Tuesday, August 15

Gary Kildall : A good life !?

As the popular press celebrates the 25 years of PC revolution, and recounts the PC stories where the heros are Bill Gates, Steve Jobs, Michael Dell etc., it is also important to remember Gary Kildall who could have/should have been where Bill Gates is today.

I came across this article about Gary Kildall, head of Digital Research and who wrote CP/M operating system. According to article/legend when IBM came knocking for an OS to run its PC, Kildall was of flying his aerobatic biplane, and left his wife Dorothy to do the talking who in turn was too hassled planning for vacation to take the IBM proposal more seriously.

The article quotes former CEO of Symantec Gordon Eubanks: "Gary could have owned this business [ie, computing] if he had made the right strategic decisions... He did not care that much. Dorothy ran the business and he ran the technical side, and they did not get on."

Article goes on to mention : "Kildall died in 1994 at the age of 52 from injuries received in a biker bar brawl during a night out in Monterey, California."

A more sympathetic story in Dr. Dobb's journal mentions the cause of Kildall's death as falling from a ladder in the bar. The story refers to Kildall as an academic type who cleared the path on which Microsoft flourished.

He starts of happy, a laid back academic -- "Gary was happy in his marriage, happy to be living by the ocean, happy not to have gone to Vietnam, and most definitely happy in his job". -- whose accomplishments though path breaking was overshadowed by the success of Microsoft "his resentment of Bill gates was inevitable" but "never expressed publicly"

He did become wealthy by selling his company to Novell 1991.

Gary then moved to the West Lake Hills suburb of Austin, Texas. The Novell deal had made him a wealthy man. His Austin house was a sort of lakeside car ranch, with stables for 14 sports cars and a video studio in the basement. He owned and flew his own Lear jet and had at least one boat

A great quote from Tom Rolander's eulogy at Kildall's funeral " ...It was then that I learned that computers were built to make money, not minds."

In some ways every competitor to Microsoft has been a repeat of the Kildall story. Kildall was passionate about software, Bill was passionate about the "business of software".

Everyone is a hero, depending on your perspective.

Gordon Eubanks sets the record right about the MS deal with IBM in this interview. (very interesting reading)

Thursday, August 10

Norlin's Maxim & Digital Footprints

AOL's accidental release of the search records, while giving an interesting peek into private livesof its users, is another proof of Norlin's" Maxim: that "The internet inexorably pulls information from the private domain into the public domain"

Inspite of Norlin's Maxim, enterprises are clearly duty bound to treat users/customer's digital footprints with same level of care as they would treat their credit card numbers. I don't think I am comfortable with AOL/Time Warner having any such data in its possession in a manner that is potentially accessible to someone/anyone. My identity and my digital footprints should be inaccessible to anyone that includes people within organizational boundaries.

Digital lifestyle does leave footprints, your entire life is being recorded. Here is interesting article that appearded on this issue: "Beyond the question of informed consent lie larger questions: Should all of this electronic flotsam and jetsam be archived in the first place? What are the consequences for us if our digital footprints survive indefinitely? Who should decide whether they do survive?

Sunday, August 6

IBM is Legacy, Infosys is the future

It's been interesting to see the reaction to Chidamdaram's (Indian Finance Minster) comment "IBM is legacy, Infosys is the future,". Beyond the sheer immodesty of comparing a $90 billion American/Computing icon to an $2 billion Indian firm, the reactions have generally been dismissive ranging from denial, shock, angry, patronizing.

IBM has transformed itself before; it could and most probably will transform itself again. Clearly IBM has woken up to Indian skills and it is re-organizing itself coupled with $6 billion investment over next 3 years , and few would dare to bet against IBM. Yet till it successfully achieves this gut wrenching transplantation/transformation, I guess it is fair to call IBM legacy.

Stephanie Moore of Forrester Research in her latest report points to some reasons why Chidamdaram might be right.

Friday, August 4

Open Source & Open Innovation (Cont'd)

Below are reasons why IT services firms will begin to look beyond supporting third party open source communities and instead will look at open source as way to enable rapid innovation, rapid diffusion and market acceptance of those innovations.

Overcome Frontloaded Investment Model

Major successful open source communities represent cumulative effort running into billions of dollars. Many IT service vendors would abandon pursuing such opportunities due to capital constraints and risks involved.

De-risk early adopters

Open source reduces risks for early adopters, which is especially important for enterprise IT customers. Enterprise IT customers are among the most risk-averse. They assiduously avoid building in any dependencies on specific IT service vendors. Open source model allows them access to source code and any derived work or modifications can used under the same terms as the original work.

Software especially un-proven, "innovative" code needs to be observed to make sure it performs the desired operation without undesired side effects. Using software means placing an enormous amount of trust on the IP provider’s intentions, capability and future roadmap and viability. Making source code available mitigates a significant amount of these risk perceptions in an effective manner. Clients can now maintain independence from vendor in the event of technical difficulties and/or bankruptcy of the software vendor.

In-Built viral marketing model

General Public License (GPL) and similar licenses guarantees your right to share and change software. This encourages developers to share their work and modifications. Key strength of OSS is the ability to customize to satisfy heterogeneity of demand. By creating, building and maintaining external communities, the firm can now engage in serious, in depth discussions with influential individuals, companies & organizations. This puts the firm in a position to demonstrate leadership & vision and enable us to influence the direction and structure of the competitive landscape.

Network Externalities & Complements

By being the first mover in the market, a firm can “cross the chasm: and build a large user base, leading to network externalities especially if the innovation can act as a platform on which others can innovate upon. But the biggest gains come from reputation of being a thought leader and building relationships with the most likely early adopters who will reveal themselves as participants in the open source project.

Network externalities manifests itself in multiple ways 1.) New users are always influenced by what previous users have chosen, 2.) Early entrant in market can acquire superior reputation, capabilities, alliances & resources 3.) Having one's innovation accepted a standard in certain situations may lead to user lock-in 4.) Tap into ingenuity of outsiders to develop complements on the firm's IP. All of these increases the value of underlying innovation to the market and hence higher the chances for making money.

Open source community can now supplement a company's sales force as a lead generator and an effective channel to push IP assets that then generates demand for high margin services. Incubation & stewardship of successful open source projects can act as an inexpensive (based on opportunity cost of status quo) reputation building tool to extract higher margins. Being the gatekeeper of the open source projects can act as a sustainable competitive advantage.

Open Source & Open Innovation

Traditionally open source has been seen as an community based software development model which was an alternative to more structured development methodologies. Today "open source" from its origins in utopian ideas of free & open software movements, has morphed into a deadly weapon that is tactically used for larger strategic objectives. Significant number of programmers, who are part of the open source movement are paid to do so and not necessarily doing so as hobbists, amatuers or for other altrustic purposes. Large corporations have usurped the open source movement to commodotize competition and/or increase adoption of complementary offerings by offering it free.

[Complements: Bread & butter are complements, so if price of bread goes down (becomes zero/free) and demand for butter goes up]

Clearly few independant developers would want to be willing participants to such shenanigans given that increasingly objectives of more successful projects are for a for-profit organization for private returns. So the point I am getting to is this: Open source is becoming less & less of an altruistic alternative development model and increasingly become the mainstream ADOPTION model for profit-oriented corporations. And there is nothing wrong with that.

What software companies in the open source space aim to achieve and more likely to get are groups of early adopters and dedicated users, who can act as highly informed and credible validators, some of whom could contribute code. More simply companies will aim to create a market for an innovation that was not their earlier.

My argument is that open source will evolve as a robust business strategy where software and services are complements. With the growth of services, software will increasingly become "freer" and companies will resort to open source. R&D invesments of services companies result in IP assets that are complementary to services and rapid diffusion of IP assets using open source will generate demand and reputation for associated consulting and application development and support services. The primay goal is to increase the number of potential customers/market for the innovation then use their superior strengths in service delivery to monetize the innovation. Beyond monetization & business models open source is a compelling model to benefit from innovation that happens outside the firm also referred to as the "open innovation" paradigm.