chris horn's blog

Nicholas Carr came to notoriety in 2003 for asserting that information technology no longer delivers a competitive edge. He claimed that although such technology is a prerequisite of any enterprise, it is no more so than electricity or telephones. Likewise, he argued, neither electricity, phones nor computer technology give competitive advantage, since everybody else has these too. Fortunately companies like Capital One, Southwest Airlines, Goldman Sachs, Toyota and many others ignored him. Police and the security forces, and the military, are not the only organizations who extensively exploit computers and software to overcome aggressive adversity from the opposition. Information Technology can strategically be used to give competitive advantage.

His latest book, The Big Switch, is in two parts. The first gives a charming history of the electricity industry and some comparisons to the computer industry. For computer industry practitioners and technology historians alike, it is a light, interesting and innocuous read.

The second part is more significant. Carr bleakly observes complacency and naivety amongst internet advocates. Rather than the internet being a liberalizing force for global humanity or an empowerment away from governments and towards their peoples, Carr sees dangerous forces at work which may be concentrating power and immense wealth in a few fortunate individuals and in specific companies, as well as of course manipulation of populations by governments. Google comes in for particular attention, in the entire concluding chapter of the book. Carr discusses Google’s reputed quest to exploit artificial intelligence to the fullest by using the knowledge inherent in the world wide web, ultimately striving to be able to whisper answers and suggestions to any of our thoughts directly within our brains. God, Carr argues, has become the Great Programmer and the Universe is but the logical output of a computer.

Those concerned by privacy may be interested in Carr’s assertions that anonymous information and anonymised data can easily be overruled by inference automatically deduced through information culled from a small number of disparate sources. Those running businesses which rely on the internet may be interested in Carr’s observations on the fragility of the internet – as was exposed as recently as the start of this year by international sabotage in the Middle East, Iran and India. Those concerned with cultural understanding and appreciation of much international content on the web will be interested in Carr’s views on the inevitability of blandness. Those observing the polarity of US political commentary may be interested in Carr’s hypothesis on web newsfeeds and blogs which he infers from Thomas Schelling’s (an economist) experiments in 1971: these showed an intrinsic natural propensity towards racial segregation within America’s suburbs. Those concerned by skilled labour shortages in Ireland may be interested in Carr’s conjectures on how the computer industry worldwide is in fact destroying jobs, not creating them.

Perhaps having forcibly laid down some portentous predictions, Carr might have suggested some alleviating actions. For example Carr asserts that everyone in the YouTube economy is free to play, but only very few reap the rewards; the erosion of the middle class may well accelerate, as the divide widens between a relatively small group of extraordinarily wealthy people – the digital elite – and a very large set of people who face eroding fortunes; and humanity is left with a prospect which is far from utopian. If computerization is really different from those past technological revolutions which helped close wealth gaps, then a discussion of actions or policies which might ameliorate the future would be insightful: but Carr appears reluctant to offer his wisdom.

People like Carr may be skeptical that the Web will create a more bountiful culture and they are equally dubious that it will promote greater harmony and understanding: instead they believe that cultural impoverishment and social fragmentation are as likely outcomes. If this is the case, then what should or could be done to improve things ? Do we trust that humans browsing the web can extract balanced judgments ? Should we – and what right do “we” have anyway – care about such issues, and should we make such judgments ? Should society encourage web content to be apolitical ? Old-timers like this reviewer will recall that commercial promotion using the internet once was ruled unacceptable by the community. Should our search engines attempt to tag argument with counter-argument ? Is there an opportunity to use the Web to aggregate and bundle (as in the traditional media, including for example this newspaper) and thus present balanced views, rather than the Great Unbundling which Carr perceives in the Web ? Should search engines be more circumspect about inferring our personal preferences as to our preferred content, and thus risk presenting content contrary to our individual prejudices ? Is the concept of a responsible, “public-service” search engine, useful and conceivable ? Certainly there is scope for reasoned discussion on improving upon or even avoiding the various outcomes for the Web which Carr discusses and predicts - but perhaps Carr is saving this for his follow-on tome “The Big Switch 2”.

This – in part two – is a dark book. It is characterized by sometimes nebulous extrapolation of certain trends and selected observations to assert sensational outcomes for the future of the internet and the web. Extreme positions and incitement to fear may no doubt generate some attention on the international speaking circuit. A more balanced and mature treatment is possible and arguably more responsible if, admittedly and almost certainly, less lucrative.

OpSource’s acquisition of LeCayla was announced today.

Conor Halpin and I met with OpSource in Santa Clara late last year, and I was immediately impressed by Treb Ryan and his team. LeCayla’s business has been growing to the extent that we needed to open a physical presence in the US to serve customers, and convert US based prospects. We considered various options: organically building a direct presence ourselves; acquiring an existing US company; or partnering with a stronger and complimentary US operation. We talked both to our existing Irish based investors, and potential new US based VC investors interested in the SaaS delivery space.

In the end, acquisition by OpSource makes a lot of sense. LeCayla was already a customer of OpSource’s hosting solution, and both companies were thus aware of each other. OpSource has a vision of a complete SaaS delivery platform: not just basic hosting, but also valuable services such as analytics, visualization and now - via LeCayla - billing. OpSource brings a wider reach of deployed customers; LeCayla brings OpSource not only a well architected and proven self-service billing solution, but also an excellent engineering team and a business presence in Europe. It is my understanding that Treb Ryan intends to retain Conor Halpin and all of his team.

I have enjoyed working with Conor and the board of LeCayla, and sincerely wish the entire teams of OpSource and LeCayla not only success, but fun in achieving that success while working together.

I spent last week in Rwanda, as Chair of UNICEF Ireland, bringing some of our individual donors to see our work with children.

It was my first visit to Rwanda, and I was incredibly impressed by the sheer beauty of the place. It is a small country, almost the size of Ireland, and like Ireland extremely green and lush. The scenery is stunning: Kigali, the capital (of “mille collines”, a thousand hills), is built amongst hills and valleys; Gisenyi near the border with Congo is on the shores of the spectacular Lake Kivu; and we finished amongst the Virunga volcanoes near the border with Uganda. Bluegum, sugar cane, eucalyptus trees and vegetables and flowers are abundant in the fertile soil. Three languages are predominant, with most people multi-lingual: Kinyarwanda, French and English.

In preparation for my trip, I had read Dervla Murphy’s own account of her visit in 1997, and I was very keen to see what changes had occurred since then.

The entire country is pristine. I saw no litter anywhere whatsoever, and no graffiti. Plastic bags are illegal, and I had been warned in advance that customs officials will confiscate them from your luggage on arrival. One Saturday morning each month, the entire nation – including its politicians – take part in community service, umuganda, which traditionally was a form of labour, as opposed to financial, tax: as I saw last Saturday morning, each community goes to work on maintaining the local paths, tracks, water infrastructure and so on.

The parallels with us here in Ireland seem remarkable, except perhaps a different view in Ireland of pervasive tidiness, purity and social commitment. Like us a few decades ago, Rwanda is a wonderful country with incredibly friendly people, in a green oasis of rural agriculture, and an under-developed but potentially services-led economy. Gisenyi is a concealed haven, right on the Congolese border beside Goma, but at our hotel we saw an internationally very well known US film star, and Bill Gates is also rumoured to be a periodic visitor.

The population of Rwanda is 9m, with only about 23% urban. The main roads pretty much everywhere have people walking along both sides of them – it needed steady nerves from our UNICEF driver to ensure that nobody was hit. The main roads are tarmaced, but potholed, and almost all side roads are heavily rutted dirt tracks. On one bruising 20km drive along one to visit a school, I had the chance to ride a gicugutu: a scooter, made entirely of wood – the frame and the wheels - great fun, if exhausting.

The five year term of Paul Kagame since 2003 has seen the economy grow 44% to 2.4Bn$ (2006 figure), with growth of 4.5%-6.5% expected for 2007. The incidence of HIV/AIDS in Rwanda is just 3%, very low compared to some other nations, and due in part to the strong educational and health programmes of the government. There are elections next autumn, and from what I learnt, Kagame is a highly popular leader even if sometimes controversial internationally in the aftermath of the genocide.

Re-integration of society since the genocide of 1994 has clearly been painful and every citizen was affected by what happened. It was surreal to visit and have a drink in the bar of the Hotel des Mille Collines in central Kigali, an apparently perfectly normal international hotel but also Hotel Rwanda. Each April, there is a one week of national mourning, in memory of the start of the events of 1994. I naturally took the opportunity to talk quietly to individuals, and heard their personal stories and how they have dealt with the situation. One of the key national educational issues is how to explain what happened to the young Rwandans who have been borne since 1994: how do you explain to young teenagers what the adults around them – including their teachers - did and experienced just 14 years ago ?

On this particular trip, the focus was primarily on education (as opposed to e.g. HIV/AIDS for which I have visited other African nations before). UNICEF worldwide has a programme of what are called “child friendly schools” – a term which I personally find strange since it implies that other schools are “child unfriendly”, but there is a certain logic. Child friendly schools generally have better staff/student ratios, sports facilities, teacher training, re-integration of orphans and challenged children, and in particular are safe locations for girls – separate latrine facilities for example. Attendance rates, and completion rates, in child friendly schools are generally excellent. In Rwanda, the target staff-student ratio is 1:55 (as opposed to nearly double that historically). Sports facilities – like soccer, volleyball, basketball, gymnastics – are very helpful in re-integration of orphans and vulnerable children into the normal society of their peers.

We visited both child friendly and as yet un-refurbished schools. A child friendly school is used as a centre point for a cluster of schools within a district, with teachers at the centre training those from the periphery. The contrast in terms of fit-out were obvious: concrete floors instead of mud; desks instead of benches; good sanitation and separate latrines; rain proof roofs; rain water collection tanks, and so on. The far better attendance by girls in child friendly schools was conspicuous as we visited classes.

We also visited child headed households, which I had experienced in Kwa-Zulu Natal and Zambia on previous trips. I was invited into the home of a 14 year old girl, who ran the household for her three younger siblings with support from UNICEF. Her extended family had been killed in the genocide. Her eyes carried a deep sadness which will haunt me for some time. In the schools we visited – of both categories – there were between one third and one half of the children like her and her siblings who had been orphaned and were vulnerable. Attending school, and getting younger siblings educated, is clearly an enormous challenge when so many domestic issues – including in particular food – pre-occupy teenage-led families.

Paul Kagame hosts a national childrens summit on an annual basis, over two days which are also nationally broadcast. Childrens issues are high on the national political agenda and UNICEF is a valuable partner.

For me, UNICEF is a wonderful organization and I occasionally surprise myself with deep awe, respect, sadness and hope – and yes, from time to time, tears. IMHO, to make a difference we really do need global organizations with scale and impact. UNICEF eradicated polio across the planet: I’m not convinced that many other organizations could have done this. It is not just about emergency relief but also about development of nations. I understand that a well known Irish national NGO has recently decided to cease any development activities and focus solely on emergency relief: while this is perhaps understandable given their limited scale, it has left projects abandoned with funding suddenly stopped, and with organizations like UNICEF then having to step in at short notice to pick up the shattered pieces. Development requires sustained, multi-year long term commitment: a “spray and pray” strategy is immature. Sometimes smaller NGOs suddenly abandon a country, as a response to strife, and in some cases – despicably – pull out their white staff, leaving other staff to their fate: UNICEF continues for example in Kenya and indeed Melanie Verwoerd, our UNICEF Ireland Director, had been in Kenya just the previous week – she was interviewed live from Kenya on the Gerry Ryan show amongst others. Sometimes, as an emergency relief response, smaller NGOs have difficulties working where they have no track record: at the time of the Asian tsunami in 2004, smaller NGOs reputedly turned up at Jakarta on short term tourist visas. The Indonesian government came under some entirely misplaced media criticism here in Ireland and elsewhere at the time: but on the ground the Indonesian authorities had long established operations with UNICEF and the Red Cross and handled the crisis well with military efficiency.

We visited, on our first morning, the Kigali Memorial Centre, where there are mass graves for 250,000 people. We laid three wreathes on the graves, and spent several hours inside the centre itself. Apart from the Rwandan story, including its impact on children, the remaining third of the centre is devoted to other genocides, including the Nazi and former Yugoslavia genocides in Europe. Let me leave you with one of the quotes carved outside the centre:

“In a search for a hideout, I found Jerome, his legs cut off. I could not leave him in this state. I tried to lift up Jerome so that we could leave together, but the car of the commune stopped near me. It was full of machetes and other instruments of death. I lay Jerome down on the ground and ran because a man got out of the burgomaster’s car to kill me. He finished Jerome off. I saw this when I looked back to see if anyone had followed me. I will never forget the way Jerome’s face was filled with desperation. Whenever I think about it, I cry all day long.”

Eric, 13

In the spring of 1994, approximately one million Rwandans were brutally and savagely murdered. But, as the Memorial Centre says, what really happened was not a million murders but first of all, one extremely violent and brutal one. The loss of a beautiful human life. And then, another was done. And then, incredibly, a third. And then a fourth. And on and on and on, relentlessly, on over a million separate individual occasions.

PS: if you are really really interested, there are some photos here.

A lot of things happening at the moment in IONA, Le Cayla, Cloudsmith and UNICEF, and more about these in due course, but this blog entry is about the Science Gallery.

I first wrote about my involvement with the Science Gallery almost a year ago, and now – at last!! – it is opening. The launch event is on the first week of February 2^nd-9^th next, and is all about the science and art of light, with techno-artists and punk scientists :-). If you are in Dublin that week, do come along – most of the events are free!

The full programme is a .pdf here but to give you a flavour of what’s happening:

· U2’s light show director Willie Williams

· The Sun in 3D

· Playing pong live on neighbouring urban buildings

· Live illumination of bumble bee flight paths

· Hand cranked luminescent jewellery

· Light tracing

· Ultrasound fusion – Camera Lucinda

There’s also informal meetings with creative individuals in events like the Open Mouse Night, Seed Dating, Show and Sell, etc. LightWave fun will also be on the streets of Dublin for the week – the Lightmobile VW Beetle; Laser bombing; the Bubbleheads on their 4 seater bike; 120 traffic cameras montaging on to the Irish Times building in Tara Street, and The Hive down in Grand Canal Square.

Have fun. The Science Gallery has been a fun project for me, and it’s great to get it open at last. I think it will change the public’s perception of science and technology.

PostScript: The Science Gallery now has a YouTube channel, and a short video of the opening night on 1st February last is here.

This morning I had the pleasure of giving a brief talk at Engineers Ireland on the occasion of their second annual Innovation Awards, for the most innovative engineer and the most innovative company of 2007. A couple of people asked for a copy of what I said, so for better or worse, here goes…

172 years ago, on the 6^th August 1835, the first president of our Institution, Colonel Burgoyne, at our inaugural meeting, said:

“We are engaged in the service of Ireland, and it is our duty, as well as our interest, to promote its prosperity to the fullest”.

In my view, ladies and gentlemen, we – the Engineers of Ireland – could be doing considerably more to promote the prosperity of Ireland to its fullest.

Let me explain. In 2000, our Government had the foresight and commitment to initiate Science Foundation Ireland so as to develop a world class research capability in biotechnology, and information and communications technology, as an essential foundation to our nation’s growth. The discovery of new things, by research, is a commendable activity and may indeed be a foundation for our nation’s growth. It may attract foreign investment, and it may encourage the invention of new appliances, and machines based on insights from the natural world. We celebrate our most successful scientists via SFI, the Royal Irish Academy, the British Telecom Young Scientists Exhibition, and indeed via others.

We also celebrate our entrepreneurs. Ernst and Young, and Ulster Bank, recently hosted a televised evening at CityWest in which our entrepreneurs of 2007 were celebrated. Entrepreneurs organize and manage a business, sometimes taking considerable risk to do so. This year’s winner, Liam Casey of PCH, is a well deserved winner. Having known Liam for some time, I was delighted to sincerely and warmly congratulate him in person on the evening for his business in sourcing manufacturing services from China. But I did reflect at the time on the extent to which entrepreneurship in general, as so ostentatiously celebrated at CityWest and as reflected by the portfolio of finalists chosen by the judges, really benefits our economy. It is wonderful to see the growth of family businesses, and the implementation within Ireland of business models imported from overseas, but it is unclear to me at least whether these examples necessarily lead to a sustainable prosperity for Ireland. We can have successful hospitality businesses, successful reseller and distributorships in Ireland, and successful implementation here of models already proven elsewhere. While all these entrepreneurial activities create employment, it is unclear in general whether they lead to sustainable national prosperity. “Me-too” businesses here in Ireland may enrich some individuals, but in my view at least will not overcome our faltering national competitiveness.

Science is the discovery of what already exists. Entrepreneurship organizes a business. Invention yields new ideas which did not previously exist. But innovation puts new ideas into practice, bringing to life new insights. Joseph Schumpeter, in his Theory of Economic Development (1912/1934), noted that innovation brings new goods, new methods of production, new markets, new sources of raw materials, and new organizational structures into practice.

I believe if we, in Ireland, can innovate and thus put new ideas into practice, then we will benefit from a sustainable national prosperity. If we can bring new products, new processes, new markets, new sources, and new business structures into practice, then we will not only change Ireland but also change the world.

Today we rightly celebrate our innovators, and our innovative companies. They should be the true foundation for promoting our national prosperity to the fullest.

Confucius was born in the state of Lu. When he received news that the powerful state of Qi was preparing to attack his homeland, he sent his gifted disciple Zi Gong to talk to the rulers of the surrounding states. Zi Gong went first to the state of Qi and observed to the military generals the flaws in a strategy to attack Lu. He succeeded in persuading the generals to first attack the state of Wu instead. Zi Gong subsequently went to Wu and instigated the king of Wu to attack Qi…Thus, Confucius saved Lu.

From ninth chapter of Chang Duan Jing.

At first sight, it would appear that there should be an excellent cultural fit between the open source movement in the West, and Chinese values. Open source emphasizes collective knowledge and sharing of competence. In China, the loyalty to the group is strong; communist philosophy emphasizes sharing, and Confucian teaching emphasizes the latent potential of the individual to attain skilled judgment from the experience of others.

The use of the web is growing fast in China – exceeding the US and growing much faster than the US - as reported in Forbes. Open source collaboration uses the web as a collaboration platform, so you would also expect this to add to the momentum of open source in China.

The Economic Intelligence Unit recently reported a ratio of 100 jobs for every computer science graduate in China, with this number expected to sky-rocket; and Duke University reported 60,000 computer science graduates from 4-year degree programmes in China in 2004, and 292,000 from 3-year programmes. This huge domestic demand, and huge output, of software developers might lead you to expect further momentum for open source in China.

A recent Eclipse Members meeting noted that China has the most number of the downloads globally (over a recent 18 month period) at 21%, followed by the US at 18%, and both Germany and Japan at 8% each.

So: what is the status of open source in China ?

Well, there are a small number of open source projects in China, but apparently not as many as you might expect. XOOPS (a content management framework) is quite well known and Stephen Walli’s blog contains an interesting presentation by Tiaiwen Jiang, the community leader in China, on the project from the Chinese perspective. Huihoo is a leading open source middleware project including a J2EE implementation, JFox. Qianqian at Harvard Medical School initiated, in 2004, a collaborative project Wen Quan Yi to develop an open source font set for the 70,000 Han characters encoded by Unicode.

An interesting development is the merger of ObjectWeb in France and Orientware in China at the end of 2006, to form OW2. They are sharing open source contributions in a variety of middleware technologies and their deliberations are documented in their Board of Directors minutes...

But, perhaps predictably, the main interest in open source in China is Linux: just google ‘china open source’ and you’ll see! In 2003, China enacted the Software Government Procurement Regulation (SGPR) which excluded foreign companies from the federal software market. As recently as the end of 2005, CIO Magazine was discussing China’s federal commitment to Linux – for multiple reasons at the time, including suspicions of US intelligence agencies “trojan horses” in US proprietary code (remember the B-767 government jet delivered in 2002 to Beijing, but with eavesdropping devices discovered on delivery ?); overcoming WTO IP concerns by promoting open source; localization to the Chinese market; and kick-starting a strong domestic software industry.

But then things changed in 2005, despite CIO Magazine’s analysis above: in trade talks, China laid aside the SGPR in favour of concessions on industries such as textile and colour television.

So now, according to Lou Shouqun of the China OSS Promotion Unit (a non-government organisation) in a recent presentation, the Linux revenues in all China last year (2006) were about 218M RMB (20MЄ), with a market share (by revenue) of just 3%. Other UNIX systems were 52% - the financial services and telecommunications industries in China have heavily used Solaris, AIX and HP/UX, amongst others. Windows was 42%. While the overall market is growing about 10% per annum, Shouqun believes Linux in China is growing faster than the market, albeit from a low base.

Things have changed even more significantly since the 2005 abandonment of the SGPR directive: Microsoft seem to have successfully found favour with the federal authorities. Fortune magazine documented Bill Gates recent summer visit to China; the history of Microsoft in China, and how Microsoft has very successfully wooed the Chinese policy makers creating an apparent “win-win” situation. It is a fascinating article, and I recommend it to you if you haven’t already read it.

So, why are there few committers in China, and apparently meek participation in the global open source, particularly when the number of software professionals in China is rising so rapidly ? Why is it that Windows is far more successful in China than Linux, and is Microsoft’s new strategy truly a “win-win” ?

The urgency to make money is IMHO a national obsession in China. Consumerism, and chasing Western fashions and brands are all-consuming. You must remember that, within the life times of those of us in our 40s or more, very many Chinese were incredibly impoverished to appallingly abysmal standards of life. It really is only in the last twenty years or so that national living standards have consistently dramatically improved – while admitting of course that there remain many challenges and disparities today across the huge country. In my own experience, making money is far more important to many Chinese than political discourse.

If your parents and grandparents have supported you, a single child, through your professional education as a software developer, their expectations (and needs in their senior age) will be that you will support them. Your partner’s parents and grandparents will have similar expectations. An engineer, including a software engineer, is considered a respected professional: many policy makers, senior business managers, and senior party members also have engineering backgrounds. As a software engineer, your own, your family’s, and society’s expectations are all that you will be financially successful.

Can you be truly financially successful in China if you are an open source developer ?

In the West, much of the open source activity in fact is carried out within companies, including Intel, Novell, IBM, Sun and Oracle, amongst others. Foreign companies in China with recognized global brands – such as Microsoft, with its very wealthy founder – are highly attractive as employers, since they not only in general pay well by local standards but also potentially open the possibility of international travel.

But, which foreign companies have so far established software development laboratories in China which contribute to open source development ? IBM have a Linux technology centre in Beijing. Intel announced in 2004 development centres in Beijing, Xi’an, and Guandong to help Chinese companies develop desktop applications for Linux. Oracle promotes its products on Linux in China, including via the Oracle technology centre in Beijing. But these centers appear, on the surface, to be solution centers which promote Linux based application solutions perhaps as a response to the apparent promotion of Linux by the Chinese authorities and prior to the SGPR retraction; rather than development centers actively contributing to globally available open source. I of course am very open to correction, but it would appear that to date only Novell has opened an R&D centre in China specifically for Linux system development. It is also noteworthy that IONA (of which I’m Vice-Chairman) has Chinese committers from its Beijing R&D centre on the Eclipse STP and Apache CXF open source projects.

For domestic Chinese activity, the largest player in open source Linux is Red Flag. It is ambitious to develop into an international player in Asian Linux, and has recently announced a specific initiative. However its current sales revenue is still relatively small, even by Chinese national standards, at just 40M RMB (3.6MЄ).

To the extent that open source development is being conducted in China by foreign companies, with Chinese committers, then arguably these initiatives need to be more openly promoted and publicized to the Chinese software development community. The open source movement in China needs major foreign brand name companies to visibly invest and recruit in China for development of open source.

Well, then how about Chinese open source start-ups ? Are there any budding MySQL ABs, SugarCRMs, or xTuples ? Yes, and I mentioned Huihoo and Red Flag earlier, as examples. But IMHO the open source industry in China is currently fragile and considered so both by potential employees (ie software developers) and, as importantly, Chinese corporate customers. It is frankly easier – and perhaps more socially acceptable with one’s parents – to work for an established organization, particularly if it is a foreign brand.

Let’s now look at that second question I posed above: why is Microsoft now being much more successful in China ? Microsoft seems to have overcome concerns by Chinese policy makers by pro-actively taking a number of steps. The “trojan horse” threat has been overcome by allowing access (and hence inspection) under appropriate conditions to Microsoft source code, and China now has a federal laboratory to do exactly so. Microsoft has been very actively investing in the education sector, including rural classrooms and software engineering universities, and so aligning its investments with the federal desire to strengthen software skills nationwide – Microsoft is training 1,000 instructors and 20,000 software engineers, and offering online courses to another 50,000 engineers. It has worked with the federal authorities in the context of WTO obligations to ensure that more Chinese PCs have legally licensed pre-installed copies of Windows. In turn this is overcoming piracy issues since the pre-installed versions are more current, have less bugs and more features than older copies of Windows. It has also dramatically dropped the price of Windows in China. In summary, President Hu Jintao on a visit to Microsoft said that Bill Gates is a friend to China and the Chinese people: in China, this is an incredible endorsement, and it is difficult to find any analogy in the West for such an important and powerful public ratification.

It would appear that Microsoft is on a roll in China. It is very interesting to reflect on the Microsoft strategy and their execution of it within China, and contrast that to the open source industry and initiatives in China. Of which open source project or company will the President of China publicly endorse as a friend of China and of the Chinese people ? If the open source industry globally is to benefit from China’s rapid development, it is clear that investment – perhaps akin to Microsoft’s commitment to China – will be needed.

It is also very interesting to ponder to what extent the prices Windows customers in the West are paying are being used to subsidise Windows customers in the East. Cross-subsidies are of course not at all a new idea in any industry: I find the Microsoft case interesting because it is part of a much broader initiative.

Let me finish by a hypothesis for policy from the Chinese Government perspective. The war is not about whether Windows or Linux will ultimately win. Both are sufficiently low cost here in China to be usable. Microsoft is generously up-skilling the national software engineering talent pool, and the open source industry is also helping by publishing its source code and inner workings. The war is rather about building a vibrant software industry in China, capable not only of satisfying national needs, but also exporting and becoming a world leader.

The main requirement is excellent application development, on whatever foundation systems and middleware technology are de facto in the global industry (it doesn’t matter which, as long as they are low cost in China). Open source by the Chinese industry – and for the Chinese industry - could play a very significant role indeed. By fostering a national repository of re-useable Chinese application components – with documentation and test suites – written by Chinese developers (in Chinese first, and then maybe English), with a framework put in place and re-enforced by Government policy and investment, then the national industry could be rapidly enhanced.

“Therefore the Master concerns himself with the depths and not the surface, with the fruit and not the flower….When his work is done, the people say ‘Amazing: we did it, all by ourselves!’’”

The Tao Te Ching, by Lao Tzu


This was the basis for an invited keynote I was to give at the OS Summit in Hong Kong at the end of this month: but the conference has now been postponed until sometime in 2008.

Professional investors understand liquidity. They understand asset backed securities, and they understand the risks when assets subsequently emerge to be poorer quality than they were represented to be. Sub-prime assets can be embarrassingly illiquid and career changing.

In the world of enterprise IT investments, customers have likewise yearned for liquidity. Lock-in to assets available solely from any single vendor implies significant risk to the purchaser. Bad investment decisions into IT assets which subsequently emerge to be poorer quality than they were represented to be, can be embarrassing and career changing – particularly if the assets are illiquid and difficult to replace.

Financial markets have been driven by liquidity. However by contrast, purchasers of IT assets have found it challenging to be able to subsequently replace and substitute alternatives when desirable.

Until now.

Today, I believe that the software and hardware industries are fundamentally changing in favour of liquidity. Software is increasingly componentized. Software has increasingly recognized industry standards which facilitates substitution of alternatives. Open source provides liquidity through lowering the cost of change.

Enterprise software vendors should be trusted partners in providing and maintaining tailored solutions. The ability to successfully integrate a variety of components from a variety of sources to an enterprise level of service is valued. The ability to scalably manage multiple configurations, and evolve them dynamically over time, is valued. Tailorable, personalized solutions for specific customers, partners and staff, but all as part as of the holistic enterprise, are valued. Dynamic systems enable liquidity amongst software assets – no matter from which particular vendors specific assets are obtained.

New, and sustainable, business models are emerging from software vendors who deeply understand technology liquidity.

Single, monolithic, vertically integrated silos of software stacks is thinking from the last century. Integrated stacks are illiquid if any specific components or layers cannot be readily substituted by better alternatives on the market today, or which may emerge tomorrow, from any vendor.

It does not take an oracle to foresee what will happen if BEAS are purchased by ORCL. Overlapping products – portal servers, application servers, service busses, Java development platforms, whatever – will be culled: “synergies” throughout the two organizations will be executed. ORCL will attempt to cross sell its own offerings into the BEAS client base and migrate them away to ORCL alternatives.

Professional investors understand liquidity. Even if they are new to investing in IT equities, they therefore should have little difficulty in understanding that enterprise IT customers likewise yearn for liquidity of technology assets. In the past, enterprise vendors have been slow to offer liquidity. Now, the IT industry is changing fast, and the potential upside for investors in IT is vendors who understand and are executing on technology liquidity: vertically integrated illiquid stacks are from a former and sub-prime era.

Think liquidity.

A core theme of Web 2.0 is the collective wisdom that results from the network effects of sharing across the community. The wisdom of the crowd is sometimes more than the sum of the individuals therein. Wikipedia is one prime example, since collective knowledge can trigger insights for individuals, which can then augment the collective wisdom: the added knowledge which would not arise if the group did not collaborate together. I recently wrote a blog entry about a similar phenomenon in multi-disciplinary research. Group and individual reasoning can positively feed off each other.

One of the dichotomies of the Web 2.0 phenomenon is on one hand, the power of the group and the collective knowledge of the crowd; and yet on the other the significance of each individual. Yes, collective knowledge such as Wikipedia and del.icio.us (and of course Google!) have emerged, but blogs written and commented by individuals are still a fundamental force. Some may argue that indeed the information in specific blogs written by certain individuals is more valuable, accurate and reliable than that in shared wiki repositories maintained by the amorphous net community. There is room for both individuals and the crowd.

In the race to be successful on the web, the focus is on attracting and retaining users, eyeballs and clicks. For the promoters of a web site - whether a commercial venture, or just a worthy cause for society at large - building and growing a “market” is key. Monitoring usage patterns, listening and reacting to user feedback, all builds momentum: hopefully a tipping point is passed, and the network effect of market momentum reinforces the popularity and acceptance. However: does a mass market strategy play only to the crowd, and not to the individuals therein ?

For Web 2.0 , Chris Anderson introduced the term “long tail” to emphasise deploying:

“customer-self service and algorithmic data management to reach out to the entire web, to the edges and not just the center, to the long tail and not just the head”.

As noted by an Amazon employee quoted by Wikipedia: “We sold more books today that didn't sell at all yesterday, than we sold today of all the books that did sell yesterday” -- read that slowly to yourself again if you hadn’t come across it before..

Further, in his discussion on technology market dynamics, Christensen noted:

“Simply put, when the best firms succeeded, they did so because they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers' next-generation needs. But, paradoxically, when the best firms subsequently failed, it was for the same reasons--they listened responsively to their customers and invested aggressively in the technology, products, and manufacturing capabilities that satisfied their customers' next-generation needs ….But the problem established firms seem unable to confront successfully is that of downward vision and mobility, in terms of the trajectory map….”

Success – at least in some industries, such as the disk drive and earth moving machinery industries which Christensen documents – can equally lay the foundation for failure. Group and individual behaviour can play off each other, creating emerging forces from below.

Combining the Anderson’s exhortation to reach out to the edge, with the warning by Christensen not to be outflanked by emerging disruptive technologies from below, it would seem wise to ensure that a Web 2.0 market strategy explicitly recognises the potential of the individual, as well as the mass market of the group. Even more important is to react to dynamics in the market and to changing tastes. The observation is: that in a global market of mass consumerism, the ability to cater for the vast number of changing individual personal tastes and desires – to personalise and dynamically tailor your products and services – may be much more commercially – and socially – valuable, than volume plays of standard products and services to an anonymous amorphous group.

The long tail changes: it wags. The universe of micro-markets in the long tail is worth addressing – this is Anderson’s observation. In addition, changes in a micro-market may in due course influence the mass market (and blind side you) – this is in essence Christensen’s observation.

Ajit Jaokar was one of the contributors at the Fidelity event in Galway, and he reminded the audience of Tim O’Reilly’s characterization of the Web 2.0 phenomenon:

• the web as a platform;
• harnessing collective intelligence;
• data as the next Intel inside;
• the end of the software release cycle;
• software above the level of a single device; and
• rich user experiences.

I thought about each of these six facets as I reflected on the dynamics of the micro-markets, and list some (not all!) of my observations below: how does Web 2.0 address the wagging long tail ?

One common way of reaching out to the long tail, and monitoring its movements, is “data as the next Intel inside”. Google exploits what its itself calls the ”uniquely democratic nature of the web” to derive data on the click activity of millions of users to drive its PageRank algorithm. I suspect that social networking sites, such as MySpace, Facebook, Bebo and LinkedIn, could likewise exploit their data about networks of people. I’ve always wondered in passing how data regulators, such as the Irish Data Protection Commissioner, view such click gathering and social networking activities…

As Web 2.0 embraces beyond “the level of a single device” – which was Ajit’s theme of his presentation - I observe that telecommunications operators, such as Vodafone, O2 and T-Mobile, collect and record quantities of data, ironically in a large part due to regulatory requirements of data retention legislation in jurisdictions such as Ireland. These vast data archives capture about social communication patterns of populations – it is not just the social networking sites which have such data! There are opportunities, and privacy risks, to exploit these vast patterns to provide commercial value. One can imagine intelligence being generated by mobile phone operators to enable targeted marketing by third parties and content providers…

Quietly collecting mouse click activity, or analyzing phone call patterns and triangularising the locations of their owners, are data driven ways of using to drive for the long tail. Importantly, the data is dynamic and therefore so also is the derived collective intelligence: as trends emerge, or change, so can the offerings tailored for particular sets of individuals. But it seems to me that these approaches may wear a clandestine cloak: there are more explicit ways of using collective intelligence for the wagging long tail.

A successful web site needs stickiness to retain, and track, its audience, including the wagging long tail. A social networking site such as those above in part generates its stickiness because of the network effect of having ones friends, co-workers and colleagues using the same site: most people think it is too cumbersome to re-register oneself and encourage one’s cohort elsewhere. IMHO, the resulting stickiness is in fact rather superficial, rather than systemic: it consequently threatens any purported fiscal value for the site. The SIOC project at DERI in Galway underlines the benefits, and business consequences, of seamless federation of online communities. Stickiness should not be driven by re-registration inertia, but rather by community value and impact - which is one reason why I believe Ammado will succeed.

Another strategy to capture the long tail wags is “harnessing collective intelligence” – another of O’Reilly’s Web 2.0 facets. One explicit way is to allow individuals to define their own collections of interesting items, and then to share and discuss them with other like-minded souls. A simple way to do this is just by tagging items: for example, photos tagged with “Galway” on Flickr will appeal to certain people. But tagging rather quickly loses its impact when trying to find items with a combination of tags, requiring tedious trials of various search criteria; and tag synonyms are a problem in a global world: try “football” in del.icio.us as an example – or even “Galway Hooker” in Flickr!

Rather than expecting people to work out the correct search and query expression across a set of tag values for what they actually want, another way is to let people explicitly define and share their own collections. Hobbyists – such as stamp collectors – have been doing this for years, and a craft worker likewise learns what the set of right tools are for the job from the experiences of his trade. Enabling individuals – and micro-markets and even the crowd - to share what works well together when, is a positive tactic for managing the wagging long tail, and which I wrote about recently in the context of software configurations and Cloudsmith.

When doing a little research for this blog entry, I came across Dan Bricklin’s interesting blog entry on When the Long Tail Wags The Dog. His theme is that “must have” items have more value than those which are less likely to fit the job at hand; and that general purpose items are likely to have most value since they can entertain the dog as well as its long tail. While I don’t disagree, my thoughts about the dynamics of the long tail, and how to work with within it, are a slightly different emphasis.

Reinforcing Bricklin, being relevant to the individuals and small groups in the long tail requires customization and tailoring of general purpose offerings. In the enterprise software space, software vendors have traditionally worked with systems integrators to tailor more appropriate solutions to different niches of the market. With componentization in the software industry, in principle useful aggregations of different constituent parts can more likely be used to tailor specific solutions. Collective intelligence can be harnessed by explicitly sharing these aggregations, as I indicated above.

However, once delivered, installed and put into use, assemblies of software components in production environments have in the past usually been relatively static. The challenge is that the long tail wags: micro-markets and even mass markets change, and production systems need to more easily do so too. One promise of the dynamic module environment of OSGi is to enable dynamic evolution: if collective intelligence can be dynamic as trends emerge, or change, and then suggest new offerings tailored for particular sets of individuals, then perhaps also can production software assemblies in business and enterprise environments be dynamically adjusted. This is a theme which we are working upon in IONA, particularly in the context of our highly dynamic plug-in architecture for Artix and our open source FUSE offerings – see Eric Newcomer’s blog.

But if the world is dynamic, and contains a universe of micro-markets as well as a mass, can offerings not only be tailored so as to be a good fit, but also be priced attractively for each ? What when micro-markets change ? As I wrote about, one industry which faces these challenges is the mobile/cell phone operators, for whom intelligent and responsive bundling of services (SMS and MMS and call rates and roaming charges etc) is competitively critical. The ability to generalise this approach into the world of software components and packages is of interest and relevance to the wagging long tail. LeCayla is one company building a common approach to the issue of dynamically rolling out new charge and billing rates so that software vendors can competitively foster specific micro-markets.

Let me summarise: the internet as a platform enables a global market to be addressed. Web 2.0 uses collective intelligence to play in both the mass markets, and the long tail of numerous micro-markets. There is room for both individuals and the crowd, and group and individual reasoning can positively feed off each other. – creating the ever lurking possibility of being disrupted from below. Scalably addressing both the mass market and the long tail is however not the complete issue: markets change, the long tail wags, and scalably addressing dynamic markets is even harder – but possible.

Footnote: my 7 month old Alsatian, Charlie, has yet to grow into his long long tail. He wags it a lot.