Skip to content →

Tag: internet

Microsoft and Google: Wielding Hard and Soft Power

Vendor Lock In

Steve Lohr of the NY Times posted an interesting article on the economics of Google and Microsoft. As usual the Network Effect was front and center in the analysis. Bill Gates gets his props as the foremost applied economist of the 20th Century. For those keeping score at home, that would be the last century. According to Lohr, Google lays claim to the 21st century. But it’s Lohr’s extension of the metaphors of hard and soft power that open some new areas for conversation.

Microsoft is associated with hard power combined with the network effect. The idea is that through proprietary formats and an operating system, Microsoft created a lock in that couldn’t be broken. You can check out any time, but you can never leave. Interestingly, Microsoft’s network effect was created without the Network. Dominance was enforced at the Enterprise and OEM level, most users never actually had to buy a Microsoft product.

Google is associated with soft power. Users are free to leave at any time, no proprietary formats are used, but ongoing usage creates a form of addiction. The network effect enables the large scale harvesting user gestures to create a learning machine that constantly adapts their algorithms. The result is the ongoing incremental improvement of the value of their software products delivered through the Network. Switching costs are low, but finding better value is difficult.

The internet has detached the user experience from Microsoft’s hard power, and Google has created a cash machine located firmly within the Network. Microsoft won the 20th century battle for hard power, but the 21st century’s battle is over soft power. The major players have to dominate without lock in, and Microsoft is starting to pivot from hard power to soft power. The Yahoo play was part of that strategy, Live Mesh and Silverlight also move Microsoft up the stack to the level of the Network. To win in the soft power arena, you’ve got to play in the open and you’ve got to deliver more value. The other thing Microsoft needs is a source and engine for harvesting user gestures as an input to improving the value of the product.

The hard power metaphor is useful at looking at the lock in players that still have some dominance. The obvious move would be to look at the entertainment industry, but that game is largely over. It’s the Telcos that really still play hard ball with hard power. The iPhone is starting to break that lock as it floats above the telephony system and lets the Network dominate. Think about the raw usage percentages of the iPhone, how much telephony, how much Network? The big lie that the Telcos need you to believe is that voice data is special. They need to distract you from the fact that the Network is getting more and more real time and delivers multiple media types for a lower cost.

But the Telcos are safe until the internet identity problem is solved. Today you’re identified by a phone number. Tomorrow it may be OpenID or CardSpace, but you won’t need that phone number anymore. When the hard power war is over in that space, a huge wave of innovation will be unleashed. And you might be surprised about who’s leading that charge…


Descartes, Skepticism & the UnNetworked Personal Computer

Rene Descartes

Rene Descartes published his Discourse on the Method in 1637. In order to create a solid foundation for the natural sciences, Descartes employed a radical skepticism. He stripped away every piece of the world around him until he was left with his doubt, his thought and a single existence. This was expressed as: “Dubito, cogito ergo sum, I doubt, therefore I think, therefore I am. The thinking, doubting ego was all that was left as a certainty, a monologue echoing through the darkness. When I visualize that moment I think of Samuel Beckett’s The Unnamable, or of much of his later work, Imagination Dead, Imagine, for example.

It wasn’t until I listened to a Philosophy Bites podcast with Barry Smith on the philosophy of Ludwig Wittgenstein that I understood the willful solipsism of Descartes’ approach. Wittgenstein’s critique is simple and beautiful, the tools of doubt and thought are social. Language is social, there is no such thing as a private language. If there can be no private language, Descartes simply became a hermit. He believed he cut every tie, but the knife was borrowed from society. Billie Whitelaw demonstrates, in Beckett’s Not I, even as we are alone in the darkness; we frantically reach out to the world.

The first commercial personal computer wasn’t part of a network. There’s a sense in which it was an instantiation of Descartes’ Discourse on the Method. The software product and hardware peripheral ecosystem that developed around it reflected this disconnected state. And while from a technical point of view it was unconnected, from the human side it was always already connected to the Network. The conception that the computer was ever alone, disconnected in the darkness; computing, crunching numbers, writing to a hard disk in its own private Idaho was false at its point of origin. In the beginning, there was sneakernet.

Sneaker Net

The beginning of this train of thought began not with Descartes, but with Microsoft. The first era of Microsoft was created to supply products to the unNetworked computer. If you examine the products that provide the dominant share of revenue, Windows and Office, they don’t require the Network for purchase or use. Microsoft’s thought is deeply rooted in the image of the solitary computer. Wittgenstein once defined philosophy as the battle against the bewitchment of our intelligence by means of language. Microsoft is in the middle of a titanic struggle with the bewitchment of its intelligence. If there is to be a Ray Ozzie era of Microsoft, it will signal the shift from the solipsistic computer to the Network, the creation of roots and rhizomes spreading into the Network, and the establishment of revenue streams that are fundamentally of the Network. Microsoft’s current set of competitors are already living off the Network, the brain trust at Microsoft has had a large margin for error, but the door is closing.

There’s a wonderful story that Barry Smith tells about a conversation between Elizabeth Anscombe and Ludwig Wittgenstein. Anscombe says to Wittgenstein that she can understand why people thought that the Sun revolved around the Earth. Wittgenstein thinks for a moment, and says “and why is that?” Anscombe continues, “Well it looks that way.” Wittgenstein smiles and says, “And how would it look if the Earth revolved around the Sun?”

One Comment