On HP

The dam starts to crack. Rumours around HP suggest they are building their own OS. Perosnally I wouldn’t bother doing it myself if I was HP. On occasions like these you go to the specialists and in that case it means Canonical. They have years of experience building a consumer friendly version of Linux. In fact I don’t think hardware manufacturers building operating systems is a good idea.

At this stage everyone cites the example of Apple but the fact is their refusal to license any Mac OS contributed to Microsoft’s dominance in the first place. Hardware and software are two different things and I think having companies focused on one or the other is the best way. Some may argue that this is not the case with mobile and give Android’s difficulties as the prime example. The counterargument is Symbian and it’s a pretty good one.

Apple seem to have set their stall out as a niche manufacturer come what may. This is not a criticism, someone has to be the Mercedes of the tech world and someone else the Toyota. I am always skeptikal about one company trying to control all aspects of a system and I think it is better for the consumers when different companies establish common standards and promote competition between application developers. This also allows companies building operating systems to focus on what they are good at.

Microsoft is getting in to trouble now because it is too cumbersome to lead in any of the emerging markets. It is compounding the problem by trying to add even more weight when it should be trying to shed it and trying to get into markets it has no hope of cracking like search.

Pic: fattytuna

On Chrome

Another bloody browser, this time from Google. It’s a crowded field and Google’s efforts outside search have a mixed track record. Gmail is excellent but Knol is terrible. I installed Chrome and it’s nothing special. On the plus side it has a nice simple UI, on the minus side it’s not very intuitive. For my money Opera is still the best and I won’t be switching any time soon.

What’s more interesting is where Google is going with this. I think Arrington is right. Google is preparing to enter the OS market and Chrome is the first shot. Microsoft have foolishly left this avenue open first by allowing Linux to creep up on them in the UMPC market and then by not addressing the sector properly and leaving it to XP. Now I have nothing against XP, it’s a good OS. I’m just surprised MS hasn’t put out a purpose built UMPC operating system. W7 may have something along these lines but I don’t think MS can afford to hang around here. They may wake up in 2010 with their core business gone if they are not more careful.

Back to Goog. To keep denying they are working on an OS when they have already begun the Android project is clearly ridiculous. They basically admit as much in the Chrome announcement:

At Google, we spend much of our time working inside a browser. Like all of you, we search, shop, bank, read news and keep in touch with friends – all using a browser. People are spending an increasing amount of time online, and they’re doing things never imagined when the web first appeared about 15 years ago.

They are right here. These days all I use my OS for is to drive my browser. This minimises the importance of the operating system if all it has to do is run a browser and the associated plugins. My next machine will probably be a Dell E running Linux. This will be plenty to browse the web and send emails which is all I really need. The days of everyone having heavy operating systems are gone. Some people will still need dedicated desktop apps but I expect this small market to be dominated by Apple and high end macs.

The era of MS dominance is at an end. So on the Google browser I say no thanks but on the OS yes please. The more competition the better.

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On Goobuntu

Writing the post about a greener Linux got me thinking about what Microsoft should fear the most. As I was looking around I came across the answer: Goobuntu.

One of the enduring problems Linux has is its lack of brand awareness. Most people stick with Windows because they have heard of Microsoft. I guess the best known Linux distro is Ubuntu and I’d guess less than 2% of people have heard of it. I think this is why MS shows little apparent concern about it’s core OS business. However a Google backed OS would be a different prospect. Google has a consumer brand people know and generally trust. So long as they delivered a clean Linux OS and didn’t do anything daft like invading privacy they would be onto a winrar.

Netscape’s ghost

Google’s reticence may be explained by a residual fear of Microsoft. They claim not to be concerned with MS at all and, in reality, they should not be. That said I think any fears are emotional not rational. As Google was growing up MS was taking Netscape to the cleaners. Netscape famously invited the attack by proclaiming the death of MS and ended up getting rather more than they bargained for. Whilst Google is clearly not vulnerable in the same way Netscape was they still may be reticent about making such a clear attack on MS. Eric Schmidt is also a Novell refugee, another company bruised by MS which may add to the caution over the OS game. Ironically if they did release Goobuntu they would be doing to MS what they did to Netscape – cross subsidising a free product to disrupt the core business of a competitor. Perhaps it is regulators and not fear of MS which is preventing them making the move.

They have no such reticence when it comes to mobile as the release of Android attests. This may actually boil down to the fact that Google sees the future of search as mobile and are preparing to shift their business in that direction rather than any fear of MS. Their recent spectrum bid points in this direction and it would be the simpler explanation. In a way this is worse news for MS, Google showing no interest in the computer OS market indicates they think there is no future in that business. Maybe the only thing more scary for MS than Google releasing an OS is Google not releasing an OS.

Read more:
On Linux
On Ubuntu
On breaking up Microsoft

On a greener Linux

More trouble for Microsoft as it emerges that Linux servers take 12% less energy than Windows Server 2008. This is another straw in the wind for Microsoft. With energy prices as high as there are any company which can take 12% off your costs is an attractive alternative. MS is being assaulted by different competitors, large and small, from all sides in all its core businesses. It’s response? Buy an ailing Yahoo. Not good.

Microsoft isn’t dead (yet)

When Paul Graham mooted the death of Microsoft the impressively named Don Dodge replied with a post pointing out that MS revenues grew by $4bn to 2007. I looked at the MS earning releases which place a lot of emphasis for future success on Windows Server 2008 and the entertainment and devices division. No mention of Vista which is looking increasingly like a bust. Whilst revenues have been growing MS is sailing into a world which for the first time looks like they will face serious competition in all of their core products.

Microsoft’s historic strength was operating in markets with almost no competition. For years nobody produced a serious alternative PC OS or enterprise suite but both of those games are changing rapidly. And as these products will be increasingly browser based MS won’t be able to pull the trick which doomed the competition for Office. Of course they could fiddle with IE to make the MS alternative work better but with Firefox and Opera out there this strategy would more likely result in companies ditching MS altogether. MS brass realise this even if Dodge doesn’t which is why they launched the Xbox and it is also behind their move for Yahoo. MS thinks if it can diversify and get some of that sweet cherry pie of advertising all will be well. Comforting but wrong.

Dodge cites the Apple/MS desktop stats to claim MS has a good position in search. This is a total canard. Apple has 6% of the desktop market but they are doing something innovative and different with that 6%. MS has 10% of the search market with a me too product. He also cites Windows mobile, which is awful and faces serious competition from a number of different competitors, not least Google’s Android. On balance I’m closer to Graham on this one.

Skate to where the puck is going to be

When Steve Jobs talks about Apple strategy he quotes Wayne Gretsky: skate to where the puck is going to be. MS skates to where the puck was 15 years ago then persuades itself that’s where the puck is. The emergence of the Internet spooked them and they didn’t respond well. First was the laughable attempt to usurp the Web with MSN, then there was Netscape.

Ironically, going after Netscape was the worst move MS ever made. Netscape was always vulnerable because they never cracked a reliable business model. They were built on sand whereas Google is built on rock solid revenues. Looking back, by destroying Netscape MS harmed itself. It may have removed a short term competitor but by crushing a company with huge natural vulnerabilities it lulled itself into a false sense of security and tied itself up with regulators for the next ten years.

While I don’t agree with Graham that MS is dead, I think it is in a downward spiral and getting out of it in its current state looks less likely by the day.

On XP

The tanker begins to turn. Microsoft have announced an extension for XP on the desktop following their earlier move to extend XP for UMPCs. Now I’ve been predicting the death of the desktop. Maybe I’m wrong but if they do survive it will be in this lighter shape, not Vista powered behemoths.

All they are doing with this move is recognising reality. PC manufacturers were using a loophople in the Vista licence to downgrade to XP, or as PCs PR lady puts it ‘upgrading to a more familiar experience’. By doing this MS has de facto readopted XP by acknowledging it as their OS of choice for stripped down PCs. They didn’t want to do it but the threat of Linux taking over this rapidly growing market was too horrible to contemplate so this is the least worst option.

Of course the real problem with doing this is that extending XP indefinitely means the end of Vista. Now this is the right move but it’s like having to admit the car you just bought is worse than your old one, you don’t want to do it but that is where MS is currently stuck. Using XP for everything and leaving Vista in the garage.

On Ubuntu

Canonical are moving to create a UMPC specific version of Ubuntu. We are still at the straws in the wind stage but this combined with the news that Linux is making strides in the mobile market is something Microsoft needs to do something about soon. I’ve said before I think this is the right time for Linux to break out into mainstream use and I see more and more evidence each day.

I’m most surprised that Microsoft is obsessing over advertising and Google just when serious competition is emerging for both their core businesses. Connectbeam and Trampoline may be small now but all it would take is an acquisition by Google, a turbo boost from Google Apps and they could have an enterprise suite which seriously threatens Office.

And getting into STBs wont be easy either with specialists like Humax already quietly rolling up numbers and BitTorrent deciding its future lies in the living room. I have the feeling all this adds up MS waking up one day with its core software business gone and not much to replace it. They are spending far too much time on competitors and too little on users who are learning to do without them.

Read more:
On Goobuntu
On Linux
On breaking up Microsoft

On power

Before I begin this post I must confess a conflict, Arrington style. I own a Mac Pro. It is beautiful and powerful. In earlier posts I have said that the market for heavier Operating Systems which run big applications locally is limited. Unfortunately for Microsoft, Apple owns this market. I use mine for editing video and the sole reason I shelled out three grand for it was Final Cut Pro. I tried Adobe Premier on a PC and, combined with the move to Vista, I decided to go for a Mac.

In essence Microsoft’s problem is that they are now caught between the Scylla and Charybdis of Apple and Asus. Make a big powerful OS and you are faced with Leopard, make a small light OS and you are confronted with Linux. MS is caught in the middle trying to be all things to all men and failing. It was a profitable business in years gone by but now it is being squeezed by the two A’s and further pressure is being exerted from the Web as applications increasingly migrate online.

The bottom line is that in future only specialist users need powerful machines. Creating an OS for such power will be a niche pursuit and it is a niche that belongs to Apple having long ago captured the hearts and minds of the creatives. All other users want is to access the web easily to check facebook, write email and read the news. And all that needs is a web browser. I also think in future increasingly enterprise apps will be rendered through the browser to increase flexible working. Some may say security will not allow this but the reality of security is that employees invariably use insecure systems such as webmail, especially when confronted with a ’secure’ system which is locked down so far as to be unusable.

I’m not sure this is all doom and gloom for MS, it just means they will have to diversify away from their traditional revenue streams. All they need to do is take this guy’s advice. He has some of the best insights I’ve read about the way things are moving.

On breaking up Microsoft

I’m always interested in the psyche of a company, it’s like a rhythm the company moves to and runs subconsciously through everything they do. I think it’s why some people do brilliantly at one company and disastrously at another. One of the reasons I want to work in my own start-up is to have a corporate culture which suits me well. I have experienced this when I was at Orange and I did my best work there.

There is something deeply embedded in Microsoft that seems unable to keep things simple. So even when they have a good idea like the Xbox they can’t resist putting out four different versions of it. Apple has parodied this trait in its commercials, some have speculated how a MS iPod would have turned out and others have pointed out its muddled branding. MS has recently hired marketing guru Alex Bogusky to help them turn things around but I think the problem lies deeper than simply changing the marketing.

Vista is so heavy that users are baulking at the basic requirements needed to run it and sticking with XP. I’ve said before I think the future lies in much lighter operating systems. MS really needs to forget about building an even bulkier Windows 7, throw out the entire code base which is giving it such problems and set off an internal competition to build a new OS. Pick five of the most creative programmers give them all their own company, a stack of cash and let them get on with it. No rules – let them build it on top of Linux if they want to – and see who wins. Let Windows and Office lumber on if they like but get some fresh air into the company.

WL Gore and Associates is a uniquely well run company. One of the principles it employs is to break up any business unit once it gets bigger than 250 people. It does this to maintain a start-up atmosphere and to avoid stifling creativity. This is the road Microsoft needs to take – ironically this is to impose the anti-trust ruling on itself. Microsoft itself could become the holding company and take its history of muddled brands into the past. In its place Xbox, Live Search, (ahem) Zune, and what ever other brands it decides to develop would then be separate companies with only a parent in common. It is no coincidence that its only post-Windows success, the Xbox, is run as autonomous unit. Ballmer is apparently moving in this direction by trying to develop more internal autonomy. He should go the whole hog and break the company up.

On Linux

Attitudes to Linux is one of the great dividing lines between technical and mainstream users. From what I read from Linux enthusiasts it is fantastic and Windows is terrible by comparison.

Now for programmers, using Linux to build out a back end is doubtless as fantastic as they say. I have no idea since I will never do this but for users trying to install a front end Linux is terrible. My only experience is with installing Ubuntu on an old laptop only to rip it out moments later. The problem was I couldn’t get anything to work, the wireless didn’t work, printer drivers didn’t work. Nothing. This may be down to my technical incompetence but Windows XP is much more usable. I have never used Vista, now having switched to Leopard.

The Ubuntu UI wasn’t too bad and I’m sure if it or some other Linux distribution had come pre-installed like on the Asus I would be fine with it. With more and more of my applications migrating to the browser I don’t really care about using Word or Excel when Open Office can open documents adequately enough. I think I’d probably have to keep a machine capable of running MS Office somewhere but my reliance on those programs is waning fast.

People are already starting to speculate about what is in Windows 7 but I think the Andreessen prophecy about the OS migrating to the web is finally coming true. About a decade too late to save Netscape but there you go.

This could be Linux’s time. If someone can reliably put out a stripped down, good looking Linux OS then the time could come when Windows finally has a worthy competitor. MS is scrambling to get into the UMPC market perhaps realising that simpler operating systems which can fit on smaller machines are the way of the future. This makes Microsoft far more vulnerable to a nimble competitor as its advantage lies in having thousands of programmers making an ever more complicated OS for ever more powerful machines.

If machines start getting simpler and less powerful because more is migrating to the web where does that leave MS? Turning round the super tanker takes a long time. Getting into the console market with the Xbox was a clever move to diversify but making up all the lost revenues from its core business will be a hard task.