Bad Waiter Interface I had dinner the other day with Creative Good founder Mark Hurst at Mellow Yellow in Chicago. On the way out, we noted how terrible the interface on their computer register was, with poorly labeled, ordered, and placed buttons. As we discussed this, a waiter, who used to be a programmer, came up and started demonstrating just how bad it was. He told us that they used to have a better system before, and this was a new installation all the employees hated. The old system had been built from user needs, the new system was simply designed (and purchased) by people who never had to use it. No wonder it's terrible to use and hurtful to productivity.

Patents and the W3C Software patents are the only way to shut down open-source projects and innovation. They're also legal reality in the US. The W3C recognized the important role they may play in the future and has put together a framework (RAND) that requires patent holders to 1) announce they have patents when they do and 2) license patents equally to everyone. Some people critisize the new policy arguing the W3C should not recommend standards that have underlying patents. They also point out that the current rules encourage patent-non disclosure.

Until patent laws become less completely stupid, the above may be the best solution. Since patents have to be licensed equally to all organizations, no one company can try to shut out another through patents. So if Microsoft tried to use its patents to stop development in one area, it would have to hurt Red Hat, Sun, IBM, etc. equally. Under RAND, it seems, cross-licensing under discriminatory terms is no longer OK. The software patent system just sounds like a big mexican standoff to me.

Ask and ye shall receive This is one of the things I love most about the Internet, people are so helpful. Morbus Iff send this super tip on stopping the irritating Sherlock 2 banners. Thanks! Looks like I was phrasing my google queries wrong.

How lawyers work Great quote by Lessig today in a NY Times roundtable between him and Whitfield Diffie, Ray Kurzweil, Peter Neumann, Bruce Sterling, and Severo Ornstein:

The real problem we face is not slowness in technological innovation. The real problem is slowness in legal and civil rights innovation in response to the technological change. It was not until the late 1960's that the Supreme Court finally held that wiretapping was regulated by the Fourth Amendment.

The reason for this failing has lots to do with the way lawyers think. We are reactive traditionalists. It is hard to think creatively. But if we used the same kind of innovative creativity that our Framers used in crafting our government, we could craft creative balances between technological capabilities and human weakness. Technologies can't be guaranteed to be used only for the good. But technologies placed within well-crafted institutional structures can be made more likely safe than not.

(Via Tomolak)

Rage! I installed a wireless ethernet card today (which rules) but had to upgrade to Mac OS 9.2 to get the card to work. During this upgrade, Apple changed my Sherlock to Sherlock 2. I hate Sherlock 2. It has these large, pointless icons that don't tell you what they do, windows that keep resizing for no reason, defaults that bully you into lame sites like Go.com, defaults immune to change, AND continual banner ads. Banner ads on a desktop search utility?! If anyone knows how to stop this Sherlock 2 insanity please email me at zimran@winterspeak.com. Thanks.

What tragedy of the digital commons? Nobel Laureate Daniel McFadden writes on why the Internet needs a pricing mechansim to compensate content producers. I think he's wrong. As the WTC attacks demonstrated, the world is full of people who will happily create content without needing to be paid for it. Instead of fixating on traditional publishing models, think of the Internet as a way of harnessing all the unused mental cycles out there. Just as people don't need to be paid for keeping diaries, they don't need compensation for maintaining blogs.

Moreover, I find McFadden's assertion that "the Internet tends to fill with low-value information" ridiculous. Has he wandered into a Blockbusters, or seen a magazine rack in a supermarket? Low-value inforamtion is pretty ubiquitous. Personally, all the best things I've ever read have been online.

Quick notes One major personal gripe I have is when people call XML a standard. XML is a standard -- a standard way of defining other standards! You can create proprietary, closed tag-sets using XML which is exactly what Microsoft does, and then claims they are open and standard. Sheesh. And in case people have forgotten, XML is not any sort of interoperability panacea because interoperability is not a technology issue, it's a business issue. Microsoft is employing the same proprietary lock-in strategy with XML that it always has.

Just for fun Hah! Here's an excellent account of an investment banking internship for a U of Chicago MBA student.

Belly of the Beast I was at a Microsoft presentation today where they spoke about their .NET strategy and XP. Here are my reactions:

1) Microsoft's new licensing scheme is designed to increase the cost of ownership for those whose upgrade cycle is longer than 3 years while making it cheaper for those with upgrade cycles of 2 years. Their argument is that since it costs them more money to support old software, they should pass those costs onto the appropriate users. Personally, I have never had any support from Microsoft for any Microsoft product, so I don't know what costs they're talking about. Their real motivation is to force people into a faster upgrade cycle, which is more lucrative for Microsoft. Microsoft's only competition on the desktop is old Microsoft products.

2) Passport authentication is still in flux. The presenter told me with a straight face that ultimately, each user may end up having their own personal authentication server on their desktop which would then serve authentication up to other devices. For 99.999% of the population, this means all you need is a text expander on your desktop to store your passwords. No one needs their cell phone to ask their desktop for permission to buy off Amazon's useless WAP site. I'll write about the Joy of Text Expansion soon. Personally, I doubt Redmond will give up the power centralized authentication gives them.

3) .NET really is a big deal for the company. The presenters honestly believed that Microsoft supports open standards because they use UDDI, XML and SOAP. This is disingenuous, because a centralized authentication server is essentially a closed system even if it runs on open protocols and platforms. And they are shifting all their apps to this base. Moreover, the Word XML formats will continue to be partially proprietary, just as Word document standards are now, so don't expect great openness there either.

4) Smart tags are here to stay. Although they may have taken them out of the browser (for now) the rest of Office XP is riddled with Smart Tags that default to Microsoft standard services (such as Expedia over MapQuest). Users will probably never change their Smart Tag defaults, so unless companies pay for the privilege, they're not going to have access to these services. This clearly should be an active anti-trust area.

5) The SSSCA did not have high priority within all parts of the organization (these folks had never heard of it).

6) The future of Microsoft is built on massive interoperability where applications can serve up information (possibly over a network) to each other. So Outlook will serve addresses to Word, Access will serve numbers to Excel, and PowerPoint will send data to Visio. Given that the transaction related parts of XML will be kept proprietary, this essentially makes Office even more monolithic than it is now. When Microsoft talks about interoperability, they only mean interoperability with other parts of Microsoft. By converting the PC to a server as well as a client, they've automatically created (and own) 250M low end servers. That's server market share that Apache can never dent. It also locks Java out of the peer-to-peer game, the one area on the desktop it actually had some relevance. This is probably partly why Java will not be included in XP.

It will become increasingly expensive to use Microsoft. It will also be hard to operate outside their network, unless you use truly open protocols. The applications will become thick clients that increasingly mediate between the user and their data. So expect more frustration. And since monocultures are toxic to a network, expect more viruses that are more pervasive than anything we've seen so far. Businesses are going to have to get MUCH smarter than the current crop of execs who chase after any gee-gaw convinced it will finally make all their IT investments pay-off. If I was a business seriously interested in productivity through technology, I would stay away from XP and .NET.
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Microsoft license scheme forces XP upgrades As I wrote in my last post, Microsoft's biggest competitor on the desktop is old versions of Microsoft. Their new licensing scheme hopes to solve this problem once and for all. It does this by 1) forcing companies to buy new software every time they upgrade their systems and 2) forcing companies to rent software instead of owning it under a license. Businesses are not pleased.

Why Geoffrey Moore doesn't get it. Over the summer I read Crossing the Chasm by Geoffrey Moore and Information Rules by Varian and Shapiro back to back. The former is a business book about high-tech marketing, the latter a business-y book about information economics. Reading them together illustrates how poorly Moore understands his industry.

That's not to say Crossing the Chasm has no value. The basic strategy he lays out--first target a niche market until everyone suddenly starts to buy your product--is sound, but Moore doesn't understand why it works. He illustrates this limitation through his remarks on Microsoft: "to the best of my knowledge, Microsoft has never followed the niche strategy that I have been so strongly advocating...Microsoft's history is so unique it makes it virtually unusable as a precedent for strategy decisions in other companies." (p71 1999 paperback).

What Moore never twigged, but Varian and Shapiro understood right away, is the strength of demand side externalities in these sorts of information goods. The value of Word to me increases as more people use Word--it becomes easier to share documents. Therefore if everyone uses Word, it's hard to use anything else. Note that this is not true for a web browser, if everyone else uses IE I can still use Netscape and be OK (a fact Microsoft is furiously trying to change). Moore's niche strategy is nothing more than focusing on a fragmented market and gaining the 30% share needed to kick-start these demand side externalities that will drive market share to 100%. And an unassailable 100% at that.

Also note that other examples Moore wheels out do not work like this. For example, the value of my Palm Pilot increases only marginally if other people also have a Palm Pilot. Likewise, the value of Amazon only increases marginally if others use it (although their book reviews do create some demand side externalities, and undoubtedly they have great economies of scale on the supply side.) Hotmail has weak demand side externalities, eBay's are strong. And so it goes on.

The point is that the technological game is played by exploiting strong demand side externalities to lock up a fragmented market, and then start forcing that market through upgrade cycles by controlling the interface (this is what Microsoft has to do each time they release a new OS or Office application). So long as the market dominance is maintained, this can happen endlessly.

Obviously, this model sucks for consumers. It does not take long until upgrades are driven by the supplier's need for more money, not the customer's needs for a better product. This explains Microsoft's legendary "we've added features that just one person requested" attitude--they're desperate for features they can roll into upgrades. If they cared about actual customer needs they might decide that the increased complexity of single user-requested features actually harms the experience of the program overall for all the users who want something simpler. This model also drives complexity in technology, which is why development and productivity gains have been so stagnant. Eventually, firms are going to figure out that sometimes simpler, cheaper technology suits their needs better than complicated bloatware designed to justify yet another upgrade. But consumers share in the culpability. By being so passive in their technology choices, they've positioned themselves as the spoils of war, so that's how they're treated.

Open source software and open standards have a particular advantage in the standards control war--they're the one thing all players in a fragmented market can agree on. To prevent a dominant player from locking-in, all other market participants could support an open standard (and so forfeit market lock-in themselves). The Apache server and the FreeBSD software at its core pretty much cemented the TCP/IP stack's role as network standard of choice--it's a platform without a platform vendor.

Microsoft has two strategies to continue to capitalize on its desktop lock-in. First of all, Microsoft's biggest competition on the desktop is older versions of Microsoft. Leasing policy, backward (but not forward) compatibility, retiring support for old OSes etc. all eliminate the market for old Microsoft products and make room for new ones while protecting the lock-in. Secondly, Microsoft targets new markets by essentially merging them with its existing monopoly position, i.e. it ties the software into its desktop OS. They've done this with the word processor, spreadsheet, database, browser, media player, photo editor, text editor, server (in XP) etc. etc. It does not matter if they instantly commoditize the product (which for information goods means its price falls to zero) so long as it supports the central platform which the company can still charge for. Given that this is how information goods work, the court's hesitation in the Microsoft case because the company had not grown through acquisition makes no sense.

Moore would have written a better book, and no doubt delivered better service to some of his clients, if the understood the economics behind his advice.
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Authentication is not authorization Nice piece in The Register that points out the difference between authentication and authorization and explains why Microsoft's recent moves with regards to HailStorm should not be interpreted as any sort of Redmond concession. As I pointed out about six months ago, if the locus of control moves from the hardware (authentication) to the user (authorization) then it does not matter what OS the system runs on. .NET is a gigantic authorization infrastructure controlled by Microsoft.

K-School tackles software patents Some folks from the Kennedy School take their stab at the whole software/intellectual property debate. The come up with the following schema:
- Patents protects object code (as object code is product or functional innovation)
- Copyright protects source code (as source code is expression)
This isn't bad, as it allows implementations to be patented, but not functionality. I personally don't think event the patenting of implementations is necessary, but this is clearly better than the 1-click nonsense we have now. Copyright protecting source is also OK, although the current copyright provisions are broken.

Consumer rights online Complacency is eroding individual's rights online. Lessig talks about the erosion of the "end-to-end" principles that allow online innovation. Also, Microsoft and Disney are working to outlaw software libre and cripple all digital hardware. While holders are free to enforce copyright, it's wrong to legislate against business models. Do the right thing. Write to your congressman and support the EFF. I gave today.

Experience, not content A while ago I wrote that publishers are leaving money on the table because they don't understand they're selling experience, not content. O'Reilly gets it, as they demonstrate by offering their DocBook both on the Web and on paper (much like Philip Greenspun did a while ago). Why will people buy the book anyway? Because reading pages and pages of text on a screen sucks, and reference books work best beside the monitor, not competing with it.

GPL works through copyright Eben Moglun talks about the legal enforcebility of the GPL (total). Now, whether the GPL is the best license to use or not is the matter of some debate. People couch discussion of this license in terms of freedom, but it's probably better to look at the economics, particularly around standards, lock-in, and interoperability.

Computers are too complex Computers are too complex. Much too complex. And the technology industry is leaving alot of money on the table by not realizing this. Here's a screed outlining the difficulties in weblogging (you're reading a weblog right now btw). But I find the vicious tone taken towards normal end users offensive. These are your customers. These are the people you serve. Looking down at them will not help you build better technology that serves customer needs. And in my experience, they're far more rational than geeks--why should you hit the "start" button to turn a computer off?

Why the Justice Department blinked Columbia Law School prof and EFF member Eben Moglun says the Justice Department blinked in the Microsoft anti-trust case because PC makes are currently very weak. Remember, PC makes want to commodify away the complementary good (OS) to reduce prices overall, but can't do that now because they need XP to boost sales. Read the slashdot thread.

More on the tragedy While Bush declares War on state sponsored terrorism, it's worth checking out some international perspectives on the incident. While the world condemns this weeks horrible events with one voice, they also mention subjects taboo in US media, namely how the CIA funded Osama Bin Laden and created the Taleban, why the US is less insulated from its actions abroad, and how to really combat terrorism (nb. nuking civilian populations not recommended). I fear that the hot headed stances being discussed now will make things worse in the long run.

Yahoo! gets a little more bit literate While Hotmail ties Passport into its web email offering and continues the war against plaintext, Yahoo!'s email service has become more bit literate. After responding to a message, users are now prompted to move the message out of their inbox. This is, of course, exactly what users should do, and although I would prefer not being prompted, it does suggest that Yahoo! is thinking hard about good email habits. Hopefully businesses (and individuals) will start to do the same.

Monolithic software A key component of the Unix design philosophy is that it avoids monolithic programs and instead aims for simple programs that can work together. The three key features of this is 1) interoperability, 2) flexibility to user needs and 3) simplicity in the programs. All of these are anaethema to the Microsoft model because 1) interoperability damages their monopoly position 2) economic buyers of MSFT software are different from its users in corporations and 3) its harder to churn users through upgrade cycles if programs are simple. For these reasons, it's wrong for Linux to recreate the MSFT desktop and imperitive that Linux recreates the MSFT desktop. Ahhh technology.

Good Easy on Wired Wired ran a piece on the Good Easy, which got picked up by Slashdot. For those nostaligia buffs out there, here's the original article.

More on the attacks This was put together by a reporter friend of mine in Paris. It illustrated how shocked people have been all around the world by yesterdays attack.

The bombings of the World Trade Center and the Pentagon dominated French media coverage and conversation at French schools, offices, and cafes Wednesday as the French officials condemned the attacks and deployed security forces across the country.

Le Monde headline: "America hit, the world seized with fright." Le Figaro: "The New War." Le Parisien came out with a special edition, with 22 pages of coverage. Liberation had no headline at all, letting a full front cover photo of lower Manhattan up in smoke do all the talking.

In a televised announcement Tuesday evening, French President Jacques Chirac called the terrorist attacks a “horrifying tragedy” and expressed his support for the American people.

"Never has a country in the world been the center of terrorist attacks of such magnitude and violence….What happened in the United States concerns us all," he said after an emergency cabinet meeting Tuesday evening. Troops were deployed at the borders, airports and government buildings, and military vehicles were seen rolling down the streets--as many as a dozen under a half hour by the Seine. Flags were at half mast and the Archbishop of Paris, Cardinal Jean Marie Lustiger held a mass in Notre Dame.

The Paris Bourse was down 7.4 percent. All flights to the US or Israel from France were canceled until at least 7pm.

Meanwhile, French rushed to check up on loved ones in New York and Washington, jamming phone lines to the US. The US Embassy switchboard was also overloaded. American tourists ran around cafes, asking where they could watch CNN on TV.

All day, France Info radio ran interviews of shocked French people wondering how such an event could have happened in a country. Some said they had stayed up all night to watch live news broadcasts.

"It's like the Eiffel Tower crashed. It's something you never imagine ever happening," said one.

Terrorist attacks on the US No technology news today, just some comments about the terrorist attacks in the US. Scripting.com feels that a Palestinian group might be behind it, while USS Clueless things it's Osama Bin Laden. Whoever claims responsibility for this terrible attack, it shows what the wars of the near future will be like. Not the sort of thing Bush's missle defense shield can help protect against. Prayers go out to all those effected.

Bye-bye bay-BeOS Be closed down last August (for those who don't know, Be produced what Neal Stephenson described as the "Bat mobile" of operating systems). After the rubble was picked up by Palm, Jean-Louis Gassée, Be's CEO, argued that Microsoft's anti-dual boot policy made it impossible for OEMs to include it on their machines, even though the operating system was free (like beer, but not like speech). While this is exactly the sort of anti-competitive behavior the government has decided to overlook, I don't think that Gassee's argument holds water--Be would have been doomed anyway.

Once upon a time, the operating system was a layer that sat on the underlying hardware and provided APIs for applications. To avoid being commoditized away, Microsoft essentially tied its OS to applications, such as the word processor, spread sheet, low-end database, and most recently, browser. All of these applications (except for the browser) have strong demand-side externalities, i.e. they're much more useful if many people use them because folks can then share files. Be, even if it was a better OS, had no hope of displacing this huge installed base of installed applications. The only thing that can compete with Microsoft Office products is newer Microsoft Office products. And although they chased the embedded market, they were dead in the water there too -- that belongs to Linux, the ultimate commodity OS. Be would have been better of going after some niche like video editing and getting installed as the standard in dedicated digital editing suites. Engineers should know by now that great technology cannot beat the economics of networked information.
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DMCA the sequel I go away for a weekend and look what happens. As predicted, the record industry is trying to build its business model into the legal system and criminalize competition. By building strong copyright authentication in at the hardware level, people cannot release work into the public domain even if they wanted to.

HP & Compaq Now that the technology industry has collapsed, it's clear to anyone that the PC is an entirely commodity product. Dell, the low cost leader, is grinding away the competition through a price war it's uniquely positioned to win. So HP and Compaq's merger, although an act of weakness, may give OEMs the muscle they need to work on commoditizing away other complementary goods (like operating systems).

(Winterspeak will be on hiatus until next week. Am going on a retreat).

Silicon Desert Visuals Here are some pictures I took of the Dubai Internet City. They still need to work on the whole "freedom" angle, as I was actually banned from taking these. Enjoy these raw jpegs:

- Here is the exterior entrance of the builings in the campus
- You can catch a glimpse of the lake in the "courtyard" between the main campus buildings
- And finally, here's a peek inside--could be anywhere in the world.

Links to picks are now included in the article page

Quick links Two good pieces from The Register today: 1) Why DivX does not threaten movie studios they way Napster did (they better understand they're selling experience, not content) and 2) Sklyarov boss exhibits cojones--always good to see genuine corporate courage.