by Dana Blankenhorn
Volume V, No. VIII
For the Week of February 26, 2001

This Week's Clue: Microsoft Loses Its Mind

This Week's Clue: Microsoft Loses Its Mind

SSP (Shameless Self Promotion)

The Magic (and danger) in Peer to Peer

Book of the Year

Newbies Still Dominate

Clued-in, Clueless

When do we become our parents? When do we become the enemy we fought against when we were young? 

Many will say that for Microsoft the crucible was its anti-trust case. I would argue it was Microsoft's war against "software piracy," its efforts (so far unsuccessful) to enforce one-sided "license agreements" under which it doesn't sell software (that's how consumers interpret the transaction) but merely allows it to be used on a single machine.

Whatever the cause, Microsoft has moved firmly away from the market and toward the government. It is making its software a law enforcement mechanism and looking for government help to maintain its monopoly in the name of law enforcement. In doing so it has become vulnerable to the first "kid with a Clue," to the next Bill Gates. 

Evidence for my first charge, that Microsoft has made its software a law enforcement mechanism, can be seen in its Windows XP operating system and its strategy for that software. Microsoft claims that 40% of its software use is "pirated," and thus its revenues would rise 40% if it enforced its licenses. Thus future versions of its OS (and Office application suite) will require registration to work, and that registration will identify the machine it's on and prevent the copying of software to a new machine.

Having moved decisively on its own behalf Microsoft is also moving on others' behalf. Lycos' Hotwired broke the story on how Windows XP's ("Secure Audio Path" ) will prevent "music piracy" on behalf of record producers. The Register of the UK has bowed to HotWired's scoop and detailed Microsoft's strategy for making this a standard and forcing compliance

This use of "West Coast code" (software) to enforce "East Coast code" (copyright law) will only work if the market has no choice but to use Microsoft products. IBM has invested $1 billion in Linux development, while Sun has announced a new architecture that pushes open source's stepchild, peer-to-peer computing . Thus, the only way Microsoft's strategy works is if the government enforces its client monopoly. 

That's the background for Jim Allchin's recent audacious statements against open source, which were widely reported . Microsoft has evolved a lot in the last decade, from a geeky outfit both ignorant and alienated from government, to an enemy of the government, and now to a key government ally. Its next evolution will be an attempt to become the government. 

Microsoft's moves put it at war with the "geek" mentality that built it. In the end this will destroy the company. If I owned any Microsoft stock I'd sell it. If I had the nerve I'd sell it short. 

SSP (Shameless Self-Promotion)

After some flames, some unsubscribes, and a bit of soul-searching I've decided to take a-clue.com back to weekly publication. It took me much longer than expected to load five dailies (even with the content in hand) and I need to make a living (this is my marketing, not my work). If you really liked the daily delivery, let me know and we'll see what we can do for you, but you might want to just read one item each day off this issue. (I know, betcha can't read just one.)

Join the A-Clue.Com discussion at I-Strategy , our shared e-mail digest produced with Audettemedia. You can also read me daily at ClickZ , monthly at B2B, and Boardwatch, weekly at WorkZ  and once every two weeks at Internet Content. Remember that it's journalism that keeps the Clues coming...

Shameless Promotion

E-COMMERCE 2001(tm) CONFERENCE & EXPOSITION March 8-10, 2001, Outrigger Waikoloa Beach Hotel, Big Island of Hawaii AN INTERNATIONAL EVENT...ENROLL NOW...

Takes on the News

The Magic (and danger) in Peer to Peer

IBM and Sun have it right. The big technology trend for 2001 is "peer to peer" computing.

Ironically this is a case where Intel has finally trumped Microsoft. The rise of peer-to-peer is a natural outgrowth of Moore's Law. Computing power makes today's server tomorrow's client. Instead of buying a $500 client people wait a year and buy a machine that can serve as well as receive multimedia files.

As people have tried to use this capability, however, Microsoft has cracked-down. Microsoft has deliberately crippled Windows to reduce its capability for opening connections, charging out the wazoo for server versions that aren't crippled. Now they're actively attacking both open source and peer-to-peer as dangers to the status quo.

They're right about that, but smart companies get behind change. Only the Clueless will try to keep technology's genies in bottles. The result is a great opportunity for Linux (backed by IBM) to break Windows' monopoly on clients, and for Sun to break Microsoft in the architecture area.

What's needed for Sun and IBM to succeed are applications - legal, business-like applications. What can you do, legally, with the power of peer-to-peer? How can you deliver marketing messages within that kind of network? What can you sell to people using that network, or through that network?

Answer these questions and the next great fortune (maybe even Bill Gates' fortune) will be yours.

Book of the Year

If you enjoyed Jon Katz' "Geeks" when it came out in hardback last year, you'll need to buy it again.

The "afterward" Katz tacked-on changes the nature of the story and renders it important. It began as the adventure of two young men from rural Idaho to Chicago, searching for computer jobs and understanding. It became Katz' own story, an important work on mentoring (even parenting) the gifted.

Katz admitted he broke the journalist's code in his research. He got involved in his subjects' lives. He suggested they move to Chicago, then suggested they apply to college and move closer to town. Finally he fought (hard) for the application of one at the University of Chicago, and...you want me to give away the ending in the review? (Rosebud was his sled.)

Along the way the teacher became the student. Katz' subjects taught him how resilient and grounded young people can be, if they're bright, even if they seem rootless. They taught all of us just how we must change if we're to maintain our technology leadership.

The lesson is that schools suck. They've become prisons for our best and brightest, which may be why so many of our best today are immigrants. The fear parents and administrators have of teenagers has paralyzed schools, and kept from their true mission, which is to nurture and mentor and guide. This is a call to arms for all of us, on a personal and societal level. It is must reading.

And when you're done, read Stephen Pizzo's Katz interview

Newbies Still Dominate

Why does America Online continue to gain users? It's because (believe it or not) newbies still dominate the Net.

That's the hidden lesson in a Pew study whose headline was that 56% of Americans now use the Internet . Internet use remains weakest among the elderly and the poor, but nearly everyone in the upper middle-class is now wired, according to the report.

Another important lesson hidden in the figures, however, is how similar new users are to early adopters. The most common use of the Internet is e-mail. The most common use of the Web was serving an existing lifestyle - hobbies, entertainment, and news.

I have said for years that AOL's vision of a "walled garden" Internet was limited, and eventually it would run out of suckers. That hasn't happened yet. AOL is very strong among families. The parents think it's got great censorware and the kids love Instant Messenger. Millions more have AOL accounts to reach those people. But as parents learn that the Internet is no more dangerous than AOL, and the kids learn they can have IM without AOL those advantages will dissipate. AOL's vision remains limited.

Clued-in, Clueless

Clued-in is Sun's Jxta (pronounced "juxta") , the first attempt to harness peer-to-peer in the commercial computing space. Most important of all, it's open source.

Clueless are Belgian police who launched a crackdown on music sharers. Treating copyright violation as a criminal offense is the first step toward creating a backlash that will destroy the rights of all copyright owners.

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