Innovation in Software

Disclaimer: it’s no secret I’m not a fan of Microsoft, and I know some of you are. This is just where I am at the moment, it’s not a troll but an observation. I seek constructive feedback only.

John Dvorak is possibly the crankiest man on Earth. Now he’s aiming it all at Microsoft.

Microsoft is a software company. It has been distracted too easily by the success of others in essentially unrelated fields. Here are but a few examples (and there are dozens more):

• Years ago in the pre-Internet era, AOL was the talk of the town, so Microsoft had to copy it with MSN. No money was made; no strategic advantage was gained.
• Netscape was the rage for a while, so Microsoft threw together a browser and got in that business. The browser was given away for free. No money was made; the strategy got the company in trouble with government trustbusters.
• During the early days of the Internet, new online publications appeared. Microsoft decided to become a publisher too, rolling out a slew of online properties including a computer magazine and a women’s magazine. They were all folded.

[snip another half dozen or so examples...]

This is a company that began making development tools for programmers, beginning with a programming language. Does anyone see a pattern here?

[...]

Maybe Microsoft cannot come to grips with the reason for its success. After all, Ballmer is not a computer programmer, and has never been too interested in software or computers and seems to want to run a media company.

Ballmer may get his wish by turning Microsoft into one, but I don’t think he’ll like it.

It’s true that Microsoft was taken a few twists and turns. Developing bad ideas is what Microsoft does, and have done for over 25 years. The only truly successful products they have in their stable – the products that finance the entire empire – are the Windows operating system(s) and Office. Nearly everybody expects both to take a massive hit on market share within a few years.

Hugh Macleod has, perhaps in the hope of getting Scoble’s old gig as Microsoft evangelist, tried to change the culture within from the outside with his blue monster meme. He’s had limited (but sometimes notable) success in the nearly three years since he started it, and I expect that might have been Microsoft’s last great chance: it was an excuse to change the culture into something more dynamic.

Talking to people within Microsoft there are two cultures: the old guard who want to run things as normal, and the newer breed who want to mix things up. The simple truth is senior management have seemingly let both sides down in the last decade (if not longer).

Without a fundamental culture change, and an ability to focus on core skills (rather than dancing everywhere and anywhere as Dvorak points out), means Microsoft are risking everything.

Nobody cares about Windows any more, because the applications of the future are on the web and the OS is becoming nothing more than a local file store. Nobody cares much about search beyond the engines they already use, no matter how much you try and get them to switch. Everybody hates the Zune. The development tools are over-complex, but that’s perhaps because the underlying libraries are over-complex and the bizarre insistence that an application written in Windows 3.1 should run smoothly in Vista makes developer life awkward.

So what are Microsoft’s core skills? Well, despite Visual Studio being a pig, it has a fan base. MSDN is loved by the people who love it, and as Apple realised with their ADC programme in the move to OS X, it’s those guys who are key to the future. Go and ask developers what they need to build the tools of the future and focus on it.

Apple took a gutsy move in clearing the decks with OS X and basically stopping support for System, but in the process they were able to focus the APIs to make programming for their platform much simpler, cleaner, more fun.

They targeted the very best developers on the planet, who in turn produced applications so desirable that “alpha users” wanted to buy Apple kit to run them. Go to a gathering of leading technologists, designers, writers or other alpha users today and the Windows machines will be notable by their absence (or extremely small presence). If the laptop hasn’t got an Apple logo on it, it’s odds on it’ll be running a flavour of GNU/Linux.

Microsoft need to do the same. They need to focus on the aesthetics of software, and take their base of developers and make them champions.

Then they need to think about how to help their customers become the very best customers they can be. When I sit down at a machine to work, to play, whatever, I don’t want to think about using a computer: I want to think about the job I’m doing. I want to think about how to get what I’m doing, done.

In short, Microsoft lost my business because BSD Unix and OS X allowed me to get to the pub sooner.

This needs to be the focus of the Office team: how do we make things so easy, users don’t even need to think about what they need to do for more than a few seconds before we’re helping them do it.

If the culture internally wakes up to the reality off campus that they need to change, and get senior management backing to focus on those changes, they can build a platform for the future that keeps Microsoft in the top flight for another generation. If instead they continue to stick their heads in the sand and think they can be any company they want to be, well…

Trying to shift to a monetisation strategy based on advertising in this economic climate is just pure foolishness, just as building a strategy on your competitor’s leading product is going to make you forget about making your own products the very best they can be. Microsoft’s current strategy is akin to Adobe announcing they’re going to launch a search engine: most of their base are going to ask very loudly “WTF?”

I suspect though that Ballmer will be allowed to continue playing in the sandpit that is Microsoft, the cultures will continue to clash, and nothing useful will be produced as a result. Potentially they’re going to find themselves in the same position as GM within a few years.

Shame. Who will I moan about when Microsoft goes under?

The way I understand it, there are two groups inside Microsoft right now: I shall refer to them (even if nobody else does) as the Old Guard and the New Guys.

The Old Guard are the guys who built Microsoft in the first place. They’re the ones that we might consider the Evil Empire. They thought about software as a means to make money in itself. IPR and tools like DRM were critical to their thinking about how software should work. They’re the ones the EU don’t like. They’re the ones we’re a bit tired of in the open source community. They want your money.

The New Kids have seen a little more of the World as it really is. They think that software is a tool to sell services, training, knowledge, and that things like IPR and DRM get in the way of incredible creative freedoms. To them being able to mix in with as many people as possible is more important than trying to make sure that Microsoft locks you in: they want to win by producing the best tools possible. They want your heart and soul, feeling your money will follow.

The Old Guard is, naturally, getting older. They’re retiring. The New Kids are getting more important. They’re rising through the ranks. They’re able to make decisions. They’re the future.

We’ve just seen another small move in the battle that the New Kids are winning.

Give them time. They’re getting it.

Whilst I’ve worked in data centres before – and am all too familiar with how hot, noisy, industrial and dangerous they can be – I sometimes forget how the software industry I now work in has an industrial footprint in those rooms. It’s easy to think of my business as being ‘clean’, because the dirt is so well hidden.

Plans for Google’s new data centre in Dalles, as the blueprints published by Harper’s shows, should remind us just how industrial our business really is.

Combined with the annotation by Ginger Strand, we get a picture of how big this data centre is. Three buildings of over 68,000 square foot each and electricity consumption equivalent to that needed to power 82,000 homes, a third of which will be used just to keep the building temperature at a reasonable level.

Thanks to its location much of the energy used every day will be supplied via hydroelectric power, however its very existence has caused other technology firms to up their data centre spending, and it’s unlikely all of that capacity will be run on renewable power. And besides, every watt of clean energy powering a server is a watt not powering a domestic home.

It’s also worth remembering this isn’t “the” Google data centre. It’s “a” Google data centre.

For years now they have been pushing racks into peering sites and DCs around the globe as well as smaller facilities of their own – an estimated million servers are out there running Google sites, and there are more data centres planned by Google and their competitors over the next four years. Already data centres consume more power in the United States than the army of some 100-million-plus American monster-sized televisions. As the magazine itself says, the Web “is no ethereal store of ideas, shimmering over our heads like the aurora borealis. It is a new heavy industry, an energy glutton that is only growing hungrier.”

Better virtualisation of servers is going to help, but there’s a limit to how much you can virtualise. Is the time now right for us to get smarter again about how we use clock cycles? Is the efficiency-first stance of programming we’ve consigned to the era of the 8-bit machine now going to become fashionable again?

Maybe though, we could do a little to educate the public to make use of this vast industry a little more efficiently. Does the quest for the top 100 current hot trends at Google really suggest that we’re using this power wisely?

Via RoughType

If you need any proof that we’re in a bubble around Web companies, the valuation of Facebook at $15 billion thanks to the $240 million Microsoft just paid for a 1.6% share, must be it. Even the TechCrunch guys seem a little flummoxed by it – the comments are worth a scan.

To put that into perspective, if we assume $150 million in revenues next year is solid we’re talking about 100:1 price-to-earnings ratio there. If you’re the kind of person who normally yawns when hearing about P/E, here’s why it’s important.

There are lots of reasons a company might be valued with a high P/E. The six most common are:

• The market expects earnings to rise rapidly in the near future. This is normally the case with oil or gold companies who have little in the way of earnings right now, but who have secured income in terms of drilling/mining rights
• The company makes piles of cash normally but has had to take a one-time hit on something showing earnings being lower for this year
• The company has a business advantage that guarantees revenue for low risk. Think “monopoly”.
• Investors need to shove a large amount of money into the market to get it out of other vehicles, so the law of supply and demand means prices go up
• High demand for a particular share for some reason, for example a takeover bid
• The company is hyped, and we’re in a bubble

Going through each of these in the case of Facebook:

• Facebook’s revenues are not going to rise dramatically any time soon. They have not suddenly secured a huge pot of advertising revenue they have yet to “mine”, and my P/E is based on next year’s optimistic revenue figures, not past figures.
• They’re not making a lot of cash at all, and they’re not taking any major hits in terms of infrastructure, so that’s not it.
• Whilst everybody is raving about them, they don’t have a monopoly. It would be relatively easy to replicate the Facebook platform in open source (in fact, that’s an idea going onto the site tomorrow – unless you now put it up first and claim credit), so it’s hard to see how this sticks. The value is in the user base, but talk to MySpace if you want to hear about how fleeting they can be.
• Microsoft are in no hurry to diversify risk or in need to get money out of other “vehicles” – they might need to show their shareholders they’re hitting hard with their new advertising-driven model, but that doesn’t justify the expense
• 1.6% is no basis for an immediate takeover bid

That leaves us with…

• We’re in a bubble

It’s not like Microsoft are going to miss $240 million. It’s not that we’re in big trouble if this doesn’t hold up when Facebook floats in a couple of years.

It’s the mindset that bothers me.

People are no longer looking at figures. They’re thinking irrationally. They’re buying shares because they want to hold a chip. I’m not an IFA or your banker, but I suggest you make sure you don’t pay too much for any chip you want to hold on to yourself.

I don’t normally blog Apple product releases, as people get tired of them so quickly, but I was mildly intrigued by mentions in yesterday’s announcements around their software products.

Firstly, Apple seem to be claiming that they “invented” the lifestyle application. Whilst iPhoto and iMovie are definitely a lot better than their predecessors, they weren’t the first and I think this is a tad disingenuous. However, it’s the attitude that intrigues me:

Jobs says, somebody asked him, you guys are so far ahead of everyone else, why do you keep obsoleting your own products? He says it’s for the same reason they made them in the first place – because Apple really cares about this stuff.

Caring about doing things better is where software should be at right now, but as an industry we seem so obsessed about doing things more profitably. Not enough people have worked out that we’ve got it the wrong way around.

I was also intrigued by some of the notes John Fortt wrote up when he got to play with some of the iWork suite – particularly Numbers, the new spreadsheet application.

Microsoft (MSFT) has always seemed to resent the fact that everyday Excel users use spreadsheets to make lists and do presentations as often (or more often) than they use them to make calculations; in the last few years, Microsoft has built in just a few list features. Apple seems to embrace these everyday uses for spreadsheets, making it convenient to put multiple lists on a page, and choose from a pre-populated list of options when it’s time to do a calculation.

Numbers looked so good, in fact, that it made me wonder what Microsoft thinks.

Embracing how the user really works is ridiculously hard. It’s the hardest skill I’ve ever had to acquire: knowing I’m probably wrong. It’s like learning to count from zero, but harder. Starting with how a user wants to think about and use data is something that takes time, patience, and several releases. I’ve bought every version of iWork to date (the newest edition is in the post to me now) and the iteration in regard to user experience has been patchy, but at least moving.

And what do Microsoft think? Well, Fortt has an interesting thought:

Which brings me to my hunch: The reason Microsoft delayed the release of the next version of Office? Apple showed Numbers to the Microsoft crew a week or so ago as a courtesy, and the MacBU folks realized they had a lot of work to do if they want to look decent next to Apple’s new iWork lineup.

That would be astonishing if true. If after all the years of adding back-end features to Excel, somebody, somewhere at Microsoft has had the realisation that it’s user experience that counts, we’re going to see some interesting developments in the years ahead.

Whilst social photo sites like Flickr have grown over the last few years, many developers have been asking “now we have the resource, what do we do with it”. The first interesting application was tag clouds – it allowed you to see from the metadata in the system what was there and get an idea of how ‘heavy’ some concepts were. But what to do with the imaging itself? All those photos, and no easy way of making use of all the data they contained.

I’ve been ploughing through TED talks (no surprise that my favourite section is the What’s Next in Tech area), and have been meaning to post up lots of the talks, but one being discussed on a mailing list I’m on this morning is the demo of Photo Synth. Here’s the official video:

There are a couple of interesting things about this. Firstly, whilst the first half of the demo – a demo of Sea Dragon, a resolution independent image library – is interesting, there’s nothing truly novel about it. The only limitation stopping that system from being produced in the past is processing power. Every Computer Science/Software Engineering undergrad I knew had that idea whilst in the labs at University.

The second half though – the demo of Photo Synth – is what really grabs people’s attention. By computing vanishing points and common overlaps in images, it becomes possible to build a 3D representation of the object being photographed (in this case, Notre Dame) that you can take a virtual tour through. The applications are fascinating, not least because it takes mapping to a whole new level, and starts answering questions about what we’re going to start doing with all this social media.

One thing I noticed about that application, is if you upload a photo into a set that this software is processing, the software has to ultimately work out where you were in relation to the object. If just one photo in the set is geo-tagged (and many camera phones coming onto the market have in-built PS), I can work out your precise location. Now, let’s suppose you go on a tour of Paris. You take lots of photos all over the city. I now know your location when you were taking each of them. What’s more, the image will have within its metadata the exact date and time. I can, from that, construct a complete trace of where you spent your day from morning until night, with GPS-accurate location data, even though you didn’t have a GPS unit on you. Intelligence agencies are going to love this stuff…

Another interesting thought, is how this is being called a “Microsoft technology”. It wasn’t developed at Microsoft – they bought it in, and have worked out how to bring it to market. Well, when I say bring it to market, I mean do what Microsoft always do: make it available for Windows machines, but pretend the rest of the World doesn’t exist – the tech preview doesn’t work on Linux and OS X at the moment. This is a typical “flat World mentatility” prevailing at Microsoft I hope they’re going to change soon.

Microsoft are buying in a lot of innovation at the moment. They know they have a shortfall in innovative thinking (that’s what happens when your revenue is made up of sales of operating system software you can’t radically change and Office software everybody hates), but they have a big pile of money in the bank. By buying up the ideas and then pushing it out there, Microsoft are getting a lot of credibility within the geek community, and hopefully the idea-hungry culture will start to infect the rest of the company. I suspect a lot of people at Microsoft got a slight kick in the stomach when they saw Surface all over the web last month, simply because it’s such a radical change in how Microsoft looks at itself and answers the question “what is it we do?”

I have absolutely no respect for Microsoft, its software, or its business practices – I genuinely hope that for the sake of humanity the OSS community gets their act together and puts them out of business – but I’m starting to warm to some of the ideas and their employees.

This is perhaps the oddest promo video I have ever seen. It’s worth every minute, despite being from the evil empire themselves down at Microsoft.

And it is really worth sticking with it until 7 minutes in. At that point it gets even weirder.

With all the production values of a porn film, the standing ovation at the end for a bit of copy’n’paste plagiarism and the closing shot suggesting Microsoft sales guys sleep with their clients, it’s one to file in the “how not to sell your product” category.

Either that, or the shots of 5.25” disks, audio cassettes and the “when we get OS/2, I’ll be ahead of the learning curve” references have just made me feel a bit ill.