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First, Technology Second, People Third
care much about shared source or Smart Tags and we are wasting our time
following their marketing trail. We need to focus on Microsoft's true goal,
which is to completely dominate the internet services market. We should pay
attention to how they are building a services infrastructure, not a
technology infrastructure. We should figure out how they are going to use
tools like Passport and Microsoft Messenger to control our personal
information and various internet transactions.
Keep Your Eye on the Ball
Winer seems to think that Microsoft "dropped
a bombshell" with their .Net
shared source announcement, I am not taking my eye off the ball. While
we bow to Scoble because he
out, I am not going to take my eye off the ball. While people flock to
Slashdot to read
the story and comment on it, I am not going to take my eye off the ball.
While people continue to point to the original story on O'Reilly and shake
heads, I am not going to take my eyes off the ball.
Listen to me very
closely. Shared source is trivial. Smart tags are trivial. No big deal. What
does Microsoft want? Here is the mind bomb: Microsoft's business
model no longer revolves around software. Instead, it revolves around
services, transactions, and extracting value from activity on the
The True Microsoft Misdirection
Some people are very
upset about Smart Tags. Some people are directly fighting
Smart Tags. Microsoft must love this. I suspect that they care very
little about Smart Tags. They are a very useful diversion. Think about all
of the energy spent on talking about them and working
against them! Smart Tags are a diversion. The media has been wrapped up
in Smart Tags for weeks. How very useful for Microsoft. If they keep them,
so what? If they drop them, so what? In the bigger picture, for general
users, they are another minor feature. Yawn. Does your grandmother
care about Smart Tags? Do you? Really? If you hate Smart Tags, it is because
you feel that Microsoft is abusing you and your content and your web site.
Users don't care too much either way.
what are these squiggly lines? Hmm, whatever."
Think of all the
hype that Microsoft's shared source announcement has generated and will
generate. Think of all the links to the story. Think of the buzz. Bonanza!
Microsoft's marketing department is doing outstanding work. People continue
to talk, talk, talk about Microsoft. About what they are doing. About
what they are not doing. So much free press. So much publicity. I bow
respectfully to their marketing machine. This is why Microsoft has $30
billion in cash (and growing by $1 billion per month) while their
competitors suffer and die.
The funny thing is
that shared source is not a big deal. It is a bastard child of Open Source,
twisted to fit the needs of Microsoft and Microsoft alone. Bravo for them.
They are acting just as we should expect, as capitalistic pigs hell bent on
profit. If your eye is on the shared source ball, then you have succumbed
again. Just as people spent weeks on Smart Tags, much more energy will be
spent on shared source. If we do this, we are suckers. We are pawns.
revisited: Microsoft simply doesn't care as much as they once did about
technology, including Smart Tags or shared source. Technology is not their
top priority anymore. Their war
with AOL over content is not top priority. Instead, Microsoft's
top priority is subscribers. So, the war with AOL is interesting and
gives us a glimpse of the new Microsoft.
truly, deeply, madly wants us to think about technology. They want us to
talk about technology. They wants us to drool over technology. The more we
fight and yell, the more they will succeed.
Thief in the Night
Once upon a time,
humans killed animals with clubs. Then, many moons later, came the
industrial revolution. Machines replaced people. In many cases, machines
augmented our physical skills. Then, mostly during this this century,
machines started to augment our thoughts and emotions. We are still in the
middle of this information age. Indeed, what matters more than ever is
ideas, opinions, and brainpower. Along these lines, Microsoft was able to
harness a lot of brainpower (i.e., their employees) to create some useful
software (i.e., brainpower augmentation tools). This software generated a
lot of profit for the company. Microsoft was able to extract a lot of value
from the marketplace by marketing and delivering these tools. These tools,
to put it bluntly, augmented our minds.
The days of rabid
profits for Microsoft through certain software sales channels are almost
gone. It doesn't seem that way to us, but Microsoft knows this. And,
they feel the intense heat of Open Source. So now, the software days have
been replaced. Not for many years, but we are seeing the cracks in the
concerned with the augmentation and control of many minds. They care
about the connection of many minds via the huge network of installed
software, i.e., the internet. The infrastructure for the giant mind meld is
basically in place. It will continue to grow and they will continue to
supply the software. But, the real candy is no longer the software itself.
control the internet perfectly and they can't own it directly. But why would
they want to own anything? Why would they want to carry the software
inventory of the internet? Instead, right before our eyes, they are building
the layer over the internet that will allow for things like micropayments,
highly targeted (paid, interactive) content, security based on your economic
value, and control of user information. And more.
revenue models: (1) Rent. (2) Services. It
makes sense to make the transition from products to services. Right now
Microsoft is basically a manufacturer. No, not of hard goods. But, they
still manufacture software. Over the next decade, they will get away from
that business. It is starting to stagnate; at the least it is getting to the
point where they can't make outrageous profits. So, it is time to charge
infrastructure rent and sell infrastructure services.
twist: Actually, Microsoft wants to control the entire services
infrastructure on the web. Think about that! While people sweat over
shared source and Smart Tags, Microsoft is working to build their services
infrastructure. You should start paying much more attention to Passport,
Microsoft Messenger, and related infrastructure tools and services. I don't
think that they literally care much about these technologies. I know that
sounds a bit strange, but think about it. They could give away a ton of the
technology because as long as they control the flow of information and cash,
they control the services infrastructure. Specifically, they control you and
your online life.
to think about. Do you think Microsoft really cares about routers, hubs,
broadband, and other infrastructure issues. Sure, of course they do.
However, are these things critical to them? Of course not. The infrastructure
is a commodity in most respects. Now, apply this thinking to the software
for the internet, and perhaps even the desktop. It is all becoming a
commodity. Linux and Open Source are changing the game so that Microsoft has
to zig to the zag. They have to transition from software to services. In a
sense, they are transforming into the biggest ASP you have ever seen. (Whoah!)
technology was free, or nearly free, what would you do? You'd find a way
to extract value from the interconnections and intersections of the network.
You'd build and support a technology infrastructure that in turn supported
your ability to extract money from all the activity generated by that
network. (Whoah, again!)
So, services come
first, technology comes second, and you come last. Microsoft is looking for
control. They have lost a lot control over the technology and the software
markets, so they are shifting to an area that is not dominated. Services on
the internet are not dominated by any company. They are going to fill the
void. Of course, they will continue to suck life from the software industry
because they can, and because there is still profit to be made. But, the big
profit is going to be made by owning your information and owning the entire
internet service market. We, of course, will be manipulated the entire way.
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