Marketing Memos

As Bill Gates globe trots to promote Vista, Microsoft’s latest assault on hardware, IT pundits speculate about the corporate uptake of the new operating system.  Some say adoption is an inevitability, and easily absorbed as new PC’s arrive with Vista pre-installed.  Others claim the hardware requirements and extra management hurdles will keep
corporations ordering or installing XP until Gates is resting quietly in the Old Hackers Home.

I’m more worried about the collateral damage to the economy.

The delightful cynics at The Register report the financial impact of Vista as projected by IDC.  Though the story spins these costs as financial stimuli, others see it as a burdensome tax.  The cost is inarguable, so the benefit must be understood in order to justify the
cost.

IDC uses Massachusetts (land of Open Document Format Mandates) as a case study.  They project that Vista will "create" 5,000 new jobs within IT companies and churn some $2 billion (yes, ‘B’ and in "Billionaire Bill") in money exchanges during just the first year of availability.  As nice as it is to have 5,000 more employed people, we must ask what extra benefits come from this multi-billion dollar "investment."  Keep in mind that Massachusetts has it easy compared to New York, a state that IDC predicts will dump $7 billion Vista bucks, as well as a few gangsters, into the their community toilet (a.k.a. the East River).

Yes, that is the sound of crickets you hear.  IT is struggling in the
silence to determine what Vista offers that is different enough to want to suffer the expense and cranial follicle removal their IT staffs will experience. 

• There is disk drive encryption, but that can be had as a third party
  add-on for XP for the relatively few road-warrior laptops in use. 
  Besides, techies have not yet recovered their breath from the idea of
  Microsoft offering security features.
• There is the UNIX-like subsystem to allow for some application and
  utility portability from UNIX/Linux, but it is more likely to garner
  litigation from SCO than paying customers.
• Complete Backup would induce a switching cost from however enterprises
  are doing backups now, and would be an incomplete solution until Vista is
  completely rolled-out … in other words, not a backup plan.
• Instant Search offers nothing more than one can get with the
  Google Desktop Search, which is becoming the defacto desktop search
  implement for enterprises.
• A lot of features either target consumers or require committing to a
  horde of Windows servers, and thus find at best a limited sub-market.
• And, the Aero Desktop seeks any business need at all.

Microsoft has an uphill battle within the enterprise to make Vista relevant. 
After all, two billion dollars is big money to anyone. Even Bill Gates, as that would eat up 1/24th of his personal net worth.

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For the last year I have monitored the declining financial condition of SCO
as they bleed away cash on both ill-advised litigation and ill-conceived
products.  In the past week various news organizations have belatedly
followed my lead, speculating on when SCO’s death knell will sound.

Given the financial inevitability of SCO’s demise, the more interesting
question is "who might buy SCO?"  Lord knows SCO is a cheap stock, running
just north of a buck per share this afternoon and facing delisting if it sinks
much further.  With a market cap of a measly $23M, any one of a number of
players could gobble it up in an instant.  If there is any meat on SCO’s
bones, it may be a race to see which vulture picks the carcass clean. 

So who would buy this corpse, and to what end?  On the chessboard of
marketing, there are some interesting gambits.

Red Hat - The King:  The recent (un)holy alliance between Novell
and Microsoft, with their unwritten threats of litigation against other Linux
distributions and developers, gives Red Hat motive.  SCO claims copyrights
to much of the UNIX foundation, and hence to (allegedly) much of Linux.  If
Red Hat were slick and fast, they could procure SCO, liberate the copyrights,
publish and mirror the key information, and throw Novell and Microsoft’s
newfound advantage into a meat grinder.  There are legal dangers therein,
but this litigious front is so littered now that this action would take years to
resolve, and in the mean time earn Red Hat top honors among Open Source
advocates around the globe.  Fast shuffle this plan through any of the
non-profit (and hence expendable) Open Source organization, and it might be a
risk-free adventure.

Novell - The Queen: Novell has a vested interest in acquiring SCO and
any supposed claims they have to UNIX.  By bringing home what was once
entirely theirs, Novell would multiply the leverage they already possess and
make the Novell/Microsoft F.U.D. machine even more fearsome.  This one
trick might well knock a leg out from under Red Hat, and make Larry Ellison
wince.

Oracle - The Rook:  Ellison knows a gambit when he
sees one, and is not shy when it comes to using the courts to push an issue (as
he did by going up against the FTC during his Peoplesoft plunder).  Larry
now has a vested interest in keeping Red Hat propped-up, especially since the
Novell/Microsoft pairing is beginning to show serious traction.  Since
Larry wants to make money from Red Hat’s work, and keep Microsoft on the
server-side decline, he must slow any progress Novell makes in the Linux market. 
"Owning" some rights to UNIX/Linux gives him a means to that end.

IBM - The Knight: Since IBM is now the champion of all things Open,
they may chose to be a white knight.  IBM could buy SCO from petty cash,
and publicly indemnify anyone contributing to Linux by holding alleged title to
SCO intellectual property.  This helps keep the Linux market competitive by
maintaining equality between two main vendors.  IBM does not want Linux to
slip into a one-company product, and they want to please the Open Source
community.

Any bets?

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I love when history repeats itself.  A new round of suckers arrive to
lay wagers against.

When the backs of my ears were still damp and Lotus 1-2-3 was the cool, new
technology, HP came close to popularizing touch screens for PCs.  Their
HP-150 — an all-in-one PC with an unfortunately tiny screen and a truly
innovative way of engineering a no-touch touch screen — was thrust into the
market.  The HP-150 had a run longer than most anyone predicted, and as
best as I can tell not at all because of the touch screen.

The problem was not in the engineering (well, aside from the fact fat
fingered troglodytes had a miserable experience when attempting to use the tiny
9" touch screen).  It was that very few applications needed a touch screen,
and with the HP-150 being the only corporate desktop being shipped with that
capability, few application vendors bothered to explore the potential.

Which made last week interesting in as much as HP appears to be at it again,
though Apple is getting it right, and IDC thinks HP might learn something from
Apple (they sure missed the boat when Job and Woz tried to teach them the first
time).

At CES, HP was showing off a new touch screen Vista Media PC.  But the
interface seems to have few uses beyond launching applications and within a few
provided point applications.  The interface appear to be a half breed
bastard child of a common touch screen and Microsoft’s tablet PC controls. 
HP may well have more success than with the ancient HP-150 in as much as many of
the interfaces are embedded Windows itself, and thus some applications will
"work" without additional application coding.

But as an application does little well with a mouse until the assumption of
the presence of a mouse is made by the programmer, so too will applications lack
sophisticated usability until a touch screen is assumed.  If HP’s new touch
screen is not an open standard, odds are nobody will invest the software
development required to take advantage of it.

Apple on the other hand made a touch screen a reality on their iPhone personal
…. "device" (what do you call a gizmo that is your MP3 player, cell phone,
and PDA, portable web browser, and object of lust all rolled into one? ) As
with the Mac, Apple took great pains to insulate the user from the technology by
making sure the technology drove the user experience.  All applications in
the iPhone are driven through the touch screen, and by the absence of a physical
keypad, all future applications will do the same.

Would HP or any PC vendor dare to go that far?  IDC thinks so. IDC notes that consumer products may now be the technology leader in terms of the direction in which innovation happens.  This is a reversal of fate from the Bad Old Days when expensive technology created for IT slowly commoditized to fit the budgets of home users.  Today costs are so low that the mass market drives innovation (because there are a lot more iPod buyers than
mainframe buyers), and some consumer electronics innovations leak up to IT.

In both cases, the driver is clear: the application comes first. 
Regardless of the niche, the interaction of the user with the application — be
it ERP or MP3 — is paramount.  Now if HP could just afford to hire Steve
Jobs back …

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At the application layer, the Unholy Grail for software vendors has been to lock-in the customer.  For this evil Yin, customers attempt to balance the universe with platform agnostic Yang.  If Bill Gates had died young and Windows had not been born, universal harmony might have been achieved earlier.

Wishful thinking aside, we witness a steady realignment of the stars as
customers find more ways of achieving platform indifference in pursuit of the
perfectly portable application.  The obvious industry change came with the
birth of HTML and an entirely neutral user interface (Lord knows Microsoft’s
Minions tried to abduct this child while still in the cradle, but they are beginning to lose ground ). 

Not all applications can be web based, so platform choice tends to be
dictated by the platform technical expertise of the vendor.  Since nearly 
everyone use Windows (save the brave souls at IBM and Novell, who have mandated
Linux desktops for all), most application vendors support a Microsoft user
interface.

Well, until IBM, the Eclipse Foundation, and NASA decided enough was enough.

Eclipse RCP (Rich Client Project) allows one to develop rich GUIs for multiple
platforms with a single code base.  Since the GUI is often the most
labor and time intensive part of developing a new application, it become the
road block for many vendors who throw their hands skyward and submit to
Microsoft assimilation. RCP
allow them to make a portable GUI that runs on Linux, Macs, and yes Windows,
without being a slave to any of the three operating systems and associated APIs.

This may not sound exciting given that the combined Mac and Linux desktop market share hovers around 7-8%.  After all, what vendor would add 15% effort to get 5% more market share.  But as
the chickens and eggs argue about genealogy, we in technology marketing must
recognize the lead/lag affect of applications and operating systems. 
People adopt operating systems to run applications, and for no other reason
(well, Linux bigots adopt Linux for the same reason most people voted for John
Kerry … out of pure hatred for the alternative).  The probability of an
operating system being deployed is directly dependant on the applications a
company uses.

IBM is a case in point vis-a-vis RCP.  Lotus Notes customers had
(allegedly) been demanding a Notes clients for Linux (and the cynic in me believes that 99.999% of this demand was coming from within IBM).  So IBM, the champion of all things Open and of Eclipse in particular, used RCP to create their next Notes client for Linux and Macs. 
IBM customers who deployed Windows on desktops in the past (in part of in whole)
due to the Windows-centric nature of the client, now have the option of
deploying a different desktop OS.  This option did not exist before now. 

The egg has spoken!

Only time will tell if Eclipse RCP changes the fundament of the market, but
HTML has shown us that it can be done, and that the market demands it. 
Software start-ups will more likely adopt RCP early as they want to maximize
their TAM (Total Addressable Market) and grow the fattest revenue streams
quickly.

And if the IBM elephant can dance, then the rest of the industry might call the tune.

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