Posts filed under “Intellectual Property”

Smackdown! Microsoft versus Google

To be filed under Outsource THIS right off my desktop!

Google has taken aim at one of the two biggest Mister Softee moneymakers:

"On Thursday, Google, the Internet search giant, will unveil a package of communications and productivity software aimed at businesses, which overwhelmingly rely on Microsoft products for those functions.

The package, called Google Apps, combines two sets of previously available software bundles. One included programs for e-mail, instant messaging, calendars and Web page creation; the other, called Docs and Spreadsheets, included programs to read and edit documents created with Microsoft Word and Excel, the mainstays of Microsoft Office, an $11 billion annual franchise.

Unlike Microsoft’s products, which reside on PCs and corporate networks, Google’s will be delivered as services accessible over the Internet, with Google storing the data. That will allow businesses to offload some of the cost of managing computers and productivity software."

There can be no doubt that Microsoft has a dangerous rival in Google, but
its more than mere business challenge — its a philosophical, also. The battle is
between Microsoft’s approach of owning a stranglehold on desktop  computing, versus Google’s massive online server cloud accessible by any user, anywhere, no IT dept
necessary.

As we noted previously, adaptation of both Vista and the new Office have been slower than expected; indeed, its hard to describe it as anything short of a disapointment. Google obviously recognized this softpoint and decided it was an opportune time to pounce. Very Sun Tsu of the not-so-genteel Google boys: Always take advantage when your adversary is weakened or vulnerable.

This is a potential paradigm shift. Do the math, and you will understand why:

"While most analysts say that businesses will increasingly use software delivered over the Internet and supported by advertising — a formula that Google has mastered — they are split over the threat that Google’s offering represents to Microsoft in the near term.

“I think Microsoft should be very concerned about this,” said Rebecca Wettemann, vice president of Nucleus Research.

Ms. Wettemann noted that a business may spend about $80,000 on a systems administrator to manage e-mail and desktop office software. For the same amount of money, Google Apps allows a business to support 1,600 users, she noted. Simply in terms of staffing, “this may be a better proposition even if Microsoft were free,” Ms. Wettemann said." (emphasis added)

A better value proposition than free Microsoft. Now that’s a tough gig to beat (even with Googler’s egregious boilerplate).

Critics will note that the Fortune 500 are unlikely to adapt this. After all, Windows XT was called the IT Department Full Employment Act, and well paid CIOs are unlikely to put themselves out of a job.

It is also true that the growth segment of business and computing is NOT the Fortune 500; rather, its in the small start up, the entrepreneur, the solo practitioner. This is the area where Google can lay a pretty decent hurtin’ on their older, less nimble rival.   

Is Microsoft the next Blockbuster Video? I doubt it. They have too much cash, too many franchises,  and too many sharp people to be totally marginalized. But I also very much doubt they are the next GE, a company that has managed to evolve and reinvent itself repeatedly over the course of more than a century, and remain a top layer in numerous niches. Not Blockbuster, not GE, but somewhere in between (if anyone has a perfect corporate parallel, let me know in comments).

Whether Microsoft can do the same, whether they can adopt their monopolist business model to something that thrives on competition, has yet to be seen.

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UPDATE February 25 2007 8:42am

IT Wire notes that:

"Google’s newly released online productivity suite Google Apps has already replaced Microsoft Office at more than 100,000 small to medium enterprises and has been deployed at two of the largest companies in the world, according to the search leader’s enterprise product boss."

Google manager: Google Apps replaced Microsoft Office at 100,000 businesses        http://www.itwire.com.au/content/view/9889/53/

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Source:
A Google Package Challenges Microsoft
MIGUEL HELFT
Published: February 22, 2007
http://www.nytimes.com/2007/02/22/technology/22google.htm

Category: Consumer Spending, Corporate Management, Digital Media, Intellectual Property, Technology, Web/Tech

IBM Suing Amazon over Patents

Category: Corporate Management, Intellectual Property, Technology, Web/Tech

Relentlessly Bearish Fashion

Category: Intellectual Property

Zune: mPod or iClod?

Category: Corporate Management, Film, Intellectual Property, Music

The Media Goes Blog Crazy!

Category: Financial Press, Intellectual Property, Investing, Media, Web/Tech, Weblogs

Copyright Abuse by Media Bullies

Category: Financial Press, Intellectual Property

Warner Bros Goes P2P via Bit Torrent

Category: Film, Intellectual Property, Music, Technology

Myhrvold on Patents

Category: Intellectual Property

Rise of the Pure Patent Business Model

Back in December 2004, I wrote a column titled "Five Under-the-Radar Trends for 2005". One of the below radar trends I predicted was the acceleration of intellectual property lawsuits. That turned out to be rather prescient.

There are actually two different issues here: The first is, should the USPO
be issuing so many patents, especially those for business methods? Amazon’s One-click buying, and MercExchange’s Buy it now auction are certainly questionable "inventions." That’s an issue for Congress, who needs to adequately fund the Patent Office so they can hire many more patent examiners, rather than merely have an under staffed patent office rubber stamp applications.

The second issue is that once a patent becomes issued, who gets to use it and how? Very often, we see the first issue inappropriately raised as a PR defense in the second. I don’t get the sense that all of the financial media really has a firm grasp on this. There is an entire world of patents, innovation, USPO issues, and large corporate litigants that have not been adequately discussed. Some get it, some don’t. Compare  this story: "eBay Takes on the Patent Trolls" with this one "In Patent Case, EBay Tries To Fight Its Way Out of Paper Bag." (For some intercorporate litigation, see Apple against Apple Corps. Ltd., and TiVo’s against EchoStar’s Dish Network).

Incidentally, the term "Patent Troll" was invented by Peter Detkin when he was defending a patent case against Intel. Ironically, Detkin is now managing director with Intellectual Ventures, an intellectual property firm suing patent infringers.

If you recognize the property right inherent in patents, then the term "Patent Troll" is quite meaningless, meant to stir up political opposition to patents. How you use your property is irrelevant to the property right attached to it. What does it matter if you choose to manufacture widgets — or merely license the patent to thos ethat do? 

What is actually going on now is a massive land grab underway by large corporations, looking to keep the fruits of entrepreneurs and innovators labor for themselves. These are not meek and vulnerable entities at the mercy of lawyers; rather, these are very astute players seeking to use the patent to further their own goals — often at the expense of innovation.

Take Intel, where Detkin was vice president and assistant general counsel, for example. They are certainly no stranger to patent litigation. As the book Inside Intel makes clear, INTC used its patents as a club to thwart competition in the CPU market for decades. That’s why its taken AMD so long to become a legitimate competitor to the chip giant.

The stealing of entrepreneurial innovation by large firms is fairly common place. My own experience with patent enforcement is that it is an enormously expensive, difficult, time consuming venture, fraught with peril. Consider the case of Robert Kearns, the inventor of the intermittant windshield wiper. In 1967, he received several patents on his design, which he tried to license to the Big 3 in Detroit. They sent him
packing, but later the intermittant windshield wiper somehow found its
way into autos. Long story short, he ended up in litigation for decades before finally winning. Thats decades later.

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Category: Financial Press, Intellectual Property, Technology, Web/Tech

Intel & the Patent Trolls

Category: Corporate Management, Intellectual Property, Technology