by Dana Blankenhorn
  Volume VI, No. XLVI

This Week's Clue: Fences and Frontiers

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This Week's Clue: Fences and Frontiers
SSP (Shameless Self Promotion)
SP (Shameless Promotion)
The Technology Depression Is Not Over
BMG Hangs Itself
China is the Real Game
Clued-in, Clueless

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For the Week of November 18, 2002

The history of the American West is all romance. Cowboys and Indians, outlaws and individualists, it lived on for 100 years in song, story, and major motion picture.

It was also a lie. The romance came and went in a virtual eye-blink. In just 25 years the romantics were replaced by farmers and fences, the land opened up by the railroad. The buffalo and passenger pigeon were hunted practically to extinction. (Most of today's buffalo are part-cow, and the pigeon went in 1914.)

The profits were all sent East to new, mega-corporations. Most of the real men and women of the old West became virtual serfs, the land owned by a government corrupted by New York money. The West didn't make Jesse James and Billy the Kid so much as it made J.P. Morgan and E.H. Harriman.

Yet the myth is of Buffalo Bill, then Tom Mix, John Wayne and on down to Clint Eastwood. Given a choice between a hard truth and a good story we prefer the story. MGM, which popularized the West, was owned by Loew's of New York, and its films are now controlled by AOL Time Warner, also of New York.

So it is, to a great extent, with the Internet. The digital frontier today is filling with fences. ICANN is on its way toward being replaced by national country codes, ruled by local laws.

The Dial-up World of AOL and MSN is a walled garden, which people leave only occasionally, because the Web delivers only a basic browser experience, not the proprietary software environment built by Time Warner or Microsoft.

Meanwhile in Broadband Land (where I live) the Internet is somewhat more of a presence, because our e-mail clients are always active, the great Google library always within our reach. But even here, a few paths are worn smooth, and the rest are unused. The newest technologies of peer-to-peer are outlawed, and most of us are law-abiding, as in fact most early westerners were law-abiding. The stories of cowboys and Indians kept them snug in their beds and deliciously frightened around cozy campfires, or (later) in darkened movie houses. So it is with our own stories, of hackers, viruses and subterranean collections of Britney Spears MP3s. We cocoon around our Tivos.

But this too is a lie. In fact, it was the era after the taming of the West that was the truly great one. The electrical grid, the telephone network, the automobile, the airplane, and the movie itself were just some of the wonders that emerged in the 1890s. The real glory had barely begun with the "closing of the frontier," and the real story had barely been told.

So it is today.

The pathways of the Internet let this story reach you in many countries, in India and Pakistan, in South Africa and England, in Hungary and Singapore and Australia (to name but a few). The limits are of language, and software translation lets us bridge even those limits (poorly today, better tomorrow). We have barely scratched the surface of what all this honest, worldwide, recorded conversation might create.

And wonders never cease. Computing opens new frontiers in every direction.

What might we connect home wireless networks to, once we stop thinking of computers as typewriters and TVs tied to tape recorders?

A chip is a computer, and a chip might hold, not just intelligence, but sensors and actuators, a complete, clever machine. This frontier is wide-open, an unplowed prairie bigger and grander than anything crossed by the buffalo.

Moore's Law as applied to radios, with 802.11 technology, lets us "wire" even countries like Namibia, bringing those minds into the Web, allowing them to contribute both problems and solutions.

How quickly can we replace hydrocarbons with hydrogen, now that our minds are connected? How might we find new ways into space, not to visit this time but to stay?

A computer is intelligence, software its application. It doesn't have to be plugged into a wall - it can float free and report back through the air. Even the weak power of a solar panel can power a host of tiny chips. Doing what exactly? Whatever you can imagine.

In my recent study of politics I have often compared our time to the 1890s, a Civil War generation seeking easy and glorious victories. But that time was also a time of immense optimism and hope, of expectation, of new worlds coming within reach, asking to be conquered.

So, too, is our time. The last half-decade of the Internet's development was a great story, of boom and bust. Now we go beyond.

You, my dear reader, will take us there.


SSP (Shameless Self-Promotion)

My book, "The Blankenhorn Effect: How to Put Moore's Law to Work for You," is coming out soon from Trafford Publishing . If you want to talk it up, ask for a free PDF

You can follow the continuing story on my "Moore's Lore" blog . My other books (which will also get new names soon) include "Boom, Bust & Beyond: The Best of Dana Blankenhorn," , "The Time Mirror," and "Living on the Internet" . I still write for Boardwatch , Boardroom , Marketing Profs Thom Reece's eComProfits and BtoB . I still produce I-Strategy for Adventive

I'd like more readers, so tell your friends, clients, partners, and Congressperson about You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know .

Remember: it's journalism that keeps the Clues coming...


Shameless Promotion

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If you're serious about Internet Commerce, you need Whitehat Interactive . Get it today.


Takes on the News

The Technology Depression Is Not Over

Further evidence is in that the technology depression won't end soon. Gartner is predicting a "vendor bloodbath" that could wreck such companies as BEA, Acer, and Borland. "By 2004 half of the vendors that were in business in 2000 will not be anymore," was the warning. (Think that might include Gartner itself?)

The fact is that, with customer budgets continuing to tighten, you can no longer make money through "upgrades" that don't include new profit-making capabilities as part of the bundle. Even Microsoft is finding that out - I haven't upgraded by basic PC set-up in four years and I don't intend to.

There's an important Clue here. Get out of maintenance and cut back your "customer relations" staffing. Go back to the lab and the library. Find out what new capabilities are possible, based on your existing platform, and how that might positively impact customers' bottom lines. Put all your energy into real upgrades, and simplify the business process of customers making money from your efforts. That's the only route to survival.


BMG Hangs Itself

Bertelsmann has undergone a complete reversal of policy since throwing over former-CEO Thomas Middelhoff .

Middelhoff tried to buy Napster. The new German bosses have decided to make copy protection standard equipment on all future releases, and never mind what Philips (which rejects such a notion with its trademark) thinks of it.

Unless the move is followed by all other CD companies it is extremely Clueless. Artists are paid based on the number of CDs they sell. Any feature that makes CDs hard to sell makes it harder to sign artists to new contracts.

The recording industry blaming Napster for slow CD sales is like the Republicans blaming Clinton for their economic troubles. It may sound right, but it's simply wrong. I haven't bought a CD all year, fearing that I might buy a protected disc (forcing me to break the law to make it portable). Many others, I'm certain, have done the same. (It doesn't take much of a disincentive to say no to a purchase when times are tight.)

But there's a better reason why this is stupid, as Princeton's John Halderman explained to VNU Net Copy protection is a waste of time because it's easy to break. Once consumers become accustomed to seeking, and finding, illegal software (and software that breaks copy protection is in fact illegal) you either throw your customers in jail (in which case they're no longer customers) or you take a stance of complete hypocrisy (antagonizing those customers who do want to obey the law).

Antagonizing customers and assuming they're all thieves, rather than negotiating with the market, is a great way to go broke.


China is the Real Game

At the dawn of the 20th century the U.S. fought an easy war and became a world power. The reason we were able to do this so easily is that our economic rivals in Europe were spending huge portions of their own national incomes arming themselves against one another. They took their eyes off the ball, and those weapons were eventually used in World War I.

Republicans like to think this age is similar. They won an easy war in Afghanistan and an election. But the fact is we're now doing exactly what those European powers did a century ago. We're spending our treasure on weapons and letting another nation win the war that counts, the economic war.

That nation, of course, is China. Between them, China and Taiwan (which China claims is just a renegade province) hold a stranglehold on a growing number of sectors in electronics. China's industry is growing while ours stagnates. China's industry is attracting capital while we have lay-offs.

Instead of fighting a World War over an irrelevant asset (hydrocarbons will in time be replaced by hydrogen or human life on Earth will cease) we should be concentrating on the economic battle ahead. Unless the economic pressure of the Free World forces Red China (and the East is still red, gang) into affirming democracy and liberty, then America loses no matter what happens in the Middle East.

After 1949 a generation of red-baiters on the right demanded, "Who Lost China?" They hounded liberals to their political deaths, demanding an answer to that question. So now this liberal asks, "who is losing the future to China?"

As Walter Judd and his "Committee for a Free China" did two generations ago, the finger of blame points, and it points toward the Oval Office.


Clued-in, Clueless

Clued-in is Jock Gill . When the going gets tough the tough get busy. You can't win by copying your rival in any business, you've got to do something different. In politics, this means true Internet marketing.

Clueless is the latest European legislation aimed at outlawing "hate speech" online , along with an Australian move aimed at halting "violent" protest by blocking access to anti-globalization Web sites . It's possible to remove what you don't like from designated portions of the Web, but that just makes it harder to keep track of and more dangerous. When it's all encrypted e-mail, you know nothing until the bomb goes off.


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