john mullinax

Cash-for-Clunkers: Another Inane Economic Policy

Your link says that the Cash for Clunkers program is estimated to raise Q3 Real GDP from 1.3% to 2.0%. Not a perfect program, but if the analysis you cite is true it sounds like a hugely effective program. Bottom line: 0.7% Real GDP growth from only $3b investment? Sound's great!

And it's good for the environment, too? If only all the federal programs worked this well.

Ford Is Counting on China

I thought this was a pretty good post until I read this...

"Ford's F-series -- including the all-new Fusion, Edge, Ford GT, Ford Five Hundred, Ford Freestyle and the Freestar -- accounts for a significant portion of the company's total sales volume and profits."

This sentence gives the appearance that you are deeply confused about Ford's business and market position.

To correct a bit: F-series refers to the F-150 and F-250 lines of pickup trucks... *none* of the vehicle models you mentioned are actually included in the F-series family. Also, the Ford GT and the Freestar were discontinued *years* ago. The Ford Five Hundred and the Ford Freestyle were both renamed - also a coulpe years ago - to Ford Taurus and Ford Taurus X, respectively.

Update on My 2009 Economic Predictions

For the record, Oracle bought Sun.... (the IBM deal fell apart).

Google Increases Home Page Text by 33%. Are They Scared of Microsoft?

I always use Bing Maps for directions - works great, and the 1-click directions is super convenient when you want to share directions with other people.

BTW, I have also occasionally found YouTube videos via Bing, and then when I clicked through they couldn't be played... to be fair, I supect this is an issue with YouTube itself and not Bing... maybe they have an indexing problem? In any case, it seems like something that would affect Google and Yahoo, as well. I'm not sure about this, though, because I don't use Google any more.


On Jun 19 09:04 AM Angry Banker wrote:

> Its hard to believe all the hype about Bing the last few days. Today
> I met a conscious decision to use Bing instead of Google to do all
> the things I normally do with Google. To be fair, Bing is still in
> Beta mode, but based on my usage today, I found:
>
> 1) The image search was buggy and the definitions for various image
> sizes were ill conceived
>
> 2) The map functionality couldn't handle directions
>
> 3) The video search had broken links
>
> 4) The search engine repeated numerous results
>
> Beta has a long way to go before being better than Google. So they'd
> better get busy before making Beta into Alpha.

Why Isn't Microsoft's Strategy Working Anymore?

IMO, This die has already been cast. Whether to embrace the cloud or not is no longer a choice - Microsoft *IS* embracing the cloud. The article above is filled with factual errors, misplaced assumptions, and wrong conclusions, but it is right on thing: this is a period of transition for Microsoft.

To understand why Microsoft is embracing the cloud, and the importance of this transition, you have to understand Microsoft's core business strategy: Microsoft is a platform company - this means they're core business is to make platforms for other people to build applications on. This is why there is a Windows client, mobile, and server version. And why SharePoint and Office are a foundation for custom productivity and collaboration applications.

Now, the cloud is becoming a platform for applications, and Microsoft will be there, too. Early indications are that Windows Azure will offer the best of Amazon-style cloud (infrastructure-as-a-s... and a Google-style cloud (Platform-as-a-Service), and do it in way that is both enterprise friendly and approachable for startups. They already offer business-grade collaboration, email, IM, and web conferencing in the cloud. Office apps in the cloud are coming. In fact, Microsoft has already said that over time they will offer *all* their business software as both licensed software and as subscription from the cloud. The idea is to give people choice in how they consume functionality, but also to help people create experience and capabilities that combine the best of what the cloud and the best of what deployed software can offer.

Despite the firm commitment and progress on the cloud front, htis is not an "either/or" story... In fact, the death of the client is much exaggerated. For example, iPhone apps are great precisefly because they are client apps that take full advantage of the underlying platform in ways that browsers apps cannot. Palm Pre and the WebOS is is the same... despite the name, the apps for the Pre run on the OS, not in a browser. Walt Mossberg has even started calling this Web 3.0 - rich client experiences that incorporate online information in a very user-friendly way. This has been a key part of Microsoft's vision for over a decade, and Apple (and more recently Palm) has done a great job executing their very complementary version of this vision with iTunes and iPhone. Adobe with Air and Flash is on the same path.

Although they seem web-centric from a distance, even Google is on this path... it's less obvious to a casual observer because they are adding rich client application capabilities into their browser (compiler, offline storage, etc.), but their goal is to re-create a full application platform within the frame of browser so that browser apps can offer similar experiences to what rich client apps can offer. Though abstracted via the browser in Google's version of this strategy, they apps hope can be created will nonetheless draw on traditional operating system resources like the ability to store things on the file system. Google's Android OS is another example where they are seeking to be an application platform/OS company.

So all the major players have a similar strategy when it comes to leveraging rich client with internet services... the big difference is the place they are starting from.

Microsoft is in a very good position here. They have both an enteprise and a consumer heritage, as well as a gigantic developer and partner ecosystem. Moreover, they are enabling that ecosystem with a common developer model for creating rich, internet-connected experiences across platforms - including Windows, Linux, Mac, Windows Mobile, Nokia, etc. This, in turn, means skill re-use for developers and partners and faster time-to-market for partners and devs to deliver new software-based innovation.

Windows Server 2008 has been a big hit, and with Windows 7 and Windows Azure just around the corner, and a new Office and new Windows Mobile on the horizon, Microsoft is advancing their platforms at every "platform tier" - client, mobile, server, productivity, and cloud. IMO, this is a a great time to bet on Microsoft for that reason alone.

When you add in what Microsoft is doing with Project Natal for XBOX 360, as well as Bing (passing Yahoo in search share last week), the story looks even better.

(Disclosure: I do work for Microsoft, but my opinions are my own and I am not speaking as a representative of the company).

On Jun 08 10:20 AM Crocodilian wrote:

> Microsoft illustrates that monopoly profits can be good and bad.
>
>
> They're good: you make a lot of money.
>
> They're bad: they leave with you with a perverse incentive set.<br/>Nothing
> else that Microsoft can do will make them as much money as their
> desktop monopoly. Its not that they don't have interesting technology
> or other good products -- XBox is good work -- its that compared
> to their core monopoly, this will never make them much money.
>
> Ray Ozzie and the "promise" of cloud computing illustrate this problem
> nicely. Ozzie is one of the smartest guys around, and he's been a
> pioneer in "cloud computing" and network applications, starting with
> Lotus Notes, and continuing at the very cool Groove Networks.
>
> So Ozzie's the guy with the chops to deliver superior application
> functionality in a browser, that's clear.
>
> Except that anything can run a browser-- and MS makes their money
> on Windows and Office.
>
> So Microsoft's success leaves it with the decision: Do we stick with
> what's making money, or promote lower margin technologies for the
> future? Either decision is painful.

IBM Drops Two Bombs on Microsoft

@Nikola, Actually Windows Server 2008 (launched about 9 months ago) is also designed to be modular. If you want to just run the server core to churn web pages, and leave out the GUI and most other stuff, Windows does that.

BTW, desktop virtualization -- running the OS on a server and just presenting a virtual OS to a user. Microsoft Windows has been available this way for some time. The question you should be asking yourself, if your an IT manager, is this: what provides the best balance of user experience/capability for employees and efficient allocation of resources for the enterprise (factoring network, hardware, management costs, etc.).

It's not rocket science. If you're planning to put a desktop with a hard drive and computational power on everyone's desk, you'll want to put the OS on it in most cases. Or you can plan to put limited capability terminals on desks instead of PCs -- e.g, without a hard drive or without the normal amount of processing power. These can work for some types of employees, but they only work for some user profiles. Does the user need a laptop they can move between rooms, buildings, take home, or work offline? Are they doing computationally intensive tasks like working with sophisticated spreadsheets and models? Do they ever work with media? What old legacy applications do they need to use -- will they work in the new environment?

Once these sort of questions are answered, it turns out that there are some employees who typically can get by with the virtualized desktop approach, but going down that path introduces an additional layer of management complexity at a time most enterprises are trying to standardize and simplify -- you now take on a whole new class of machines that need to be managed, including the new task of allocating the right kind of machine to the right kind of worker, changing machines when worker changes jobs (or how they do their job -- e.g., want to institute a telecommuting policy, check with the desktop infrastructure to see if you can, etc.).

Net-net: treating PCs as distributed computation resources that are centrally managed offers far more benefits (flexibility for almost any situation, enterprise agility, management simplicity, employee satisfaction, fully loaded cost) in most instances than centralizing computing power and just offering the virtual instance of a PC.

That said, there are cases when you might have task workers with very specific and limited computing needs, and where the profile of legacy apps fits with desktop virtualization. In these cases, the question is what offers the best path. Do you want to virtualize with Windows, an OS that people already know, and which you are probably already adept at managing? Or introduce a new OS with new application compatability issues, additional patching and management requirements, extra help desk support complexity, etc?

What (If Anything) Google Chrome Will Mean for Businesses

More than anything else, Chrome strikes me as a "trojan horse" of sorts to get Google Gears installed on people's computers. Mozilla is already out there for users... the most notable thing about Chrome is that the download forces an install of the Google Gears software alongside the Mozilla/Gecko rendering engine.

Why would Google do this? Because they realize that marrying installed desktop software and internet content could help them create new kinds of experiences to drive additional usage for their apps by consumers and possibly businesses. Ultimately, the goal is more revenue.

What I find interesting is that this is a very similar to Adobe's vision for computing experiences, as AIR illustrates. At a high level, it's also similar to Microsoft's "Software-plus-Service... vision for computing, that basically says that the web platform and all the other software platforms should work well together.

As a side note, it's interesting that Google is not just copying Microsoft's (and Adobe's) basic strategy here, they are actually copying specific IE features for Chrome... e.g., separate tabs in seperate processes, private browsing, phishing protection, etc. were released first as IE 8 features (or IE7 in the case of phishing protection).

There are differences, of course, as Google and Microsoft are approaching a similar vision from very different places. Google has been a strong search provider, but may still be learning how to be a software company, with on-premise software products and a software ecosystem to support. Google's ability to execute their flavor of the deployed software + internet services strategy requires getting new apps built to meet all the various computing needs out there with a browser/Gears-based solution. A tall order that will take time - particularly if you think about the business computing market that Google hopes to break into.

For it's part, Microsoft has a great deal of software deployed in the ecosystem, as well a a raft of internet services -- some strong and well-established, some still emerging. For example, think of Mesh and the Windows Live stuff like Messenger, identity, email, contacts, video streaming, etc.). Also, think of new rich, internet-connected smart client capabilities in .NET that lets businesses and partners create superior new experiences, and think of how Office suite itself has become an internet aware platform (one example: FedEx QuickShip lets you ship over the internet from Outlook). Finally, think about how Microsoft is providing choice of deployment models in some of it's "traditional" software -- letting people choose on premise or cloud hosting (e.g, SharePoint Online, Exchange Online, CRM Online, for mid-market and larger businesses and Office Live for small businesses and individuals). So that's a lot of stuff... and that's the point: in its offerings for both consumers and businesses, Microsoft is combining the power of the internet with the capabilities of software, and doing it across many devices... and in some cases even across platforms.

And very importantly, Microsoft is going down this path with an industry-leading respect for privacy that puts users in control of their data.

So given the similarities in high level strategies, the interesting question isn't who's got the "right" uber-strategy, it's who can most effectively empower users across a broad range of computing needs (that today includes a range of legacy computing environments) with better experiences?

For this reason, I think Chrome may actually help Microsoft. Although multiple companies share a vision for computing that includes the internet and deployed software working well together, it is a change in mindset for consumers and businesses alike. Google's efforts with Chrome should help educate the marketplace about the value of supplementing browser-only experiences with internet-connected software.

That's good for Microsoft, because I believe their flavor of the "Software-plus-Service... vision is simultaneously the broadest and the also the most pragmatic/approachable for users who want better experiences.

Disclosure: I work for Microsoft, but my opinions are my own.

Why Is Google Entering the Browser Market?

I expect former Firefox users to make up a big chunk of new Chrome users. Your point that Firefox is essentially a Google browser anyway is a good one....

Apple, Microsoft Run for the Clouds in the New Client Software War

Well, I think you've hit on some important things... especially, the growing importance of cloud services exchanging packets with many types of device end points... aka, the rise of the web platform.

BUT: just because the web has evolved into an additional legitimate platform does not mean other existing platforms are no longer valuable. It DOES mean greater choice in how providers and consumers of services make tradeoffs between network depencies, reach, deployment, user experiences, etc.

iTunes is indeed a great example of a rich user experience leveraging cloud services. Microsoft took a cue from iTunes, and in many respects outdid iTunes with the Zune PC software. We're a long way from a acceptable iTunes or Zune user experience that is browser-based.

In addition to Apple, Google clearly gets this -- that's why they're investing in an application platform to make offline experiences possible. Adobe gets this -- that's why they want to compete in the application platform market with Adobe AIR. Certainly, Microsoft gets this -- just look at what they are doing on both the services front (Windows Live Platform, Office Live, SharePoint Online, etc.) and the software front with Silverlight for browsers (cross-platform), Silverlight mobile (cross-platform), and WPF (Windows-only browser and smart client apps), etc.

So good job highlighting the importance of the cloud -- but rather than displacing everything else, much more likely that the cloud and all the platforms will keep getting better at working together.

More here: blogs.msdn.com/johnmul... .

Disclaimer: I work at Microsoft but my opinions are my own. :-)

Microsoft Down Despite Analyst Enthusiasm

Good roundup of analyst comments. Thanks. As one of the top R&D spenders in the world, Microsoft has a huge amount of innovation coming down the pipe. One of the biggest challenges for Microsoft is enterprises' ability to productively absorb this innovation. Some will do it well, some will do it poorly, and a few won't do it at all. Those businesses that manage to put to put Microsoft's innovation to good use have an opportunity to differentiate themselves from those who don't... but many will struggle to keep up with the blistering pace at which Microsoft is bringing new capabilities to market.

Microsoft also has a hidden strength -- as the product portfolio broadens Microsoft is developing different kinds of relationships with the enterprises in the marketplace. Increasingly, Microsoft is not just a technology vendor, but a broad partner across in how enterprises serve their own customers and suppliers. If they can leverage the new relationships to drive greater technology adoption, then the future should be very bright for Microsoft. BTW, I blog at blogs.msdn.com/johnmul... .

Google vs. Microsoft: Blue/Red Ocean Earnings Productivity

I get the idea that marginal costs should equal marginal revenues to maximize earnings. But it's not clear to me why you think the models can be safely extrapolated out so that additional spending will lead to additional revenues in a predictable way. Particularly in the Microsoft case -- where the model shows actual REP at -36%... I don't understand how you can be confident that additional spending would lead to known additional returns. More likely, I think Micorsoft is near a point of discontinuity -- meaning that significant additional spending would require evaluating Microsoft with a new model/algorythm to find theoretical optimium. I say this because Microsoft's has a couple of significant challenges: (1) Helping the marketplace digest the blistering pace of innovation coming out of Microsoft's enterprise software, mobile/embedded devices, consumer software, and online services groups. And (2) growing the organization without losing the ability to spend efficiently. It's even more complicated, because these challenges are inter-related in a number of complex ways. For more on these challenges, see here: blogs.msdn.com/johnmul....