Full disclosure: I own a very small number of RHAT shares.
I see no reason for MSFT to buy RHAT, even for the purpose of shutting it down. If MSFT was dumb enough to start such negotiations, RHAT would just let the rumor leak and drag out the process while their stock soars. RHAT shares have been doing quite well lately, fueled by nothing more than an OLD revelation about Michael Dell and his $100M investment. An MSFT buyout rumor would further pump the price of RHAT without any need for increased earnings or expanded market share.
A real or vaporous MSFT buyout would be like tricking Al Qaeda into promoting US Treasury Bonds.
Disclaimer: I am not an investment advisor. This is not investment advice. Your actual mileage may vary.
I have a modest amount of money that I used to set up a rollover IRA. I invest it in a combination of stocks and mutual funds. I chose some international funds, because some of the markets overseas are just too hot to pass up. Domestically, I have some open source companies -- Red Hat, Novell, and VA Linux. They have all taken quite a beating in the dot com bust, but I bought after that, buying at relatively low prices.
Consider the SCO vs. IBM lawsuit. I missed the opportunity to short SCO. If I can't bet on the sure losers to lose, I can bet on the winners to win. A victory in that case won't do much for IBM, but it could be massive for the companies who actually sell Linux.
IMHO, each of the open source companies has some core value -- services and products that simply cannot be allowed to disappear. If their stock drops low enough, they get bought out by the companies who need this stuff to survive. The value of those products and services transcends the revenue/profit that they generate today. If you really want to be cynical, consider the "nuisance value" of these companies. What would Microsoft be willing to pay to make them go away?
At some point, I expect IBM to buy Red Hat or possibly Mandrake. The motivation for IBM to do this might be to prevent Sun from doing it first. Even if IBM, Sun, or [gasp!] MSFT creates their own Red Hat knock-off (like White Box or Centos), Red Hat would benefit indirectly. Novell already bought SUSE, so the precedent has been established.
I would like to see one of the big mutual fund companies start an open-source mutual fund. That way, small investors (like me) could efficiently diversify our open source portfolios and get into some of the privately held companies. For example, I really like Zope. I have a multinational deployment that is so large and sucessful, it's mere existance is something we would like to keep away from competitors. I would buy Zope if they were publicly traded, else I need a mutual fund to put a deal together and get into the action.
It takes some time for people to make the transition to open source. Many users know barely enough to use MS products, much less an alternative. Those who are happy enough "in the Matrix" are best left there until they desire to get out.
When people ask any of the following questions, a prescription for OSS may be indicated:
(1) Why am I getting popups even when I am not online? (2) How do I stop the machine from crashing 5 times aday? (3) How do I get the functionality of <insert product name here> without paying <insert price here> ? (4) My anti-virus software is crashing my machine -- what can I do?
When people discover what OSS does and how the community works, there some who refuse to believe. However, most of the people I have unplugged are quite happy in the OSS world. They rarely go back voluntarily.
This is no more a scam than employer-paid health insurance. The ONLY reason for health insurance to work the way it does is taxation. If you had to pay for it yourself with after-tax dollars, the cost would be at least 30% higher. By keeping the cost concealed from the IRS, it is concealed from the employee as well. Most of the incentive for controlling healtcare cost is pretty much gone. Ideally, market forces would follow supply/demand and create a relatively efficient system. Instead, the whole thing is out of order because the entity that pays the bill is not the one who uses the service. We keep the two disconnected only because of tax policy.
For many years, senior executives have been paid partially in stock and options. The concept has filtered down to the not-so-senior level of management as well. In theory, the managers are motivated to do things that will raise the stock price and therefore their compensation. Nothing illegal about it. Capital gains tax MUST be less than the rate for ordinary income, otherwise the stock market will become as inefficient as the health care system.
The fact that converting salary to capital gains defeats FICA as interesting. On one hand, it IS a loophole. On the other hand, how guilty should anyone feel about declining to participate in the world's largest Ponzi scheme?
Pro === 1. Forced retirement of obsolete equipment at the end of the lease. Leases eliminate management discretion in the upgrade process. You can and will upgrade when the lease expires -- not before, not after. Useful when senior management is out of touch with technical reality, although the loss of discretion cuts both ways (see below).
3. The "temporary" nature of leased PCs is understandable by the average employee. If they KNOW their machine is going away in 36 months, they tend to find better places (file server, CD, etc.) to store their data. Leased servers have the same impact on sysadmins -- they can plan on a non-discretionary 100% replacement at a known date in the future.
Con === 1. Mid-life hardware upgrades are a problem. Do you save the old parts to put the machine back to as-delivered condition when the lease expires?
2. Who owns the software? Is that leased also? Usually the answer is "no" (see Microsoft EULA). But you have to wonder about the OEM packages that may be pre-installed and supposedly licensed to a specific machine. Of course, open source would take care of the problem:-)
3. It is possible to have a lease that extends beyond the warranty period. How much do you spend to fix a computer you don't own? What happens when you return it and it's broken? If you are paying seperately for hardware maintenence, how happy are you going to be when the maintenance cost exceeds book value?
4. Towards the end of the lease, the monthly payments will exceed the value of having the equipment. What do you do if the equipment is obsolete before the lease expires?
I think the depreciation curve on IT equipment is too steep for leasing to make sense. I have some experience with leased equipment. My company bought a smaller company, and they had leased PCs. Not only were they leased, they were barely adequate when new and were obsolete at the time of the acquisition. Nobody would spend money to upgrade the PCs because the lease was going to expire in about a year. The cost of the upgrades (monitor, OS, memory, disk, etc.) was dangerously close to the cost of replacing the machines outright. The employees had to suffer with junkware for almost a year before the problem could be solved. If the machines were purchased, the problem could have been solved sooner. It's hard to acknowledge technical reality when money is going out the door every month. If the stuff is already paid for, it's a little easier to wake up and smell the cappuccino.
I believe the "original" Napster offered the RIAA something along the lines of what I suggested. Wouldn't it be a pisser if the best deal they could ever have was the first deal they were offered? If the RIAA had simply taken the money, they would have had billions by now. If you factor in what they "lose" due to piracy and add the money that they were too dumb to take, it shows that the RIAA folks are not the brightest bulbs in the box.
If the industry doesn't get a clue soon, I have some ideas on how to use existing technology to foil the subpoena/lawsuit process, and an idea on how to build a totally undetectable "weapon of mass distribution". I like my WMD idea enough to sit on it until the DMCA and "trusted" computing becomes so oppressive that it's time for a nuclear counterstrike. Note to RIAA: Think fast.
Unlimited sharing via p2p. The file transfer program collects stats on what was downloaded so that the royalty portion of my $5 can be allocated proportionally to the copyright holders based on what was downloaded. The copyright holders don't need to know what I downloaded, they simply need to know that 30 million subscribers paid $5 each this month for a total of $150,000,000. Of the songs downloaded, 0.00015% of them were Billy Joel/Pressure. Mr. Joel, his record company, and the RIAA somehow divide $225 among themselves and life goes on. Most of this money is NOT going to be paid to ANYONE if the status quo is maintained. If Mr. Joel is unhappy with $225 for the month, he has to somehow increase his market share above 0.00015%.
I already own as much music as I really need. I have the ability to simply pay $0 and keep what I have (which is what I do now). By accepting my proposition, they get $60/yr more from me than they get now. By using a fixed rate and keeping it low, the incentive to disrupt the statistics is eliminated. The copyright industry is in it's own version of the Vietnam war. They can stay on the battlefield and fight as long as they want, but real victory remains elusive. It's hard to find the enemy. When they are found, each individual can easily be beaten. However, the resources needed to hunt and kill all of them is far more than the benefits of winning the war.
For the sake of argument, let's say I have a line of products with zero marginal cost. There is some initial cost to make the first copy, but the actual production cost of each additional copy is inconsequential. I can get 15% of the US population to give me $60/yr but they want an "all you can eat" pricing plan. It is very easy to copy and redistribute my product. So easy, that the biggest threat is unauthorized/unpaid copies. Ill-advised attempts to maximize revenue have eroded the customer base to the point there the customers are getting very good at copying the product without my assistance. If the problem gets much worse, there will be no products to distribute, because nobody wants to pay for them -- at least not on a per-product basis. Given the nominal cost of copying (which could be reduced to zero if the customers do the work themselves), it is more important to get paid by everyone who has interest in the product, regardless of how many products they have (remember: cost of production is $0/unit for P2P). We still need to keep track of which models of my product are popular, so that I can compensate the people who made the original products based on the success of the work they did.
Our friends in the music industry seem to be locked in on the concept of getting paid for every song. The are missing the opportunity of getting a larger amount of money that would come from collecting a nominal amount from a huge customer base. All they have to do is work out an equitable distribution system on their own.
One more thing: AM is susceptible to electrical noise (RFI). Between the CPU and flourescent backlighting of a display, the demand for AM radio in an MP3 player is minimal. I'm not sure I buy your distortion theory, but the antenna is definitely a problem because of wavelength.
Where I live, the state university system decided to spend lots of bond money on their own switching equipment, so as to provide (and of course charge for) local phone service in the dorms. They did this about 8 years ago. I am guessing they had maybe 5 years of solid revenue until the cell phones proliferated and the game was over. I understand why they did it. Dorm phone service had been a giant cash cow for the phone companies (charging "installation" fees for the same lines every semester). It was just too juicy a target to pass up.
The REAL motivation was that state bond money was essentially a gift from Santa Claus -- the agencies that received the money were never obligated to pay it back. Operating money was the hard-fought budget battle that took place every year. Well, it seems that the snazzy new phone gear was purchased with bond money, and the fees paid by students became part of the operating budget. Unless the university system starts losing money on operational costs, the demise of the local phone cash cow is left for the taxpayers to deal with. My guess is that the taxpayers will spend the next 30 years paying for the state university phone network.
Of course, the path of least resistance is to use Internet access to subsidize the loss of phone revenue. The colleges can still surcharge the hell out of Internet access. That puts a band-aid on the problem, but only to the extent that students can be prevented from sharing via Wi-Fi.
Considering main benefits of the lawsuit from a SCO point of view:
Cash from MSFT & SUNW
Postpone bankruptcy
Pump the stock so as to create an escape path for investors
Hopes and dreams of a buyout
In this case, losing the lawsuit will bankrupt the company, no matter who pays the cost. If you accept bankruptcy as inevitable, and you get all of these benefits with a frivolous lawsuit, where is the deterrent? Unless the SCO gets the royal smackdown from the SEC and a whopper shareholder lawsuit, Darl and his buddies will parachute to safety.
I agree that browsing at the same priv. level as a software installer is a big problem.
In addition to the "Let's all run as Admin" scenario, MS also makes it all too easy for IE users to unintentionally install things. I have seen numerous examples where a Windows 2K spyware infection went well beyond the user's profile. If your entire TCP/IP stack is hijacked, you need to do more than trash the users profile. It always amazes me to see how we can peform all of these administrative lockdowns to prevent Windows users from installing software, and along comes the spyware and it plays right through. Hmmmm....
As you say, it the user's habits contributing to the problem, compounded by OS and programs that make it easy to do unsafe things. One easy way for Firefox to defend itself make sure that XPI installation requires an active step that neither the program nor the user can bypass or click through. If you must download the file, and click "Tools...Extensions...Install" as opposed to getting a "Click OK to enhance your browser" prompt out of the blue, then the bar is raised to a level where newbies are not likely to jump. Anyone who can't figure out how to manually install an XPI is probably best served by skipping extensions altogether.
OSS certainly puts a cap on how much the proprietary software vendors can charge for a product. It's not a coincidence that the most overpriced products were the first to see OSS drop-in replacements. Also let's consider the latest trend in customer support: the Bangalore script reader. If that is how support is going to be done, people will soon discover that searching Google Groups is easier, faster, and more effective. As the quality of vendor support goes down the toilet, so does the logic that justifies buying commercial products over OSS.
I will even take your "OSS is bad" argument one step further: Once the ball gets rolling, companies who adopt OSS the fastest will reap the benefits of lower cost vs. competitors who still buy proprietary products. At some point, companies will be adopting OSS products simply because they can't afford not to. Example: As soon as one of the major airlines eliminated food service, they ALL had to go pretzels-only. Otherwise they operate at a cost disadvantage in a market that won't support higher fares. When was the last time you had more than 1 oz. of starch when flying coach?
On the other hand, there is nothing about artifically high prices that helps the software industry in the long run. Granted, certain companies could keep tighter control of their market share without OSS, but it would be a smaller market. No one in the software industry can expect to survive for long in a stagnant environment. Without a constantly growing market, nobody can achieve the year-over-year revenue growth that investors require.
I have absolutely ZERO sympathy for companies who are losing market share to OSS. Let's face it: that which can be done by OSS will be done. At the same time, IT work that can be moved to India will be (even if OSS did not exist). Companies have to deal with the OSS competitive reality, just as IT workers have to deal with competition from India. The irony is that the companies who were the first to get on the India outsourcing bandwagon are some of the same companies who are getting undercut by OSS -- some of which is developed by the very same people who lost their jobs to offshore outsourcing in the first place! Karma, indeed!
For the sake of argument, I'll even buy the theory that many OSS products are merely "good enough" replacements. IF that is true, then the weakest, most poorly supported, overpriced commercial products are vulnerable. Again, I see no problem here. If you make the job loss argument, I counter that most of the development jobs were moving offshore anyway. By the way, we gain plenty of jobs by making more use of hardware and software because the cost is either zero for OSS or reduced because of the OSS competitive threat. In fact, some of those jobs are more difficult to move offshore and therefore more useful to have in the first place.
Consider the market evolution of PCs replacing mainframes (think of all the wildy-overpriced mainfame software that got cloned onto PCs). The price of software fell through the floor but the market expanded 100-fold. OSS is just the next step in the evolutionary cycle. The alternative is to pay exhorbitant prices, suffer with obnoxious licensing terms, for crappy products with lousy support. No thanks.
Although some of the flat panel technologies have issues with burn-in or brightness, at least they maintain each pixel in focus. CRTs get fuzzy over time. Not everyone wants to see square pixels, and the latency can be an issue, but I'll take LCD over CRT any day.
masquerading as Y2K IT experts. They advised everyone to issue a survey to their supply chain, for the purpose of identifying suppliers who were likely to have Y2K problems. My company received hundreds of these surveys, most of which were copies of our customers' internal Y2K surveys. Most of the questions had no context and were therefore irrelevent -- a complete waste of time. And then there was the dreaded follow-up calls and e-mails for any surveys that were not completed.
If I had it to do all over again, I would have charged for the time spent on survey responses. I'll bet 90% of the survey problem would have disappeared.
When people looked back at the real Y2K problems and solutions, the IT ignorance of the big-time consulting firms was finally exposed.
We DID have some BIOS and OS problems with a few ancient PCs (hooked up for low-tech data capture). Of course, nobody wanted to spend the money to buy replacements. For those PCs that were truly Y2K challenged, we printed up these very large flourescent pink stickers with a picture of a bomb and an ominous Y2K warning. Then we slapped the stickers on the ancient PCs. As if by magic, the old machines were gone in less than a month.
Considering software patents as a replacement for copyright is an interesting concept. Not very practical, as we have enough trouble with software patents as it is. The worst possible case is what we have now -- the perpetual tyranny of copyright combined with the "I just patented the alphabet" patent system. Anyone who proposes that we ditch either of these is on the right track, even though they may be heading in the wrong direction. Ultimately, I think that if given the choice, the software industry would choose copyright protection over patent. The trick is making them choose. Presenting copyright vs. patent as mutually exclusive is a good start.
"A simple PC user's system will be infected, as will a public site, and information will be transferred from one to the other. "
I'm not so sure the public site even has to be "infected". Maybe the infected PC just encrypts the data to be stolen into a nudie jpg image and posts it to a binary group on Usenet. Maybe it just runs a Perl script to auto-post the data to a blog. It would be fairly easy to abuse a number of public facilities with no need for a direct attack. The "harvesting" of this information would be indistinguishable from ordinary teenagers downloading yet another picture of Anna Kournakova. I thought of this years ago, but never mentioned it anywhere -- giving ideas to bad people and all that. I read somewhere that terrorists are quite fond of steganography, so the cat is really out of the bag already.
" Is there any remote chance of getting these spyware authors prosecuted."
At this point, I'm not so sure the spyware authors are the real problem. Fool me once, shame on you. Fool me twice, shame on me. Fool me 65,536 times, just paste the "Kick me" sign on my back.
The security issues of MS products are well documented, with plenty of real-life evidence. Open an e-mail, launch a virus. Visit a website, get spyware. Eat at McDonald's every day, get fat. You can't expect security out of Microsoft any more than you can expect to lose weight by eating Big Macs. There are alternatives to MS products, just as there are alternatives to the fast-food hamburger.
The problem is that if anyone can install just about anything on your computer without your consent, then any data on your computer can be redirected and exploited. Spyware is just the beginning. It's going to get ugly.
The question was not all that hard. I don't watch the show very often, but I think I remember that question from another episode. I think Ken provided a plausible-yet-wrong response just to go home. To me, it was ridiculously simple. When you think of industries that simply don't exist outside of their "season", it doesn't take long to zero-in on taxes.
Then again, maybe not. I saw the show when it was on TV, my wife watched it later on tape. I paused the VCR during final jeopardy to ask my wife if she knew the answer. Much to my surprise, she didn't.
Kind of ironic though. A guy who wins $2.5 million is going to be dealing quite a bit with income tax issues.
I can't wait until they use this on the show:
Answer: "This is an unlikely company to do Ken Jennings' tax return; it's mere existance got him kicked off of Jeopardy." Question: "What is H & R Block?"
Nobody needs telco services to implement PIN authentication; you can do it yourself. Some of the high-end answering machines are like a miniature PBX; it won't take long before they screen all incoming calls for you. I believe there are some that already do.
The ultimate telco nightmare is when commodity hardware replaces network-based services. If the telcos don't defend the integrity of Caller ID, the problem will be solved without their participation.
I only pick up calls from people I recognize, sort of a mental "whitelist". The fakers would have to get the names and phone numbers of people I know, otherwise they get my answering machine.
Let 'em try faking Caller ID -- it just raises the bar a little. The appropriate countermeasure is a challenge/response scenario where authorized callers have a PIN number and the rest go to voice mail. I can't wait to see how much the telcos enjoy losing their Caller ID revenue stream when people get annoyed with faked calls.
As you say, outsourcing is the "trend du jour". The current trend is fueled by a large supply of people with cheap PCs and very little experience who masquerade as IT workers.
People seem to forget about the 1980's style of outsourcing. The big players (EDS, CSC, etc.) were pitching outsourced data center management. The suits bought it, with mostly disastrous results. If it worked, most IT work would have been consolidated into a few IT companies. The overseas migration would have been fairly simple. But it FAILED. The only way to save money was to slash the level of service to unacceptable levels. Here we go again.
There would be this huge supply of liquid CO2 stored underground. Nobody wants to fill the atmosphere with CO2, but at least some of it gets converted back to oxygen by plants. Won't we eventually have an oxygen shortage when too much oxygen has been used in the ZEPP combustion process and is now stored underground in the form of liquid CO2? Will some future generation need to find an energy-efficient way to release oxygen from CO2 or possibly water? Is this more difficult than the original problem? There must be a better way.
Imagine yourself as the CEO. Think about what you want to see as a measure of success. Growing your existing products is everybody's favorite strategy -- it's generally less risky than developing new products. Of course, the growth ends once the market is saturated, but the overwhelming motivation is to keep milking that cow as long as something comes out.
"Most money from software comes from support..."
Only for high-end systems, not the stuff Microsoft sells. "Software Assurance" is the closest they get to a traditional support contract. It's pricey and the term is limited. To me, it looks like their strategy is to soak the "early adopters" who want or need every new version that comes along, even if it means the average user runs the old versions without paying MS another dime. "Software Assurance" tries to expand the pool of early adopters, but it also expands the pool of customers who will wait even longer before buying an upgrade.
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Full disclosure: I own a very small number of RHAT shares.
I see no reason for MSFT to buy RHAT, even for the purpose of shutting it down. If MSFT was dumb enough to start such negotiations, RHAT would just let the rumor leak and drag out the process while their stock soars. RHAT shares have been doing quite well lately, fueled by nothing more than an OLD revelation about Michael Dell and his $100M investment. An MSFT buyout rumor would further pump the price of RHAT without any need for increased earnings or expanded market share.
A real or vaporous MSFT buyout would be like tricking Al Qaeda into promoting US Treasury Bonds.
Disclaimer: I am not an investment advisor. This is not investment advice. Your actual mileage may vary.
I have a modest amount of money that I used to set up a rollover IRA. I invest it in a combination of stocks and mutual funds. I chose some international funds, because some of the markets overseas are just too hot to pass up. Domestically, I have some open source companies -- Red Hat, Novell, and VA Linux. They have all taken quite a beating in the dot com bust, but I bought after that, buying at relatively low prices.
Consider the SCO vs. IBM lawsuit. I missed the opportunity to short SCO. If I can't bet on the sure losers to lose, I can bet on the winners to win. A victory in that case won't do much for IBM, but it could be massive for the companies who actually sell Linux.
IMHO, each of the open source companies has some core value -- services and products that simply cannot be allowed to disappear. If their stock drops low enough, they get bought out by the companies who need this stuff to survive. The value of those products and services transcends the revenue/profit that they generate today. If you really want to be cynical, consider the "nuisance value" of these companies. What would Microsoft be willing to pay to make them go away?
At some point, I expect IBM to buy Red Hat or possibly Mandrake. The motivation for IBM to do this might be to prevent Sun from doing it first. Even if IBM, Sun, or [gasp!] MSFT creates their own Red Hat knock-off (like White Box or Centos), Red Hat would benefit indirectly. Novell already bought SUSE, so the precedent has been established.
I would like to see one of the big mutual fund companies start an open-source mutual fund. That way, small investors (like me) could efficiently diversify our open source portfolios and get into some of the privately held companies. For example, I really like Zope. I have a multinational deployment that is so large and sucessful, it's mere existance is something we would like to keep away from competitors. I would buy Zope if they were publicly traded, else I need a mutual fund to put a deal together and get into the action.
It takes some time for people to make the transition to open source. Many users know barely enough to use MS products, much less an alternative. Those who are happy enough "in the Matrix" are best left there until they desire to get out.
When people ask any of the following questions, a prescription for OSS may be indicated:
(1) Why am I getting popups even when I am not online?
(2) How do I stop the machine from crashing 5 times aday?
(3) How do I get the functionality of <insert product name here> without paying <insert price here> ?
(4) My anti-virus software is crashing my machine -- what can I do?
When people discover what OSS does and how the community works, there some who refuse to believe. However, most of the people I have unplugged are quite happy in the OSS world. They rarely go back voluntarily.
This is no more a scam than employer-paid health insurance. The ONLY reason for health insurance to work the way it does is taxation. If you had to pay for it yourself with after-tax dollars, the cost would be at least 30% higher. By keeping the cost concealed from the IRS, it is concealed from the employee as well. Most of the incentive for controlling healtcare cost is pretty much gone. Ideally, market forces would follow supply/demand and create a relatively efficient system. Instead, the whole thing is out of order because the entity that pays the bill is not the one who uses the service. We keep the two disconnected only because of tax policy.
For many years, senior executives have been paid partially in stock and options. The concept has filtered down to the not-so-senior level of management as well. In theory, the managers are motivated to do things that will raise the stock price and therefore their compensation. Nothing illegal about it. Capital gains tax MUST be less than the rate for ordinary income, otherwise the stock market will become as inefficient as the health care system.
The fact that converting salary to capital gains defeats FICA as interesting. On one hand, it IS a loophole. On the other hand, how guilty should anyone feel about declining to participate in the world's largest Ponzi scheme?
Pro
:-)
===
1. Forced retirement of obsolete equipment at the end of the lease. Leases eliminate management discretion in the upgrade process. You can and will upgrade when the lease expires -- not before, not after. Useful when senior management is out of touch with technical reality, although the loss of discretion cuts both ways (see below).
2. Monthly payments -- better short-term cash flow without actually borrowing money.
3. The "temporary" nature of leased PCs is understandable by the average employee. If they KNOW their machine is going away in 36 months, they tend to find better places (file server, CD, etc.) to store their data. Leased servers have the same impact on sysadmins -- they can plan on a non-discretionary 100% replacement at a known date in the future.
Con
===
1. Mid-life hardware upgrades are a problem. Do you save the old parts to put the machine back to as-delivered condition when the lease expires?
2. Who owns the software? Is that leased also? Usually the answer is "no" (see Microsoft EULA). But you have to wonder about the OEM packages that may be pre-installed and supposedly licensed to a specific machine. Of course, open source would take care of the problem
3. It is possible to have a lease that extends beyond the warranty period. How much do you spend to fix a computer you don't own? What happens when you return it and it's broken? If you are paying seperately for hardware maintenence, how happy are you going to be when the maintenance cost exceeds book value?
4. Towards the end of the lease, the monthly payments will exceed the value of having the equipment. What do you do if the equipment is obsolete before the lease expires?
I think the depreciation curve on IT equipment is too steep for leasing to make sense. I have some experience with leased equipment. My company bought a smaller company, and they had leased PCs. Not only were they leased, they were barely adequate when new and were obsolete at the time of the acquisition. Nobody would spend money to upgrade the PCs because the lease was going to expire in about a year. The cost of the upgrades (monitor, OS, memory, disk, etc.) was dangerously close to the cost of replacing the machines outright. The employees had to suffer with junkware for almost a year before the problem could be solved. If the machines were purchased, the problem could have been solved sooner. It's hard to acknowledge technical reality when money is going out the door every month. If the stuff is already paid for, it's a little easier to wake up and smell the cappuccino.
I believe the "original" Napster offered the RIAA something along the lines of what I suggested. Wouldn't it be a pisser if the best deal they could ever have was the first deal they were offered? If the RIAA had simply taken the money, they would have had billions by now. If you factor in what they "lose" due to piracy and add the money that they were too dumb to take, it shows that the RIAA folks are not the brightest bulbs in the box.
If the industry doesn't get a clue soon, I have some ideas on how to use existing technology to foil the subpoena/lawsuit process, and an idea on how to build a totally undetectable "weapon of mass distribution". I like my WMD idea enough to sit on it until the DMCA and "trusted" computing becomes so oppressive that it's time for a nuclear counterstrike. Note to RIAA: Think fast.
Unlimited sharing via p2p. The file transfer program collects stats on what was downloaded so that the royalty portion of my $5 can be allocated proportionally to the copyright holders based on what was downloaded. The copyright holders don't need to know what I downloaded, they simply need to know that 30 million subscribers paid $5 each this month for a total of $150,000,000. Of the songs downloaded, 0.00015% of them were Billy Joel/Pressure. Mr. Joel, his record company, and the RIAA somehow divide $225 among themselves and life goes on. Most of this money is NOT going to be paid to ANYONE if the status quo is maintained. If Mr. Joel is unhappy with $225 for the month, he has to somehow increase his market share above 0.00015%.
I already own as much music as I really need. I have the ability to simply pay $0 and keep what I have (which is what I do now). By accepting my proposition, they get $60/yr more from me than they get now. By using a fixed rate and keeping it low, the incentive to disrupt the statistics is eliminated. The copyright industry is in it's own version of the Vietnam war. They can stay on the battlefield and fight as long as they want, but real victory remains elusive. It's hard to find the enemy. When they are found, each individual can easily be beaten. However, the resources needed to hunt and kill all of them is far more than the benefits of winning the war.
For the sake of argument, let's say I have a line of products with zero marginal cost. There is some initial cost to make the first copy, but the actual production cost of each additional copy is inconsequential. I can get 15% of the US population to give me $60/yr but they want an "all you can eat" pricing plan. It is very easy to copy and redistribute my product. So easy, that the biggest threat is unauthorized/unpaid copies. Ill-advised attempts to maximize revenue have eroded the customer base to the point there the customers are getting very good at copying the product without my assistance. If the problem gets much worse, there will be no products to distribute, because nobody wants to pay for them -- at least not on a per-product basis. Given the nominal cost of copying (which could be reduced to zero if the customers do the work themselves), it is more important to get paid by everyone who has interest in the product, regardless of how many products they have (remember: cost of production is $0/unit for P2P). We still need to keep track of which models of my product are popular, so that I can compensate the people who made the original products based on the success of the work they did.
Our friends in the music industry seem to be locked in on the concept of getting paid for every song. The are missing the opportunity of getting a larger amount of money that would come from collecting a nominal amount from a huge customer base. All they have to do is work out an equitable distribution system on their own.
One more thing: AM is susceptible to electrical noise (RFI). Between the CPU and flourescent backlighting of a display, the demand for AM radio in an MP3 player is minimal. I'm not sure I buy your distortion theory, but the antenna is definitely a problem because of wavelength.
Isn't this idea the real-life version of the "Net Force" books?
Where I live, the state university system decided to spend lots of bond money on their own switching equipment, so as to provide (and of course charge for) local phone service in the dorms. They did this about 8 years ago. I am guessing they had maybe 5 years of solid revenue until the cell phones proliferated and the game was over. I understand why they did it. Dorm phone service had been a giant cash cow for the phone companies (charging "installation" fees for the same lines every semester). It was just too juicy a target to pass up.
The REAL motivation was that state bond money was essentially a gift from Santa Claus -- the agencies that received the money were never obligated to pay it back. Operating money was the hard-fought budget battle that took place every year. Well, it seems that the snazzy new phone gear was purchased with bond money, and the fees paid by students became part of the operating budget. Unless the university system starts losing money on operational costs, the demise of the local phone cash cow is left for the taxpayers to deal with. My guess is that the taxpayers will spend the next 30 years paying for the state university phone network.
Of course, the path of least resistance is to use Internet access to subsidize the loss of phone revenue. The colleges can still surcharge the hell out of Internet access. That puts a band-aid on the problem, but only to the extent that students can be prevented from sharing via Wi-Fi.
In this case, losing the lawsuit will bankrupt the company, no matter who pays the cost. If you accept bankruptcy as inevitable, and you get all of these benefits with a frivolous lawsuit, where is the deterrent? Unless the SCO gets the royal smackdown from the SEC and a whopper shareholder lawsuit, Darl and his buddies will parachute to safety.
I agree that browsing at the same priv. level as a software installer is a big problem.
In addition to the "Let's all run as Admin" scenario, MS also makes it all too easy for IE users to unintentionally install things. I have seen numerous examples where a Windows 2K spyware infection went well beyond the user's profile. If your entire TCP/IP stack is hijacked, you need to do more than trash the users profile. It always amazes me to see how we can peform all of these administrative lockdowns to prevent Windows users from installing software, and along comes the spyware and it plays right through. Hmmmm....
As you say, it the user's habits contributing to the problem, compounded by OS and programs that make it easy to do unsafe things. One easy way for Firefox to defend itself make sure that XPI installation requires an active step that neither the program nor the user can bypass or click through. If you must download the file, and click "Tools...Extensions...Install" as opposed to getting a "Click OK to enhance your browser" prompt out of the blue, then the bar is raised to a level where newbies are not likely to jump. Anyone who can't figure out how to manually install an XPI is probably best served by skipping extensions altogether.
OSS certainly puts a cap on how much the proprietary software vendors can charge for a product. It's not a coincidence that the most overpriced products were the first to see OSS drop-in replacements. Also let's consider the latest trend in customer support: the Bangalore script reader. If that is how support is going to be done, people will soon discover that searching Google Groups is easier, faster, and more effective. As the quality of vendor support goes down the toilet, so does the logic that justifies buying commercial products over OSS.
I will even take your "OSS is bad" argument one step further: Once the ball gets rolling, companies who adopt OSS the fastest will reap the benefits of lower cost vs. competitors who still buy proprietary products. At some point, companies will be adopting OSS products simply because they can't afford not to. Example: As soon as one of the major airlines eliminated food service, they ALL had to go pretzels-only. Otherwise they operate at a cost disadvantage in a market that won't support higher fares. When was the last time you had more than 1 oz. of starch when flying coach?
On the other hand, there is nothing about artifically high prices that helps the software industry in the long run. Granted, certain companies could keep tighter control of their market share without OSS, but it would be a smaller market. No one in the software industry can expect to survive for long in a stagnant environment. Without a constantly growing market, nobody can achieve the year-over-year revenue growth that investors require.
I have absolutely ZERO sympathy for companies who are losing market share to OSS. Let's face it: that which can be done by OSS will be done. At the same time, IT work that can be moved to India will be (even if OSS did not exist). Companies have to deal with the OSS competitive reality, just as IT workers have to deal with competition from India. The irony is that the companies who were the first to get on the India outsourcing bandwagon are some of the same companies who are getting undercut by OSS -- some of which is developed by the very same people who lost their jobs to offshore outsourcing in the first place! Karma, indeed!
For the sake of argument, I'll even buy the theory that many OSS products are merely "good enough" replacements. IF that is true, then the weakest, most poorly supported, overpriced commercial products are vulnerable. Again, I see no problem here. If you make the job loss argument, I counter that most of the development jobs were moving offshore anyway. By the way, we gain plenty of jobs by making more use of hardware and software because the cost is either zero for OSS or reduced because of the OSS competitive threat. In fact, some of those jobs are more difficult to move offshore and therefore more useful to have in the first place.
Consider the market evolution of PCs replacing mainframes (think of all the wildy-overpriced mainfame software that got cloned onto PCs). The price of software fell through the floor but the market expanded 100-fold. OSS is just the next step in the evolutionary cycle. The alternative is to pay exhorbitant prices, suffer with obnoxious licensing terms, for crappy products with lousy support. No thanks.
Although some of the flat panel technologies have issues with burn-in or brightness, at least they maintain each pixel in focus. CRTs get fuzzy over time. Not everyone wants to see square pixels, and the latency can be an issue, but I'll take LCD over CRT any day.
masquerading as Y2K IT experts. They advised everyone to issue a survey to their supply chain, for the purpose of identifying suppliers who were likely to have Y2K problems. My company received hundreds of these surveys, most of which were copies of our customers' internal Y2K surveys. Most of the questions had no context and were therefore irrelevent -- a complete waste of time. And then there was the dreaded follow-up calls and e-mails for any surveys that were not completed.
If I had it to do all over again, I would have charged for the time spent on survey responses. I'll bet 90% of the survey problem would have disappeared.
When people looked back at the real Y2K problems and solutions, the IT ignorance of the big-time consulting firms was finally exposed.
We DID have some BIOS and OS problems with a few ancient PCs (hooked up for low-tech data capture). Of course, nobody wanted to spend the money to buy replacements. For those PCs that were truly Y2K challenged, we printed up these very large flourescent pink stickers with a picture of a bomb and an ominous Y2K warning. Then we slapped the stickers on the ancient PCs. As if by magic, the old machines were gone in less than a month.
Considering software patents as a replacement for copyright is an interesting concept. Not very practical, as we have enough trouble with software patents as it is. The worst possible case is what we have now -- the perpetual tyranny of copyright combined with the "I just patented the alphabet" patent system. Anyone who proposes that we ditch either of these is on the right track, even though they may be heading in the wrong direction. Ultimately, I think that if given the choice, the software industry would choose copyright protection over patent. The trick is making them choose. Presenting copyright vs. patent as mutually exclusive is a good start.
"A simple PC user's system will be infected, as will a public site, and information will be transferred from one to the other. "
I'm not so sure the public site even has to be "infected". Maybe the infected PC just encrypts the data to be stolen into a nudie jpg image and posts it to a binary group on Usenet. Maybe it just runs a Perl script to auto-post the data to a blog. It would be fairly easy to abuse a number of public facilities with no need for a direct attack. The "harvesting" of this information would be indistinguishable from ordinary teenagers downloading yet another picture of Anna Kournakova. I thought of this years ago, but never mentioned it anywhere -- giving ideas to bad people and all that. I read somewhere that terrorists are quite fond of steganography, so the cat is really out of the bag already.
" Is there any remote chance of getting these spyware authors prosecuted."
At this point, I'm not so sure the spyware authors are the real problem. Fool me once, shame on you. Fool me twice, shame on me. Fool me 65,536 times, just paste the "Kick me" sign on my back.
The security issues of MS products are well documented, with plenty of real-life evidence. Open an e-mail, launch a virus. Visit a website, get spyware. Eat at McDonald's every day, get fat. You can't expect security out of Microsoft any more than you can expect to lose weight by eating Big Macs. There are alternatives to MS products, just as there are alternatives to the fast-food hamburger.
The problem is that if anyone can install just about anything on your computer without your consent, then any data on your computer can be redirected and exploited. Spyware is just the beginning. It's going to get ugly.
The question was not all that hard. I don't watch the show very often, but I think I remember that question from another episode. I think Ken provided a plausible-yet-wrong response just to go home. To me, it was ridiculously simple. When you think of industries that simply don't exist outside of their "season", it doesn't take long to zero-in on taxes.
Then again, maybe not. I saw the show when it was on TV, my wife watched it later on tape. I paused the VCR during final jeopardy to ask my wife if she knew the answer. Much to my surprise, she didn't.
Kind of ironic though. A guy who wins $2.5 million is going to be dealing quite a bit with income tax issues.
I can't wait until they use this on the show:
Answer: "This is an unlikely company to do Ken Jennings' tax return; it's mere existance got him kicked off of Jeopardy."
Question: "What is H & R Block?"
Nobody needs telco services to implement PIN authentication; you can do it yourself. Some of the high-end answering machines are like a miniature PBX; it won't take long before they screen all incoming calls for you. I believe there are some that already do.
The ultimate telco nightmare is when commodity hardware replaces network-based services. If the telcos don't defend the integrity of Caller ID, the problem will be solved without their participation.
I only pick up calls from people I recognize, sort of a mental "whitelist". The fakers would have to get the names and phone numbers of people I know, otherwise they get my answering machine.
Let 'em try faking Caller ID -- it just raises the bar a little. The appropriate countermeasure is a challenge/response scenario where authorized callers have a PIN number and the rest go to voice mail. I can't wait to see how much the telcos enjoy losing their Caller ID revenue stream when people get annoyed with faked calls.
As you say, outsourcing is the "trend du jour". The current trend is fueled by a large supply of people with cheap PCs and very little experience who masquerade as IT workers.
People seem to forget about the 1980's style of outsourcing. The big players (EDS, CSC, etc.) were pitching outsourced data center management. The suits bought it, with mostly disastrous results. If it worked, most IT work would have been consolidated into a few IT companies. The overseas migration would have been fairly simple. But it FAILED. The only way to save money was to slash the level of service to unacceptable levels. Here we go again.
There would be this huge supply of liquid CO2 stored underground. Nobody wants to fill the atmosphere with CO2, but at least some of it gets converted back to oxygen by plants. Won't we eventually have an oxygen shortage when too much oxygen has been used in the ZEPP combustion process and is now stored underground in the form of liquid CO2? Will some future generation need to find an energy-efficient way to release oxygen from CO2 or possibly water? Is this more difficult than the original problem? There must be a better way.
At least as far as HE is concerned. If there was ever a man who should be characterized as "all hat, no cattle", that would be Darl.
"All software companies go this way.
What do you base this statement on?"
Imagine yourself as the CEO. Think about what you want to see as a measure of success. Growing your existing products is everybody's favorite strategy -- it's generally less risky than developing new products. Of course, the growth ends once the market is saturated, but the overwhelming motivation is to keep milking that cow as long as something comes out.
"Most money from software comes from support..."
Only for high-end systems, not the stuff Microsoft sells. "Software Assurance" is the closest they get to a traditional support contract. It's pricey and the term is limited. To me, it looks like their strategy is to soak the "early adopters" who want or need every new version that comes along, even if it means the average user runs the old versions without paying MS another dime. "Software Assurance" tries to expand the pool of early adopters, but it also expands the pool of customers who will wait even longer before buying an upgrade.