salesforce.com corporate box. I have never received any such invitations from Siebel.

I personally do not believe that this clouds my reporting here on this blog, but now you can decide for yourself given my disclosure.

By the way, I did finally get a password and logon to Siebel CRM OnDemand -- after sending an email reminder to them yesterday. However I am not able to logon due to a Javascript error that I get when accessing their system. I have contacted their customer support organization and am awaiting their reply.

And when I signed up for the Salesforce.com trial (which worked flawlessly and immediately) it was through their website - not through my relationships to executives at their company.

Are We Losing the Robot Race?

Pik which, when launched in October 1957 by the Soviet Union, excited our nation to respond with a technology crash program of its own, we have no equivalent Space Race response to the frequent announcements from Japan of its growing prowess in robot manufacturing.

The latest news, that Sony has built a full-size humanoid jogging robot is just the latest in a series of firsts from Japanese mega-conglomerates. For some time now Honda's Asimo and Sony's Qrios have been entertaining conference attendees with dance routines.

Many have argued that humanoid shaped robots are not particularly useful by comparison to industrial robots where most US researchers have focused. Solving the complicated problems of making a machine move like a human being doesn't help with any of the heavy industrial problems for which most robots are utilized.

This narrow view of robots ignores the basic premise that Honda and Sony are successfully focused on -- that everything in our world is designed to accomodate a human frame and human hands. If robots are going to play a useful role in an everyday human world, they will have to move and look something like human beings.

Robot manufacturing will be one of the 21st centuries biggest industries. As the world's largest economy we ignore this market at our own peril.

Siebel CRM OnDemand update

Its nice to have a blog that people read. Thank you to whomever let IBM/Siebel know that I was frustrated -- suddenly a "CRM OnDemand Solution Specialist" contacted me from IBM. She was very friendly and she has set me up with a trial account that begins on Monday. It appears to be a manual process...

Suggestions to those of you at Siebel and IBM who may be reading this:

1) Automate your process for issuing a trial account -- when I register to try your software, your service should be "on demand"

2) Have your salesperson contact me to offer to help after I have a trial account not as a barrier to my getting a trial account. Use that contact as an opportunity to find out something about how I intend to use the product.

3) I got the impression that you hope that people who sign up for the "trial" will begin actually using the service and entering real data. Why would I do that? If, like Salesforce, you had a lightweight version for free I might, and then you might hook me and I'd want to upgrade to a pay version. But as it is I know that my trial will end in 30 days so I will play with your product so that I can learn about how it compares to your competitor but I will not be so foolish as to really use the product and then have my data go away in 30 days.

I look forward to receiving my userid and password on Monday...

Salesforce.com has nothing to worry about

CRM Daily ran an interesting article recently, predicting that Salesforce.com is going to feel increasing pressure from SAP and Siebel, who recently acquired Salesforce competitor Upshot. In Will the Siebel-IBM OnDemand Initiative Crush Salesforce.com CRMDaily writer Kimberly Hill pulls together a tired group of analyst quotes in the old Fear Uncertainty and Doubt (FUD) method, suggesting that having such big companies in the race will spell doom for little upstart Salesforce.com

Salesforce.com needn't worry

As a potential customer of an online SFA system I recently visited both Salesforce.com and Siebel to find out more about their products.

At Salesforce.com I was able to immediately sign up for and start using a free version of their product. A Salesforce.com salesperson called me that day to ask if I had any questions or problems and what the size of my ultimate implementation would be (should he spend any more time trying to sell me... which I respect).

At Siebel the experience was VERY different. After being promised a free trial with registration (not free use as at Salesforce, just a free trial for 30 days) I filled out the form and then was greeted with a message -- "thanks, a Siebel salesperson will call you to set up your free trial." It has been two days and I have received no call.

Big Software and small business don't mix

Sure, Siebel and SAP and IBM would all like to sell to the small and medium sized business market. After all, SMBs employ over 50% of all workers in the US. But their techniques simply don't work. A big company will dedicate a team to evaluating SFA offerings, spend months coming up with a recommendation, and spend millions implementing a product. I on the other hand want to make a decision tomorrow and start using the product the minute after I make that decision. Salesforce.com has the right stuff for small business. Siebel isn't even in the game.

Will I ever trust analysts again?

Before I believe anything more that the Aberdeen Group has to say I want them to fully disclose their sources of financing. How much are Siebel and IBM paying for this hit piece on Salesforce.com? Why is it that journalists still believe such people?

Kapustka is back!

After a short sabbatical away from journalism, fans of tech journalist Paul Kapustka will be happy to learn that he is behind a new "newslog" at CMP Media. networkingpipeline is part of CMP's effort to create focused content in narrow vertical tech niches and Paul's efforts should lend some street cred to this effort. One does have to wonder where they got the picture however... But it is great to have you back Paul!

Spoke as Napster of Social Networking

A friendly VC suggested this meme -- will Spoke be the Napster of Social Networking? And that isn't Napster as in good -- viral, inventive, breakthrough, industry changing... that would be Napster as in bad -- accused of breaking laws, shut down, investors sued...

If you haven't investigated social networking yet you should take a look at the two services that are making waves -- LinkedIn and Spoke

Did you know that you are probably already in Spoke? Only 50,000 users and already 7 million people are linked to each other. They do this by taking their member's email mailboxes and indexing everyone that the member has ever sent or received mail from. Then they cross-index with anyone else already in their system and add a variety of other Internet sourced information about each person to build a profile of the member's contacts.

Imagine the ultimate result -- an automatically generated profile of you which includes your photo, your home address, phone numbers, email addresses, jobs you've worked at, your blog, other people's opinions of you... in short any piece of information out there about you. A people Google on steroids.

Feel that your privacy has been encroached on yet?

So with spoke gathering information and building dossiers on millions of people that have no connection to the service, isn't it just a matter of time before someone sues?

Desktop Linux

In a recent news.com article, C Net reports the "news" -- IBM warms to desktop Linux Amazingly the article is actually about how one IBM exec is giving a speech at the Desktop Linux Conference. This is news? What is particularly sad about the article is that IBM seems to be still locked into the mind set of using Linux as a replacement for 3270 terminals. Someone needs to show IBM Mac OS X -- ok its not Linux, but it IS a complete Unix environment with fantastic (better than Microsoft) look and feel. It will take some effort to make Linux as easy to use as the Mac, but it is clearly possible.

If IBM really wanted to create a competitor to Microsoft it would cost less money than they are currently spending to give Java development tools away for free (eclipse). So the real question is -- why don't they want to compete with Microsoft?

Moving on

For a variety of personal and professional reasons, the time has come (after 3 1/2 years) for me to move on from Borland. I am working on some start up ideas which I will share via this blog as they develop. In the meantime, my Borland email address no longer works, but you can still reach me at the afterink email listed here (over to the left...).

One of the greatest beneficiaries (second to my daughter anyway) of my departure from Borland may be this blog. Both because I expect that I'll have a little more time for blogging but more importantly because I am no longer an officer of a public company. I had always worried about posting too much about what I was doing or what I was thinking about -- I wanted to be careful to avoid violating (or being perceived as having violated) the SEC's "Regulation FD" -- that's FD as in Fair Disclosure.

For the same reason, I won't be posting anything about Borland even now that I have departed. You may see some views on the industries that I worked in, but I'll avoid commenting on anything too direct in order to avoid the appearance that I have disclosed something confidential about the business.

We all make hard decisions in our careers and leaving Borland was definitely a hard one for me. I have had the pleasure of working with some terrific people over the past few years, and of being a part of one of the few really important software companies. Thanks to all of you reading this who have been a part of that time, hopefully we will meet again under new circumstances.

Another day, another blog...

Hardly a day goes by anymore when I don't hear that another friend has started a blog. Today it was Ed Sim with his Beyond VC self described as "A venture capitalist's viewpoint on technology, the markets, and life in a connected world..." Ed's a smart guy and I expect this to be interesting reading on a regular basis... Maybe he'll figure out how to be more regular than me! :-)

Who believes in the growth number?

I am taking an informal survey (email me) on the GDP number -- do you believe it? If so, do you believe that the tax cut is the reason or do you have a different theory? If not, what do you think it really was? 7.2% !? Here is what I want to know -- how do home refinancings figure into this number? Could it be that the real reason that GDP seems so high is low interest rates?

Funny dad moment...

You know you're a dad when you find yourself in line at the supermarket buying diapers, beer, and dog food. I imagined the store staff calling the department of health and human services to follow me home... I wonder how often those three items are purchased together. I bet it is not uncommon for dads to run out of those three items at the same time in the first few weeks... speaking of which -- Paloma Elena Shelton is now 16 days old. Sorry I didn't write sooner to let you know out there in Blog land!

Email up and running

Now that I am home, expecting the birth of my daughter, I am really going to try and get going again on this blog (so many previous promises though!). I now have email up and running for the blog -- tshelton@afterink.com if you want to write to me.

Internet Innovation continues...

I have just been playing around with a new service called Linkedin which allows you to build an online network of friends and colleagues for job hunting, sharing ideas, investigating investments... It is similar to a service (now defunct) called sixdegrees -- but much more useful. I am certainly happy to see people continuing to try out new ideas -- the Internet revolution isn't over. It has just slowed down a bit.

During the bubble we just got too far away from innovation and too interested in get-rich-quick. Hopefully the innovation is coming back.

Will Software be free?

I had the opportunity to participate in an industry roundtable at JavaOne. An interesting article has recently been published, summarizing the conversation. You can read the entire article here. In this article, I was quoted as having said:

"But Shelton countered that the reality is that "people are downloading free things from developers' sites, not from open-source vendors." In fact, he predicted that "software will be free" in five to 10 years."

It is a problem to summarize a conversation -- you always end up simplifying the points that people have made.

The funny thing is -- my prediction as stated has already come true -- there is software that is free today. But my real point was that the software that costs money today will be free in five to ten years. Free can happen in lots of different ways -- open source, bundling, or through making the software so trivial to develop that anyone can build their own.

The challenge for software companies to remain relevant is to constantly innovate on top of the layer that is becoming free.

Keeping up with the blog

OK, I am going to make another attempt -- after having been gently criticized by a close friend for letting this blog grow stale. I have a different idea about what a blog can be though than some of the really prolific posters. It doesn't make sense to me to be posting every personal thing that happens to me -- the new place for spicy noodles that I discovered, the links to every other person's interesting comment... unless it is apropos to a comment I am making. I will attempt to keep this blog information rich. Critics welcome -- email to tshelton@borland.com

Yahoo News Group

I am asked by "thejunglejaguar" -- a frequent Yahoo newsgroup poster -- to "blog it out" in answer to his question "...whether I should really be invested in Borland."

No Borland exec will ever give you investment advice.

Why not try asking questions I can answer?

The left-out coast

Unfortunately the Economist has gone to a pay-per-view web model. But if you are an online subscriber or receive the paper version (yes I still do receive paper magazines), The left-out coast published in the Apr 10th 2003 Economist print edition is really worth reading.

Subhead A state that used to be a trendsetter is stuck in a time-warp -- The differences in attitude, fashion, and politics have always been great between the East and West coast of the United States. But the events of September 11th have created an enormous new divide in the way the East and West think about the world. As this article accurately points out, Californians have simply not been confronted with the same sense of imminent danger that residents of New York and Washington face every day. As a result, responses to events on each coast are completely different.

Take for example the warning by the government that citizens should stock up on duct tape to seal their houses from potential chemical or biological weapons attacks. On the East coast, duct tape sold out in hours. On the West coast, people laughed.

At best the citizens of California believe that if there were another terrorist attack in the US that it would happen in NY or Washington DC -- far away. At worst they simply don't think about this new dangerous world we live in. The primary concern for the majority of Californians is the economy, not the new world disorder. An interesting divergence which is likely to lead to disparities in voting, government spending, and business activities. The most interesting question is whether these two world views will continue to diverge or whether they will begin to come together again. Hopefully it won't take a terror attack in San Francisco to get the West coast in sync with the rest of the nation.

Mobile Blogging

Someone recently complained that my blog has "...ground to a halt completely..." and I admit I have been very busy. If only I could blog from my mobile device as this article in Wired News describes...

I have just received a Nokia 3650 which I am very excited about -- built in camera, takes videos, ships with the real audio player... But so far my carrier here in the US (Cingular) won't let me use GPRS... so even though I have a phone capable of sending data to a website like Blogger, my phone company's network won't let me...

On a recent trip to Europe someone asked me how far behind Europe the U.S. mobile networks are. I said "at least two years behind," and then I felt bad... wanting to be more patriotic I said "maybe only one year behind..." but two years was more honest.

Picture phones will change the world

I have had so many conversations with people who say that they don't get why it is interesting to have a digital camera built into a mobile phone. To this question I offer the typical example of parents on vacation taking pictures of the kid and sending them to the grandparents. But I have also offered the suggestion that putting power into the hands of the people always causes social change and ask people to think about what happens when thousands or millions of people can take a snapshot of injustice and instantly broadcast to the world.

Now comes the BBC with an example of this social implication of picture phones.

People thought that the Internet was going to be a new publishing medium -- like television, a way for large media brands to package and distribute content for the consumption of the masses. While it has become an interesting publishing medium, the interesting things that have created the most volume in usage on the Internet have not been when a few central nodes publish to all of the leaf node consumers but rather when all of the leaves become self publishers and start talking to each other without the need to have a central node mediating the conversation. Personal home pages were an early example and blogging has taken this to another level.

The bias of phone companies was to believe that these new mobile devices would become another broadcast medium, allowing central nodes to present information to all of the end consumer leaves. I believe the real transformation will come, however, as it did with the Internet when the end nodes become the publishers.

HP =everything is possible

Perhaps HP should reconsider their advertising campaign. Or at least the way in which it is being executed. Some clever person in their advertising department decided that HP should sponsor the CNN Technology section -- a column length advertisement in the right hand side of the page reads " = everything is possible " and then the HP logo. The idea seems to be that one will read the technology article and see the HP ad, associating the marvel of technology that CNN has reported with HP's prowess in computing.

Unfortunately for HP, not all articles in the Technology section are positive.

Take this one for example, about a man who stalked his girlfriend using a GPS device... Is that how HP is helping to improve the world?

The Very First Blog

I was thinking about the medium of blogging, and what an interesting vehicle it is for individuals to express their ideas when it occured to me that I had run into a very similar concept in my youth... and it made me think that the idea of "blogging" has a pre-Internet print precedent in the concept of the "fanzine." Way back in 1975, an interesting little publication called Alarums & Excursions began circulating amongst folks who enjoyed playing role-playing games (dungeons and dragons and other games of this genre). The idea was simple -- anyone could write for the publication -- the requirement was just that each contributor had to print up their own pages of the publication, as many pages as there were expected subscribers. Each writer would then mail his or her printed pages to Lee and Barry Gold who would assemble the pages of all contributors and send them back out as the next issue of the magazine. Each author's pages would look a lot like a blog page -- a series of disconnected thoughts on different topics reflecting the author's interests. Amazingly I find that the publication is still in print and has come out every month but one since 1975...

Woefully behind

I certainly am falling further and further behind. For loyal readers here is a content tease -- updates coming soon on the Lessig conversation and on the Kurzweil inquiry...

Archives and permalinks...

My archives and permalinks should be working again, but please use my new domain tedshelton.blogspot.com

New URL

I have moved my blog to BlogSpot, Blogger.com's hosting service. The URL is tedshelton.blogspot.com in case you'd like to go directly there, rather than through the bogus register.com redirector service... I'll have to get that fixed as well... But one thing at a time! At least I am back on the air...

Unreliable server companies...

The company that has served up my blog for the past several years, SiteAmerica has finally gone completely AWOL. It will take a while for me to get my site back in order and find all of the old image files, so please bear with me.

Is Comdex Still Relevant?

Charlie Cooper says NO -- Comdex is dead. So did my cab driver here in Las Vegas. My cabbie believes that there are even fewer attendees this year than last -- the post Sept 11 Comdex. And anyway, as he points out, Key3Media is going bankrupt, aren't they?

Well I'll offer a contrarian viewpoint, and since its Vegas I will offer odds. There will be another Comdex next year. And the show will grow again. But it will be a different show than the one Charlie Cooper cut his teeth on as a young tech reporter. Or actually it will be the same one -- a sort of "back to the future..."

You see, Comdex lost its way in the world. The thing it has always done well, still does well, and will do well in the future is bring together the people who make up the distribution channel for computing products. Resellers, VARs, distributors... the feet on the street that sell technology products.

And the people who get it most are the people who live in the center of that channel. Publications like CMP Media's CRN -- Channel Reseller News. At Comdex this year, the most important event on Monday night was CRN's Industry Hall of Fame -- presented by CRN, and Comdex jointly with the Computer History Museum.

And this year the inductees were a little different from past years. In the first five awards shows the hall of fame has honored such industry greats as Steve Jobs and Andy Grove and of course Bill Gates. Who joined these titans this year?

Michael Krasny -- founder of CDW Computer Centers

Izzy Schwab -- CEO of D&H Distributing

There were a few "industry" folks (manufacturers) recognized as well -- Jerry Sanders of AMD, John Chambers of Cisco, Michael Ruettgers of EMC, and Gary Starkweather of Xerox (the only science guy). But the message that all of the inductees had was -- the distribution channel matters. That's what made us successful -- all of the people selling these products.

Izzy, of D&H Distributing, told a great story. He talked about how his father had founded the company as an RCA distributor. And how in 1986, RCA was acquired by Thomson, a European company. Well Thomson didn't understand the value of their distribution channel and so within a year they cancelled all of their distributor agreements nationwide with 30 days notice. As Izzy pointed out, this action destroyed RCA's (Thomson's) market share, a mistake they are trying to recover from to this day.

For D&H though, it was a rebirth -- they applied their sales experience and channel presence to the computer industry and are now a $900 million business. Not just taking orders but creating demand and selling into that demand.

Comdex just needs to remember this lesson. Its about the distribution network. Its about connecting manufacturers with the resellers and VAR's and distributors that actually sell the manufacturers' products. If Comdex can re-focus on this key market that it serves, maybe it will be reborn just like Izzy's company was.

Lessig blogs back

I am a few days behind (things have been busy) but I wanted to get at least some brief comments back on Lawrense Lessig's latest response in our long running debate about "opaque creativity."

Lessig reasonably criticizes my rhetorical device of suggesting that placing source code in the public eye is equivalent to a writer having to make public the thought process behind his/her work. But in doing so he ignores the underlying argument and the analysis of what "derivative works" means in the case of software.

One of the valuable parts of this discussion for me has been in refining my thinking on this subject. I have had an intuitive feeling that there is something wrong in Lessig's call for source code escrow -- and not the least of which is my concern about giving governments too much power. I have some more work to go in my thinking, but I am close to having a good formulation of the core issue. Here is an attempt at a clear statement of my thesis:

Software is not a narrative. Software is a machine

Narrative is not quite the right word (it doesn't capture songs for example) but it is getting close. Where Lawrence Lessig and I agree is that copyright law intended for narrative forms of creativity -- books, movies, etc -- is not adequate for software. Where we disagree is what the remedy should be. Lessig would require that the machine be given away for free after some period of time. In my view this appraoch is too extreme. That it gives away the algorithm along with the implementation and that software developers (like mechanical entrepreneurs) should not be required to give away their algorithms.

I will spend some more time on the formulation of this and post a longer note soon.

Snark Hunting

One of WordLab's creators, Jay Jurisich, writes with news of another naming and branding blog that he has created. Called Snark Hunting. This site seems to mostly cover news of interest to the brand brainstorming crowd.

Brainstorm Brand Names

Here's a blog that is also a resource and a database for people brainstorming slogans or brands -- WordLab -- not only is it useful, but it is a lot of fun. I rate this one a "must visit."

The most interesting item on Day 3 of NMIC

A terrific presentation by Nokia's internal group that studies consumer behavior -- these guys have done an amazing amount of research and have developed a really compelling model for thinking about how people use mobile devices. They have a number of "dimensions" that they use to segment different people's behavior around the use of mobile technologies. The devices that they introduce, like the 6800 that I wrote about yesterday, are defined by analyzing the intersections of these dimensions and identifying clusters of consumers that behave in certain ways and have certain needs for mobile devices. I can't possibly do justice to the full model and Nokia has in any case promised to put this presentation on the web -- so I will link to it when it is available. In the meantime, here are some of the dimension characteristics as a teaser:

Open vs. Controlling

Receptive and Belonging vs. Individual and self esteem

"Mind styles" that these two dimensions produce -- enjoying, exploring, managing, exploiting, controlling, defending, bonding...

Style dimension -- appearance -- premium vs. fun vs. active vs. fashion

functional dimension -- writing vs. reading vs. relationship management vs. talking...

capabilities dimension -- amount of memory, screen size, user interface, programmability...

Phone Categories that these dimensions produce -- Imaging, Gaming, Classic...

The future vision of Nokia is that "...I will have my phone with my set of applications and you will have yours and they will really be entirely personalized to each of our needs and will look nothing like each other..."

This creative segmentation which allows for devices which will become completely personlized is a tremendously powerful vision. One interesting aspect to me is what a sharp contrast it is to the way in which Microsoft has guided the evolution of the PC -- narrowing down the possibilities to a single, fairly uniform platform. One Nokia person commented to me that he and his colleagues were discussing the issue of the PC volume having plateaued at 400 million devices and why this was -- perhaps if Microsoft had adopted this experimental and fully open and configurable approach that Nokia has adopted, that the PC world would look quite different, with a much wider array of solutions adapted to different requirements...

NMIC Day 2 -- Coolest new gadget...

Nokia has rolled out an amazing number of new products today -- all extremely cool. How about a video survelliance camera that is also a GSM/GPRS phone and can transmit images directly to your phone using MMS? How about a "music stand" which has speakers built into a phone recharging station... Here is a link to Nokia's site to look at their new gadgets. But my award for the coolest new gadget goes to the Nokia 6800 -- a phone with a full keyboard like you have never seen before! Here are pictures that I took with my Nokia 7650 camera phone... First you can see the phone in its "one hand" mode -- looks like a normal phone, right? But then it OPENS... with a section lifting up from the keyboard area. This section continues to open up until it flips all the way over the top, allowing you to turn the device into a horizontal position and use a full QWERTY keyboard with two hands... The screen automatically flips orientation when the keyboard is opened.

Very cool phone. Also has a color screen... MMS capable of course. Java... And this is just one of a whole group of new phones that they introduced.

Coolest demo of the day

Reporting to you from the Nokia Mobile Internet Conference here in Munich -- the coolest demo of the day was live television playing on a Nokia 7650 over a roaming GPRS data connection! I am not kidding. The crazy engineers at Nokia hooked up a server in Helsinki with a TV tuner card and put TV1 from Finland onto the mobile network! From a 7650 here in Munich we tuned in to watch daytime Finnish television. Video and sound quality was amazing. This is what high speed data connectivity is capable of already today, without 3G -- although I would hate to get that GPRS bill at current rates!

Also, suggestion to Nokia for future demos -- daytime Finnish television is not a killer application... how about a sports channel? I guess TV1 probably wouldn't complain about being pirated though...

UK blocks international calling as well...

Jeremy McGee (an ex-Borlander) writes that:

To be fair to T-Mobile this isn't a situation that's exclusive to the US. Over here in the UK we, too, have to have the call bar lifted on international roaming and international calls.

But Jeremy goes on to explain why:

This is partly because the international rates are (usually) stupidly expensive. For some reason this is especially the case for US mobile carriers. So with debt at the level that it is with mobile telcos I'm not surprised they want to do an extra credit check.

OK, so they want to find out if I can pay for all of those long distance calls. Fair enough. But they should be smart enough to ask about this at activation time, not after I actually arrive in Munich. On the question of US myopia about the rest of the world though, Jeremy had this factoid (have to check)

87% of US citizens don't have passports.

So I stand by my complaint that we need to start thinking globally in the US. How can we be the "world's policeman" and not know anything about the world??

T-Mobile -- when will the US think globally?

I have been a T-Mobile customer since Friday and I am already frustrated with them. And I haven't even made a call yet. But the problem I am having with T-Mobile is also a problem with every other carrier in the US. There are smart people at T-Mobile, but when it comes to thinking Globally, despite being a division of a German company, they get mired in the same bad logic that slows down the rest of the US mobile market.

Here is what happened: On Friday I set up a new T-Mobile account so that I could test the new Microsoft "Pocket PC Phone Edition" and compare it to Nokia's and Sony-Ericsson's Symbian based phones (more on that later). On Saturday I boarded a plane for Munich, where I am now -- for the Nokia Mobile Internet Conference. So I arrive in Munich on Sunday night (local time) and turn on my new phone. But I am unable to get a service provider connection. After I arrive at my hotel, I call T-Mobile's customer support in the US.

It turns out that, even though T-Mobile is a German company and even though the phone they sold me was a dual-band GSM phone, I can't use my US T-Mobile account in Europe. In fact I can't even call Europe from the US.

You see, if you are a US citizen and you want to call internationally, they assume that you must be a criminal. This is the only explanation that I can come up with. I had the same problem a few years ago when I was a Sprint PCS customer, and again when I set up my Cingular account (which I use for work). By default when you get a phone in the US you can only use that account in the US and you can only call people in the US. In order to get this changed, you have to petition an International department which, after an investigation, will decide whether or not an account can be approved for international use.

I guess the theory is that the US is such a large country and market that we can grow up and live out our entire lives without ever needing or wanting to call someone outside the US and without ever needing to use our mobile phones from outside the US.

Unfortunately isolationism leads again and again to a rude awakening when some external event provides a reminder that we are part of a global economy and a worldwide society. Not activating mobile phones for international use is just a symptom of the larger problem. Eventually we are going to have to start training our children to look at the world outside our borders -- and to think about themselves as part of a global civilization.

The Hype Backlash -- Web Services' Turn...

The articles are beginning to appear, like this one at Business 2.0. Entitled "Still Waiting for the Web Services Miracle" the article is a fair complaint that the hype got out of control. And the author even writes that

If you forget the grandiose promises, there are some things Web services are good for right now...

But this is just the beginning of the backlash for Web Services. I expect a lot more articles in the next few months complaining that web services is not all that it has been promised to be...

Time to move on... (Re: Microsoft)

Well, it isn't actually possible to download the court's opinion from their website -- I am guessing due to the large number of download requests... It was heartening however to see (using this nifty tool at Netcraft) that the court is running Linux... But in any case the news is out and the court is allowing the Justice department's settlement with Microsoft to stand. So I guess its time to move on to the next issue...

.NET vs J2EE -- The PetStore Debate

Wouldn't it be wonderful to have an independent party create a comparison of J2EE and .NET in order to demonstrate the benefits and issues with each of these two frameworks? The Middleware Company had said that they had created just such a comparison using the PetStore demonstration application. But now Rickard Öberg provides a devastating critique of this effort and others have stepped forward to claim that Microsoft paid TMC for the report...

Microsoft News Flash!

Just received a PDF from the United States District Court announcing that Judge Colleen Kollar-Kotelly will issue "Opinions in the Microsoft cases" at approximately 4:30 p.m. on Friday, November 1, 2002. Should be downloadable tomorrow from the court's website.

The real debate

I am beginning to feel a little guilty about the time that Lawrence Lessig is spending with me in conversation about his concept of "opaque creativity." But I continue to believe that this is an important issue, and that Lessig is a person in a position to have a significant influence over the way in which the marketplace thinks about this idea. So I was gratified by the continued seriousness with which Lessig has addressed my concerns in his latest reply.

Lessig returns to the fundamental issue, why should software (or really any kind of opaque creativity) be treated differently from other types of creativity? Why shouldn't all types of creativity receive the same copyright protection under the law? The argument has two parts:

95 Years
Lessig writes that at 95 years, copyrights for software do not provide a balance for the public good -- in 95 years software will have no value, in fact the software product will probably not be able to run on any available hardware. If I can summarize the argument, 95 years might as well be forever. This is the same argument which I agree with that Lessig has been making about copyright generally. Copyright should be for a "limited term." This is true whether the copyright is for a book or a film or a software program. I think there is an interesting argument in saying that different types of creative output should have different lengths of time of protection, because of the inherent "shelf life" of the material. But this is a very different argument than that of saying that software should be escrowed and source code should be released. One is an economic argument about the value that the public enjoys in exchange for copyright protection. The other is an argument about what the public should be allowed to do with the property once it is in the public domain.

Opacity vs. Transparency
This then is Lessig's primary argument. Works of opaque creativity are fundamentally different from works of transparent creativity. With a book, I have all of the "code" before me, transparently. I can reproduce all or part of a manuscript and I can embed any part in a new work. With software, or other works of "opaque" creativity, it is very difficult for me to do anything other than reproduce the product in its entirety. And if the manufacturer has included security elements which require a licensing key to activate the software, reproduction of the product may not provide me with the use of the product. This is a reasonable objection, but the solution need not be Lessig's proposed source code escrow scheme. Consider the three most common uses of copyrighted material that has passed into the public domain -- duplication, derivation, and partial use.

Duplication
In the case of duplication, software can clearly be duplicated in its entirety whether or not the duplicator has access to the source code. An issue remains in that mere duplication of a software program may not be sufficient to allow for use of the software. Thus some system should be in place to provide the public with access to a version of the software that does not require a security key to unlock functionality, or some ability to generate such keys once the software has passed into the public domain. This is not unlike the problem that Lessig mentions regarding the film industry -- how does one make sure that some copy of a film is available to be duplicated at the point when that film passes into the public domain. I would suggest that this problem should be solved for all categories of copyrighted material, not just such works of "opaque creativity."

Derivation
In the case of derivation, the concern is more complex. I submit that the process of creating a derivative work from what Lessig calls "opaque creativity" is no different from that in creating a derivative work from a book or other example of "transparent creativity." Furthermore, these derivative works are being created all the time, and software companies have been unable to protect themselves from this type of derivation (see the supreme court case Lotus v. Borland).

Take for example the works of Mario Puzo, since I recently read that Random House is seeking an author to write a sequel to The Godfather. What would this new author have to go on to create this derivative work? The author could read the previous novels, learn about the characters and their motivations, get a feel for the dialog, understand the plot... but the author wouldn't have Puzo. Thus the author would have to "reverse-engineer" the thinking process needed to construct a believable set of characters, plot, dialog, etc.

The authors of Lindows did the same thing -- they looked at how other operating systems displayed icons, user menus, startup and shutdown scripts... and they created a new user environment for the Linux operating system. Would having access to the Windows or Macintosh source code have made their job easier? Yes, just as having access to Puzo as a collaborator on a new novel would make it easier for the new author to create a sequel.

There is a "means of production" for every creative work. In the case of The Godfather it was the mind of Mario Puzo. In the case of many modern "romance" novels, it is an automated book generating computer program. In the case of Toy Story it is a set of algorithms for rendering 3D graphics. In the case of a software program it is the source code. Software should be treated the same as any other creative work -- the resulting work should be made public when the copyright term expires. But the government should not create a system which compels artists, writers, movie producers, and software programmers to make public their means of production.

Partial Use
It is this last category of use that is certainly the most difficult to answer. For a book this might mean reproducing a single chapter. For a film it might mean showing a scene. For a software program it might mean using one function. In the case of the book or the film, I might have trouble getting a hold of the source material, and there may be some technical skill required in copying a film scene, for example. But once I have the source material it is possible to make this partial use of a creative work. With software, this is not a straightforward proposition. I take this then to be the real center of Lessig's case that software escrow is necessary to protect the public good.

The interesting problem with software is that this is exactly where the rules of copyright and the rules of patents/trade secrets intersect. No one will be interested in duplicating trivial functions, such as the way a window is displayed. The interesting functions to reuse from one software application to another will be those that do real work. For example, if I wanted to produce a photo editing application, I would be very interested in taking filters from Adobe's Photoshop and including them in my application. But this represents the core know-how of the Photoshop team, the proprietary algorithms that are the magic that makes Adobe a leader in digital photo manipulation. Furthermore, these algorithms may be the basis of not just one program, but many different programs and indeed, for some companies, an entire business.

To my mind, this is where software patents come into play. If Adobe wants to protect this core knowledge, they have two choices. One is to file a patent, describing the key algorithm. While this would give them protection from competitors for some period of time, it would also put the algorithm into the public domain once that time has expired. At that point, I can write my own software that implements Adobe's algorithm. Alternatively, Adobe can keep their algorithm secret -- BUT then they have no avenue for complaint if I am able to figure out how they achieve a given effect and duplicate this filter in my competing software.

So to summarize this argument -- there are two kinds of features that one could extract from a software program. The first is so trivial that there is no economic value in creating a system which provides for its use. The second is so crucial to a software company's business -- in a sense it IS their business -- that it should remain in the realm of patents and trade secrets and not be subjected to disclosure simply to receive copyright protection for a given specific product.

A few nits...
To respond to Lessig's two final points in his reply:

(1) I don't agree that "we've converged" -- only that I understand a little more clearly what is proposed. I agree that the state should provide protection commensurate with the economic value that is derived by the public after the limited time of such protection. I believe that I addressed this issue above under the heading "95 years" and I believe that we are both in agreement that copyright terms for all works should be shorter. I continue to believe that software should not be treated differently from other creative works.

(2) I am happy to agree to disagree on the (not mystical) difference between atoms and bits as I don't believe it is fundamental to the issue of real importance. The cost of digital duplication rapidly approaches zero, and I would argue is zero from an economic perspective. How much did it "cost" to copy this document to your computer? However the cost of physical duplication of any object will never approach zero. This creates a key economic difference.

Non Nits
I entirely agree that the US Congress has enacted copyright laws which are not in the best interests of our Republic but are instead designed to serve the financial objectives of a small number of powerful companies.

I entirely agree that the protections that our government provides to creators of intellectual property should be commensurate with the benefits that the public ultimately enjoys once those works enter the public domain.

I firmly reject the notion that software developers should be singled out amongst all creators of intellectual property and forced to divulge the means of production and the algorithms which enable them to practice their craft.

I also reject the application of this principal to all creative works -- I do not want to live in a society which compels me to register the contents of my brain with the federal government, in a "secure" escrow agreement which enables future members of the public to create, for example, articles like this one -- the rough equivalent for a writer to the demand on software programmers that their means of production and algorithms be placed in escrow.

I hope that together we will come to a clearer agreement on "opaque creativity" and why it is or is not different from other types of creativity. And more importantly, what should be advocated for the protection of each category of creativity.

Thinking in exponentials

Ed Felten did the hard math and came up with a figure of a 7% annual growth rate as the answer to the math problem posed by Ray Kurzweil, namely:

The rate of change ... is accelerating exponentially. We are "doubling the paradigm shift rate" on a constant basis. This century will be the equivalent to 20,000 years of progress at today's rate...>

OK - have to think about this some more. Maybe Kurzweil can weigh in and offer some explanation of his numbers?? You out there Ray?

Open Letter to Jeremy Wagstaff

Jeremy:

After what I thought was a promising start, our conversation on SMS vs. MMS has gone nowhere. To my mind, there is an interesting difference between being a columnist for the WSJ and being a blogger, participant in the world wide conversation. As columnist you can be abstract and anonymous -- the idea of a person, but with the mighty reputation of the WSJ to stand behind you and give your words meaning and importance. As a blogger you are only as good as you give -- what you post, how you respond to readers, how you participate in the conversation of the marketplace.

To me, this is the fundamental difference between old media and new media -- the relationship between author and reader. In the old "mass" media, journalists have to be anonymous. If you are Walter Cronkite, you simply can't be expected to respond to the millions of viewers who tune into your program. And you rely upon CBS to provide you with the gravitas that will cause those millions to trust your reporting of the news.

But as a blogger, as with your loose wire blog your relationship as author to your readers changes. Readers expect to interact with authors out here in this new place called the web. We expect that authors are real people, not representatives of huge media conglomerates. We expect a conversation to take place.

I am not suggesting that every author has to respond to every reader. But when, as you did in responding to my September comments on your article on MMS, you write:

Interesting letter on this from Ted Shelton, with some fair points. I'll respond when I have a moment. Keep 'em coming. JW

there is a reasonable expectation on the part of the reader that a conversation will occur.

Ultimately, although I am passionate about the issues surrounding mobile devices, I don't care if you decide to respond to that particular thread. My point in writing this email is to observe that there is a fundamental difference between the way you think about yourself, and your relationship to your readers when you enter the web. Re-posting columns from the WSJ to a blog does not take advantage of this new rich medium that is developing and you are short-changing yourself by not participating in this new kind of conversation with the marketplace.

yours,

Ted Shelton

Blogger Code of Ethics?

Thanks to Doc Searls for pointing me at the latest take (and a thoughtful one) on the invitation by Microsoft of bloggers to the Mobius 2002 conference. This entry in the debate is from Sheila Lennon. So much has been written on the topic that I really think there is little more to say... on the topic itself. But it is interesting that there is so much debate about whether or not bloggers should follow a "journalistic code of ethics" -- in other words, what I think is interesting is the meta-issue...

The medium of the web has become an important source of information. I was reading J.D. Lasica's article on where "Net Luminaries Turn for News" and realizing how fundamental the Net has become as a news source. Jaron Lanier answers,

Apart from my time driving in my car, the Internet is my only source of news...

I wonder how many people can say the same? I still like the feel of paper and magazines -- and I spend a lot of time on airplanes -- so I haven't become as extreme as Jaron. But the Net is one of my primary sources. And I have to admit that blogs have become an increasingly important way for me to filter that news. If bloggers are going to serve as the front line for filtering news, we have to have some sense of where their allegiences are. In the Microsoft case, people complained that by accepting Microsoft's gifts, and the all-expense-paid trip to Mobius 2002, that the bloggers would be biased. Or at least would have the appearance of being biased. I submit that this is an OLD MEDIA issue.

Reader and Author
I am not, by the way, saying that the bloggers were not influenced by Microsoft. In fact, reading accounts from the events that occured, I can only conclude that many were influenced. However, I say this is an old media issue because of the difference in the relationship between reader and author in the old media vs. the new media.

In the old media world the the relationship between reader and author is anonymous and abstract. I am aware that there is an individual named Walt Mossberg at the Wall Street Journal, but I will never interact with Walt. I won't meet him, I won't speak with him, I won't exchange email, and he won't respond to anything in my blog, even if my blog is about something in his. Now this says something about mass markets, but it also says something about the assumption that mass media makes about its relationship to its readers. In this abstract and anonymous world of mass media, the only thing that I have to go on in trusting that Walt Mossberg is not a shill for Microsoft is the reputation of the publication and the journalistic code of ethics that I expect them to follow.

However in the new media I can have a very different kind of relationship with authors. I can expect to meet them in real life. I can expect them to respond to my email. I can even expect that they will respond to something I have written in my blog. Even if none of these things happen, my expectation about the relationship is different -- there is a conversation and we are both part of it and I have as much right to be heard as they do. Because my information is not filtered by a small number of mass media outlets, I also have the right to decide whether or not I will hear them. This means that I can make a decision about whether or not I believe that a given blogger is a shill for Microsoft based on my personal relationship with that individual blogger -- not an evaluation of the reputation of that blogger's parent organization and its journalistic code of ethics.

Scalability
Some may answer that this model is not scalable -- that it is simply not possible for bloggers to know everyone that reads their blogs. Or even for every reader to know every person whose blog they read. I agree with this but at the same time I believe that trust networks naturally evolve, and that these networks will allow certain bloggers to reach much broader audiences -- but still because of a personal relationship. Doc Searls is a good example of this. I have had the pleasure of getting to know Doc, and I believe I have a good understanding of his strong personal sense of justice and honor. There are people reading my blog who know me, but may never know Doc. The fact that I vouch for Doc will, over time, cause those people to accept my trust in Doc as their own.

Trust each other, not institutions...
People are already building web based systems to support the development of these trust networks, and some of these will prove to be useful formulations in the digital world of the basic mechanism that has worked for human beings since we began our long path toward "civilization." Ultimately trust in each other as people is so much more powerful than our trust in institutions and rules that the call for bloggers to follow some journalistic code of ethics will appear humorous to future generations of netizens.

Ray Kurzweil

Dan Gillmor, writing in his weblog "eJournal" about attending PopTech has a number of interesting observations about the speakers. I was particularly interested in his comments about Ray Kurzweil as his most recent book, The Age of Spiritual Machines has given me a lot to think about. I take Dan to be skeptical about Kurzweil's vision of the future, but you can draw your own conclusions by reading his comments. I was particular interested in this reminder from Kurzweil's book:

(Kurzweil's) ...into implications of things, besides his inventions. The rate of change, he notes, is accelerating exponentially. We are "doubling the paradigm shift rate" on a constant basis. This century will be the equivalent to 20,000 years of progress at today's rate, and people don't appreciate the implications of this.

Testing the Hypothesis
It seems to me that a reasonable test for this hypothesis would be, what happened during the last century? If the rate of change has been accelerating smoothly, were there 20,000 years of progress, at the 1900 rate? Kurzweil answers this question by drawing graphs of the number of inventions, changes in certain key technologies, etc.

However I, like Gillmor, am not satisfied with the graphs -- I want to answer this at a more basic gut level. How fast did things seem to be changing in 1900? At that rate did 20,000 years of "progress" occur over the past 100? Since I am only 36 years old, it occurs to me that I cannot have a very good gut instinct about the rate of change in 1900. So I re-ask the question in a way I can comprehend -- How much has changed in the past 10 years vs. the previous 10 years?

The past 20 years
The past two decades can be, from my experience of the world, defined by two distinct seminal events. In the past decade, the emergence of the world wide web. In the previous decade, the personal computer. Each of these technologies changed MY world, and I would argue the whole world, an enormous amount. My gut feeling is that the Internet has changed the world a lot more. And even within each of these two trends, I can see that the early stages started out slowly, and then accelerated.

Thus my gut evaluation of Kurzweil's hypothesis is that it is roughly accurate. At the rate of change of the year 2000, over the course of the first century of this new millenium, 20,000 years of progress will take place. No wonder we increasingly feel out of touch as we age.

The next 20 years...
So how much progress will there be in the next 20 years at the rate I am comfortable with in 2000? At some point I stop being able to adjust my "comfort" with the rate of change. Then the world pulls away from me... How do you stay comfortable with the world's rate of change for a longer period of time?

News Is Free

Here it is, the next stage in the reinvention of how you consume information, and what better name than News Is Free. Blogging is becoming a way of life for some -- to my mind though it represents just the tip of a major socio-cultural-media-iceberg which is going to create an entirely new category of occupation and will transform how we consume news and information.

Individuals will develop net-reputations as experts in specific fields. Products like "New Is Free" will then aggregate the work of these individuals in a form which consumers can customize. The result will force traditional information outlets to transform how they think about the news, and how the filter and present information. This is the next revolution of the Internet -- using the power of all these connected people to make sense of all this connected information.