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Saturday, January 28, 2006

DanB at 3:28 PM [url]:

Measuring the value of a company to society by its ecosystem

This is a follow up to my last post titled "Microsoft Ignores Massachusetts Again":

A recording was recently posted on ITConversations of a panel discussion last October that included Microsoft's Ray Ozzie (co-CTO), Yusuf Mehdi (MSN), and Gary Flake (now head of one of the new Microsoft labs I discussed). At about 4 minutes and 45 seconds into the recording Ray mentions the word "ecosystem" -- which is part of a major point in the ad I discussed. At 7:10 Gary Flake talks further about the developer ecosystem and the "indirect network effect" and (at about 8:00) "the ecosystem of developers [Microsoft] helped empower". Gary goes on to say the Internet ecosystem is even bigger.

With the advertisement in the Boston Globe (also posted as an essay -- not a blog post -- on the Microsoft website linked to in my last post), Microsoft seems to be making it official that they want the people (and by extension, the government) of Massachusetts to value Microsoft as having economic value to the state measured by their ecosystem of local software developers that make use of their products. The money that leaves the state and goes off to Redmond is to be ignored in this equation. More important is the money that goes to local developers and companies through those company's sales and service income as they sell to the rest of the world.

I can see this as a valuable argument to try to make around the world to governments everywhere. Don't worry about those billions of dollars building up near Seattle, Washington, USA. Look instead at other companies who build on our platforms. Many are your brethren and we are merely tools to help them make money. Ignore the money we make in the process.

OK. I guess we need to look at that model. Ignore the revenues and profits of the platform developers. That doesn't matter. Look at the jobs and revenues of the users of the platforms who produce products and services for others based on those platforms.

Using this model we should look at open standards and open source. How valuable are they to all of us? As Microsoft's Dr. Flake says (at 8:05) the Internet is bigger than Microsoft, Google, or Yahoo. What is the Internet? It's an agreement among many parties to follow certain open standards to interoperate (it's an "Interoperating set of networks"). So, measured by this model, what about Open Standards like HTML, HTTP, SMTP, and RSS? What about Open Source Software like Linux, Apache, MySQL, Perl, PHP, and GCC? How many "partners" does Linux have? Apache? How many devices have Linux in them or C code compiled with GCC? How important are they to society? By Microsoft's measure I'm sure they are quite important. More important than any company. These open platforms need more protection by governments (who are hopefully the stewards of society) than Microsoft does (Microsoft has billions of dollars to help defend itself, the Open world does not -- remember we are ignoring payment to the platform creators in Microsoft's new model of measuring worth).

So, as I see it, Microsoft in their advertisement has told the Commonwealth of Massachusetts to start looking at ecosystems. Don't look at the revenues Red Hat makes, look at the revenue of local software developers that use Linux and Apache. Look at the value of the educational institutions that use Linux. I wonder how things measure up? I wonder which direction things are going?

Thursday, January 26, 2006

DanB at 11:30 PM [url]:

Microsoft ignores Massachusetts again

For many years I used to run into Bill Gates at Stewart Alsop's Agenda conference. I'd ask him about setting up a research group in the Boston area. (I started asking before the DOJ lawsuit as I recall.) He'd always say no. They like to keep all their R&D in Redmond or something he'd say. Of course, I knew they were doing work in the SF Bay Area, and later in Cambridge -- but the one overseas in England not the Cambridge here in New England.

This is kind of strange. Spreadsheets were invented here. A lot of word processing and the precusor to desktop publishing were developed here. Groupware had a large start here (Ray Ozzie's Notes). The first inter-network email and the use of the "@" in email were here. And that's just in office applications. We have had strong work in lots of software areas. The telephone was invented here. We have great universities turning out lots of innovative engineers. This is a very fertile area. Always has been and will continue to be. And Microsoft has needed new applications.

Other companies have R&D labs here: Novell, Sun, Red Hat, Intuit, and more. The W3C is here. The Free Software Foundation is here (maybe that's helped Open Source and Free Software do so well...). But no big Microsoft lab, just a sales office.

Finally, Microsoft did buy a good sized software company here -- Groove. But Groove's Ray Ozzie seems to be spending more and more time in Redmond. You'd think they'd use that as an opportunity to build a world-class R&D lab here instead.

Microsoft just announced some new R&D labs. Ray announced it today on his blog (along with more of his neat advancement of RSS). Again not in Massachusetts. Another one in the Bay Area and another one in Redmond. What did we get? An advertisement on the op-ed page of the Boston Globe (not an op-ed, an ad clearly labeled as such) under the by-line of Ray Ozzie talking about our baseball teams and how many companies here are in their "partner ecosystem" and how much they help our economy and therefore Microsoft helps us, too, indirectly. Of course, if you think about it, EMC is a "partner" but they also are partnered with IBM, Red Hat, Novell, etc., and they are the second largest company in the state according to the newspaper this morning. Lots of other companies are "partners", but not just with Microsoft. That's not investing in our Commonwealth. That's trickle down. And lots of the money (paid to Microsoft for their products) goes out of the state to Redmond. I found it strange that they ran the ad with Ray in it the same day as his blog post with the lab announcement.

Sigh. One of these days they will open a lab here, not just sales offices. Until then, it's their loss.

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