Sometimes it Just Feels Like 1984

This article in the NYTimes is a throwback, and with all due respect to Mr. Stross, he just doesn’t get that it’s not just about computers anymore and market share isn’t a meaningful metric for success in the broader market, as odd as that may sound.

The best time for gaining market share is when your main competitor stumbles while introducing an entirely new version of its core product. Thanks to Microsoft’s lumbering pace, Mr. Jobs had six years to look forward to the moment when XP would be replaced by Vista.

1) Microsoft vs. Apple meant something when being a platform meant having enough mass to attract application developers. It’s 2007 and everything new runs in a browser… how many installed applications do you use? Microsoft Office, maybe Quicken… both are native on the Mac. Stross mentions this in one sentence and ignores what a significant shift this has been in the industry as a whole.

2) Drivers? People who use Macs base their peripheral decisions on around what is supported on Macs… not the other way around. Your printer doesn’t have a Mac driver? No problem, buy a new printer, they are cheap. I don’t base my computer decision on what printer supports it.

3) Market share or profitability? What would you rather be, a PC maker fighting commodity pricing trends or a niche vendor making a lot of money and practically guaranteed to continue to do so for the near and medium term future? How about market share for portable media players, online music downloads, now phones (okay, Microsoft gets Apple on that one, Windows Mobile has been doing really well for 2 years now).

4) I really don’t think Jobs wakes up every day trying to beat Microsoft at their game. If anything, he has forced Microsoft to adjust to a new landscape thereby positioning them as the underdog. Here’s the deal, you can define your company around a set of competitors or build your company to a vision that transcends competitors and I think it’s fair to say that Jobs has done the latter, therefore the whole Apple has 3% while Microsoft has everything else almost doesn’t matter… I’d still want to be Apple for a lot of reasons that are important, like profitability and market trajectory.

Lastly, Stross makes a big deal about Apple’s retail strategy but keep in mind that Apple’s retail division generates over $2 billion a year in revenue, contributes greatly to high customer satisfaction, and lastly, gives Apple complete control over merchandising and pricing. The fact that the company has gained market share indicates that their retail presence isn’t an inhibitor to growth.

UPDATE: Stross should read Cuban’s post on his switch from Vista to a Mac… “I had gotten to the point where I was embarrassed to be a PC owner”. I’m surprised that Cuban doesn’t know that Microsoft does have a version of Outlook for the Mac, I’m sure he can afford a copy of Microsoft Office for the Mac, it comes with it. I think it’s fair to say that Apple’s “window” is wide open.

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ActiveGrid Acquires TurboAjax and Stakes Out Dojo

If you are steeped in Ajax development you will no doubt need no introduction to The Dojo Toolkit. If not, allow me to shed some light on this. Dojo is a open source DHTML toolkit written in Javascript, which for the non-geek audience means you can use it to quickly build rich web applications, and by “rich” I mean applications that have a lot of functionality in the UI that would normally take a developer a significant amount of time to develop or fall back into Flash.

Despite it’s capabilities, Dojo has some major problems, first among them is that it doesn’t have reliable commercial support so if you decide to use it you have to be prepared to fend for yourself. Quality of the interface widgets is another issue, simply put they have quirks, to put it kindly.

ActiveGrid is a company you will be hearing more about. Originally conceived as a grid computing vendor, to be honest I never really got their pitch… it was grid computing but developer tools. I always felt that the fact that they were open source was more important to them than anything else. The company has a new CEO, Chris Keene, and things are turning to be a little clearer.

The company’s updated messaging is clear: companies need to migrate legacy client/server apps (the homegrown kind) to modern web-based variants and the way to do that is to retool away from things like MS Access to visual development tools built on open and standard web technologies. It’s interesting to me that enterprise 2.0 is rapidly becoming a messaging cornerstone for a lot of vendors, interesting because it truly is a grassroots meme (props to Andy McAfee!)

Chris wrote a good post on his blog about the company’s acquisition of TurboAjax, a Dojo provider. His comments about their intentions say it better than I could:

  • Lack of commercial support: without the availability of commercial support, AJAX will not achieve enterprise adoption. With this acquisition, ActiveGrid will now stand behind both the TurboAjax products and the Dojo Toolkit.
  • Missing features: common complaints around the Dojo toolkit include lack of complete documentation and robust samples. If AJAX toolkits are to be adopted, they need the same polish as proprietary solutions like Flex.
  • Inconsistent standards: as the saying goes, the nice thing about AJAX standards is that there are so many to choose from. There is an alphabet soup of Javascript libraries out there, including JQuery, Prototype, Rico, Scriptaculous, Ext and YUI. Each of these takes a very different approach to solving the same problem.
  • Security: don’t even get me started on the security challenges in an environment full of widgets, gadgets and 3rd party web services. Suffice it to say that when this rock gets turned over, lots of ugly stuff creepy-crawly things will slither out.

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VMWare in the Merc

There’s always a sailing angle in the fluff pieces on successful companies

Growing up on the banks of Chesapeake Bay, Diane Greene loved to sail her dinghy. She mastered windsurfing when the sport was new. She studied naval architecture and as a young woman lived in Hawaii, designing windsurfing gear.

Like a lot of people I am really happy for VMWare, they are a great company with a truly in-a-class-by-itself product. To see the employees come out ahead in the IPO is nothing but goodness.

There is an interesting backstory on VMWare about their early days. This deal was shopped heavily and a lot of investors looked at the deal and passed because they just couldn’t understand why virtualization would be important when everything we know tells us that hardware prices would continue to fall. The value turned out to be a lot of things other than cost, we now know.

The other factors in their early fundraising story were that venture investors don’t like husband and wife teams, especially when the wife is as understated as Diane Greene is. SAP passed on an early opportunity to invest primarily because of the husband and wife factor. In our case it is clear that no one questioned her competence directly, but the fact is that Greene doesn’t fit the template of the classic Silicon Valley CEO and it is without question that investors had to consider their ability to replace her given the voting power their combined stock guaranteed.

I think it’s also fair to say that a lot of investors overestimated the ability of competitors and open source projects to replicate what VMWare is doing. At it’s core, there is a very small population of engineers and architects who can deliver a virtualization product and, as it turns out, that just isn’t getting any easier as time goes by. It’s a super complex product to deliver and VMWare had demonstrated that they do it better than anyone else, a barrier not likely to be breached any time soon.

In the final analysis I think a couple of things are clear, first and foremost is that boostrapping the company to the degree that they did ended up having a highly beneficial effect for the employees. Another lesson is that venture investors often experience inability to unstick their paradigm when they come across a deal like VMWare that isn’t about sex appeal, consumer flash, and in-the-tornado founder charisma. Invariably, venture investors look at something like VMWare and try to fit it into a predefined bucket based on other investments they have made or things they have looked at. It takes a company like VMWare to remind everyone that meat-and-potatoes technology may be boring but it is really lucrative.

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