Sunday, August 01, 2004

Telirati Newsletter #47

In this newsletter, written in 2004, I made a number of predictions. My scorceard looks like this:

Apple did make a UNIX my mother could use. But now they face the task of taking advantage of, rather than being run over by, the coming desktop Linux wave.

Microsoft, after the huge technology achievement of Windows 2000, did face the challenge of remaining relevant, and largely failed. Microsoft isn't moving fast enough, hasn't had a break-out into new product categories - with the possible exception of XBox, and hasn't created any new product categories to dominate.

Until recently I was right about VoIP being irrelevant because incumbent networks could comfortably drop prices. Cisco is finally getting some traction (by default) in VoIP CPE, and Skype has discovered pricing and a business model that (probably) works.

I was thuddingly wrong about VoATM. Never heard of VoATM? Yeah. Anyway, DSL and VoATM are wrong and deserve to lose. VoIP will set you free to buy service from any telco. VoIP wins.

In 2000, I predicted content protection is futile, and it remains so. Public domain literature still isn't in mass-market circulation. Nobody has, for example, brought Soviet-era prices to iTMS for back catalogs of Soviet-era classical recordings. eBooks are still a total commercial failure. Bah! How many years of clue-stick bashing will it take?

9/11 has forestalled both shrinking government and making it more transparent. The population is the target of tag-and-bag technologies, not the government itself. It will be a long road to turn this one around, and this is Not a Good Thing.

Oh, and other failed prediction: Windows CE, Web terminals, and other non-PC products went nowhere for Microsoft, and continue to go nowhere. Maybe CE will make a comeback in Xbox II. Maybe.


Telirati Newsletter #47: At the Crossroads

A number of technologies, economies, companies, and policies are at a crossroads now. They are worth marking.

Apple is flush and healthy. They have had time to really finish OS X. When Steve Jobs started Next, I could have told him it was a dim idea to use a Unix variant as the basis for his operating system. Some ten years later, he might be done taming Unix, and in time to catch the Internet wave. Apple will thrive or die based on whether OS X really is a Unix my mother could use.

In newsletter #46 we looked at Microsoft?s operating systems design leadership with and found it a mixed bag when it comes to being equipped for the next fight. Speed has become the issue. Microsoft has many of the right answers, but can it put them into products, have the products accepted, and have applications that take advantage of the capabilities quickly enough that those right answers turn into value, instead of just white-paper fodder? Focus, simplicity, and clear-headed assessments of whether leapfrog moves have to be made when incrementalism gets bogged down will be the key. The positive signs for Microsoft come from the fact that Windows 2000 is an excellent product. It really does deliver the ease of use that only Windows95/98 had before, and then some. Go ahead! Windows 2000 is an NT that doesn?t hurt to install anymore. Your mother could set up Internet connection sharing. A wonderful product. But is a wonderful desktop OS enough? Will COM+ win the middleware war? Will Microsoft break out into post-PC devices? They are fighting a war on many fronts, and victory is not at hand.

The technical battle of packet-switched voice vs. circuit-switched voice spirals into irrelevance. Much as Intel showed the world that manufacturing prowess can overcome the purported advantages of RISC, circuit switched communications carriers are showing that bits are bits and that the incremental advantage of packet switched voice communication can be countered by incumbency, scale, and experience in network operations. In the middle term, ATM will emerge as the currency for apportioning DSL bandwidth between voice and data. ATM is a connection-oriented virtual-circuit technology that will prove to be just flexible enough to enable DSL to use its bandwidth very efficiently. DSL is not as pure as IP over a cable modem, especially for supporting household servers visible to the Internet, but clever cooperation between CPE devices and carrier equipment will make even this distinction irrelevant.

In telephony, CPE vs. network is a battle that morphs into an Internet incarnation as Cisco acquires a lot of carrier-oriented technologies like big-iron unified messaging technology. They are forgetting that the network is dumb and the edges are smart. While the network is very good at being dumb, reliable, and transparent, it is as hard as ever for attempts to add value to the network to keep up with the cleverness that springs up at the edges. They will find customers who are happy to buy more efficient ways to deliver capacity, but dubious about providing more than an e-mail address over and above the raw bits.

Intelligence at the edge, plus voice-over-ATM, will produce a new class of mass-market telephony applications for making individuals? telephony experience smarter and better. These applications will live in integrated access devices and will arbitrage the boundary between ATM WAN connections on one side and IP SOHO LANs and wireline/wireless telephone handsets on the other side. The most imaginative applications that break down the boundaries between business and residential needs, and that take best advantage of the WAN architecture will form the basis of a new and vibrant class of intelligence at the edge. Voice mail will morph into a more user-friendly blurring of the real-time/store-and-forward boundary, much as instant messaging is blurring this boundary in the text medium.

Music and books are at a crossroads. Publishers and creators can either face up to the fact that content protection is futile and change their business model to suit, or they will break their pick on the matter. Good guys in governments around the world can give this a heavy shove in the right direction by publishing all material under government ownership, the public domain, and material in their possession that is not protected by intellectual property law in open and unprotected formats. The result would be an efflorescence of cultural wealth, and a crushing blow to both piracy and harebrained schemes to infringe on the doctrine of fair use with fragile software locks. Government, museum, and foundation archives are brimming with recordings, images, texts, movies, and video. A large amount of it belongs to the people, or to institutions chartered to enhance the people?s lives through culture. It is time to use the Internet as a giant amplifier of the cultural legacy of mankind. The alternative is quite dark. The Digital Millennium Copyright Act tramples well-established doctrines of fair use, and creates novel thought crimes, like knowing how to break cheesy ?copy protection? schemes that at times take the form of a bit in a binary file, a setting in the Windows registry, or a line of text in a configuration file. It is not exaggeration that attempts to move past business models into an unaccommodating future will, in the short run, make the government into publicly funded goons for music and movie publishers.

The above comments might make your chronicler out as some kind of anti-capitalist flower child. Ha! The next victim standing at the crossroads not minding the traffic to be run over by the V-8 powered luxury sport utility vehicle of progress is government bloat and waste. Here the people are the ones faced with a decision: Do we let the fat times continue to blind us to the fact that government is at least twice as large as it needs to be? Or will the ethic of cheaper faster better begin to gain traction when people contrast the performance of government against the performance of technology. Will we accept more intrusive surveillance, or turn the camera the other way so we can see in real-time how many road crews are hanging out at Dunkin Donuts? We have ?sunshine? laws and the Freedom of Information Act. Government, in theory, operates under the scrutiny of the people. Why not make it a matter of course that all government meetings are recorded and the recordings posted on the Internet, along with all documents? In every department outside the FBI and DoD this should be the norm, and even in these departments, 80% of matters are mundane and would benefit from the sanitizing benefits of sunshine. The rest can be recorded and electronically numbered and signed in a way that would absolutely prevent destruction of evidence should they be unsealed in case they become the subject of an inquiry. Or, if these arguments do not sway you, think of it this way: Where do you think the productivity gains that will take your online stock portfolio to new heights will come from? Look at that nice fat government over there, like a great fatty slab of bacon. Wouldn?t privatizing another 20% of the GDP look nice on that mutual fund statement? Flower child indeed.

And finally, back around to Microsoft: What a simple idea, that Windows CE should be the foundation of simple, inexpensive machines that surf the Web. Not exactly a crossroads, it is more like ?Well, duh!? An idea whose time came about a year ago but nobody took the call. This product, together with Microsoft?s game console architecture again puts Microsoft at the crossroads of non-PC mass-market products. Microsoft tried, in the distant past, to promulgate a game console architecture. This time around, the x86 instruction set looks like part of the mix, which raises the likelihood of success considerably. But is it enough to withstand the rock of falling PC prices, while resting against the hard place of game console competition?

We will be keeping an eye on these crossroads.