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Technology Protectionism

December 21, 2006 Leave a Comment

Dictionary.com defines protectionism as such:

pro·tec·tion·ism [pruh–tek-shuh-niz-uhm] –noun

1. Economics. the theory, practice, or system of fostering or developing domestic industries by protecting them from foreign competition through duties or quotas imposed on importations.
…

This is the phrase that came to my mind a few days ago when I read the article about Microsoft’s Linux Support Subscriptions. Microsoft and Novel have teamed up and are brandishing the Microsoft patents at the technology community in an effort to stem the incoming tide of the open source community and fear of possible outgoing tide of revenue. Novel has struck a deal with Microsoft to have Microsoft bless the SuSE Linux Enterprise Server (essentially saying that SLES has no unlicensed Microsoft technology in it…any Microsoft-ish technology that is there is now licensed). Microsoft is also hinting (not so subtly) that they might sue anyone who may have unlicensed Microsoft IP (or something that might look like Microsoft IP) in their open source projects. This then causes a ripple effect to commercial providers who may include open source components in their products (like Apple’s OS X) and the business who use these open source and commercial products. (sniff, sniff…do I smell SCO in the air?)

As a business person, I’m a strong proponent of IP protection and patent law. But eventually in a complicated soup like the technology industry, where stuff has to work together and interoperate, there needs to be some consideration of the best interest of the customer. Throw the open source ingredient into the pot and you get technology vendors who don’t believe or understand the open source movement looking for ways to protect their interests (i.e., revenue streams).

This is nothing new in the wider economic sense. All you have to do is do a Google news search for protectionism. You get examples ranging from the US government’s protectionism of the US Ports to the EU’s protectionism of sportswear imported into the union. The underlying goal of each of these examples is to protect one group form changes that are occurring in the larger world. There are lots of social and economic reasons that can be given for why the protectionism is needed, but the real reason is anchored in the fact that it’s hard for people to change. And in today’s change accelerating world, it’s only getting more and more difficult.

The technology field has been going through it’s own core changes for the past five to six years. The over spending of the bubble years led to the cost cutting and maturity of the use of IT within business. Large IT “deals” started to decline; programmers who were lured into the cycle of self-destructive levels of work and productivity for the false hopes of quick wealth started to turn their energies to the altruistic endeavor of open source development; businesses started to see real value and security in the open source projects.

A technology company is no different than a person…change is hard. Many companies fail because they either don’t change when they need to or early enough, or they don’t change fast enough. Then look at the biggest, they can delay the change through the use of their legal armies. Figure out a way to use the legal system against those that are causing the change. Boost your own declining revenue streams by instilling fear in your customers (all customers love vendors for doing that…ever hear of a license audit?). The move by Microsoft and Novell is nothing more than technology protectionism.

So Microsoft is scared. Windows Vista hasn’t been going as smoothly as they need it to. All of the cool features it was supposed to have have almost all disappeared due to technical difficulties of implementing them in the hodgepodge of legacy code. Apple’s computer and OS popularity has grown. Deja vu with the Firefox browser’s popularity continuing to grow. Another 800 pound gorilla by the name of Google has been invading it’s part of the jungle for a while now. How is the company going to keep or grown it’s 28% profit margin in order to keep another 800 pound gorilla (the street) happy? Release the IP lawyers.

An so business start to protect their own self interests and pay into the protectionism scheme. Of course these business need to save face themselves, so they change the name of the scheme 180 degrees from protectionism to interoperability. Wouldn’t you do the same if you had a well funded ($34B) army of lawyers marching toward you?

I just don’t buy this spin that this deal is about making Linux and Windows more interoperable. If that was the case, there are open standards that Linux has supported from it’s inception that Microsoft could start to fully support (interoperability is about more than just two companies products). This is all about Microsoft protectionism. I think the pressure that Microsoft is feeling is greater than what the general press is talking about (personal opinion). Rather than trying to inovate their way out problems they face with the changing technology marketplace, they are taking the protectionism route. Beat up on the marketplace by threatening to sue unless they buy a Linux License from Microsoft.

I’m calling shenanigans on this use of the De Tocqueville model.

Form, Function, Community and AdSense

November 28, 2006 Leave a Comment

Today a colleague and I were chatting about some random topic (so random I can’t honestly remember what it was) that spun into a discussion of that “SeatGuru Guy”. My colleague mentioned the Fortune article that talked about how the guy behind SeatGuru makes $120k/year (back in 2004) from advertising on his website that he originally started as a hobby.

This then lead to a discussion of my friend’s HotSpotr community driven wifi database site. Andre built this web application as an exercise in Ruby on Rails development, made it accessible to anyone to add hotspot info into it, and then began telling his network of contacts about it. About 4 months later, it has grown into a DB of 1100-ish wifi spots from around the country. Andre has invested a bit more time to add new features to it and the site’s community continues to grow. Now, in itself, this application isn’t anything unique in nature…wifi database sites have been around for a while and there are a number of them that have many more hotspots listed than Andre’s. But I still use Andre’s.

Why? Because it’s the best functioning wifi application I have found! It’s mashed-up with Google Maps, provides useful ancillary information about places with free wifi, allows me to find what I’m looking for with only two page views, and recently even provides a mobile interface (which I have used a number of times while on the road). It works, it works very well, and it’s getting better. So I tell everyone about it and give back to the community by adding new spots when I find them. (Keep up the great work Andre!)

At this point, it’s still advertising free. Andre did this as a project to learn a new technology in his spare time but also to develop something that he hoped others could use. Back in the early days of the web (the Mosaic era), I created something similar–a free service listing Freenets/Community Networks around the country. I did it because I was involved with my local Freenet, and thought others would find the service valuable (they did, I even won a few of the early “web awards” for the site). This is the altruistic root of community…and what makes most great community web sites great.

My concern here is that we are loosing our understanding of what is meant by community. How many of the other hotspot sites out there make money off of their service though the advertising fees? There is nothing wrong with that in itself. I’m sure most of these sites started off just like Andre’s. But when these sites start focusing more on the form of how to drive more advertising revenue (i.e., make users visit more pages before they find what they want, plaster as many ads on the page as possible to drive up the revenue per view) versus the function of how to provide great value, they lose sight of why they started. Form wins over Function. The trust of the community is broken.

[I’m using Andre’s site as an simple, personal example. You can see this same thing in the histories of a number of the Web 2.0 companies. The most successful (the measurement of which ranges from number of users to acquisition cost) understand this battle and have walked the fine line of pleasing their community by still providing value while having the community fund them in a fashion that doesn’t alienate the community.]

In the debate of Form versus Function, I’ll side with function every time. However, I’m also a pragmatist…I have a mortgage to pay just like others and I understand the reason behind placing ads on a site. If Andre’s site becomes popular enough, I wouldn’t blame him if joins Google’s AdSense network. It’s when the Form starts taking precedence over the function of the service originally offered that I’ll have to have a little conversation with Andre (most likely over drinks…Delusion Andre?).

This leads me a new little twist in the eternal battle of Form versus Function…Gimme Some Candy. Gimme Some Candy is the way zefrank, my current favorite vloggers, funds his video blog the show with zefrank. I stumbled across his vlog when a fellow business travel showed it to me in the concierge lounge of our hotel during a recent trip. zefrank created this idea to fund his vlog without advertising by simple letting people donate money to him if they like what they saw. Each episode, you can give him some candy by donating to sponsoring his show. The more you donate, the bigger and flashier the icon you get. These icons (and any text message you want to share with the world) are then displayed on the following episode. So not only is zefrank funding his show, he is providing a way for the community to rate his shows and also allow the sponsors to do some advertising (the text appears as a tooltip for your icon) .

(pssttt…ze: bring back your “favorites” list of the shows that brought in the most candy…)

What I love about his concept is the simplicity and elegance of it. Function wins with a creative nod to Form. The community supports the service and service provider (capitalism at it’s best).

In a word….Brilliant!

How Much Infrastructure is To Much Infrastructure

November 19, 2006 Leave a Comment

Lately, I have been doing some advising for a friend of mine on a new technology business. They are in the early stages of building out a new SaaS offering and they are planning out their technology infrastructure. The discussions that we have been having would be all to familiar to those of us who sold through the “bubble years”. How big do you plan your infrastructure?

The enthusiastic ones talk about the thousands upon thousands of possible customers and millions of visitors per day (at least that part is different from the bubble…back then it was millions of customers and 100’s of Millions of visitors…at least I was fortunate enough to work with a couple of the companies who actually did that type of volume). The cautious ones talk about minimizing the number of moving parts and not make it too complicated. The pragmatic ones (I consider myself part of this group) try to strike a balance between the two.

During the bubble you needed to spend literally millions on infrastructure to run an Internet company. Today, open source packages enable you to do this for close to nothing. You can build out a very robust, flexible, and scalable infrastructure based on open source (can you say Google?). But the question still exist, how much do you need and at what point.

The specific question comes down to a single source for user information (most specifically their authentication) for the customers and visitors to the web based service. One thought is to implement an LDAP system right away for future grown and flexibility. Another thought is to just build it into the web site.

For the record, I’m part of the LDAP camp. I think it will provide the flexibility of a single source of truth for users right now and is standard enough that most open source packages can hook into it for authentication. The plan includes adding multiple services that are either free or for charge, and a users set of services could belong to both groups. The thought of trying to synchronize user authentication information between multiple systems across each service just adds too much complexity.

If anyone has any opinions to share on this topic, I look forward to hearing them. How are others out there implementing their infrastructure for similar situations?