[KLUG Advocacy] Interesting . . .

[Adam Williams]

>>>http://www.pbs.org/cringely/
>>>"Invincible: How Microsoft and Wal-Mart Can Lose, but 
>>>Can't Be Beaten"
>>Wow,  this guy is on the PBS site?  The article seems rife with
>>conservative/republican axioms.  Not that they are neccesarily wrong,
>>they are just tossed out in such a, well..., axiomatic way.  Below the
>>journalistic standards I expect from PBS.  Reads a bit like an InfoWorld
>>article.
>Yup, on the PBS site, but I've never seen him on the network. He is a 
>commentator who comes out of the computer biz, more or less on the 
>technical/corporate side.

Yep, I've seen his name around in other rags.  Never noticed he had any
relation to PBS.

>I've started something of a dialog with him; with the same book reference
>posted on this list. This morning my third reply went out. Cringely is 
>taking another look at the book (he read it when it came out); we'll see
>what he says after absorbing what I've written, and the message the book
>carries, with an eye toward Linux and Microsoft.

Cool.  Nice to see that he actually reads his mail.  I've pretty much
given up on writing to journalists,  even to say nice things (Hey!  It
happens).

>>"But at their hearts, each business is successful because it has managed
>>to reduce its cost per transaction until it is lower than all its
>>competitors"
>>Is this the heart of Microsoft's success?  Do they really have a more
>>efficient cost-per-unit operation than other huge software houses? 
>I tend to think the answer is yes. If you consider this is, in effect,
>another way of saying that Microsoft has been very successful in pushing
>the installation of product as far up the supply chain as possible. As I
>pointed out to Cringely, if MS could figure out how to injection-mold 
>Windows and Office onto hard drives, they would.

Ok, I'll accept this, but it isn't quite the same as success by c-p-u. 
One could make an arguement that up-chain installation became an avenue
they could pursue because they had already achieved neat ubiquity in the
PC market (everyone who bought a box also went out and purchased a
stock-o-m$-floppies).  They didn't achieve that ubiquity by focusing to
heavily on c-p-u,  they used to have pretty aggressive customer
relations / promotions, etc....  I guess it depends on if you mean
"successful" on the accounting end or out in the market.  He does admit
that NOW they could endure high c-p-u and still be considered
"successful".

>This lowers the cost of [end user] transactions a great deal. It's costly
>to get a copy on Windows out on shelves, with fancy packaging, shelf
>space, and installation support. It's CHEAP to get Dell to pre-install
>a few jillion copies; only one contract to sign, and the counter-party
>does all the work!

Sure.  But I'm not agueing that low c-p-u isn't a very good thing.  I
think his low-c-p-u = success equation is ludicrously simple.  

>>They've grown and scratched more immensely expensive projects over the
>>years (Bob, Cairo, etc...).  In my mind their success stemmed from there
>>ability to provide a usable platform on cheap ubiquitous hardware, 
>>while all their "competition" stumbled about like so many dazed and
>>confused trolls.
>This is about right. Let's suppose that, except for Windows and Office
>being pre-installed, Microsoft has just about exactly the same batting
>average as any large software house. They're still way, WAY ahead over-
>all, billions to the good, based on their pre-install base alone. They
>can actually support a LOWER batting average than many other software
>producers.

Absolutely.

>>"IBM might compete with Microsoft, for example, and its recent
>>flirtation with Linux is aimed at exactly that by lowering transaction
>>costs."
>This is correct, in an indirect way. IBM has recognized for a long time
>that writing the platform (OS, compilers, libraries, etc.) is almost
>pure overhead. Linux provides IBM with a huge opportunity, something
>they are only starting to grasp. IBM is also transforming itself from
>[primarily] a hardware supplier to a full-service, diversified provider
>of IT solutions. 

I think IBM is starting to grasp that,  I've seen it in the attitude of
the tech-support people (who can tow the company line better than most
door-to-door "missionaries").  But I really don't think they initially
opened up to Linux with that as a vision.  Their customers pushed and
shoved them into it,  but the point is that they got the clue and moved
(pretty shocking for a behemoth like IBM).  Most IBM customers I talk to
are happy, bordering on excited, about almost all the news that comes
down from the big blue hill.  This is ***NOT*** the sentiment one picks
up when M$ enters a conversation, whether it is with a secretary sitting
in front of Office XP ("What the ????, the items in my menu bar keep
moving!"),  someone who has to quote the licensing, or an MCSE that
needs to forget everything he learned about NT4 domains and enter the
steaming maw of Active Directory.  And many of these people almost foam
at the mouth if I, or someone, mentions Linux.  "Come on, you've got to
be kidding!"  But that doesn't mean they like Microsoft.  I think this
makes a potentially volatile market,  and not something I would call
"success".

>>Erm.. no.   I am an IBM customer.  ...
>Now, now, Adam, you don't have to disagree! Cringely has a point here. He
>simply doesn't have (or write) the WHOLE point.

Right, I go back to my "axiomatic" adjective as a description.  There is
truth in the gist of what he says.  In the same way that the Cliff notes
of a novel are the novel itself.

>>You can have immeasurable low cost-per-unit,  but piss off your
>>customers and watch out.  IBM bends over back wards NOT to do just
>>that,  the M$ guy practically moons you on the way out.
>But no one sees "the MS guy"! 

They call us with regularity, and we are nothing.  It makes me suspect
that larger firms get haranged quite a bit.

>Customers can be really angry, but if they have no alternatives, there's 
>no place for them to go. This is why the book I cited was so interesting;
>it provides a reasonably consistent model for HOW leading firms in a market
>lose their dominance, over time, and across a number of industries. I'm
>looking for some reason why the same forces don't apply to the software 
>business.

Haven't read the book.  Is it generally available?

>>"If IBM really intended to compete with Microsoft it would COMPETE WITH
>>MICROSOFT, which would require exiting the hardware business
>>completely."
>>Why?
>Because the hardware business is low-margin stuff (compared to software),
>and because it keeps IBM involved in the sort of sales that don't allow
>many per-transaction costs to be eliminated. This seems to be the Cringely
>thesis, anyway.

1.) SOMEBODY has to build the hardware

2.) If I want support I can (a) get it from the same people who built
the hardware or (b) from the people who didn't.  Hmmmm.....

For the upper end I think the hardware business is an asset in selling
their other services, and Cringely on this is just dead wrong.  He needs
to revisit the realities of corporate politics.  The logo on the big
whirring black box says "IBM",  the man that shows up has "IBM" on his
shirt AND on his duffle bag, the onlooker wearing the suit-n-tie
smiles.  After all, don't you take your Ford to the Ford dealership to
get fixed.

Last I checked IBM was pretty much out of the PC hardware business.

>>So they only "pretend compete" now? Hey, we are only talking about those
>>"pretend" dollars you might spend on either an NT cluster or a main
>>frame.
>The point here is that IBM and Microsoft are not quite in the same business,
>and in some ways they had more overlap in the past. In fact, IBM is currently
>a fairly large installer of Microsoft-based systems, and they make a lot of
>products that rely on Windows. The difference is that IBM wants to be in every 
>aspect of the product life-cycle now... they'll not only sell you the hardware
>and service it, but they'll come in as consultants and study your business,
>recommend what you need to meet requirements, and provide the applications,
>upgrades, and custom programming talent.

Yes, if you request something like this M$ will hand it off to a local
consultancy service.  (All of whom ***SUCK***, by the way, but that is a
different thread).

But you are right,  they're are many ways they do not compete, and
places where they overlap.  But would IBM rather sell you an RS/6000 or
an xSeries (this weeks name for an intel box)?  For more reasons than
just moving iron.

>IBM sees many of the business activities that MS won't touch as being some
>of their most lucrative, while understanding that most of the basic stuff
>(platforms and basic server stuff) are becoming commodities.
>>This statement is a bit over-arching.
>Yes, it's a partial statement of a broader picture. I get that feeling
>from reading some commentators; Cringley is no exception.

Ok, then basically we agree. :)

>>"Both Wal-Mart and Microsoft will eventually founder, probably from
>>inbreeding and corporate crankiness decades down the road. Until then,
>>it is their game to lose, and the best way to compete is probably by not
>>competing at all. Just be what they aren't and where they aren't. And,
>>like mammals in the age of the dinosaurs, wait for that comet to
>>strike."
>Doesn't seem like he's learned some lessons very well, mostly about how
>emerging technologies have their own proponents, and how premium companies
>become welded to their pricing and strategies.
>It's easy (and a good percentage play) to forecast the dominance of the
>currently dominant players for an indefinite period into the future, but
>such conventional wisdom often does not pan out, and that's what the
>book is actually about.

Again, haven't read the book (yet).

>>And "By dominating shelf space, concentrating on market share, and
>>making product feints into segments it doesn't really care about,
>>Microsoft keeps many potential competitors literally off the field" is
>>illegal, after a certain point.  It certainly is unethical.
>Yes, to both of your comments. MS'es tactics only prolong their position,
>it is not preserved or guaranteed.

I think there is evidence, historically, that unethical, pushy, and
shady business practices, while successful in the short term,  tend to
come back and bite hard.  In part this already happened.  The anti-trust
case, however floundering in its conclusion, did give Open Source a
helpful push onto the radar screen.  Resentment of forced upgrades and
other practices have yet to bear fruit,  but the vine is certainly alive
and healthy.  But he is right that "it is their game to loose".  But
they seem to want to win by clubbing the competition: Open Source.  With
that strategy I think they will loose.  Better to go back and poison
that vine through benevolent treatment of the customer (which they can
afford).
 
>>The idea that the internet, pda's, etc... came into being like a comet
>>smashing the earth is baloney....
>I did point out that things don't often happen like this, the analogy is
>somewhat too confrontational for my taste. More often, dominance in a
>market fades, replaced by a new technology that has strengths that exploits
>the weaknesses of the old. I fell that OSS meets these requirements.

Agree.

>>Smart people saw these things coming, and Microsoft probably sees things 
>>coming I/we don't even know about...
>Yes, but are they going to be important. MS has missed a number of things
>in the last few years which have turned out to be fairly important, and it
>is a predictable pattern.
>>(after all, according to the article, they have all the smartest people).
>Which, even if true, is no guarantee of ongoing success. Moreover, this 
>is exactly the sort of thing that breeds over-confidence, a source of failure.

"The jet ski verses the battle ship may not be as certain an outcome as
the captain of the battle ship thinks, primarily because he thinks it is
certain."  It is a paraphrase and I can't remember who said it,  but a
fun quote none the less.

>>The only way to compete is to compete;...
>Sure, but the competition is often not, perhaps cannot be... face-to-face,
>direct. It starts with scattered smaller applications, and goes up in 
>scale and value as the technology matures. I can't say how far along this
>is with regard to Linux, but I do think it fits the profile (Read the book!),
>and that I see that continuing.
>>...to establish some elvish enclave and only play in arenas where you 
>>KNOW you can win while you wait for the world to change is a one way 
>>ticket to the ash heap of history.
>Right, the world doesn't change by itself.  It does change when something 
>comes along that, even if not mature, offers a better value proposition.

Sorry,  the implied fatalism of these guys just irritates me.  The world
as something you sit back and watch unfold.  Then if your smart you can
grab an opportunity that comes waltzing by.  Opportunity doesn't knock, 
you call him and invite him to the BBQ,  and lots of times he doesn't
show.  But if you never have a BBQ?

Things (technologies) don't "come along",  people invent them, promote
them, use them, sell them, and discard them.

And a fatalistic capitalist?  That just doesn't make sense!  I've the
studied-religion-including-latin socialist!  Shouldn't I be the fatalist
at this party?  But then it wouldn't be as much fun. :)

>Oh, did I mention that you ought to read the book? :)

I think I caught that.