On the end of Yang

Despite my hiatus I could not let this news pass. Jerry Yang has finally resigned as CEO of Yahoo bringing an end to a disasterous tenure in which he spurned a $33 per share offer to acquire the company only to see it sink to $10. Now this is not all Jerry’s fault, every stock has taken a battering since the summer, but it is mostly his fault. Every move he has made has been hedged around with vacillation and uncertainty because, in short, he is not a leader.

The real reason Yahoo is doomed is that it hasn’t really changed since 1994. Admittedly Google hasn’t really changed since 1996 but Google was built around a genuinely brilliant insight from Larry Page which spelled the end for the portal strategy of which Yahoo was the prime exponent. They may not have set out to do it like MS did with Netscape but make no mistake Google killed Yahoo.

The bottom line is Jerry Yang was never cut out to be a CEO. And like anyone stuck in a job they are not suited to the best thing to do is pack it in. I bet Jerry never felt so relieved as he did yesterday, what Yahoo needs now is someone who thrives in adversity.

On the death of Office

Google Apps is starting to turn from a sideshow into a proper business. Google seems to be using revenue from its search business to undermine paid for software of a competitor, Microsoft. Ironically this is how Microsoft killed Netscape and unfortunately for MS it is a very effective tactic. There are far too many advanced features in MS Office which means it is vulnerable to a stripped down competitor like Apps. Google charges comparatively nothing ($50 per year for the premium service) and hosts everything itself.

This approach is not without weaknesses if Google wants to get out of the SME market. As they grow some enterprises may want to take all their applications in house, not host them on Google’s servers. At the moment Google only offers its enterprise apps stuck to its own servers. Cloud computing is very attractive but any large organisation will want to control its own cloud.

Theory Y

Ultimately what I really want is the capability to hack together different suites into one service. So for example we could use Gmail for mail, SocialText for wikis, Sonar Dashboard for networking and Connectbeam for tagging and search. New services should be easy to trial and add to enable quick decision making when someone finds a new app they want to try. At the moment getting a new application added to a corporate environment is a very time consuming process with the result that the applications being used are miles behind what is available.

Software alone is not the solution though, these tools can only support good management. I am currently reading the Human Side of Enterprise. It was first published in 1960 but is fresh as the day it was written. The approach to management it espouses is maximum freedom and maximum responsibility for employees. Most organisations are not run this way and still cling to the idea that people are naturally lazy/incompetent and need to be constantly corralled by a management class. The alternative view is that people are naturally enterprising and will respond positively to a challenge so long as they aren’t constantly interfered with. Organisations like WL Gore & Associates and Semco have succeeded taking this approach long before collaborative software became a reality. And to really get the best out of collaborative software, management will have to change too.

Read more:
On balance
On Gmail
On trampolines

Related articles by Zemanta

• Google pushing software to low-cost Linux PCs
• Marc Benioff’s mantra: Anything but Microsoft
• Google must upgrade hosted apps to appeal to IT, analysts say
• For Google Apps, 2008 may be the year it realizes less is not more

On Bill Gates

The retirement of Bill Gates reminds me of the end of the Lord of the Rings, it seems to have happened about eight times. I remember him announcing stepping down as CEO, stepping down as CEO, stepping down as Chief Software Architect, announcing his retirement, doing his last CES, doing his final developers keynote, doing his wacky retirement video, announcing his retirement date and now, finally it seems, actually leaving (except he’s still doing one day per week at Microsoft). Like many Microsoft products, it seems there are may versions of the Gates’ retirement. Even in reporting it I have caught the disease and described it twice.

Gates is the standard by which all other technology entrepreneurs will be measured. No doubt there were better coders than him but there is no better strategist. Even though Apple saw the potential of Xerox PARC’s Graphical User Interface first it was Gates who recognised hardware didn’t matter and staked his entire company on that insight. And won.

Even his fiercest critics acknowledge the debt owed to MS. By creating a common OS platform for other developers to build on MS made the personal computer accessible and help laid the foundation for the explosion of the Internet. Yes MS engaged in some rather fruity behaviour down the years but even now, with their power on the wane, we must admit we are better off with them than without.

These days those insights are as sharp as ever. It was Gates who put in train the company’s greatest innovation – the Xbox – and with it the one genuinely distinctive product, Xbox live. In 2003 he predicted the computerless home in an article which I have not seen bettered for its brevity and insight. And now instead of wasting his money on yachts he is giving it away to promote education and combat disease. If he does to malaria what he did to Netscape the world will be a better place.

Read more:

High Stakes, No Prisoners: A Winner’s Tale of Greed and Glory in the Internet Wars

On Microsoft’s biggest mistake

On Microsoft strategy

On XP

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.