Information wants to be free! Software should be free! PCs should be free! Cars should be free! Beach side properties in Hawaii with 200 yards of beach front and 20 acres of grounds should be free! Can you see where I’m going with this? Not into the arms of French Anarchist Pierre-Joseph Proudhon, who declared “La propriété, c’est le vol!” (property is theft).

The capitalist system is not without its faults, but it is very effective at “allocating scarce resources among competing uses”. The market mechanism, implemented in a multitude of ways, is the engine of the capitalist system, and it has the wonderful advantage that it doesn’t require a great deal of oversight. But it appears to raise paradoxes when you examine the software market. Consider the issue of Falling Transaction Costs, which is relevant to what I’m discussing here. The key fact from the link above is that computer transaction costs fall at the rate of about 20% per year driven by both Moore’s Law and Metcalfe’s Law. You would think, wouldn’t you, that the cost of software ought to follow the same type of curve?

The Software Market

Here we are in 2008 and I go into the Apple store yesterday to discover that Microsoft wants to charge me $239 for an upgrade to Office 2008 (from Office 2004 on the Mac). I’m not sure I even paid that much for Office 2004 in the first place, and I’m certainly not going to buy. Now if I look on the Internet I’ll discover that NeoOffice, a very capable Office clone and a reputable Open Source effort is available for nothing at all. If Microsoft Office is overpriced, is it fair to say that NeoWare is underpriced? Nothing does seem like a very low price.

Let’s deal with Microsoft first.

The company is a monopolist that takes no note of the cost of production of its software. It charges a high price that leverages its monopoly position. The only mechanism available to correct this “market defying tactic” is antitrust action. From a business perspective Microsoft got very lucky in 2000. George Bush got elected and one of his first moves was to squash the action that the US DOJ was taking against Microsoft. The US policy on regulating monopolies has since been “Companies shouldn’t be regulated for any reason, in any way, any where, at any time, by any one, ever, at all.”

Europe (an economic block that is actually larger than the US) has a different policy which can roughly be stated as: “Monopolies are fundamentally unhealthy and need to be regulated, and that means you Microsoft.” Action by the European Union against Microsoft resulted in the recent $1.3billion-do-we-have-your-attention-now fine. No matter whether you think the fine is too high or too low or, as Goldilocks would say, “just right”, it’s worth noting that the fine is only likely to push the price of an Office 2008 upgrade higher. So that’s a result? Not.

The only thing likely to pull the price down is competition. And, as I have said, MS Office has such competition on the Mac from NeoWare. And the price of NeoWare is nothing.

Or is it?

Ten Reasons Why Nothing is not Nothing

Conceptually you’d expect free software that is pretty similar in function to seriously over priced software to sweep the market. In some areas it does, but in some it doesn’t. Why?

The answer is that all software has hidden costs and some of these costs are prohibitive for some buyers. Here’s a list of ten reasons why free software may not be free, as far as the buyer is concerned:

1. Brand FUD: Microsoft is a well recognized brand, NeoWare is not. The fear here is imaginary. You imagine that there will be problems with the NeoWare product. This leads to uncertainty and doubt. This stops some people from buying the free product.
2. Price FUD: In this world you get what you pay for. Pay nothing, get nothing. Freeness arouses suspicion in many people and for good reason, usually. It’s not just the brand, it’s the freeness.
3. Cloneliness: How much of a product clone is NeoWare? If it’s not exactly the same, how close is it? Will it display all my Word files accurately (most, yes, all of them, probably not). How much effort is that going to impose on me?
4. Narcissism/Image: If I use this product people will think I’m a geek. I’d rather stay in the mainstream. It could work the other way, of course: Geek is chic! That’s how it is with fashion. There’s a generation of kids out there who won’t pay for music, but will pay for ring tones. Figure that, if you can.
5. Installation FUD: What if it just screws everything up. Who’s throat do I choke. This may relate to brand FUD but it’s slightly different. It doesn’t apply on a Mac in my experience because the software never screws your system, but Windows is different. On Windows, Microsoft software installations tend to work, but how good are the Open Source alternatives? It’s FUD.
6. The Learning Curve: “Don’t teach me how to fish, just take me to a fish shop.” In reality the learning curve is probably bigger for Office 2008 than NeoWare. But the perception may be otherwise. And, some free software products do impose a learning curve.
7. Support: If something costs nothing, will you ever get service, if you need it? Actually this is the revenue stream that most free software depends on, so it shouldn’t be a problem. In reality for desktop software the Internet is your best support channel. Forget the telephone. But for many people it’s “someone I know” and if that someone doesn’t have NeoWare, maybe NeoWare is risky for you.
8. Software Management: Managing a PC sucks. Why not just use Zoho or Google for word processing and ditch both MS Office and NeoWare. Yes. why not? You have to manage the software and the goddam files and who knows what grief is in store if your disk dies? This is a hidden cost – and you may believe it’s lower with the devil you know.
9. Non-buyers Remorse: I never paid for it and there’s this button on the web site asking for donations, so I’ll send the NeoWare team $10. It’s only fair. You may not be afflicted like this. I am.
10. Availability: MS Office is just easier to find. I bought it at Fry’s when I bought the computer. I just didn’t see any NeoWare on the shelves.

So, like it or not, that’s why Microsoft can charge $239 for an Office upgrade.

I remember a briefing I once had with Oracle, where the Oracle marketing man proudly proclaimed that “we now have a Soundex capability.”

In case you didn’t know: The Soundex algorithm is a method for indexing names by sound, according to their English pronunciation. The idea is that names with a similar sound like Smith and Smythe will have the same index. It’s a simple algorithm that collapses any name into a 4 character code. Rumor has it that the algorithm was invented in an effort to sort out the names of English casualties in World War One – because many of the conscripts were not literate, so some of their names were recorded wrongly.

Replying to the Oracle marketeer I said, “but that only amounts to about 10 lines of C code.” The response burst his balloon. He had no clue as to how complex Soundex is to implement and he was astounded that I knew. It was an unlikely event, but he’d run into an analyst that had actually coded a Soundex search.

This is a powerful reason, by the way, for keeping a profile on analysts that you brief, with specific reference to their technical background and understanding. I was a software engineer once. That doesn’t mean that I’ll always be right about whether a software product is good or bad, but it does mean that I’m pretty good at “kicking the tires”.

Lies, Damn Lies and Heuristics

Listen to me! I have a software product to die for. It can develop applications that are much more sophisticated than are ever developed using Microsoft’s Visual Studio, or any configuration of Eclipse with any set of build tools. If it’s fed with the right information, it can duplicate or exceed all the functionality of SAP, including every one of its modules and likewise it can deliver anything that any of Oracle’s application portfolio can offer, or Microsoft’s for that matter.

And best of all, it’s free!

It’s the GNU C compiler.

You see, I didn’t tell a lie, but I mangled the truth so badly that it’ll never walk again.

In the 1990s when I used to spend a good deal of time evaluating development tools and CASE tools, I’d run into that dishonest kind of presentation again and again.

Probing into a product’s capability, I’d ask, “if you put water into it and boil it, can it make a decent cup of tea”.

And the marketeer would reply, “yes, we can achieve that via the low-level API,” which means “no”. And by the way, every technical analyst worth his sodium chloride knows that means “no”.

The Right Briefing Presenter

Just as you set a thief to catch a thief, you should send a technician to brief a technician. If you don’t, you risk having a poor opinion of your product proliferate. Even on a good day, an analyst with good technical skills is capable of assuming that the deficiency is in the product, as well as the presenter.

And by the way, that’s one of the reasons why IT vendors pay analysts to do message testing.

Note: This posting is one in a series of postings that deals with the topic of dealing with analysts. Click here for links to other postings in the series.

John Gilmore said, famously, “the Internet interprets censorship as damage and routes around it.” It’s an eloquent warning to anyone who wants to censor Internet postings or even whole web sites and it’s a metaphor. What really happens is that censorship excites curiosity and it’s curiosity that routes itself around censorship as best it can.

The recent attempt to censor YouTube by Pakistan ended badly. Pakistan Telecom poisoned the DNS service for local ISPs so that people in Pakistan trying to access YouTube would get no connection. It then made the mistake of publishing that DNS table to its international data carrier, PCCW Ltd. of Hong Kong, which in turn published it across the world. The DNS poisoning spread from there and knocked out YouTube for a few hours. So if you didn’t know that the Domain Name System (DNS) doesn’t check the information it gets from authoritative servers, you do now.

DNS poisoning is carried out by many countries as a form of censorship, but no country has ever let the poison spread like Pakistan did. A Pakistan Telecommunications Authority spokesman claimed that Pakistan was trying to ban access to a trailer for a new film by Geert Wilders, which is said to portray Islam as fascist and prone to inciting violence against women and homosexuals. No doubt the trailer will now find its way onto many different web sites and will be viewed by 100 times as many people (especially Pakistanis) who would otherwise have had no interest.

This is what is dubbed the Streisand Effect, named for Barbara Streisand, who sued photographer Kenneth Adelman for US$50 million in the hope of preventing an aerial photo of her house from being displayed on the web. The photo (click here to see) is boring at best, but it immediately became popular, has been posted on many web sites and can now be considered a monument to John Gilmore.

The Streisand Effect

The Streisand Effect is well known, but not yet well known enough. Here are some of the organizations and people that need to take a crash course:

• The UK’s Commission for Racial Equality accused the comic book Tintin In The Congo, written in 1931 by Herge of being racially offensive (which it probably is) and immediately turned it into a best seller. It climbed to No 8 on Amazon’s most popular books list.
• The Church of Scientology tried to get web sites to delete a video of Tom Cruise advocating Scientology in what was supposed to be a video for church members only. It not only failed but provoked a backlash.
• Disney, IBM and Microsoft jointly issued a cease and desist letter to news portal Digg.com because it provided links to an article that published an encryption code that could be used to break electronic locks on HD-DVDs. Digg initially responded by taking the postings down, but Digg users wouldn’t play along. They inundated Digg with postings that contained the code, published photos with the code on it, sold T-Shirts with the code on it and even wrote a song with the code in it, and performed the song in a video that was viewed over 200,000 times on YouTube
• The King of Thailand, Bhumibol Adulyadej, felt insulted when portrayed in a YouTube video with feet superimposed over his head. The Thai government banned the site, causing a rash of YouTube videos directly aimed at insulting the king.

Historians looking back at the history of Europe sometimes wonder at how Europe could collapse from the highly civilized era of the Roman Empire to the primitive era of the Dark Ages. Clearly, marauding Huns, Goths and Vandals had a good deal to do with it, but it still seems a little anomalous that the great engineering skills of the Romans were lost and the Roman roads, aquaducts, baths and sanitation systems fell into disrepair.

The simple truth is that periods of decline happen, and they happen in all walks of life, even without the intervention of marauders.

The IT Dislocation

A period of technical decline happened in computing from 1990 through to, well, just about now. It’s this that explains the apparent anomaly that the IT industry has suddenly rediscovered virtualization, when it’s been hanging around since the middle of the mainframe era, looking for work.

“Hey guys! Look what I’ve invented. It’s kinda round and you can attach it to an axle and move things from here to there with it. It’s gonna be revolutionary as far as transport is concerned. I’m gonna call it a wheel. Good name huh?”

A dislocation occurred in the move from proprietary operating systems that were bound to proprietary hardware (such as OS/400 or Digital’s VMS) to operating systems that were less bound to the hardware; by which I mean Unix, Linux and Windows (only one of them is not proprietary – for 10 bonus points, tell me which).

It’s difficult to point at one specific cause for the decline of the sophisticated proprietary OSes, but the following forces that were in play, all had something to do with it:

1. The emergence and great success of Microsoft, a company run by engineers that had no depth experience of multi-user computing.
2. The business model that Microsoft adopted in its approach to server computing.
3. The triumph of Unix as the basis for OS portability coupled with Unix’s unsophisticated process scheduling capability.
4. The dramatic growth of the computer market causing an escalating skills problem.
5. The realization that Moore’s Law would continue to deliver more power in an exponential fashion.
6. The commoditization of hardware leading to highly inexpensive servers (and desktops).
7. The growth in the number of software vendors writing applications for increase
8. The adoption of Linux and its use on repurposed servers and PCs to implement single applications.

The proprietary OSes were built to run mixed workloads and many applications at the same time. Because they were proprietary they imposed standards for the way that applications should be built and these standards tied the applications to the OS. It was as hard as hell to build portable applications for most of these OSes, so few ever tried.

Unix began to dominate the sever OS market for several reasons. It was written for general portability rather than performance within a specific architecture or specific cpu chip. This meant that it could be used as the basis for any new hardware idea that any vendor developed. Writing a new OS takes a long time; bending Unix took much less time. For that reason IBM, Digital, Sun, HP, Sequent and, just about anyone in the hardware game evolved their own version of Unix.

Unix (in all its versions) was seriously inefficient compared to minicomputers like the DEC VAX, HP 3000 or AS400, but Moore’s Law gradually took care of that problem. Also, Unix didn’t even have a sensible file system, but that proved to be an advantage. The database vendors quickly fell in love with it. If you used Unix, you needed a database.

And that was the beginning of the “march of the servers”; some Windows, some Unix, some Linux. The database servers were followed by email servers and file servers and print servers and DNS servers and web servers and application servers and firewalls and spam filters and appliances, appliances, appliances – stretching from one end of the server farm to another. A server farm was a stud farm. It was a place where servers bred.

The Pendulum Swings Back

By 2005 almost everyone (except the mainframe people, who knew better) had got into the mindset of “a new application = a new server.” Servers were cheap and you could just add them incrementally with new new application. In many areas you didn’t sell software anymore you sold an applianc, and the appliance was just the box that the software came in. It was “plug in and go.”

The reverse swing of the pendulum was caused by:

1. Moore’s Law ran out of steam. Chip vendors responded by putting more cores on the chip, and were hence able to claim that the newer chips were more powerful (as indeed they were).
2. The server farms began to run out of space and power, and ran into cooling problems too. When you realize that computer room space is the most expensive office space there is, you understand why organizations don’t particularly like server farms.
3. The resource efficiency of the individual servers started to become a matter of record as soon as companies launched server consolidation efforts. The resource inefficiency had become almost scandalous. In some Unix environments I came across the average resource utilization was 6% and in one Windows server farm I stumbled into it was only 4%. Imagine buying 20 room house and only living in one room.

So that is the impulse to virtualization. That is: “why virtualization, and why now?”

This is a posting in the Virtualization Focus Series. Click here to see an index of such postings.

The Onion is perhaps the best satirical web site in the US. They hit the nail firmly on the head at times, as they do in this video which reflects concerns about voting fraud in New Hampshire and New York State. Lol funny.

Note: If your company blocks videos (some do) you won’t be able to see anything below this sentence. If that’s the case, then log on at home to view it.