Posted by Scott Laird
Fri, 29 Apr 2005 14:22:49 GMT
I’ve been watching Eclipse Aviation for years–they’re a jet manufacturer startup founded by an early Microsoft guy, aiming to build cheap business jets. Cringely’s latest article talks about Eclipse and a new airline that’s buying 300 of the little jets, aiming to turn them into a sort of air taxi service–they’re so cheap that it’s possible to compete with big airlines without having to stick to fixed routes and timetables.
Except here’s the fun part–the company that buys the little jets (from a Microsoft guy) and lets lots of people share them–it’s being run by a guy from Citrix.
Some things never change.
Posted in Business | Tags aviation, citrix, eclipse, jet | no comments
Posted by Scott Laird
Fri, 11 Mar 2005 19:38:53 GMT
With all of the Five Years Since the Bubble Burst reminiscence articles today, I almost missed the other headline with “Burst” in the title–apparently Microsoft settled their long-running patent suit with Burst.com. Burst alleged that Microsoft stole their streaming-video technology, thinking that they could force Burst out of business for less money then it’d take to license the patent. Cringely has some details on the suit from years ago.
This was one of the two big patent suits that Microsoft has been involved in recently. The other suit was basically a submarine patent from Eolas, claiming that they owned the concept of embedding things into browsers. From where I sit, the Eolas case is a textbook example of why we need patent reform. The Burst case was different, though–it really looked like Microsoft sat down with Burst years ago, saw what they had, and then decided that the cheapest way to get their hands on Burst’s technology was to stall until Burst ran out of cash without actually ever paying them a dime. There were allegations that Microsoft had “lost” most of the email from their executives who had dealt with Burst. In general, published reports made Microsoft look about as slimy as they appeared at the height of their big Justice Department case.
I assume that the terms of the Burst settlement will be sealed, but since they’re both public companies, most of the financial details will show up in SEC reports sooner or later.
Posted in Business | Tags burst, eolas, microsoft, patents | no comments
Posted by Scott Laird
Tue, 25 Jan 2005 17:07:41 GMT
The Register is reporting that a couple Chinese DVD manufacturers are suing the DVD patent holding group over their patent licensing fees, claiming that the way they’re managed is a violation of antitrust law. The original article in CHINAdaily says that Chinese manufacturers are being charged $20 per player for patent fees, which is up to 20-30% of their production costs. The suit claims that this is unfair, because US DVD manufacturers are only charged 2-3%.
I have *no* idea what to make of this. On one hand, I’ve seen $17 DVD players before, and you can’t tell me that it actually cost $60-80 to produce. Even if the really cheap players are unlicensed (it’s not uncommon for cheap DVD players to simply ignore paying for things like patents and CSS fees), the numbers still don’t make sense, because they suggest that DVD players cost over $40 to produce. Since I can go to Target and pick up several different models of $40 DVD player any day of the week now, you can’t tell me that every sub-$40 DVD player is a loss-leader to get people into the store.
Similarly, the 2-3% number doesn’t work for me. I mean, who builds consumer electronics hardware in the US these days? I’m not a big follower of the CE market, but I’d assume that the only US-based hardware manufacturers are niche players, probably either really high-end stuff (like the $30,000 DVD jukebox that the DVD industry is currently suing) or embedded hardware for places where local management and extreme quality control is more important then cost, like the aviation industry. In either case, an average selling price of $600 would turn a $20 licensing fee into 3%.
So, I’m not really sure how the Chinese manufacturers can claim discrimination.
On the other hand, I’m not a big fan of intellectual property licensing groups, and I’m even less a fan of DRM groups, like the DVD Copy Control Association. Since this lawsuit has the ability to make major changes in the way that these two businesses work. On the other hand, pretty much every industry association out there works in the same manner, and I’m rather fond of things like DDR SDRAM and standardized flash memory cards–it’d be a shame to invalidate all of them at the same time.
On yet another hand, if the DVD patent group loses some of their DVD patent licensing rights, it’ll probably just make the patent holders move on the next-generation optical disk standard (either HD-DVD or Blu-Ray) even faster. Assuming that they can find a way to structure the licensing rights in a manner that won’t have the same problems as the DVD patents, they’d have an enormous incentive to push HD video disks onto the market as fast as possible. It’d also drive a bit of a wedge in between the CE hardware manufacturers and the content people (like Disney), because the CE people would want HD to completely supplant DVD as quickly as possible, and this wouldn’t play well with the content side’s perpetual fear of high-quality digital releases of their works.
Posted in Business | Tags china, dvd, lawsuit, patents | no comments
Posted by Scott Laird
Thu, 14 Oct 2004 18:12:14 GMT
According to CNET, Intel has dropped their plans for a 4 GHz Pentium 4 chip, replacing it with a 3.8 GHz chip with a 2 MB cache. Intel is spinning this as a deliberate move to distance themselves from the “more MHz is better” mindset:
Behind the shift is Intel President Paul Otellini, who wants the company to move away from focusing on increases in chip speed, measured in megahertz, as the primary way to increase performance. Intel has talked about such a shift for years, but remained fond of the clock-speed approach until recently. Speeches by executives about moving away from megahertz were often closely followed by announcements of faster chips.
Of course, the spin is wearing a bit thin on this–if Intel could release a 4 GHz P4, then they’d jump at the opportunity. It’s certainly cheaper to produce P4s with 1 MB of cache then with 2 MB; replacing their entire 1 MB line with 2 MB models will lower their profit (assuming that the replacement chips sell for more or less the same price).
On a similar note, Om Malik points out that Intel’s latest quarterly earnings were quite a bit worse then Intel’s been spinning.
Posted in Business, Computer Hardware | Tags hardware, intel, mooreslaw, pentium4 | no comments
Posted by Scott Laird
Wed, 06 Oct 2004 03:32:49 GMT
Apparently there’s at least as much money in unpopular, non-bestselling works then there is in blockbusters. That’s the theme of Chris Anderson’s ”long tail” article in Wired. Rhapsody streams at least one copy of their top 400,000 songs every month. Less then half of Amazon’s sales come from the top 130,000 titles in their inventory. The majority of their sales come from books that physical stores don’t (and can’t) carry.
When you’re in an environment where shelf space isn’t a limitation, where it doesn’t matter how big your catalog is, then increasing the number of choices that you provide increases sales and increases profits.
Wired’s article has inspired a lot of writing today. Kevin Laws at VentureBlog has a great article showing that most of the successful .coms (Amazon, eBay, Google, CafePress) can be understood in terms of the long tail–they all stretch way further into the tail then anyone ever did before, and that’s where they found their profits.
From a cultural prospective, the whole long tail thing makes me more optimistic for the future then I’ve been in years. It points out that there’s a market for niche goods, no matter how small of a niche it is. The Walmartification and Hollywoodification that we’ve seen over the past few decades may just be a temporary phenomenon driven by the economies of scale that don’t really matter for digital goods. A lot of smaller markets that have become more obvious lately–groups like hardcore gamers, radical early adopters, anime fans–aren’t just aberrations, but a sign of things to come. The Internet makes it possible to profitably cater to small audiences.
Of course, someone still has to actually build the thing that the niche wants to buy. No matter how many people want a Treo 650 with WiFi, it’s still not going to show up in stores next month. As the business world adjusts to the long tail mode of thinking, we’ll probably see manufacturers who can profitably build a dozens of variants of their products and do small runs without having big distribution problems.
I’ve been wondering how this applies to products that aren’t actually products, though. Case in point: home internet access. I’ve been fighting for six months to get faster network access at home, but I’m running into the niche problem: I don’t want the same thing that most consumers want, so companies don’t seem interested in selling it to me. DSL and cable companies want to sell me an asymmetrical link with a dynamic IP address and a gob of filtering to protect me from whatever is eating Windows boxes this week. I want to buy a link with a decent upload speed, a static address, and no filtering. Both Verizon and Comcast view my market as being too small to bother with–I’m in the long tail, and neither of them looks past the big hits.
The thing is, though, this is completely insane. Because neither network provider is actually selling a product. Sure, they’re selling access to their immense wiring plant and a bunch of network gear (along with really bad support), but fundamentally, the only difference between what they want to sell and what I want to buy is a configuration file. I mean, Amazon at least needs to keep track of a zillion different books in warehouses, and Rhapsody needs to have disk space for 735,000 songs. Verizon doesn’t need that, because the thing that differentiates between the different DSL products that they sell is autogenerated. There’s no fundamental reason why they couldn’t add more speed grades to their DSL portfolio, along with static addresses, looser (and stricter!) filtering, bigger address pools, varying upload vs. download speeds, and then simply charge a premium price for “non-standard” settings, all available via a web interface. If they weren’t a Bell, with all of the ingrained Bell mindset, they could roll something like this out in a matter of weeks. There’d be some support and training costs, but they’d more then make up for it with increased revenue. That’s the point of the long tail. Instead, they view it like different DSL packages are competing with each other for shelf space, and they’re cannibalizing their own sales, alienating their own customers, and providing a safe niche for leaner, faster competitors.
Posted in Business, Computer Networking | Tags dsl, longtail | no comments
Posted by Scott Laird
Wed, 08 Sep 2004 15:44:43 GMT
Remember Infinium Labs, the makers of the Phantom game console, which has been total vaporware for at least a couple years? Their latest quarterly report filing says that they’re almost out of cash. While a lot of people online don’t seem too surprised by this, I have a slightly different perspective, and what I’ve seen doesn’t look like a company that’s about to implode.
As mentioned before, Infinium’s Seattle R&D office was right next to my office, and I saw their people daily until they moved into bigger offices on September 1st. They certainly weren’t acting like they were broke–the employees were working long hours right up to their move-out date. I saw glimpses of Phantom prototypes and production samples from time to time, but I never got a demo. One of their managers had a wall-mounted countdown clock, set to trigger in November–they were really focused on getting their product out on time.
Personally, I expect them to ship the thing, perhaps on time, perhaps a bit late. I don’t have high expectations for their product, but I don’t expect them to implode before they ship.
(via Gizmodo and Firing Squad)
Posted in Seattle, Business, Computer Hardware | Tags broken, infinium, seattle | no comments
Posted by Scott Laird
Tue, 10 Aug 2004 19:37:03 GMT
I was flipping through this week’s eWeek and discovered a fascinating article on outsourcing. According to the article, the new trend to watch is “shared sourcing,” where you partner with someone and have them handle pieces of your business, without handing over everything. The example given is kind of amazing–they’ve outsourced the drive-through lane at some McDonalds:
Customers arriving at one of the 11 McDonald’s franchises run by Bigari Food Enterprises in Colorado, Missouri and Minnesota have a variety of ways to order their burgers and fries. The drive-through lanes are handled by a Bigari-run remote call center (located in the United States) that uses voice over IP and digital photos to link inventory and the food preparer to make sure the right burger ends up with the right customer. Orders can also be placed from the children’s play area, from phones at in-restaurant tables, from cell phones or via the traditional walk-up method. Sales have increased and mistakes have decreased at those McDonald’s stores.
Okay, it’s not exactly outsourced; the McDonalds franchise owns the call center as well as the restaurants, but you should be able to see the writing on the wall. Who thought that McDonalds employees would have to worry about having their jobs shipped overseas?
Getting past the paranoia, though, it’s a fascinating way to improve an age-old business model. It’ll be interesting to see how this spreads. Cheap, ubiquitous communications changes a lot of old assumptions.
Posted in Business | Tags drivethrough, mcdonalds, outsourcing | no comments
Posted by Scott Laird
Fri, 18 Jun 2004 01:52:21 GMT
Wow. It’s nice to have people who can write on our side.
Cory Doctrow gave a talk about DRM at Microsoft Research recently. Boing Boing had an excerpt:
Here’s what I’m here to convince you of:
- That DRM systems don’t work
- That DRM systems are bad for society
- That DRM systems are bad for business
- That DRM systems are bad for artists
- That DRM is a bad business-move for MSFT
It’s a big brief, this talk. Microsoft has sunk a lot of capital into DRM systems, and spent a lot of time sending folks like Martha and Brian and Peter around to various smoke-filled rooms to make sure that Microsoft DRM finds a hospitable home in the future world. Companies like Microsoft steer like old Buicks, and this issue has a lot of forward momentum that will be hard to soak up without driving the engine block back into the driver’s compartment. At best I think that Microsoft might convert some of that momentum on DRM into angular momentum, and in so doing, save all our asses.
Go read the whole thing; it makes it really clear why the whole RIAA/MPAA digital rights thing is dumb and hurts all of us, even the artists (like Doctrow) who need to live off of their creations.
Posted in Business | Tags doctrow, drm, evil | no comments
Posted by Scott Laird
Tue, 02 Dec 2003 20:46:54 GMT
I’ve been reading a few things that suggest that the PSTN (Public Switched Telephone Network–the traditional phone system) is dying, soon to be devastated by VOIP. Since companies like Vonage are starting to switch consumers and small businesses, and larger companies have been moving internal phone service to VOIP for a while, within a few years most profitable customers will have have left traditional telcos for nice, cheap facility-less VOIP. That’ll leave expensive customers (rural consumers, for example) as the primary users of the old phone system, and that’ll destroy the business model of all of the telcos.
We’ll see. Maybe it’ll go that way, maybe it won’t, but I wouldn’t buy telco stock right now :-).
The story goes like this: once we have a good, semi-open way to map traditional phone numbers onto VoIP providers, we’ll start seeing pure-VoIP calls between (say) Vonage and 8x8 customers. Companies can jump in and do direct VoIP calls to other companies and consumers using the same database, either the ENUM thing that never seems to go anywhere, something DNS driven, or something new. Doesn’t really matter which way it happens, because one of them is going to happen very soon, probably within 6 months, and it’s probably going to be at least partially driven by the Vonages of the world in an attempt to cut their costs when talking to customers of the other VoIP providers.
Once we have open-ish IP telephony, unless regulation rears its ugly head, phone service will end up looking a lot like email. Consumers and very small businesses will pay a provider, and larger companies (and geeks) will handle it themselves, directly. In either case, you’ll end up paying someone to connect your calls to (and from) the legacy PSTN, so Aunt Mildred in Kansas can call you, but 95% of the traffic will be SIP end-to-end. Once this is in place, we can start exploring what you can really do with SIP above and beyond traditional telephone service (your phone number follows your laptop on vacation, for instance).
But, here’s the problem: SIP spam. What’s going to keep the spamming scum of the earth (and I’m being charitable here) from blasting your phone with automated crap 24x7? Regulation probably won’t do it–they’ll just connect directly (via IP) from outside of the US, just like some SMTP spammers do today. The economics are basically the same as they are for SMTP spam, it’s astoundingly cheap to send, and you only need a few returns per million to break even. It’s not completely clear that today’s spam filtering techniques really apply to SIP spam, besides blacklisting and whitelisting.
I’ve been enjoying the near-complete lack of phone spam at home since the FTC do-not-call list took effect. I wonder how long the quiet is going to last, though.
Posted in Business, Spam | no comments
Posted by Scott Laird
Wed, 12 Nov 2003 18:18:20 GMT
Hmm. Is the FCC about to kill VOIP?
Apparently the December 1 meeting is to be a formal FCC hearing designed to legally circumvent the more normal, deliberative Notice of Inquiry process, which is designed to solicit, collect and consider a wide range of public comments.
…
The hearing will hear “a wide range of witnesses from industry and government,” but not (apparently) from the entrepreneurial creators of the next communications industry, from end users who stand to benefit from the demise of the old telephone “industry”.
…
“Shortly after the forum,” the letter continues, “The FCC will initiate a Notice of Public (sic) Rule Making on VoIP services.” As if the FCC will not need much time to consider the “witnesses” in the forum, as if the FCC already knows what the rules will say, as if the fix is in.
[isen.blog]
Posted in Business | no comments
