About Jean-Louis Gassée

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Posts by Jean-Louis Gassée:

The end of Motorola?

Once upon a time, Motorola was the king of cell phones. AT&T invented the cellular network, Motorola, already a leader in radio technology, designed the mobile devices and, in 1983, introduces the Dyna-Tac, the first of a long line of clearly superior products, all ending in Tac.  In the late eighties and nineties, MicroTacs and StarTacs were musts for Silicon Valley geeks and MBAs alike.  Motorola’s prowess was, in fact, much wider, ranging from NASA communication equipment to microprocessors (6800, 68000 and PowerPC families) and networking equipment.  The company even made yet another name for itself by inventing the Six Sigma quality improvement processes.  Motorola was a widely admired electronics giant.  Was. More

Software: how do you compete with free?

That’s the question Steve Ballmer, Microsoft’s CEO, is trying to answer every morning when he goes to work. On the server software side, Windows Server is doing well, especially with the Exchange e-mail server and the unheralded but very good collaboration server, SharePoint.  These products have matured, they’re relatively easy to set up and manage by IT organizations.  The Exchange component  is a spectacular success: it manages e-mail, contacts, calendars for hundreds of thousands of organizations all over the world.  Even Apple finally embraced Exchange: the iPhone now syncs well with Microsoft’s server and the next version of OS X promises “native” Exchange support.  In plainer English: Apple’s Mail, Address Book and iCal programs, for example, will sync with Exchange “out-of-the-box” just like the iPhone does.  (This will be a relief to suffering Entourage users.  Entourage is Microsoft’s own Outlook sibling on the Mac, but it is a poor relative and lacks Windows’ Outlook depth and polish.)  Seeing that Windows Server generated more than $20 billion last year, one is tempted to think everything is going swimmingly. More

“Cloud Computing is bad for you”…

So says Richard Stallman the father of the Free Software Foundation. He makes a simple argument: By using Cloud Computing applications you surrender your life (data) to some big company you can’t trust.  You’re no longer in control.  Conversely, if you keep everything on your (Linux) desktop, you’re the master of your own destiny.
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This is, to say the least, countercultural. The new and improved wisdom is “everything”, every application, every service will be delivered from the Cloud, a “server farm” somewhere in the world.  To be a little more precise, yesterday’s difference between the e-mail client application and the e-mail service is going away.  The browser becomes your OS (Operating System) through which the e-mail service (Gmail or Outlook Web Access) is delivered.  Even Photoshop will go this way: you store the original image in the Cloud and, through your browser, you navigate the universe of editing features.  You give an order, say crop a part of the picture, Gaussian blur, twist a color.  Then, the order is executed on the server, in the Cloud.  This uses much faster computers than your laptop and your browser gets the rendered result.
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This is exactly what Photoshop Express does. The old way local processed the image locally because you couldn’t count on the network bandwidth (speed) to ship back an updated image from the server each time you made a modification.  The local processor had fast access to local memory, performed the image rotation and the screen had similar fast access to the modified image residing in memory.  The ‘everything local’ (storage, processor, display) advantage hasn’t disappeared, but networks are faster, servers have more muscle (in most cases) than my laptop and we use smarter ways to pick which part of the image we want to send from the server to the browser.  Put another way, Photoshop in the Cloud isn’t a universal solution: graphics professionals will want a 30”screen, eight processors and 16 gigabytes of local storage.  But ‘the rest of us’ will find the Cloud solution satisfactory, especially if we can walk to any computer in the world, upload, edit and e-mail polished pictures without a local application, using Photoshop (or its competitors) as a service, not a desktop application.
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This is both an actual example and a valid metaphor for the new genre of application software delivered as a service (SaaS) from enterprise servers or from a Cloud Computing provider such as Google or Microsoft Live. Stallman will have none of this.  Interviewed by The Guardian, he counters: “It’s just as bad as using a proprietary program. Do your own computing on your own computer with your copy of a freedom-respecting program. If you use a proprietary program or somebody else’s web server, you’re defenseless. You’re putty in the hands of whoever developed that software.”
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The gentleman is opinionated, to say the least. A Google search on his name will produce a rich trove of strongly worded rants revolving around one idea: software ought to be free.  This hasn’t made him friends in companies such as Microsoft but Linux and its cousin FreeBSD, all related to AT&T’s Unix, have become indispensable components of modern computing.  Richard Stallman knows very well that, without the free software movement, there would be no Cloud Computing.  Amazon, Yahoo!, Google and most others run on free Unix relatives.
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Going back to the argument Stallman just made against Cloud Computing, it’s hard not to find parts of his statement either naïve or disingenuous. If you use proprietary software, he says, “You’re putty in the hands of whoever developed that software.”  The idea is that free, Open Source software, protects people against dirty deeds, manipulations from the authors of proprietary software.  Sounds ominous but, regrettably, Stallman forgets to offer examples of such bad actions.  Higher price, perhaps?  But the cost of ownership, that is training, maintenance and the like, dwarfs the initial price tag of software, be it on the desktop or on servers. Unlike an extraordinarily gifted programmer such as Stallman, most users cannot inspect the source code of their word processor or e-mail program.  As a result, the ‘protection’ afforded by ‘freedom-respecting’ programs isn’t as good for me as it is for him.
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There is more.  We no longer live in a disconnected computing world: we get e-mail, we look up Richard Stallman on Wikipedia. So, even if we sagely run spreadsheets or photo-editing programs on our desktops (the Cloud Computing giant Google offers a neat desktop Picasa 3 on Linux…), we have to communicate and we have no way to inspect the software that runs on the network.  Like it or not, we have no choice, we trust others with our data.  Bad things happen from time to time, but not to the point of killing the system.  Cloud Computing may or may not be The Future but doing everything on the desktop is definitely passé.
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Richard Stallman forgets a statistical truth: Trusting people get screwed sometimes.  Paranoid people get screwed all the time. –JLG
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The Big Meltdown: an unauthorized view

I’m good at predicting yesterday’s weather, or impersonating the 6 pm TV announcer solemnly attributing today’s fall in airline stocks to the rise in oil prices. As for future events, I need a little more time.  You sense where I’m going: Where were the sages who tell us, today, why the financial markets collapsed?  The rearview explanations abound: CDS (Credit Debt Swaps), regulators looking the other way, subprime mortgages seducing homeowners into using their house as ATMs and, above all, the obligatory, populist and escapist: Wall Street Greed.
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I beg to differ, not by 180 degrees, more like 60 or 90. And I’ll hasten to say I don’t propose to really explain (as opposed to describe), let alone propose remedies to the crisis.
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Why?  Because we’re dealing with mysteries, not secrets.
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A secret is like a combination lock. With time, accomplices who procure the blueprint to the safe, harder tools, faster computers, the lock can be picked, the secret revealed.
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A mystery, on the other hand, is just that, a mystery, there is no combination, no code to be broken. Who created the Universe?  God, some will say .  Fine, but who created  God?  The Meaning of Life?  42 — according to Douglas Adams.  Mysteries do not lend themselves to syllogism, to deduction, only to metaphors for their contemplation.
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For example: Wall Street Greed.
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Consider mutating bacteria such as E. Coli or clostidrium difficilis. Why blame them for nosocomial (contracted in hospitals) diseases, for the weakening arsenal of antibiotics?  They multiply, they evolve, they adapt, they survive.  And, consider their last name, Coli, because they live in our colon.  It’s not a given we’ll ever eradicate them and, if we did, that their disappearance would benefit our species.  Instead, we evolve tools, chemicals and practices, to keep them under control.
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The metaphor is a little obvious. Wall Street is an ever-evolving life form of practices, deals, dealers and their inventions, their financial instruments.  They can’t, they mustn’t be eradicated.  We can’t live without credit, leverage, currencies and insurance.  Just like we need to use antibiotics judiciously, to invent new ones and to worry about prophylaxis, we have no choice but continuously evolve financial regulations and policing organizations.
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Contrary to what easy-thinking ideologues claim, we don’t need less regulations. Societies cannot be ruled by the Law of The Jungle.  Try deregulating traffic intersections.  Yes, too much regulation leads to old style central planning, gosplan, to a Soviet economy, even more corrupt in the end.  The real difficulty is evolving regulations and police as Wall Street evolves.
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I realize saying this is just about as helpful as the famous weight-loss regiment: Eat less and exercise more, for ever.  Another kind of mystery.
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But wait, it gets worse, the metaphor is incomplete, full despair in a moment. There is another ever-evolving life form at work: the three branches of our government with its stubborn resistance to change, to accounting prophylaxis,  transparency.  To say nothing of a sickeningly complex, always growing, smellier and smellier tax code.  If our government can’t be cleaner than Wall Street, how will this life form control the other?
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More black to this bleak picture.  Another mystery: models.
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In this context model means a set of equations.  Models are used by economists, businesses, Wall Street traders or governments, they have become both devilishly complicated, thousands of equations — and immensely valuable.  If Southwest Airlines makes good predictions for passenger traffic and oil prices, they can buy insurance for their fuel purchases and price tickets correctly and generate profits and make shareholders happy and, as a result, help pension funds pay benefits to retirees who, in turn, buy goods and services from businesses who…  And this is a laughingly oversimplified example.  Fine, but we have the finest math PhDs and the biggest computers in the world.  Probably true for a few more years.  The mystery lies deep inside the models.  They cannot deliver because their equations are, in layperson’s parlance, non linear.  Put another way, they are unstable.  The smallest error in the input data quickly results in gross deviations.  If this sounds crazy, please turn to weather forecasting.  An immensely valuable activity for agriculture, travel, insurance, war…  In the past twenty years we’ve made no substantial progress.  We always knew winters were colder than summers but we can’t predict next week’s weather with any accuracy.  And we won’t.  Counterintuitive as the statement might sounds, it results from properties of what some call Dynamical Systems or Chaos Theory, I prefer non-linear systems because the name addresses the nature of the mystery.  (A good read on the topic is James Gleick’s Chaos: making a new science.)  This has nothing to do with basic randomness found in quantum physics.  The mystery of real-life complex systems is they’re both deterministic and unpredictable. [I’ll skip over the competition between models trying to outguess one another.  Mathematically inclined readers will subsume those into an even more unstable meta-model.] .
We like to believe we can influence the course of events; this is how we’re built.
But, more often than we’d like, we have no say.  It’s a Law of Nature: financial markets will defy prediction and will explode from time to time.
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Is this nihilistic or defeatist?  Not in the least. Even if we know we can’t guarantee stability, we can make the system less dangerous, the bacteria less lethal.  And we can listen more serenely to the charlatans. -JLG
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That word again: Open

The Other Steve, Microsoft’s Ballmer, just treated us to another paean to open systems. This was last week at the Churchill Club, a Silicon Valley schmoozing institution.  There, we meet, gossip, drink, dine and watch a never ending and never boring parade of industry figures submitting themselves to soft-ball interviews by local notables of suitable rank.  (Next week, it’ll be Nokia’s CEO, coincidence, just on the eve of launching a new touch-screen music smartphone. Olli-Pekka Kallasvuo will be grilled by Walt Mossberg, the Wall Street Journal’s gadgetmeister.)
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For Ballmer, the interviewer was Ann Winblad, a respected venture investor who once dated Bill Gates, co-founder of Hummer-Winblad, one of the best Valley firms. Her genuinely inspiring life story is here, not in the surprisingly sterile Wikipedia piece.  The edited text of Steve’s remarks can be found on Microsoft’s site and if you search for “Ballmer Churchill Club” on YouTube, you’ll see bits of the Q&A session, often the more interesting part of such event.
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One the themes Microsoft’s CEO harped on was open systems, not open source, he’s not crazy about that kind of openness. Also referred to as “choice”, it is Microsoft’s mantra: With us you have a choice of  manufacturers, processors, peripherals, software.  We’re so used to the PC we tend to forget its industry has achieved the most remarkable ascent to the top of economics and culture the world has ever seen.  In three short decades it has become a trillion dollar ecosystem worldwide with Microsoft alone featuring an enterprise value of about $220 billion and operating margins in the high 30 percents.  (We thought we’d never see anything like this again and we now have Google…)
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Ballmer correctly opposes Apple’s closed control of hardware, software (and distribution) layers of its computers to the more open PC model where manufacturers offer a choice of hardware and software components thus covering a wider range of configurations, applications and prices.  Still, there is little choice outside of Microsoft Office and, for manufacturers, a PC open to both Windows and Linux installed at the factory is still verboten.  Jesuits once used what they called Holy Effrontery in defending their faith (or their power).  Never mind the contradictions, the Microsoft PC model is alive and well.  Which leads Ballmer to extend its open/closed discourse to smartphones where both Windows Mobile and Google’s Android, a nod from Steve, incarnate open choice and Apple behaves in its usual closed ways.  True again.
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But…
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There is a tricky combination of reality and perception, one that resists Ballmer’s forceful (and often very intelligent) assertions. First, for more than five years now, Microsoft’s stock has been essentially flat, a little below $30 a share most of the time.  Then we have Google.  Some call it the next Microsoft, all see its dominance of the search and advertising markets as well as its leadership in Cloud Computing developments.  This can explain the flatlining stock: for investors, even if today’s numbers are very healthy, Microsoft is no longer the king with the attendant ability to “tax” the market, to translate dominance into ever-rising profit streams.
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And we have Vista.  Never before in Microsoft’s history have we seen customers balking at the new version, Vista, and downgrading back to the older one, Xp. Today, if the effect on Microsoft’s profits isn’t clear, the impact on its credibility is inescapable.  Most of Vista’s ills are attributed to driver problems.  In plainer English, drivers are software modules that graft the many different hardware choices onto the core of the operating system.  But don’t think simple graft on a tree, connecting hundreds of delicate synapses is more like it, with many surgeons, hardware manufacturers, operating simultaneously.  Operating systems, all of them, end up with layers upon layers of additions and corrections.  The extensions and patches are needed for new versions to stay compatible with past ones and also to fix old and new bugs.  They look like Babylonian archeological digs with strata of debris marking each generation.  What Ballmer won’t say is this: the open model adds choices and opportunities; the price is higher complexity, fragility.  For Windows, the cost/reward ratio isn’t as good as it used to be when Windows 95 succeeded Windows 3.11 thirteen years ago.
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But, wait, there is more!  For all the preaching of the open/choice Gospel, Microsoft actually uses the closed model as well. I’m a man of principles, tell me the ones that the market doesn’t like and I’ll change them.  Microsoft’s game console, the Xbox?  A closed system, just like Nintendo and Sony.  The first iterations of the company’s open music players platform won’t sell against the closed iPod?  Never mind, Microsoft’s Zune is now an Apple-like platform.  Microsoft bought Danger, a closed smartphone company.  For its hardware, the Sidekick?   For its non-Windows Mobile software platform?  To build a ZunePhone?
Microsoft’s clarity of mind is admirable: it does not confuse what to say and what to do. — JLG
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Android Week

Something to keep our mind off the Wall Street catastrophe. Who knows, we might be on the verge of a “nuclear winter” as the Bush administration wakes up to another consequence of its intellectual shallowness, of its inability to understand that for markets to be really free they need to be regulated with an effective, uncorrupted police to enforce regulations.
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So, turning to saner pursuits, this coming Tuesday September 23rd, T-Mobile is slated to announce their first Android phone. What does this mean, how will this impact the smartphone market and the cellular carriers?
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Android is the name of the Open Source smartphone OS developed by Google’s engineers. What we think T-Mobile will introduce is a set built by HTC, running the Android OS and applications.  In advance of the launch, T-Mobile appears to be upgrading its network, or parts of it, to 3G connectivity.  In addition, T-Mobile plans an on-line store for Android applications, the rumor being it won’t impose the kind of restrictions Apple is known for.  In other words, T-Mobile welcomes Android developers with open arms.  Predictably, prices, handset and service, will be iPhone-like.  What appears to be not at all iPhone-like is a slide-out keyboard to be used with the screen in landscape mode.
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If all of the above is close enough to the upcoming facts, this will add a considerable amount of energy to the already lively smartphone market. Many, yours truly included, are happy to see more competition for the iPhone and his imperious maker.  As I was documenting my iPhone’s numerous crashes, one Apple individual expressed happiness: There was only one “real” OS crash, you see, the rest being processed “killed because they started to use up too much memory.” It’s a relief to know my rudely interrupted Safari browser connections or Maps searches are not real crashes.
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But, more competition is a vague phrase. Nokia has been around a long time, Windows Mobile is about 10 years old, RIM (Blackberry) too, to say nothing of Palm, Sony Ericsson and Motorola.  The iPhone has had competition for more than a year, what changes now?
Not the operator situation.  T-Mobile is a good company, with good customer service, they’re part of the big Deutsche Telekom konzern, arguably smaller but more solid than Sprint.  Curiously, neither Verizon nor AT&T, nor Sprint appear to be interested in Android.  Is it because they fear Google will have too much power on them because of the openness of the platform, because it could lead to Android VoIP applications bypassing their network billing system?  T-Mobile, in a challenger position, has no such fear.  On Blackberries, they offer what is known as WiFi Mobile Calling, that is VoIP over WiFi at home or at the office.  In other words, carriers don’t like Google pushing them towards their pre-ordained destiny: becoming wireless ISP.  Verizon talks the Open (that word again) Network talk but doesn’t really walk the walk, that is allowing anyone to bring their handset to their network.  They and Motorola got sued, and had to settle, for removing Bluetooth features allowing too much data exchange between a laptop and a phone.  Such exchange was bad: it reduced billable network traffic.  A bigger threat to the iPhone would be Verizon embracing the Android platform.
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What about the product itself?  I’ll get one as soon as possible, I already have a T-Mobile subscription. I suspect the keyboard-based UI will be well received and I’m sure we’ll see good applications on the handset, if only native Google apps, games and utilities.  The technophile is excited, and so is the venture capitalist as Android will help more applications developers make more money, resulting in new opportunities to finance interesting companies.
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And there is Google. Not the Android team, some members are ex-accomplices of mine, I admire what they do, but Google the search and advertising and Cloud Computing company.  Will Google help the still very timid smartphone advertising market?  Will a better keyboard enable more mobile applications?  For example, even as a long-time Blackberry user, I would not write this column on it.  And I won’t do it on my iPhone either.  But, will I use Google Docs on the T-Mobile handset because of its (rumored) horizontal keyboard?
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Moving to content, will the T-Mobile Android phone run all YouTube videos, will it run a version of Flash?  The iPhone doesn’t, a topic of muddled technical and industry politics debate, Apple and Adobe aren’t working too well together of late.
Still on content, imagine this: Google makes a deal with Amazon and all the Kindle content becomes available on Android phones.  Or, not at first but in a future iteration, the video downloads Amazon sells become available on Android.  And why not start sooner with the music (MP3) files Amazon sells.
You see why I’m curious.  I’m lucky, the T-Mobile office in Palo Alto is about 100 yards away from my office.  –JLG
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A second look at 3G

by Jean-Louis Gassée
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Revelation or revelator?  I’m referring to the iPhone, of course. We’ll quickly skip over the revelation part, enough praise (and some well-deserved barbs) already.  Instead, we’ll look at the light the iPhone sheds on the cellular infrastructure and on the culture of operators.
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The symptoms: spotty 3G coverage, bad reception, ‘bandwidth’ (meaning download speed) far from the “twice as fast” claims, poor battery performance.  To say nothing of software reliability complaints.  Add Apple’s lofty claims and relative inexperience in cellular telephony and you get a nice target.  As the French like to say, the higher the monkey climbs, the more people see his… mistakes.
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This being America, we now have three lawsuits broadly accusing Apple and AT&T of false claims. At the same time, the chattering classes, read the blogosphere and the aging MSM (Mainstream Media), promptly filled up with comments, explanations and accusations.  More confusion than light.
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Apple first clammed up in its usual imperious style but, soon, emails from Dear Leader himself leaked out.  Steve Jobs replied a couple of customers, acknowledged the contribution of software bugs to battery and connection issues and promised fixes in September.  All along, the company refrained from implicating carriers.
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However, as more facts emerged, we began to see a different picture.
The magazine Wired conducted a nationwide study that pointed the finger at the carrier, AT&T.  Then, a Swedish lab took it upon itself to test the iPhone reception (story on Cnet and in the Göteborg Posten), comparing it to leading 3G handsets.  The result?  With regards to radio performance, the 3G iPhone was indistinguishable from Nokia or Sony Ericsson handsets.
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Then, it transpired that Orange, in France, was ‘throttling’ the 3G iPhone. Throttling?  Here the word refers to Orange deliberately limiting the transfer speed, the bandwidth provided to iPhones to 384Kbps (Kilobits per second), which seems to be the ‘legal’ minimum of the ITU (International Telecommunications Union), not the 1Mbps or more ‘sold’ by the carriers.  [I went to the ITU site and entered 3G in the Search field.  The answer is: “The component required for this action is not available”.  This in both Simple and Advanced search.  Fortunately, Google provides the usual abundance of links and things become even less clear.  Regarding the 384Kbps number, some interpret it as the maximum rate for slowly moving devices, such as a handset carried by a walking user.  Others quote the IMT-2000 standard and ominously remind us: “The total max bandwidth of 2.4 Mbits are to be shared by all users within a single cell sector. One cell normally has 3 sectors to cover the full 360 degrees area around a cell antenna tower”.
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Confused?  Let’s step back a bit.
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When we look again at the Orange item, one implication becomes explicit: the network knows it is serving an iPhone.  A dialog, a protocol sets up the connection, identifies the phone/customer for billing, etc…  The “etc” part is very sophisticated as it allows the network to regulate the phone’s radio power, for example, no need to “shout” if the cell tower is near.  This, in turn, points to the ‘client’ side, to the iPhone’s role in the protocol.  Hence the acknowledgement by Apple of connection and power management bugs, hopefully corrected by this past Friday’s 2.1 update.  (I installed it and have nothing useful to report yet – which could be good news.)
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On the carrier side, a set of facts emerges. To begin with, carriers weren’t prepared for the iPhone, because it isn’t really a phone, it is an Internet device with a phone thrown in.  As noted here before, Google found that the iPhone provided 50 times more search traffic than the next smartphone down the list.  In the past, carriers touted smartphones as having browsing and multimedia messaging capabilities but these were hard enough to use to be hardly used.  The iPhone comes in with the first real smartphone browser and the naïve customers use it.  So much so that the network buckles under the load or, in Orange’s case, tries to survive by spreading the penury.  (In recent statements Orange appeared to promise to be back at 1.5Mbps “in September”.) See also how iTunes wireless download are only allowed with a WiFi connection, not 3G.
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So far, carriers have managed to maintain an oligopoly, a market with a very small number of suppliers. Economic theory holds an oligopoly suppresses real competition and leads to various forms of implicit or even active price fixing, as we’ve seen in France.  The lower level of competition allows carriers to delay investments and ‘milk’ their network (and their customers) just like the good old cable networks operators.  In downtown Palo Alto, the birthplace of Silicon Valley, there still are ‘white spots’, places where you have No Service.
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In keeping with the carriers’ culture, we see a combination of small print and outright misrepresentations of services.  Summarizing: your payment is mandatory, our performance is optional.  No wonder ‘trial lawyers’ are rising to this tempting occasion, this after courts started taking another look at the dreaded
mandatory arbitration clauses
carriers use to prevent disgruntled customers from seeking redress in court.
This is unfortunate.  Cellular networks are wonderful, when they work.  The voice and data services they strive to provide make our lives more productive, more fun and emotionally more connected.  (I know, there are also terribly annoying and dehumanizing uses too.)  For the technically curious, wireless networks are both admirable and ugly, an ever evolving patchwork of high-tech bits and pieces striving to appear seamless.
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We can only hope regulatory authorities will pay more attention to the gap between what carriers promise (and ruthlessly charge for) and what they deliver. As for the tall markitecture tales of 4G networks, today they’re just a way to move the debate away from today’s shortcomings by touting a bright future. –JLG
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Google Chrome: a new OS War

Not browser, OS.  More about that in a moment.
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But, first, our kind, venture capitalists, loves disruption. When the established companies take too much room on the Petri dish, there is no way for a new bacterium to prosper.  When a Microsoft dominates a market, to pick a random example, launching a competitor becomes prohibitively expensive.  We love to see the economy move to virgin territories or to watch technology (or the law) weaken dominant players.
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So, what’s not to like about Google’s new browser possibly weakening Microsoft’s position?  Possibly again, we could be trading one Microsoft for a new one, Google, for another black hole of a company sucking in all the business models coming into its orbit.

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With this out of the way, let’s take a closer look at Chrome.
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f you have the time and inclination, you might want to read Steven Levy’s story in Wired, or CNET’s shorter but insightful article, Why Google Chrome?  Fast browsing = $$$$.  I also like Niall Kennedy’s blog post: The story behind Google Chrome and, lastly, a refutation of the unavoidable conspiracy theories: When does Google Chrome talks to google.com? As I write this, a Google Chrome search returns close to 13 million results…
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Back to the OS question. As early as 1994, Marc Andreesen, of Netscape fame, said The browser is the OS.  Many, yours truly included, thought the statement was both technically flawed and self-serving: Marc was one of the authors of the Navigator browser.  In 2008, Sergey Brin repeats the mantra.  Like Marc, he’s technically wrong but existentially correct in the most important of ways, the ways of business wars.  Like Marc, Sergey knows the role, the power, the weight of the (now) underlying OS.  The operating system juggles tasks, manages hardware and software resources such as memory and input/output devices.  With processors executing one instruction at any given instant, the operating system manages the illusion of many concurrent activities, downloading videos, getting email, Instant Messaging, playing music and getting pictures out of a digital camera.  For the applications programmer, the OS is the genie right under the water’s surface.  Wherever the coder sets foot, the genie is right under there, making sure the techie walks on water.
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And, ask Microsoft, not if the OS matters, but what happens when OS trouble happens, when Vista misfires.
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But Mark and Sergey are right, we have entered a new era, Cloud Computing and yet, the lessons of the desktop age are not forgotten. Going back to the application programmer’s feet staying dry, Microsoft played and won the game of tying the OS and the applications.  Windows programmers make sure Microsoft Office programmers have what they need.  Sometimes, this happens at the expense of competitors who can’t always have access to the same technical information, either at all, or in a timely fashion.  At the very start of the Internet era, Microsoft sees what they need to do, again, tie the browser and the OS.  This gives Microsoft control of Internet applications because these need to comply with the dominant browser from the dominant OS and office applications supplier.  Internet Explorer, free and tied, kills Netscape Navigator.  Microsoft spends time and money in various courts around the world but appears to have won that battle.
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But, in September 1998, Google starts and quickly rises to its dominant position in search and advertising. In parallel, a non-profit foundation, Mozilla, resurrects Navigator as the Open Source Firefox browser.  Most of us like Firefox: free, good and getting better with every version, available on Windows, Linux and Macs.  Not tied to Microsoft or Apple.  In our happiness, we paid little attention to Mozilla’s ties to Google, financial ties, millions of dollars, $66.8 millions in 2006, to be exact.  A 26 percent increase over 2006, with little reason to think the progression stopped in 2007.  That revenue is mostly referral money generated each time we use the Google search box in Firefox.  In other words, Google cleverly financed a Microsoft (Explorer) and Apple (Safari) competitor.  A successful one: recent browser statistics credit Firefox with 43.7% share versus Explorer versions totaling 50.6%.  Too successful, perhaps.  Assuming more than $80 millions paid to Mozilla for “traffic acquisition costs”, a fraction of that easily pays for the engineers and parasites needed to write decent browser code.  That would be a make vs. buy argument.  And that would be the wrong one.
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Google’s decision to ‘roll its own’ is based on the strategic requirement to provide its Cloud Computing applications with their own, controlled, under the water genie. Cynics will say Google is playing the Microsoft game of exacting monopoly profits by tying the new OS, the browser, with the new era applications.  But, there are several twists to that analogy.
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First, Chrome is an Open Source browser. Anyone can inspect and use the code for their own work.  In the first place, Chrome is based on the Open Source Webkit also used by Apple’s Safari.  One significant improvement brought by Chrome is the V8 Javascript rendering engine.  Anyone can take the code and use it in their own work – as long as the Open Source licensing is enforced.  Will this cause Apple or Microsoft to Open Source their browsers?
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Second, focusing on Javascript, Google makes another strategic decision, a good one in my view. Over time, browsers have become more complex as they need to deliver richer, livelier applications ranging from spreadsheets to games, from video to music or PDF documents.  Adobe now promotes a platform called AIR, working ‘above’ all desktop OS and purporting to be the engine of choice to deliver ‘Rich Internet Applications’, their words for Cloud Computing.
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Not to be left behind, Microsoft comes up with their own ‘cross-platform platform’, Silverlight for the same new era target. There’s even a third-party Silverlight version for Linux being developed, with some difficulties, by a Linux advocate no less.  Why would Novell’s VP of Engineering, Miguel de Icaza help Microsoft?  I forgot, Microsoft just bought another $100 million of Linux ‘support vouchers’ from Novell.
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Now, if you are Google, will you let Adobe or Microsoft design and constantly modify the genie under the water for your Cloud Computing applications?  Not if you want to control your destiny, not if that destiny is to ‘lead’, to stay Number One.
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Javascript’s it is and we have our own V8 engine for it.
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Today’s beta version looks good to some, and is panned by others. As the new fashion of perpetual betas dictates, see Gmail, we can expect a steady stream of improvements.  More interesting will be watching if and how Google plays the tying game, how it uses Chrome to give its email or photo editing programs features not available on other browsers or speed they can’t match.  And if, how Google one day manages to make money with these applications, the old fashion way, by charging real money for their use.  We VC would like to see that.  For us, ‘free’ is a four-letter word. — JLG

The Valley loves Obama

by Jean-Louis Gassée
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Well, not everyone, we have our contingent of Republican believers who still think Obama is a socialist.
Which reminds me of the way we, the French and the Americans, are on occasion equally knee-jerk bone-headed.  In my country of birth, painful reforms are tarred as “libéral”.  There, the label means right wing free-market ultra-conservative.  Here, in my adopted country, painful reforms are called “liberal”, meaning left wing, bleeding heart, big government tax and spend socialist.  Logomachy.  Why think when you can maim an idea with a label?
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We’ll see a lot more of that in the two months remaining before the November 4th vote, one many of us here think it will go Obama’s way.  Why?
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In the first place, we despise the Bush administration. Never in the Valley’s history have we seen an administration so anti-scientific, anti-liberties, xenophobic, intrusive, profligate, dishonest, harmful to America’s standing in the world and in many ways an obstacle to what we do, a counter-example of what we stand for.
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Yes, we’re capitalists, we like to make money. But, with few unfortunate exceptions, we do it because we help entrepreneurs realize their dreams, because we’re behind Google, Cisco, Yahoo!, Apple, Jupiter, BEA, Facebook and many, many others.  We don’t strip people from their home ownership with trick subprime loans, throwing the country’s financial system into a spin it hasn’t yet recovered from.  Yes, there was the Internet Bubble and, like the current crisis, it was aided and abetted by Wall Street con artists while Washington looked the other way, or took from the other hand.  To do what we do, to continue helping innovative companies start and grow, we need a stable financial system, not the biggest deficit this country ever dug itself in.
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This administration condones the re-invasion of religion into public education: some schools in the South now teach creationism, holding the Bible’s account as a factual description of the beginnings of the Universe.  Not poetry, symbolism or a meditation on the mystery of our origins, no, fact.  The same intellectual honesty presides over discussions of climate change.
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Here, we live in a nice oasis: the color of your passport, of your skin, the thickness of your accent, the way you pray or roll in the hay, none of that matters.  What can you do?  How can you help?  Those are the questions we ask.  As a result, entrepreneurs love to come here from all over the world, Russian programmers, Chinese Ph. D, even French Polytechniciens.  I remember the July 2001 day when I became a US citizen.  There were 996 of us in the San Jose Civic Auditorium.  The federal judge who administered the swearing in told us there were 80 nations in the room.  Tiny Chinese grandmothers, Hispanics, Slavs, Swedes, Indians, Iranians…  And, with tears in my eyes, tears that come back as I write this, I thought: This is how my dear Silicon Valley will continue to be this oasis of meritocracy and entrepreneurship.  The same judge kept telling us to use our new civic rights, to register to vote.  The ceremony came to an end and, as we exited the auditorium, we saw a big table and volunteers ready to help with the registration paperwork – for the Republican Party.  The Democrats were at the beach.  That’s how I became a registered Republican –  soon to re-register as an Independent and thus able to vote either way.
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Back to the Bush administration, what does it do to help Silicon Valley continue to attract entrepreneurs from all over the world? Getting work visas becomes much harder.  This in a country where 25% of high-school “students” quit before graduation, when graduating is so easy all you have to do, in some of the worse schools, is fog the proverbial mirror.  In all fairness, that very problem, the state of high school education, the resulting lack of qualified “intellectual manpower”, pardon the oxymoron, and the ensuing need to import it, that situation is not Bush’s fault.  We blame his cavalier indifference to it.  But it predated him and secondary schools are but an example of a more general case of systems so entrenched, so powerful they can’t be reformed with politics as usual.
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Let’s face it, it’s our problem.  We keep electing solons who, once in Washington, run into the arms and wallets of lobbyists and sell us down the river to telecom, Big Pharma, healthcare and Wall Street interests.  The executive, Bush, McCain or Obama can’t win against Congress and lobbyists.
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Unless…
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Obama, once elected, displays the charisma and willpower to connect with the electorate over the heads of Congress. In other words, we need a President who gets our support, channels our willpower.  Then, together, we put legislators into a vise and squeeze them into working for us instead of being on the payroll of lobbyists and their clients.
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In his column, Frédéric explains how Obama used the lessons and the people from Howard Dean’s successful Internet operation.  Obama has shown the will and skill to use technology to empower voters like no one before him.  That’s how he won against the “inevitable” Hillary.  Too bad for her supporters if they stay angry at Obama for beating their champion, they should be furious at her for her entitled behavior and for not paying attention to what the “inexperienced” competitor was building.
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This is dangerous, of course.  Political scientists will rightly remind us of the dangers of direct democracy. It can lead to dictatorship, to a rump parliament, to the disappearance of checks and balances.  But this is a democratic 50-50 country and I don’t see a dictatorship happening here.  Unless, of course, we look at the Stalinist labeling of human beings as “enemy combatants” in order to torture them, to deprive them from the right to habeas corpus and to a fair trial.  A French communist once lectured me on the constitution of the Soviet Union, it guaranteed civil rights, personal liberties.  Unless, of course, you were an “Enemy of the People”.  No rights for you, then.  Off to the gulag.
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With this in mind, for many of us here, Obama looks safer than playing the same Washington game with barely different players. We could be naïve, we know there is the “small matter of implementation”, of the ugly reality of governing once you’ve won the contest.  Still, we hope this mestizo of John Kennedy and Martin Luther King (minus the women and the pharmacy) will restore faith in our government. — JLG

DIS: a view from the Valley

Modest and proud of it, that’s us. Our perch at a center of innovation gives us the “right” to opine about almost anything, from biotech to movies, Net politics, wireless carriers and operating systems. So, why not mull over the future of newspapers?


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et’s deal quickly with the formula: I agree with Frédéric’s prescription for the DIS. As described in last week’s Monday Note, new newspaper, laptop, smartphone, each medium, each prong of the integrated DIS has its features, its “rules of the genre”, its specific use and business model. Business model is a little abstract for me, let’s say money pump, the pockets we pick, advertisers, readers, and how.


Case closed, it’s a mere matter of implementation, right?
In the Valley, “a mere matter of implementation” is a code phrase, a tongue-in-cheek way to say we think we know the What but not the How. As in: to lose weight, all you need to do is eat les and exercise more – for ever. With the DIS, I see the question morphing into Who will do it? Fresh new money for an ab ovo entrant, an existing newspaper empire such as the New York Times or Rupert’s, or an existing enterprise outside of the newspaper world, Google, Tata or the Quandt family (they control BMW), for examples, realistic or not.


Let’s pause for a detour in the past: Exxon Information Systems.
In the seventies, the Big Oil company chartered the hypnotists at the Boston Consulting Group with designing a diversification strategy. Oil is running out, the OPEC is out of control, Exxon needs an alternative future. Information is the oil of the 21st century, chanted the Boston marabouts. (The Robber Baron from Redmond hadn’t emerged yet, but the BCG sees into the future.) So, Exxon started collecting little or no so little information systems companies, ranging from Intecom to Qwix, Qwip, Vydec and Zilog. The kommentariat bought it, Fortune Magazine sagely praised the diversification, the cover of Business Week asked: Exxon’s Next Pray, IBM or Xerox?

It all ended up in a $4 billion dollars hole. I know: I, too, bought the story and briefly ran their French subsidiary. And less than six months into the job decided I needed out. Right idea, wrong culture. We forgot Culture Eats Strategy For Breakfast. This was evident at Exxon, a well-managed company with no cultural clue (and no clue about lacking a clue) about the alien ways of computer people and technology.


Back to the DIS, fear someone with the right idea, armed with the right strategy but clueless about the people and the technology.
In the Valley, experienced, successful executives and entrepreneurs open a winery or buy a restaurant. You see, we know restaurants, we’re wine connoisseurs, we’ve been to the best ones around the world, we’ve swilled the grandest vintages. Wags call these pursuits buying oneself a phallic extender – these deluded individuals are all male, women are more sensible. These guys truly know how to be diners and wine tasters, but they know worse than nothing about the tough, thankless restaurateur trade or the bottomless vintner métier.

We need not look further than my country of birth to see other examples of Gallic phallic pride, of talented industrialists buying themselves an “organe de presse”. The malady is widespread and tells us big enterprises with big wallets probably won’t succeed in bringing a DIS to the world, try as they might.


In the Valley, we have this known, sunny view of entrepreneurs.
As a result, we could be tempted to think a totally fresh start will do it for the DIS. An experienced team of media and technology entrepreneurs with gobs of patient money from the likes of Kleiner Perkins, Sequoia or NEA, to names the firms ready to place big bets.


There is a small problem with the big idea: the business model doesn’t work like a venture investment, the rewards are too small for the risk.
As previous Monday Notes have pointed out, advertising revenue sharply declines when moving from paper to the Web. And there is Google whose riches come from pimping, sorry, selling advertising on, other media, not from being itself a new medium. So, we’re left with existing media groups. One gives us hope: Rupert Murdoch’s News Corp. He’s not exactly a kid fresh out of college who doesn’t know the word impossible. In an apparent paradox, his age, 77, is an advantage. He is, so to speak, not afraid to die, he’s repeatedly succeeded against the advice of the wise. Murdoch managed to take over choice properties such as the Times of London and, damned the Cassandras, improved them. Too early to say for the WSJ and no such luck for MySpace yet. The latter could be a case of cultural deafness. Still, my hope lies with a media group finding the will or the enlightened dictator to “cannibalize” its existing business rather than silently capitulating to its fate. This excludes most publicly traded groups, Wall Street hates cannibalism. As a result, the first step in the conversion to the DIS is a leverage buyout, the group becomes private so the surgery takes place behind the curtain. –JLG