Even those with absolutely no interest in computers might have noticed the recent departure, complete with tears, of Bill Gates from his baby, or his monster depending on your viewpoint. He’s leaving Microsoft to concentrate his energies on giving away money.
Or at least that’s the official story. My counterclaim? Well, I never took him for the genius he’s widely reputed to be, but I think he’s smart enough to get out while the gettin’s good. Following years of fortune, the William F. Buckley method of software manufacture faces a future of reduced impact. You’ll recall that on starting the National Review, Buckley said of his magazine, “It stands athwart history, yelling Stop, at a time when no one is inclined to do so, or to have much patience with those who so urge it.”
Indeed. Is this a dark view of human nature, that we can’t help but bring ruin on ourselves? Or is it a contemporary version of the old uneasy-lies-the-head?
Perhaps the only real innovation Gates brought us was his contention that he owned the spirit that lived on the plastic disc he sold. Basically he realized that if he stood athwart the evolution of software, he could charge for each stage of the journey instead of selling the whole thing at once, thus improving profit margins. It was only later that he realized how much money could be made through intentionally poor design and development techniques.
To me this appears to be a Big Con, but he made it work, portioning out to an adoring audience — or at least a continuously spending one — features that were old hat on real computers, followed by fixes for the bugs the features created, all in exchange for a continued income. And what an income!
Gates, in other words, was a pioneer of so-called intellectual property, a concept to which I have too many objections to list at the moment. Protect and encourage innovation with the patent system, to be sure. But as Windows users came to realize, Gates only invented ways to game the system, and there’s plenty of prior art in that area.
Then there’s the poor design and low quality of the Microsoft product fleet. Not to mention the shallow documentation. Or the high prices. Or the ridiculous strategy of security through obscurity. Or the Microsoft attitude that their license is more important than anything related to you. And did I mention how sucky the products are? You really notice it when you start using, for example, Amarok, which destroys any Windows-based media player I ever saw.
In fact there are way more than a tech blog’s “Five Reasons The Intel-Microsoft Duopoly Is Dead”, some of which are offered in the comments to that post. One of the demons (perhaps in this context I should say daemons) in Microsoft’s rear-view mirror has been closing fast so fast it may already be about to pass:
The emergence of free software could be hurting Microsoft’s bottom line. The company said that sales of its Office products among consumers dropped 39% in the most recent quarter. The company blamed most of the decline on the fact that the previous year’s third-quarter results were significantly boosted by revenue that had been deferred under an Office 2007 upgrade program.
Still, consumer sales of Office have shown no growth over the past three quarters, Microsoft said. The problem: Microsoft’s Office revenue typically jumps when a new version is introduced, then quickly tapers off.
With Equipt, Microsoft is hoping to extend the consistent revenue stream provided by commercial Office licensees to the consumer market, and it’s hoping that everyday computer users will see enough value in the offering to forgo free software.
Open-source software is clogging up the works for the folks Bill leaves behind. It’s messing with the business plans of corporations whose income depends on the proprietary nature of their software products. It may even begin to change society. If that sounds silly, remember how it sounded some years back when the geeks were telling us the internet would change everything.
The two most famous pieces of open-source software these days are probably Firefox and Linux, but there are lots of others. OpenOffice.org is a free open-source replacement for Microsoft Office that will be familiar to Office users in look and feel; it has everything most people expect from Office, including the ability to read and write MS file formats as well as many others. I don’t use word processors and spreadsheets and the like very often, but I’ve relied exclusively on OpenOffice.org products for seven or eight years, and have been very happy with them.
Feeling the heat, Microsoft has come up with an offer they think you can’t refuse: only $70 a year for the award-winning Office suite. Or you can use OpenOffice.org for free, and if you feel the need to fork over $70 I’ll send you my PayPal info.
In the big picture, the day of dominance for corporate-behemoth software is passing.
Early on, companies like IBM and DEC made big bucks “pumping iron”. Manufacturing useful and reliable computing hardware has always been a non-trivial job. In those days the few companies around the globe that could muster the necessary technique had a ready market for their hardware.
Given their unique knowledge of how the hardware worked, the manufacturers had a monopoly on the software that ran on that hardware, something like Apple’s current setup but much more restrictive. Every hardware manufacturer followed this strategy, so consumers found their choices limited. In exchange, they often got very high quality products and services, from IBM and DEC for example. By high quality I mean things worked and kept working; oil-service companies bought DEC machines because they’d run for ten years continuously, outside of monthly preventive maintenance stops. Competition was fierce, but rapid growth made room for several competitors to expand concurrently.
Today, scarcity is enforced by the enormous cost of building the manufacturing facilities. When I worked in a job related to the fabrication of semiconductors some years ago, the cost of a new fab was one to two billion. (And that was back when the US dollar kicked global financial butt.) Operating costs are such that you normally have to sell enormous quantities of chips, but our ravenous appetite for intelligence in the objects around us creates the possibility of huge profits. Which is why they’re so cheap we put them in watches and phones, cars and washing machines, pets and pajamas.
Cheap chips give all kinds of people all over the world enough computing power to prompt widespread daydreams of building very large systems entirely without corporate influence. Current versions of Linux prove that such dreams can be realized. Software that’s more reliable, less bug-prone, with more features and easier to use, for free, including continuing updates as they become available: corporations can’t beat that, and even Microsoft can’t buy an organization that doesn’t exist.
Robert Anton Wilson fans will recognize the essence of the Discordian spirit in the open source movement; political types might catch a whiff of anarchism. But it’s hard enough to pinpoint that this one might hope to survive a little longer than similar movements in the past.
The open-source approach is unlikely to take over the entire field; specialization is nearly always the path to the highest profit margins. But in infrastructure areas such as operating systems, compilers, and networks, open source is already the way to go. And today’s add-ons are part of tomorrow’s infrastructure.
To a certain extent the old model depends on people being paid to work long hours fulfilling the dreams of corporate marketing departments for the benefit of executives. Whether that’s exploitation or just the way twenty-first century state capitalism works, it continues the American tradition of great ideals not lived up to. A Louis Kelso-style system would distribute the gains of capitalism, which Greider calls the greatest wealth-creation humanity has yet created, more equitably.
Approaching either of the economic opposites, complete equality of wealth or complete concentration of it, brings conflict; too close an approach can bring revolution. America’s financial system has become skillful at riding that line. How many corporations in recent years have been caught profiting from third-world sweatshops? Not to mention how many are paying no taxes while accepting all the services the community supplies; worse yet, polluting their surroundings and leaving us to suffer from it and pay for its cleanup.
The open source movement is not going to fix the problem of world hunger, at least not directly. But it has finally reached the point where it can encourage people to wean themselves off the corporate teat by offering a tastier product, and that is a classic example of what Chomsky’s Establishment considers the threat of a good example.
An upcoming post will detail my experiences with Linux over the last year. But to emphasize the meaning of events rather than their technical details: I claim that, though it’s still in an early stage, this new model threatens to change social norms as well as corporate boardrooms. In another post I might explore the possible social repercussions of open source, but this one’s already too long.
All in all, I wouldn’t short Microsoft stock yet, but for Gates it’s a good moment to decide to spend more time with the family.
[H/t to Hugh Macleod for the proposed Microsoft business card. His website has a bunch of good stuff.
Also, three extra points to anyone who gets the tilde joke.]