Ballmer apocrypha and the irrelevance of Microsoft

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Apropos my column, Jean-Louis Gasseé has an hilarious spoof Steve Ballmer memo reflecting on how Microsoft screwed up. Worth reading in full, but here’s an excerpt:

For all these years, we scrupulously followed McKinsey’s “Not A Single Crack In The Wall” advice, we’ve managed to successfully Embrace and Extend each and every possible threat to the Windows + Office combo.

While we initially underestimated these new tablets, their threat soon became obvious and we started thinking of ways to protect our franchise. 

That’s when I took the company in the wrong direction. 

To prevent these tablets from penetrating the Office market, I followed our Embrace and Extend strategy and endorsed the creation of hybrid software and hardware: The dual-mode (Desktop and Touch UI) Windows 8 and Surface tablets.

The results are in. Windows 8 hasn’t taken the market by storm. The Windows 8 tablets manufactured by our hardware partners are sitting in warehouses.  We just took a $900M write-off on our RT tablets, now on fire-sale.

It doesn’t matter who actually proposed or implemented the failed strategy, I endorsed it. What matters most — the only thing that matters — is what we’re going to do now.

And while we’re on this topic, Benedict Evans has a very perceptive post arguing that, with the benefit of hindsight, we can now see that Microsoft peaked in 1995. Excerpt:

Just as overnight success can take a lifetime, so overnight collapse can also take a long time. There are founders creating companies today who weren’t born when people were still actually scared of big bad Micro$oft. It stopped setting the agenda 18 years ago. Windows 95 was the moment of victory, but was also the peak: it came just at the moment that the Internet started taking off, and Microsoft was never a relevant force on the internet despite investing tens of billions of dollars.

But you needed a PC to use the internet, and for almost everyone that PC ran Windows, so Microsoft’s failure to create successful online services didn’t seem to matter. Microsoft survived and thrived in the PC internet era, despite appearing to be irrelevant, by milking its victory in the previous phase of the technology industry. PC sales were 59m units in 1995 and rose to over 350m in 2012. Of course, that’s now coming to an end.

Though it looks like we’ve passed the tipping point, this process isn’t going to be over quickly. PC sales aren’t going to zero this year. But the replacement cycle, already at 5 years, will lengthen further and further, more and more apps will move to mobile or the cloud, and for many people the PC will end up like the printer or fax – vestigial reminders of an older way of doing things. Microsoft may yet manage to turn Windows tablets and phones into products with meaningful market share, but it will never be dominant again.

LATER: Lovely piece in Slate which explains Microsoft’s decline in terms of the storylines of The Wire.

You can always get what you want. But is it what you need?

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My review of Ethan Zuckerman’s Rewire and Aleks Krotoski’s Untangling the Web.

Open a street map of a city – any city – and what you see is a diagram of all the possible routes that one could take in traversing or exploring it. But superimpose on the street map the actual traffic flows that are observed and you see quite a different city: a city of flows. And the flows show how the city is actually used, as distinct from how it could be used.

This is a useful metaphor for thinking about the internet and digital technology generally. In itself, the technology has vast – some think limitless – possibilities. So narratives like those of Google’s Eric Schmidt and Jared Cohen in their recent book tend to sketch out all the things that networked technology could enable us to do. But what we will actually wind up doing with it is, at any point in time, largely unknown.

In that sense, Ethan Zuckerman’s book provides a welcome antidote to the current narrative of technological determinism. His central thesis is that while the internet does, in principle, enable everyone to become a true cosmopolitan, in practice it does nothing of the kind. Cosmopolitanism does not just involve being tolerant of those who are different from us. As the Ghanaian American philosopher Anthony Appiah puts it, true cosmopolitanism “challenges us to embrace what is rich, productive and creative about this difference”. Much of the early part of Rewire is taken up with demonstrating the extent to which the internet, and our use of it, fails that test…

How Microsoft spent a decade asleep at the wheel

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This morning’s Observer column.

Coincidentally, in that same year, Gates stepped down from his position as CEO and began the slow process of disengaging from the company. What he failed to notice was that the folks he left in charge, chief among them one Steve Ballmer, were prone to sleeping at the wheel.

How else can one explain the way they failed to notice the importance of (successively) internet search, online advertising, smartphones and tablets until the threat was upon them? Or were they just lulled into somnolence by the sound of the till ringing up continuing sales from the old staples of Windows and Office?

But suddenly, that soothing tinkle has become less comforting. PC sales are starting to decline sharply , which means that Microsoft’s comfort zone is likewise set to shrink. Last week, we had the first indication that Ballmer & Co have woken up. In a 2,700-word internal memo rich in management-speak drivel , Ballmer announced a “far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast-changing world”.

Before visiting the UK, reset your phone to factory settings

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Visitors may not know this, but maybe they should.

Officers use counter-terrorism laws to remove a mobile phone from any passenger they wish coming through UK air, sea and international rail ports and then scour their data.

The blanket power is so broad they do not even have to show reasonable suspicion for seizing the device and can retain the information for “as long as is necessary”.

Data can include call history, contact books, photos and who the person is texting or emailing, although not the contents of messages.
David Anderson QC, the independent reviewer of terrorism laws, is expected to raise concerns over the power in his annual report this week.

He will call for proper checks and balances to ensure it is not being abused.

PayPal giveth, taketh away $92 quadrillion from customer

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From SiliconBeat.

“I’m a very responsible guy. I would pay the national debt down first. Then I would buy the Phillies, if I could get a great price.”

— Chris Reynolds, of Media, Pa., on seeing in an email statement that his PayPal balance was $92,233,720,368,547,800 . He was not a quadrillionaire — nor the richest man in the world — for long, however. When he logged on to his PayPal account, his balance read $0. Was someone at PayPal a bit spacey? Perhaps PayPal just has astronomical on the mind: As the Merc’s Heather Somerville wrote last month, the company is working on a payments system for use in outer space. But  back to the big oops. ”This is obviously an error and we appreciate that Mr. Reynolds understood this was the case,” the San Jose company said in a statement, according to CNN. The company, owned by eBay (market capitalization: about $73.8 billion), said it offered to donate money to a cause chosen by Reynolds.

Senior moments

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Story from a friend whose daughter recently graduated from a major UK university.

The Vice-Chancellor (or perhaps it was the Chancellor – the distinction between the two is often lost on parents) was making a stirring speech about the importance of knowledge, etc. An example of this was the importance of the great overarching scientific theories. So the great man said, “And Darwin’s theory of…”. At which point he had a Senior Moment. There was a brief pause while he rummaged around for the word. And then out it came: “relativity”.

Could happen to any of us. Well any of us d’une certain age, anyway. I remember overhearing a woman in the Shelbourne Hotel in Dublin once explaining to her friend why her husband’s Volvo was superior to her companion’s husband’s Mercedes. “It’s got a cataclysmic convertor”, she said.

Some unintended consequences of NSA snooping

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One of the least-discussed aspects of the Snowden revelations is the catastrophic damage they are doing to US foreign policy in one important area, namely Internet governance.

This is one of the big unsolved problems in the international arena because of the disproportionate power that the US wields in the governance of the Net. The reasons for this are largely historical: the Net was an American creation, and it emerged from a Pentagon project, the Arpanet. In the beginning it was largely an American — and, to some extent, European — project, and so it made sense for the informal governance arrangements (under which, for example, domain names were managed) set up in the early days to continue.

But as the Internet became a truly global system, the old arrangements began to look increasingly odd. They also began to irritate some of the bigger powers like China and Russia, who couldn’t see why a global system should continue to be run by a single, ageing superpower. Why shouldn’t the Internet be governed by an international body — like the United Nations, through one of its agencies, the International Telecommunications Union (ITU)? These stirrings reached a peak at the World Conference on International Telecommunications held last December in Dubai, where there were attempts to loosen the grip of the US on Internet governance. These attempts were robustly rebuffed by the US and its allies, but it was clear that this is an issue that won’t go away.

The problem is that while the current governance system is absurd in a global context, nobody has yet come up with a convincing alternative. Or, to put it another way, it ain’t broke but it still needs fixing. The ‘obvious’ solution — to hand the responsibility over to the UN — would be nuts, because it would mean handing over the Net to a sclerotic, incoherent institution in which Robert Mugabe’s government and a host of other unsavoury regimes have a vote that counts as much as a vote from a democracy. It would be like giving a delicate clock to a monkey.

But, in the end, we will have to have new governance arrangements that meet two criteria: reflecting the truly global nature of the system; and protecting its essential features from the tampering of unsavoury regimes.

Which is where the NSA revelations come in. They demonstrate to the world that the US is an unsavoury regime too. And that it isn’t a power that can be trusted not to abuse its privileged position. They also undermine heady US rhetoric about the importance of a free and open Internet. Nobody will ever again take seriously US Presidential or State Department posturing on Internet freedom. So, in the end, the NSA has made it more difficult to resist the clamour for different – and possibly even more sinister – arrangements for governing the Net.

[HT to Robin Stenham for his comment.]

Time to dump the “Great Firewall” metaphor

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This morning’s Observer column — about a new way of looking at the way the Chinese government deals with the Net.

We need different imagery to communicate the essence of this more sophisticated approach. Rebecca MacKinnon, one of the world’s leading experts on “networked authoritarianism”, suggests that a Chinese scholar, Li Yonggang of the University of Hong Kong, has come up with a better metaphor: the internet as waterworks. He thinks that the regime’s efforts to deal with the internet can be best described as a hydraulic project. Water, in this view, is both vital and dangerous: it has to be managed.

In a blogpost about this approach, MacKinnon wrote: “If you approach internet management in this way, the system has two main roles: managing water flows and distribution so that everybody who needs some gets some, and managing droughts and floods – which if not managed well will endanger the government’s power. It’s a huge complex system with many moving parts … there’s no way a government can have total control over water levels. Depending on the season, you allow water levels in your reservoir to be higher or lower … but you try to prevent levels from getting above a certain point or below a certain point, and if they do you have to take drastic measures to prevent complete chaos.”

Given that almost all of the ruling Chinese elite are engineers, you can see why this approach would make sense to them. It’s both rational and feasible. And it provides such an instructive comparison with GCHQ, whose pet project for hoovering the network is codenamed – wait for it! – “Mastering the internet”. Interesting metaphor that, eh?