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| Sunday, December 30, 2001 |
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Wrinkage 
| | This time the primary reason is a drop in the number of registered domain names, as the number of domains not renewed exceeds new registrations. Domains bought during the rampant domain-name speculation of late 1999 are now coming up for two-year renewal, and many are being abandoned. For example over the last three months the number of .com domains has dropped by about 130k, though earlier quarters this year still saw increases. |
X Plosions
| | TIG quotes what I said here, and suggests that this means there is "trouble in Linux-land," because Microsoft is supporting OS X for this strategic purpose: |
| | Pushing any chance of Linux on the desktop is an important aim for them. Why? Because, he who dosent have the desktop today wont have the server tomorrow.. |
| | I think Microsoft supports OS X because Office on the Mac is a huge, steady and successful business for them. but maybe TIG has a point. To drive it a bit farther, he adds, |
| | Today it may seem that apple with its propreitary hardware will suffer the same fate. It wont. Microsoft wont allow it to. Microsoft will allow it to remain ghettoed to the PowerPC and Jobs will play. Port MACoSX to Intel and watch MS yank Office and other products. But as long as Jobs stays at 10% with proprietary hardware, Microsoft will back him fully. |
| | I think Steve Jobs likes running on his own hardware because he runs a high-margin hardware company. Moving to Intel would undermine that. And that choice is up to Steve, not Bill. (Does Microsoft still own all that Apple stock, by the way? Seems relevant.) By the way, Motorola has not suddenly failed to obey Moore's law. Looky here. |
| | In a related conversation, TIG also suggests a number of reasons behind what he calls the DotCom/Linux/OSS implosion. I think they're all correct, but not exclusive to Linux/OSS (open source software) dotcoms, which received a relatively small slice of total dotcom investment spending. I would guess Webvan alone received more than all the Linux and OSS companies combined. B2B and B2C schemes received many billions. |
| | Behind all of TIG's reasons is my favorite line of Stewart Brand's: form follows funding. A lot of dumb funding built a lot of dumb businesses that only looked smart in the mirror, which was momentarily given substance by huge IPOs and subsequent stock valuations. |
| | Yes, there were some good and smart business ideas in there, but they stood the best chances of survival, it turned out, by staying away from the whole thing. I know one software & services company that would still be in business if it had simply been satisfied serving its existing (and growing) customer base. But they took the money, and now they're dead. The software is in limbo, being the only asset the VCs can still leverage. And the customers are out in the cold. (This is one case, by the way, where open-sourcing the software would do a world of good for everybody involved. There's certainly no harm in it.) |
Market relativity
| | "You get what you pay for" is over the top. I don't support that and I'll argue with John about that assessment. It's a cheap shot. I know what it feels like to have someone say that about my software, stuff I worked hard on, and didn't charge money for. I don't put any less effort into making it usable when I am giving it away. |
| | I've heard that 'you get what you pay for' argument so many times, and in so many circumstances. And it's so fucking irrelevant when the subject isn't something you sell or pay for. If the YGWYPF principle applied to everything, the best spouses would be high-priced prostitutes and gigolos. |
| | But in settings where you won't make what you can't charge for, YGWYPF tends to apply. Markets, for example. Here's Dave again: |
| | So to use a Doc-ism, there's no market conversation about open source. The developers don't listen to the users (they're famous for that) but even if they did, the users would be loathe to complain because they're not customers and they know it. |
| | The bazaar Eric Raymond writes about in The Cathedral and the Bazaar is a metaphor for a development style. It has been enarged by Eric and many others (including, and perhaps especially, me) to apply generally in an economic sense. In fact, it did much to inspire the Cluetrain observation that markets are not only converstions, but fundamentally bazaars (rather than demogrpahics, categories, bulls, bears, invisible hands and other abstractions). The problem is, the development style Eric writes about in CATB is rarely motivated by the need to sell the code itself. It is produced by the need to use it, and to share it with others who need to use it. Without that kind of motivation, and that kind of code, we wouldn't have the Net, the Web, XML-RPC or SOAP, to name a very few virtuous outcomes of bazaar-stle development. |
| | Among open source developers — guys who write code to "scratch their own itch" — there has always been a corrollary to Skoop Nisker's closing line on his old newscasts: "If you don't like the news, go out and make some of your own." To bazaar-style developers that corrollary is, "If you don't like the code, go out and write some of your own. Or better yet, stop complaining and help us out with this thing." Again, this fuels the development of some terrific software, but the main motivation is to use that software. Not to sell it. |
| | We're still looking for the formula that brings bazaar-style open source development together with the bazaar we call the marketplace. We're also looking for the answer to this one: If code has customers, can its source be open? The answer is clearly "yes" if we're talking about small ticket items like Linux distributions. But for large-ticket items like Caldera's Volution Manager and VA's SourceForge, the answer is "no." I think in the long run that will change, but for now that's what the jury is deciding. That jury is the marketplace. |
| | Some of the best wisdom I've ever read on this matter just appeared on Dave's blog: |
| | Commercial vs open source is like a hot and cold water valve on a faucet. Where you want competition, give away the technology. Where you want to be competitive, keep it to yourself. |
Handbasket weaving
| | Buck, the investment banker, is torn apart by an enraged bear on pay-per-view. No exit strategy? Poor Buck, how you might wish to exercise your options now! |
Snarky new year
| | On the Internet no one knows you¹re a dog. Wait, actually, we all do know that about you, it¹s just that we¹re too polite to mention it. |
Flaps about flops
| | As I mention here, Eric Raymond the other day said open source had "won the technical argument" but not the business one. Context: we were talking about operating systems in general and Apple's open source kernel'd OS X in particular. Not about all forms of software products. Still, it was an interesting statement. |
| | As I've said many times, I think the software industry is turning into something rather like the construction industry from which it borrows much of its vocabulary (architect, design, build, tools, etc.). Construction is a $2 trillion industry worldwide. It's either the biggest business there is, or the second (after drugs). Much of it is DIY — do it yourself. Much of it is the work of small independent contractors and subcontractors. Much of it is artful. Much of it isn't. Much of it is the work of large companies, often employing smaller ones. All of it involves expertise and craft. |
| | There aren't many secrets about how to build a house, a stadium, a dam or anything else. Builders, architects and everybody else share their knowhow freely. There are lots of $billion companies, some with revenues exceeding Microsoft's, but no Microsoft. |
| | When the software industry is mature, it will look a lot like the construction industry. But we're a long way from there. The overfunding of fantasies has made the journey a lot longer, and not just for the software industry. |
| | There were fantasies about the Net as a new form of every medium you can name: TV, radio, film, publishing. There were fantasies about a whole new advertising business, and about all kinds of things that would be funded by advertising. There were fantasies about retailing. About online markets. About "push" and "portals" and many other forms of nonsense. About the "new" economy, which was never anything more than a scheme for scoring big by selling specious futures to the largest possible pool of gullible investors. |
| | There were also fantasies about Linux and open source. Investors saw them as the natural successors to Windows and everything Microsoft stood for. |
| | There were tragedies everywhere. AtHome was a brilliant idea, mostly well-executed, that delivered on the broadband promise at a remarkably low cost. I'm benefitting from it right now, paying about $50/month for performance that shames the T-1 at my old office. But instead of making money the old fashioned way, AtHome went and mooshed itself into Excite, buying into the fantasy that advertising was going to pay for everything. Stupidly, ExciteAtHome sold its fundamental service essentially below cost to the cable companies and eventually died an awful death when the advertising fantasy didn't pan out. |
| | As Dave has often pointed out, the business promises of open source and Linux sold excessively well to the VCs and then to Wall Street. One effect of that was to undermine investor faith in all commercial software developers other than Microsoft. As a class, independent software developers were shunned and struggled to survive. Some didn't. While the stock values of Red Hat and VA Linux collapsed, Microsoft toughed it out. Now Linux and open source are getting the shun treatment. Sure as night follows day, bust follows boom. |
| | But take away all the stupid investing, all the politics, all the adversarial talk, all the distrust and blame, what do you have with open source? |
| | I think you have a building method — a way to build stuff. A choice you can make. Yes, it has technical advantages. In some cases it may have business advantages as well, but those are highly conditional, and far from being fully tested. |
| | But there's a third variable, which is market demand. Craig Burton says the challenge is to drive global ubiquity while fostering shareholder value. Open source is good for the former. About the latter, it depends. We won't really know until we're way out of the current bust phase. Meanwhile we do know about closed source. It's a fundamental means for securing value of software built to sell. Which is a big reason why companies from the open source community such as Caldera and VA Software (no longer VA Linux) are selling closed source software products. |
| | My vote for Flop of the Year is the whole investment bubble. Every company has two markets: one for its goods and services and one for itself. In the dot-com bubble, interest in the latter completely overcame the former. Rather than selling their goods and services, companies sold themselves, over ane over, in round after round, to investors. Markets for many kinds of goods and services were seriously hurt. Software especially. |
| | I'd like to say it won't happen again, but I'm sure it will. |
discuss
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